HC Deb 06 May 1924 vol 173 cc270-396

10. "That any repayment of Income Tax for any year of assessment, whether ending before or after the thirtieth day of April, nineteen hundred and twenty-four, to which any person may be entitled in respect of any deduction allowed for the purpose of ascertaining the amount of his taxable income or in respect of the reduction of the rate of tax on the first two hundred and twenty-five pound of his taxable income, shall be made at the standard rate of tax for that year, or at half that rate, as the case may be, but subject to such adjustments as may be proper in cases where relief is given in respect of Dominion Income Tax:

Provided that, in the case of any person who proves that by reason of the deductions to which he is entitled he has no taxable income for any year, any repayment to be made shall be a repayment of the whole amount of the tax paid by him, whether by deduction or otherwise, in respect of his income for that year.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

First Resolution read a Second time.

Brigadier-General Sir HENRY CROFT

I beg to move, in line 5, after the word "fourpence," to insert the words but on all tea imported from the British Empire the duty be twopence. It is not necessary to deal with this question at any great length, because the House is well aware of all the circumstances of the case. I feel that the Chancellor of the Exchequer is most anxious that the relief to be given in connection with the Tea Duty shall be one which will be of advantage to the poorest in the land, and, in order to assist him in bringing that about, I want to suggest that the much-hailed relief involves not much more than some 30 or 40 lbs. per household per year; in other words, 160d. per household is the total relief which the right hon. Gentleman offers by this reduction of the Tea Duty. That being so, I hope he will regard with sympathy my proposal, which really is not asking anything new, but which merely preserves the principle which was contained in the Budget of 1919. In 1919, when the preference was first granted on tea the duty was 1s. in the pound. In 1922, the duty was reduced by 4d.—precisely the same amount as proposed by the right hon. Gentleman—not by a great democratic Chancellor of the Exchequer, because it happened to be a Conservative Chancellor. The result is that the preference on tea produced within the British Empire has been gradually fading away, because we have had reductions amounting to 8d. in three years. Last year, the value of the preference was round about 2d., and it has been reduced now as the result of the reduction of the Chancellor of the Exchequer to two-thirds of a penny.

I believe that there is not a single member of any party who will not regret this unfortunate coincidence, that the whole of the new proposals of the Imperial Conference are not to be sponsored by His Majesty's Government and that at the same time the preferences which were previously granted are in every case being very largely reduced. This fading away of the preference owing to reductions of the duties has happened in the case of coffee, cocoa, sugar, and dried fruits, as well as in the case of tea, with the result that the will of the House, as expressed in 1919, when the Preferential Duties were first imposed, has been to this extent affected, that the substantial preference of those days has now become a preference so reduced as to be hardly worth having. I am sure that I shall receive the general support of the House. The Liberal party has always declared for a completely free breakfast table, and therefore I know that I shall have their support in the Lobby; and, if I am not incorrect, although I have not studied their election manifestoes to the same extent, I believe that 90 per cent. of the hon. Gentlemen opposite have declared themselves in favour of sweeping away all food duties. For these reasons, I feel confident, even if the Chancellor of the Exchequer does not accept my proposal, that at least the majority of the House will.

The advantage, which I know the Chancellor of the Exchequer imagines is very great by this reduction of the Tea Duty, after all only amounts to something like 160d. per household per annum. It is really a very trifling advantage, and I know that if he can add to it, he will desire to do so. He will be more ready to add to that advantage when he realises—as I do not think that he has yet realised—that he has really so largely wiped out the effect of preference on tea from India and Ceylon. There is a side of this question which is not always appreciated. I think I am right in saying that nearly all the big tea companies in India and Ceylon are domiciled, in London. Therefore, if the right hon. Gentleman can divert trade in tea, as in anything else, to business communities in London, he will get an advantage himself in Income Tax from those companies. Similarly, I think he will find that practically all the tea coming to this country from the British Empire overseas is shipped by two great shipping companies. There, again, he will get an advantage in Income Tax and Super-tax. It must inevitably be to the advantage of this country to do everything we can to encourage the production of tea within the British Empire.

I may remind the right hon. Gentleman once more that the tea of the British Empire is the tea consumed by the poorest of this land. Therefore, in giving this advantage he will be giving it on the tea consumed by the poor as against the tea imported from China, which is a luxury. People no doubt will continue to drink China tea because they prefer it, and he will continue to receive his revenue on a considerable amount of China tea. From every point of view, it does seem to me advisable that we should endeavour to stimulate the production of tea within the British Empire. This preference is a great thing to any producer in the British Empire. I grow other commodities in the British Empire, and I know what it is to have something like security in the market of this country. I would ask him, therefore, to remember that, by making this country the market for the products of India, we are doing a great thing for the producers in India and Ceylon.

I know that I cannot expect very much sympathy on this question from Members who represent Lancashire and from the hon. Member for Penistone (Mr. Pringle), because they approve of the tariff in India upon cotton goods from Manchester. I know that they will never lift their voices on that subject, because, in their view, it hurts the people in India much more than it hurts the people in Lancashire. I would suggest to all those who live in other parts of the country, and who are not under the influence from which hon. Members from Lancashire and the hon. Member for Penistone suffer, that in view of the fact that the Indian Empire is about greatly to extend their tariff, it would be advantageous to those who do care about where our products go that we should have this advantage of preference in order to carry out that sordid purpose of being able to negotiate for better terms when those new tariffs are proposed.


I beg to second the Amendment.

The CHANCELLOR of the EXCHEQUER (Mr. Snowden)

The effect of the Amendment proposed by the hon. and gallant Member is to reduce the duty upon nearly 90 per cent. of the tea consumed in this country from the figure proposed in the Budget Resolution to 2d. per pound. When the duty stood at 1s., the preference upon Empire-grown tea was one-sixth, and it has remained at the rate of one-sixth. I would point out to the hon. and gallant Member that when Parliament reduced the duty from 1s. to 8d., it left the statutory preference at one-sixth, thereby reducing the actual amount of the preference. There was then no proposal of the character which the hon. and gallant Member has just submitted to te House. He spoke of successive reductions of the Tea Duty having had the effect of causing the advantage of the preference gradually to dwindle away. That dwindling process was begun by the right hon. Gentleman, who was then Chancellor of the Exchequer, the Member for Hillhead (Sir R. Horne), and it is rather curious that when the duty was 8d. no proposal of the character now put forward by the hon. and gallant Member was made. Now, when I propose to reduce the duty from 8d. to 4d., the hon. and gallant Member shows such regard for the hardships of the masses of the people of this country, groaning under the burden of this duty, that he is anxious to alleviate that burden still further.

There is no question of effective preference involved in this question. Unlike the Sugar Duty, the advantage of the lower rate of duty upon Empire-grown tea accrues to the tea consumers in this country. What would be the cost of the hon. and gallant Gentleman's proposal? Under the Budget Resolutions the duty is reduced from 8d. to 4d. The duty upon Empire-grown tea would be 3⅓d. per lb. The hon. and gallant Gentleman proposes to reduce it to 2d. The loss of revenue involved in that will, of course, be 1⅓d. per lb. on 88 per cent. of the tea consumed in the country. The loss of revenue under the Budget proposals will be £5,000,000 this year and in a full year £5,400,000. The hon. and gallant Gentleman's Amendment would cost this year £1,800,000 and in a full year £1,900,000. You could not reduce the Tea Duty alone without violating precedent and destroying the correlation which exists between the Tea Duty and the duties on cocoa, coffee, and chicory. Therefore if the hon. and gallant Gentleman's Amendment were carried it would mean a further loss of about £250,000 on cocoa and coffee. The simple answer to that is that I cannot afford it.


You can if you retain the McKenna duties.


I can very well understand the hon. and gallant Gentleman's new-born enthusiasm for the reduction of duties, an enthusiasm which does not appear to be shared to a very great extent by hon. Members on that side of the House, in view of the fact that the Amendment nearly broke down through the difficulty of obtaining a Seconder. May I say a word or two as to whether what is called a preference on Empire-grown tea is a preference at all? As a matter of fact it is not. India and Ceylon teas are not in competition with China tea, and owing to that fact and to the fact that Empire tea is nine-tenths of the total amount imported, the advantage of lower duties goes to the tea consumer. India and Ceylon tea growers are quite indifferent about the matter. They have expressed views that they would like to see it wiped out altogether. It is no protection whatever to them. The hon. and gallant Gentleman says the effect of a further reduction on Empire-grown tea would be to stimulate consumption. He knows that there has been in recent years a considerable restriction in production in India and Ceylon. The India and Ceylon tea companies do not need, on account of any impecunious condition in which they are, encouragement which would stimulate an increased demand for tea. I was asked to-day if I was aware that tea companies are making enormous profits. Every Member of the House is quite familiar with that. It is no unusual thing for a tea company to declare a dividend of anything from 100 to 150 per cent.


They have been through a very bad time.


The entire preference on tea has been passed on to the consumer, and this is borne out by a report of the Indian Fiscal Commission in 1923, which said that preference on Indian tea is only of indirect advantage to the Indian tea producers by way of a possible extension of their market and that it does not operate to increase the profits per lb. of tea sold. These then are the two points put forward by the hon. and gallant Gentleman in support of his Amendment, first of all that it would reduce the duty upon tea and that the consumer would reap the advantage of that, and that it would be giving something to the Empire. There is nothing in that line at all, and even if a preference given to any part of the Empire had the effect of a reciprocal advantage coming to this country, the experience of five years of preference on Indian tea shows that that, at any rate, has not been the result hitherto. India has no preference whatever upon any article imported into that great Empire from this country, and as the hon. and gallant Gentleman said, after five years of preferential treatment of Indian tea there is a movement on foot in India to put on additional protective duties against British products. Therefore, on both those grounds the hon. and gallant Gentleman's case has completely fallen down. I have given a very substantial reduction of the duty. I cannot, this year, afford more, therefore, I ask the House of Commons to reject the Amendment.


The right hon. Gentleman seemed to give a very curious reason for not accepting the Amendment. He said if it were agreed to it would not increase the profits of the tea companies.


I said no such thing. What I said was that the Indian Fiscal Commission said it docs not operate to increase the profits per lb. of tea sold.


If that is the difference, I beg the right hon. Gentleman's pardon. Let me put it a little more specifically. He quoted in aid of his refusal a Report of the Indian Fiscal Commission, which showed that this preference went to the consumer, that it actually reduced the cost of a lb. of Indian tea to the consumer, that it was not retained by the producer. It did not go into the pocket of the middleman, it did not even go into the pocket of the grower, but went right into the pocket of the consumer. That seems to me to be a very good reason for accepting the Amendment. I can quite understand the right hon. Gentleman saying, "What is the good of reducing the Tea Duty? The profiteer will take it. What is the good of reducing the Tea Duty? The 100 per cent. tea companies will take it." I should sympathise with him if he put his argument on that ground. But that is not at all the ground. What he says is, "The consumer would get it, and I will not let the consumer have it." That seems to be an absolute inversion of fiscal theory. He says also I cannot afford it, but here are the McKenna Duties, with £2,500,000 of income, part of which could go to the consumers of tea if the right hon. Gentleman would retain those duties, which do some good to the country, and would give this preference, which would do some good to the consumer of tea. He used another argument. He said, notwithstanding our efforts at giving a preference to Indian tea, India put duties on against us, and is probably-going to increase the rate or the scope of them. That is true, but surely it is worth while making one of those famous gestures on this occasion. Even if this is no more than a gesture, why not make it, so that we may show India that whatever she does we are still prepared to give her a preference in the hope that she will return our gesture at some time and reduce her duties against us? If my hon. and gallant Friend presses this to a division, I shall certainly support him. It seems to me the Chancellor is losing an opportunity, without cost to his Budget, without cost to his nebulous surplus, of reducing the price of tea to the consumer.


The right hon. Gentleman has supported the Amendment on precisely the opposite ground to those on which it was proposed. He supported it not because it is going to be any good to India, not because it is going to extend Preference, not because it is going to bind the Empire together, but because it would go into the pockets of the consumer. The hon. and gallant Gentleman, who is always interested in the Empire, puts it forward on disinterested Imperialist grounds, and I sympathise with him even although I am a hardened Free Trader. I always admire the hon. and gallant Gentleman's enthusiasm. He has none of the sordid motives which characterise the late Postmaster-General. He is not considering votes in this matter at all. He does not believe it would appeal to the consumer in this country. It is going to have an effect upon the hard hearts of the Protectionists of India. We have an inversion of the whole fiscal theory of the hon. and gallant Gentleman. He says, "if you give this further reduction to India they will not increase their duties against us. They will not put on new tariffs against us." But that is the opposite of the retaliation doctrine. The retaliationist says, "Put on duties so that we shall be able to remit them. If you take them off you will have nothing to give away." That is precisely what the hon. and gallant Gentleman is proposing. He says, "take off practically all the duties that affect India and then the Indians will not put these new duties on British goods." He has deserted his own proposal. He is becoming, quite unawares, a Free Trader. In other words he is accepting the Cobdenite view that if you reduce your duties you are more likely to get reductions by other people.


By not supporting my proposal you are deserting Free Trade.


Oh, no! At present I have not indicated my attitude at all. I was really welcoming the hon. and gallant Gentleman as a convert. It is a great gratification to me to find him at length seeing the light. He has so often spoken in terms of the most benighted Protectionist doctrine. We have always admired the hon. Member's ardour while pitying his unenlightenment. Personally, I believe this proposal is going to be of benefit to the consumers of this country. I think it is an admirable thing, and I only regret that the right hon. Gentleman did not find it out sooner. I think the hon. and gallant Member (Sir H. Croft) would be well advised to withdraw this proposal owing to the difficulties in which it will land him and the other hon. Members who have put their names to this Amendment.

Viscount WOLMER

There is nothing inconsistent in the attitude of my hon. Friends on both sides in regard to this Amendment, because the Conservative party has always been in favour of Free Trade within the Empire. It has always been the object of my hon. Friends to try and break down every tariff barrier that interferes with trade in different parts of the Empire, whereas hon. Members opposite have always advocated raising as many barriers as they can against Imperial trade. Therefore our attitude is quite consistent. The Chancellor of the Exchequer has advanced one very curious argument against this Amendment. He said that the experience of Imperial Preference in regard to India has been very discouraging, and that although we have given them a substantial preference for several years, India has given no preference to us at all, and he makes that a ground for not giving any further preferences to India. Surely if the right hon. Gentleman is to be logical and consistent, he ought to be in favour of giving further preferences to those parts of the Empire which do give us a preference and have increased their preferences during the last few years. I shall wait with great interest to see what the Chancellor of the Exchequer says in reference to Amendments which will be moved later on in that direction.

I should like to ask what the Liberal party are going to do in this matter? The hon. Member for Penistone (Mr. Pringle), who, after delivering one of his characteristic and brilliant speeches, has left the House—admitted quite frankly that the result of this duty would be to reduce the price of tea to the people of this country. On this side of the House we think that it would be advisable to carry this Amendment, because the money required is available by means of the McKenna duties. Are the Liberal party going into the Lobby with the Socialist party in favour of dear tea? Not long ago the Conservative party reduced the price of tea from 1s. to 8d., and that is a contribution as great as the Socialist party have effected in the present Budget. Now we are suggesting, as regards imperially-grown tea, that we should go a step further. Hon. Members admit that the effect of that would be to reduce the price of tea to consumers in this country. I want to know if the Liberal party are going to vote for reducing the price of tea to consumers in this country, or do they so much object to any extension of imperial trade that they are going to support the Government.


When I first saw this Amendment down on the Paper I got the idea, that it was a proposal in favour of ex-service men, and that the idea was really to make tea as cheap as possible. I afterwards began to make some researches, and I am now convinced that that is not the reason for the presence of this Amendment on the Paper, because I find, on analysing an Amendment which was moved last year by the hon. Member for Penistone (Mr. Pringle) to reduce the Tea Duty from 8d. to 5d., the hon. and gallant Member for Bournemouth (Sir H. Croft) was one of 250 Conservatives who voted against it, and the hon. Member for Newport (Mr. Clarry) and the hon. and gallant Member for Uxbridge (Lieut.-Commander Burney) were also amongst the 250 Conservatives who voted against that proposal, whilst the two other hon. Members whose names appear on the Paper in support of this Amendment did not vote either for or against that proposal.


We had not got £2,500,000 from the McKenna Duties to play with.


The late Goverment had a great deal more than £2,500,000 to play with, for they had a surplus of some £48,000,000, and instead of adopting the motto of the British Navy, which is "Women and children first." they preferred to build their electioneering policy on the beer barrel, and they took a penny off beer. The fact is that there is no real regard for that sober liquid known as tea in the minds and hearts of the hon. and gallant Member for Bournemouth and his Friends. They are thinking more of what would be the attitude of hon. Members who are supporting the Government, and they are concerned as to what they will do when the next election comes and leaflets are to be printed. That is, obviously, the real issue, judging from the inquiries made by the Noble Lord the Member for Aldershot (Viscount Wolmer) as to the attitude of the Liberal party. It is remarkable to hear hon. Members like the Noble Lord, who are constantly telling us that the Liberal party is dead, inquiring so frequently as to its activities. I would remind the Noble Lord that down in Devonshire we have an old proverb which runs: "Nobody goes to the funeral of a man who dies often." The Liberal party has often died within the last 100 years, but it is still alive, and it is ready to give effect to its convictions in the Division Lobby. The hon. and gallant Member for Bournemouth has not only demolished his own case by voting on a former occasion against the reduction of the Tea Duty, but he has entirely upset the argument of the right hon. Gentleman the Member for Colchester (Sir L. Worthington-Evans), who was very much concerned the other day as to what would be the effect of the present Budget by reducing the duties on tea and sugar in relation to the proportion of taxation borne by direct and indirect taxation.

The right hon. Gentleman the Member for Colchester and the hon. Member for Ilford (Sir F. Wise) were very much concerned the other day about worshipping at the shrine of the late Mr. Gladstone in regard to the 50 to 50 proportion of direct and indirect taxation, but I would like to point out that if this Amendment is carried the margin of indirect taxation will be still further increased. The right hon. Gentleman the Member for Colchester was very much concerned about the surplus announced by the Chancellor of the Exchequer, but I would like to point out to him that if this Amendment is carried he will reduce that surplus, because the year before last there was received on account of the Tea Duty at the full rate £1,557,000 and this worked out at the preferential rate of £9,988,000, so that 88 per cent. of the total received will be lost and therefore the surplus will be decreased. I have no hesitation in standing by the original Budget introduced by the Chancellor of the Exchequer. I think hon. Members of this House will be much too wise to fall into the trap which has been so cunningly laid for them by the hon. and gallant Member for Bournemouth in this Amendment. I think the Chancellor of the Exchequer has done ample duty to the women and children of this country by reducing the Tea Duty by 4d, and I propose to support him in the Division Lobby.


The hon. Member who has just sat down mentioned the fact that my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) went into the Division Lobby last year and voted against a proposal to reduce the Tea Duty from 8d. to 5d. I have not the slightest doubt that I was in the same Lobby against that proposal, but I would like to point out that the situation to-day is entirely different. At that time we had to find out where the money was coming from to allow us to vote for the reduction, but what is the position now? The Chancellor of the Exchequer is voluntarily throwing away £2,500,000 raised by the McKenna Duties, and at the same time he is throwing people out of work, and he is doing this in order to refuse this simple proposal for a reduction of 2d. in the Tea Duty to our Colonies. So far as I am concerned I shall take up this challenge which has been thrown out by the Chancellor of the Exchequer, and I shall lose no opportunity of referring to it, because he is refusing to maintain duties which are bringing in £2,500,000 and at the same time are keeping people in employment, and yet he will not adopt a simple proposal like the one which is now before the House.

Question put, "That those words be there inserted."

The House divided: Ayes, 155; Noes. 248.

Division No. 66.] AYES. [4.43 p.m.
Agg-Gardner, Rt. Hon. Sir James T. Campion, Lieut.-Colonel W. R. Gaunt, Rear-Admiral Sir Guy R.
Alexander, Brg.-Gen. Sir W. (Glas. C.) Cautley, Sir Henry S. Gibbs, Col. Rt. Hon. George Abraham
Ashley, Lt.-Col. Rt. Hon. Wilfrid W. Cecil, Rt. Hon. Sir Evelyn (Aston) Gilmour, Colonel Rt. Hon. Sir John
Astor, Maj. Hn. John J. (Kent, Dover) Chamberlain, Rt. Hn. J. A. (Birm., W.) Greene, W. P. Crawford
Astor, Viscountess Chamberlain, Rt. Hon. N. (Ladywood) Gretton, Colonel John
Atholl, Duchess of Clayton, G. C. Guinness, Lieut.-Col. Rt. Hon. W. E.
Austin, Sir Herbert Cobb, Sir Cyril Gwynne, Rupert S.
Baird, Major Rt. Hon. Sir John L. Colfox, Major Wm. Phillips Hacking, Captain Douglas H.
Baldwin, Rt. Hon. Stanley Conway, Sir W. Martin Hannon, Patrick Joseph Henry
Balfour, George (Hampstead) Cope, Major William Harmsworth, Hon. E. C. (Kent)
Banks, Reginald Mitchell Cowan, Sir Wm. Henry (Islington, N.) Harvey, C. M. B. (Aberd'n & Kincardne)
Barnett, Major Richard W. Crooke, J. Smedley (Derltend) Henn, Sir Sydney H.
Barnston, Major Sir Harry Curzon, Captain Viscount Hennessy, Major J. R. G.
Becker, Harry Dalkeith, Earl of Herbert, Capt. Sidney (Scarborough)
Beckett, Sir Gervase Davies, Alfred Thomas (Lincoln) Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Benn, Sir A. S. (Plymouth, Drake) Davies, Maj. Geo. F. (Somerset, Yeovil) Hogbin, Henry Cairns
Bentinck, Lord Henry Cavendish- Davies, Sir Thomas (Cirencester) Hogg, Rt. Hon. Sir D. (St. Marylebone)
Betterton, Henry B. Davison, Sir W. H. (Kensington, S.) Hohler, Sir Gerald Fitzroy
Blundell, F. N. Dawson, Sir Philip Hood, Sir Joseph
Bowyer, Capt. G. E. W. Doyle, Sir N. Grattan Hope, Rt. Hon. J. F. (Sheffield, C.)
Brassey, Sir Leonard Eden, Captain Anthony Horlick, Lieut.-Colonel J. N.
Bridgeman, Rt. Hon. William Clive Edmondson, Major A. J. Horne, Sir R. S. (Glasgow, Hillhead)
Briscoe, Captain Richard George Elveden, Viscount Howard, Hon. D. (Cumberland, North)
Brittain, Sir Harry Eyres-Monsell, Com. Rt. Hon. B. M. Howard-Bury, Lieut.-Col. C. K.
Buckingham, Sir H. Falle, Major Sir Bertram Godfray Hughes, Collingwood
Bullock, Captain M. FitzRoy, Captain Rt. Hon. Edward A. Iliffe, Sir Edward M.
Burman, J. B. Forestier-Walker, L. Inskip, Sir Thomas Walker H.
Butler, Sir Geoffrey Frece, Sir Walter de Jackson, Lieut.-Colonel Hon. F. S.
Butt, Sir Alfred Gates, Percy James, Lieut.-Colonel Hon. Cuthbert
Jephcott, A. R. Pennefather, Sir John Stuart, Lord C. Crichton
Kindersley, Major G. M. Penny, Frederick George Sturrock, J. Leng
King, Capt. Henry Douglas Percy, Lord Eustace (Hastings) Sueter, Rear-Admiral Murray Fraser
Lane-Fox, George R. Perkins, Colonel E. K. Thompson, Luke (Sunderland)
Laverack, F. J. Philipson, Mabel Thomson, Sir W. Mitchell-(Croydon, S.)
Lloyd-Greame, Rt. Hon. Sir Philip Pielou, D. P. Titchfield, Major the Marquess of
Locker-Lampson, G. (Wood Green) Pownall, Lieut.-Colonel Assheton Tryon, Rt. Hon. George Clement
Lord, Walter Greaves- Raine, W. Turton, Edmund Russborough
Lorimer, H. D. Rawson, Alfred Cooper Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Lowe, Sir Francis William Rentoul, G. S. Warrender, Sir Victor
Lumley, L. R. Rhys, Hon. C. A. U. Wells, S. R.
Lyle, Sir Leonard Richardson, Lt.-Col. Sir P. (Chertsey) Wilson, Sir Charles H. (Leeds, Central)
McNeill, Rt. Hon. Ronald John Roberts, Samuel (Hereford, Hereford) Windsor-Clive, Lieut.-Colonel George
Makins, Brigadier-General E. Russell, Alexander West (Tynemouth) Wise, Sir Fredric
Marriott, Sir J. A. R. Samuel, A. M. (Surrey, Farnham) Wolmer, Viscount
Meller, B. J. Sandeman, A. Stewart Wood, Major Rt. Hon. Edward F. L.
Milne, J. S. Wardlaw Shepperson, E. W. Wood, Sir H. K. (Woolwich, West)
Mitchell, W. F. (Saffron Walden) Simms, Dr. John M. (Co. Down) Worthington-Evans, Rt. Hon. Sir L.
Morrison-Bell, Major Sir A. C. (Honiton) Sinclair, Col. T. (Queen's Univ., Belist) Yate, Colonel Sir Charles Edward
Newman, Sir R. H. S. D. L. (Exeter) Smith-Carington, Neville W. Yerburgh, Major Robert D. T.
Newton, Sir D. G. C. (Cambridge) Somerville, A. A. (Windsor)
Nicholson, William G. (Petersfield) Spender-Clay, Lieut.-Colonel H. H. TELLERS FOR THE AYES.—
Norton-Griffiths, Sir John Spero, Dr. G. E. Brigadier-General Sir Henry Croft
Ormsby-Gore, Hon. William Steel, Samuel Strang and Lieut.-Commander Burney.
Ackroyd, T. R. Fisher, Rt. Hon. Herbert A. L. Lawrence, Susan (East Ham, North)
Acland, Rt. Hon. Francis Dyke Fletcher, Lieut.-Com. R. T. H. Leach, W.
Adamson, Rt. Hon. William Foot, Isaac Lee, F.
Adamson, W. M. (Staff., Cannock) Franklin, L. B. Lindley, F. W.
Alexander, A. V. (Sheffield, Hillsbro') Gardner, B. W. (West Ham, Upton) Linfield, F. C.
Allen, R. Wilberforce (Leicester, S.) Gavan-Duffy, Thomas Livingstone, A. M.
Alstead, R. George, Major G. L. (Pembroke) Loverseed, J. F.
Asquith, Rt. Hon. Herbert Henry Gillett, George M. Lowth, T.
Attlee, Major Clement R. Gosling, Harry Lunn, William
Ayles, W. H. Gould, Frederick (Somerset, Frome) McCrae, Sir George
Baker, W. J. Graham, D. M. (Lanark, Hamilton) McEntee, V. L.
Banton, G. Graham, W. (Edinburgh, Central) Macfadyen, E.
Barclay, R. Noton Greenall, T. Mackinder, W.
Barker, G. (Monmouth, Abertillery) Greenwood, A. (Nelson and Colne) Macpherson, Rt. Hon. James I.
Barnes, A. Grenfell, D. R. (Glamorgan) Maden, H.
Batey, Joseph Griffith, Rt. Hon. Sir Ellis Mansel, Sir Courtenay
Benn, Captain Wedgwood (Leith) Groves, T. March, S.
Black, J. W. Grundy, T. W. Marley, James
Bondfield, Margaret Guest, J. (York, Hemsworth) Martin, F. (Aberdeen & Kinc'dine, E.)
Bramsdon, Sir Thomas Guest, Dr. L. Haden (Southwark, N.) Martin, W. H. (Dumbarton)
Briant, Frank Hall, F. (York, W. R., Normanton) Masterman, Rt. Hon. C. F. G.
Broad, F. A. Hall, G. H. (Merthyr Tydvil) Maxton, James
Brown, A. E. (Warwick, Rugby) Hamilton, Sir R. (Orkney & Shetland) Meyler, Lieut.-Colonel H. M.
Brown, James (Ayr and Bute) Harbord, Arthur Middleton, G.
Buchanan, G. Hardie, George D. Mills, J. E.
Buckie, J. Harris, John (Hackney, North) Mitchell R. M. (Perth & Kinross, Perth)
Burnie, Major J. (Bootle) Harris, Percy A. Mond, H.
Buxton, Rt. Hon. Noel Hartshorn, Rt. Hon. Vernon Montague, Frederick
Chapple, Dr. William A. Harvey, T. E. (Dewsbury) Morris, R. H.
Charleton, H. C. Haycock, A. W. Morrison, Herbert (Hackney, South)
Church, Major A. G. Hayday, Arthur Morrison, R. C. (Tottenham, N.)
Clarke, A. Hayes, John Henry Mosley, Oswald
Climie, R. Healy, Cahir Muir, John W.
Cluse, W. S. Hemmerde, E. G. Muir, Ramsay (Rochdale)
Clynes, Rt. Hon. John R. Henderson, Rt. Hon. A. (Burnley) Murray, Robert
Collins, Sir Godfrey (Greenock) Henderson, T. (Glasgow) Murrell, Frank
Costello, L. W. J. Henderson, W. W. (Middlesex, Enfield) Naylor, T. E.
Cowan, D. M. (Scottish Universities) Hindle, F. Nichol, Robert
Crittall, V. G. Hirst, G. H. Nixon, H.
Darbishire, C. W. Hobhouse, A. L. O'Connor, Thomas P.
Davies, Evan (Ebbw Vale) Hoffman, P. C. O'Grady, Captain James
Davies, Rhys John (Westhoughton) Hogge, James Myles Oliver, George Harold
Davison, J. E. (Smethwick) Hore-Belisha, Major Leslie Oliver, P. M. (Manchester, Blackley)
Dickie, Captain J. P. Howard, Hon. G. (Bedford, Luton) Owen, Major G.
Dickson, T. Hudson, J. H. Paling, W.
Dodds, S. R. Jackson, R. F. (Ipswich) Parkinson, John Allen (Wigan)
Dudgeon, Major C. R. Johnston, Thomas (Stirling) Pattinson, S. (Horncastle)
Dukes, C. Jones, Rt. Hon. Leif (Camborne) Perry, S. F.
Dunn, J. Freeman Jones, Morgan (Caerphilly) Pethick-Lawrence, F. W.
Dunnico, H. Jones, T. I. Mardy (Pontypridd) Phillipps, Vivian
Edwards, C. (Monmouth, Bedwellty) Jowett, Rt. Hon. F. W. (Bradford, E.) Pilkington, R. R.
Edwards, G. (Norfolk, Southern) Keens, T. Pringle, W. M. R.
Edwards, John H. (Accrington) Kenworthy, Lt.-Com. Hon. Joseph M. Purcell, A. A.
Egan, W. H. Kenyon, Barnet Raffety, F. W.
Emlyn-Jones, J. E. (Dorset, N.) Kirkwood, D. Ramage, Captain Cecil Beresford
Falconer, J. Lansbury, George Rathbone, Hugh R.
Finney, V. H. Law, A. Raynes, W. R.
Rees, Capt. J. T. (Devon, Barnstaple) Spencer, George A. (Broxtowe) Warne, G. H.
Rendall, A. Spencer, H. H. (Bradford, S.) Watts-Morgan, Lt.-Col. D. (Rhondda)
Richards, R. Stamford, T. W. Webb, Lieut.-Col. Sir H. (Cardiff, E.)
Roberts, Rt. Hon. F. O. (W. Bromwich) Starmer, Sir Charles Webb, Rt. Hon. Sidney
Robertson, J. (Lanark, Bothwell) Stephen, Campbell Wedgwood, Col. Rt. Hon. Josiah C.
Robinson, S. W. (Essex, Chelmslord) Stewart, J. (St. Rollox) Welsh, J. C.
Robinson, W. E. (Burslem) Stranger, Innes Harold Westwood, J.
Romeril, H. G. Sullivan, J. Wheatley, Rt. Hon. J.
Royce, William Stapleton Sunlight, J. White, H. G. (Birkenhead, E.)
Royle, C. Sutton, J. E. Whiteley, W.
Scrymgeour, E. Tattersall, J. L. Wignall, James
Scurr, John Thomas, Rt. Hon. James H. (Derby) Williams, A. (York, W. R., Sowerby)
Seely, H. M. (Norfolk, Eastern) Thompson, Piers G. (Torquay) Williams, David (Swansea, E.)
Seely, Rt. Hn. Maj.-Gen. J. E. B. (I. of W.) Thomson, Trevelyan (Middlesbro. W.) Williams, Lt.-Col. T. S. B. (Kennington)
Sexton, James Thorne, G. R. (Wolverhampton, E.) Williams, Maj. A. S. (Kent, Sevenoaks)
Shaw, Rt. Hon. Thomas (Preston) Thornton, Maxwell, R. Wilson, H. J. (Jarrow)
Shinwell, Emanuel Thurtle, E. Windsor, Walter
Short, Alfred (Wednesday) Tillett, Benjamin Winfrey, Sir Richard
Simpson, J. Hope Tinker, John Joseph Wintringham, Margaret
Sitch, Charles H. Toole, J. Wood, Major M. M. (Aberdeen, C.)
Smith, Ben (Bermondsey, Rotherhithe) Tout, W. J. Woodwark, Lieut.-Colonel G. G.
Smith, T. (Pontefract) Trevelyan, Rt. Hon. C. P. Wright, W.
Smith, W. R. (Norwich) Varley, Frank B. Young, Andrew (Glasgow, Partick)
Snell, Harry Vivian, H.
Snowden, Rt. Hon. Philip Wallhead, Richard C. TELLERS FOR THE NOES.—
Spears, Brig.-Gen. E. L. Walsh, Rt. Hon. Stephen Mr. Spoor and Mr. Kennedy.
Spence, R. Ward, G. (Leicester, Bosworth)

Second Resolution read a Second time.


I beg to move, in line 3, after the word "duties," to insert the words except that all cocoa imported from the British Empire shall be free of duty. I understand the next Amendment dealing with coffee and chicory is in the nature of a consequential Amendment, and will be disposed of by a Vote on this Amendment. Therefore, I shall be in order in referring to that Amendment in the discussion on this one. I recognise that the Budget is primarily financial business, and although sometimes exterior political considerations are taken into account by Chancellors of the Exchequer, yet I think it would be a fallacy, in moving an Amendment, not to take account of how much a particular Amendment will cost the Treasury. The Chancellor of the Exchequer resisted the last Amendment on tea, principally on the ground of cost. I understood from him that the cost of that Amendment would be approximately £2,000,000. I estimate that the cost of this Amendment on cocoa would be something like £500,000 or £600,000, or about a quarter of the cost that the Amendment on tea would have been. Therefore, the strength of the arguments of the Chancellor of the Exchequer will be only a quarter of what they were on the last Amendment.

I will not labour the point about the benefit to the cocoa-drinker. Everybody on all sides of the House seems to be unanimous as to the desirability of reducing indirect taxation, but I should like to refer to the value of this preference on cocoa. I shall be told, I expect, that considering that about 85 per cent. of the cocoa imported into this country is imported from the British Empire, therefore the preference of one-sixth has been effective, but I think if we inquire into the figures more closely, we shall find that the great increase of Empire-produced cocoa in the last 10 years has not been the result of preference at all. As the House is aware, the bulk of the cocoa which comes into this country is grown in West Africa. In 1913, the cocoa imported from West Africa was, roughly, to the value of £500,000, but in 1915 it had risen to almost £2,500,000, and the House will recollect that the preference did not operate until the year 1919. As a matter of fact, taking the peak year of West African production, 1916, the amount imported into this country after preference began to operate is less than before preference did operate, so that I think I am right in saying that the figures for West Africa, although satisfactory from an Empire point of view, are in no way due to the preference of one-sixth which has been given.

There is another point which I should like to urge. Two other countries in the Empire export cocoa to this country, principally the West Indies and Ceylon. They have been hit, as foreign countries have been hit, by the tremendous expansion in the cocoa production of West Africa. Before the War, the West Indies actually sent more cocoa than did West Africa. Now they send very much less, but these countries have to compete with Brazil, Ecuador, and foreign countries which still export cocoa to this country. I would ask the Chancellor of the Exchequer if he cannot help these people, who would benefit by an increased preference, to maintain their competition with these South American countries.

5.0 P.M.

If I may refer for a few minutes to the question of coffee, it seems to me there is an unanswerable case for letting into this country Empire-grown coffee free. In the first place, I do not see how coffee alone could cost the Treasury more than £100,000 a year. In the second place, the proportion of Empire-grown coffee to our total imports is much less than in the case of tea and cocoa. I understand that in the year 1923 only 49 per cent. of our imports of coffee were from the Empire, so that there is a good deal of ground to be made up. Another point that I would urge upon the Chancellor of the Exchequer is this: I am told that one of the most promising coffee-growing districts is Nyasaland, and, looking at the Chancellor of the Exchequer's Estimates, I find that this year he is going to give a Grant-in-Aid to Nyasaland of £90,000. Obviously, Nyasaland is not paying its way. I venture to suggest that a substantial increase in the preference would encourage Nyasaland, and would in years to come enable that country to pay its way, and save the Chancellor this Grant-in-Aid of £90,000. I think the preferences which are asked for in this Amendment will not cost us very much, especially as regards coffee, but the advantage to be gained, both by the consumer in this country and by the producers in the Colonies, will be very great, and I appeal to the Chancellor to make some concession.

Lieut.-Commander BURNEY

I beg to second the Amendment. I am generally in agreement with the reduction of food duties, but what I particularly wish to protest against, in regard to the Chancellor of the Exchequer's action in reducing the preferences, is that this continual juggling with the preferences which the various Dominions and Colonies have prevents any continuity in the forecast of financial developments by those who are developing the various Colonies. In that connection I particularly wish to draw attention to a remark in the Chancellor of the Exchequer's speech on the 29th April, in which he said, speaking of preference: No Government, in our opinion, should attempt to bind Parliament or future Governments for a period of yours upon such a controversial issue as tariff preference. The only result could be to raise hopes which are bound, sooner or later, to be frustrated."—[OFFICIAL REPORT, 29th April, 1924; col. 1598, Vol. 172.] I believe that that paragraph condenses the difference in opinion between Members opposite and Members on this side of the House, because, unless one can come to some definite conclusion as to whether or not preference is to be maintained by the Empire, it is extraordinarily difficult for any person to forecast what may happen through this continual juggling with the actual rate of preference. What has happened in the Chancellor's present Budget is that the preferences on tea and cocoa have been halved; that is to say, the benefit which the Dominion producer obtains is, under the present Budget, one-half of what it was previously. Therefore, I would ask hon. Members to look at this problem from a very much broader aspect than that in which it is usually looked at when a Financial Resolution is being discussed. If one looks at the position of the world to-day, one must realise that this country, as a country, cannot continue to stand alone. It must be part of an economic entity, and that economic entity is our Empire. Conditions have changed in two ways in the last 30 or 40 years. Firstly, we have seen the rise of Japan and America. America, especially, is one great economic and political entity. Japan, as a modern nation, did not exist 50 years ago. Both of those countries are developing defensive and offensive forces, and, therefore, this country has to compete in maintaining offensive and defensive forces as against those two countries.



Lieut.-Commander BURNEY

If you have a defensive force that is going to be used, it obviously becomes an offensive force as soon as you do use it.


Is it cocoa that is offensive?

Lieut.-Commander BURNEY

I was interrupted, Sir. The point that I wanted to make is that the Chancellor of the Exchequer, in attacking this preference, is hitting at the very structure upon which this country now bases its existence, and I think I am in order in that.


Not quite, because I understand that a day is to be given for a Debate on the general question of preference, and, therefore, we must confine ourselves now to the preference with regard to the particular duty that is under discussion, namely, the duty on cocoa.

Lieut.-Commander BURNEY

I was going to point out that by halving the preference on cocoa, or rather, juggling with preference—that is to say, altering it from one year to another—it is made impossible for financial interests to lay out their programme ahead over a series of years, and by that very fact those financial interests which would be attracted to our Dominions, and which, therefore, would assist in the upkeep of the defence forces of this Empire, are not able to do so, because they lose any confidence that might be given to them by action such as the present Chancellor of the Exchequer has just taken. For that reason it is extremely difficult to discuss a question of this kind without realising the further developments which must ensue. If I look at the Front Government Bench—when it is full, not when it is empty—I never see a person there who has ever earned his living in trade. They are all, if I may say so, parisitic upon the producers of this country, and, because of that, they do not realise, that the action which they take throws out of gear and out of operation our extremely complicated modern commercial machinery. It is very necessary to realise that action such as the Chancellor of the Exchequer has now taken has tremendous effects, which are not marked by this year or next year, but of which we shall only see the results, perhaps, in five or ten years' time, and I think that that is largely because Members of the present Government, and Members, it may be, of a Liberal Government, have never earned their living in trade. It is very difficult to discuss financial and business matters when one had never had the responsibility of carrying them out.

Lieut. - Commander KENWORTHY

We on these benches are always accused of being capitalists.

Lieut.-Commander BURNEY

My hon. and gallant Friend, who has given up the Service and has now become a capitalist, will, I hope, turn his attention to the Empire instead of to Russia. If he would do that, he would then be able to support us on this side of the House when a Socialist Government juggles with the preferences of the Empire. I recommend him to think on those lines. As regards cocoa, so far as the actual amounts which are received in revenue are concerned, they are infinitesimal as compared with the total Budget, and from that point of view the cost to this country of practically any of these preferences is very small. I believe the total cost of Empire preference to this country is something like £4,500,000, but this year we obtain the equivalent of that almost at once. Mr. Bruce, the Prime Minister of Australia, is now laying down two cruisers which, otherwise, we should have to lay down at a cost of about £4,000,000, so that, whatever the preference is costing us, we receive it back again in the form of assistance in defence. Therefore, I would suggest that the Chancellor of the Exchequer should not look upon these preferences from the point of view of loss of revenue to his Budget, but that he should look upon them purely as a method by which he can build up the Empire as an economic entity, and that he should realise that nothing whatever is to be gained, either in cheapness of food in this country or in other ways, by continually altering the basis upon which the Empire is developed.

With regard to the paragraph which I have quoted from the Chancellor's speech, and to which I take the greatest possible exception—I think it is one of the worst passages in his speech, which otherwise, if I may say so with deference, I think was a very good one—I would suggest that the House should seriously consider whether it is not possible, by agreement among all parties, to come to some definite arrangement with regard to Preference. If it be agreed that it is to be dropped, let it be dropped; if it be agreed that it shall be kept, let it be kept; but let us know what the actual figure is to be over a series of years, so that our people can make their financial arrangements ahead. Our total Customs revenue is only £100,000,000, or 12 per cent. of our total Budget, and, of that amount, preference costs us, as I have said. £4,500,000. Therefore, continuity of policy on these lines would cost this country very little indeed, but it would be of enormous benefit to anyone who is carrying out any financial operation in regard, say, to putting down a new sugar plantation or a new cocoa plantation, or developing the Empire in any way. In regard to the question of Preference itself, I do not think there is any doubt, so far as the Empire is concerned, that it is desired that these preferential duties should be continued. For instance, Mr. Bruce himself says: I ask you to recognise where we are at this moment, and to recognise that unless something is done the future is extraordinarily dark. I want you to realise that the only hope to-day for the British Empire, and I believe for Britain, is that we should now concentrate upon the development of the Empire and bring in to our aid the wonderful potentialities and resources that we possess; and the only way we can develop the great outlying Dominions is by finding a market for what we produce. The same kind of thing is said by all the Dominion Premiers.


Does that include India?

Lieut.-Commander BURNEY

India, unhappily, has been allowed, to my mind, to get rather out of hand. With regard to cocoa, we want to try and lay down the foundations upon which it is possible to grow cocoa. If the Chancellor of the Exchequer keeps on pulling up the cocoa tree—which is what he is doing, in effect—how is it possible to grow cocoa? I am certain that if he had thought of that before he would not have reduced the preference which has been given in previous Budgets in regard to cocoa. I hope that this Amendment will be carried. Although, it is not framed quite in the way that I should have liked, it is quite a good one. If we allow cocoa to come in from the Empire free of duty, it will automatically increase the preference, and if the Chancellor of the Exchequer is still Chancellor of the Exchequer next year, perhaps he will then be able to draw up a comprehensive scheme fixing the actual value of preference in regard, not only to cocoa, but to all products of the Empire, and to keep the rates fixed for a period of years. If the Chancellor of the Exchequer would promise to do that, I should be willing to ask the Mover to withdraw this Amendment, but if he will not do that, I hope we shall press the Amendment to a Division.

Captain BENN

Those of us who have never had the advantage of a business training will be very grateful to the hon. and gallant Member for giving us his views of business and finance, which he has gained in a long and honourable career on the quarter-deck and in the ward room. One part of his speech I do not understand. He said that India has been allowed to get out of hand. I wonder what that means. I understand that he means by "out of hand" as regards India that India has adopted a policy of Tariff Reform which he and his leaders have advocated in this country.


There is no cocoa grown in India.

Mr. DEPUTY - SPEAKER (Mr. Entwistle)

We must confine ourselves to the particular article, and the discussion must be confined to that article.

Captain BENN

I was replying to a general remark, which was somewhat obscure, made by the hon. and gallant Member, and permitted by Mr. Speaker. We also learned from his speech how very much bound up together are the policies of armaments and the policies of tariffs and preference. He explained that the two go together, and that even in a small matter like cocoa the safety of the Empire was jeopardised.

Viscount WOLMER

What about Fry and Cadbury?

Captain BENN

This is an Amendment in favour of Fry and Cadbury. The Noble Lord was lyrical about Cocoa Duties and about the support which the cocoa industry gave to this party. Now he is converted, and he is moving Amendments in favour of Fry and Cadbury. It does him great credit.

Lieut.-Commander BURNEY

The hon. and gallant Member is wilfully misrepresenting what I said. What I said was, that if you have a political and economic entity, such as America, Japan or the British Empire, those political and economic entities have to support a certain burden of armaments, and that burden of armaments has to be paid for out of taxes. Therefore, the greater the area over which you can spread your burden the lese will each have to pay. If, therefore, by a preference on cocoa and so forth you can make your Empire more an economic entity the result of that must be better for the Empire as a whole, because the burden of armaments will be more spread.

Captain BENN

I understand that if the hon. and gallant Member's policy is pursued, we shall need armaments, and if we need armaments we must have money, and in order to raise money he is proposing a remission of duty. Who is going to get the benefit of the remission? [HON. MEMBERS: "The consumer!" If the consumer is going to get the benefit, what becomes of those Dominions which are going to build battleships out of the proceeds?


The demand is increased.

Captain BENN

On this duty, at least, certain hon. Members opposite have not anticipated their hustings speeches, as did the Noble Lord in regard to the Tea Duty, by announcing that they were voting for the remission of the Cocoa Duty for the benefit of the people of this country. There is not a single penny that will go to tie benefit of the consumer in the remission of this duty. The import of cocoa from Imperial sources is so small—


It is very large.

Captain BENN

It is sufficiently small to enable the total remission of the duty to be kept entirely by the exporters and none of the benefits to come to the consumers. The hon. and gallant Member for Uxbridge (Lieut.-Commander Burney) is pleading for a continuity of policy. He says that what we must do is to let the Colonial exporters know in advance what cash benefit they are going to get, otherwise they cannot sink their money in their industry. Therefore, they will not be able to get the industrial growth which he and all of us most earnestly desire. What does that mean? I am not saying anything as to the attack on the sovereignty of Parliament which comes from the Constitutional party, but if for many years in advance we give the producers in the Dominions a preference on their exports to this country, what does it mean? It means that we can never abolish these duties. Hon. Members opposite do not want to abolish them. Food duties are a part of the programme of the Conservative party. We all know that. Their view is this, that we must have food duties, because we want to use them in order to give a preference. That was the great slogan of the leader who launched that policy 21 years ago. The hon. Member is now asking us to promise in advance that we will never have this duty removed in the interests of the consumers of this country. We say that we will not take that view, because we believe what the Chancellor of the Exchequer said, in a passage which I greatly admired in his Budget speech, that the Budget is one step towards the Radical ideal of a free breakfast table.


My hon. and gallant Friend is a little confused in regard to this subject. He told us that there was great danger that if our proposals were adopted we should never be able to abolish the duty on cocoa. We are proposing to abolish the duty on cocoa from within the Empire. He lectured us on the subject, and told us that we knew little about it. I thought that cocoa was the foundation of his party. I am amazed to discover that he is not aware that the enormous proportion of cocoa imported into this country now comes from the British Empire. He does not seem to realise that fact. In 1913 we only imported 53 per cent. of our total import of cocoa from the British Empire, while to-day we are importing—it is important to note the fact that it is largely coincident with the preference that has been imposed—we import 94 per cent. of our cocoa from within the British Empire. That is a very large rise since 1913. Are we to object to that process? I am not going into the wider question, but if it be true, as hon. Members opposite are always telling us, that goods are paid for by goods, does it not follow that the more we can attract Imperial produce to this country the more it means that there is going to be an outlet for our manufactured goods.


Not if you stop them coming from other places.


I should be called to order if I went on to remind my hon. Friend that in no single instance where a country has adopted a tariff have they decreased their total external trade as a result. May I now turn to coffee, which Mr. Speaker indicated we might discuss now? In the case of coffee, everybody who knows anything about the British Empire and coffee production knows that it is a young industry. May I here appeal to those who have so often quoted famous Free Trade professors? As far as the Empire is concerned, the coffee industry is an infant industry. In Kenya, British East Africa, old German East Africa and parts of Uganda there are possibilities of growing the finest coffee in the world, without exception.

Lieut.-Commander KENWORTHY

I thought that we were talking about cocoa.


I am talking about coffee. My hon. and gallant Friend has been star-gazing and does not quite realise where we are. The Colonial Secretary is not present, and I am sorry that he has not taken much interest in this question this afternoon. Had he been present, he might have pointed out the enormous possibilities of development in Kenya Colony in this direction. We have, as the Chancellor of the Exchequer knows, encouraged a large number of men to go there and settle after the War. They have put their capital into the land The production of coffee is a matter of years. It is a question of probably six years before you get any return. So far as the experience in East Africa goes, the planters for three years were not allowed any shipping to bring their coffee to this country because of the War, and the result was that it had to be sold practically locally in South Africa at scrap price. Then there were two years of drought and Thripps disease, and also the difficulty about the rupee, which has made trading almost impossible. In view of all these facts, is it not a good thing to do what we can to stimulate that infant industry in East Africa by adopting the proposal of my hon. Friend, and cutting down this duty? The Chancellor of the Exchequer would not lose much money by it. This House agreed to a preferential arrangement.

By means of the excellent surplus which the Chancellor of the Exchequer has got owing to the frugality and the economic wisdom of his predecessors, he is wisely reducing the taxes on tea, coffee, sugar and cocoa. Last year we reduced the duty on beer, and, obviously, this year it is right to reduce the duty on tea, sugar, coffee and cocoa. Two years ago a Conservative Chancellor of the Exchequer reduced the duty on tea by 4d. a lb., which is precisely the amount that the duty has been reduced by the present Chancellor of the Exchequer. These industries are of very vital importance to East Africa, more, probably, than to any other Colony. If the Chancellor of the Exchequer will adopt our proposals he will not be doing harm to anybody, but will be doing a great deal of good to the consumer. You cannot do good to the consumer in this country without doing good to the producer in East Africa. One hon. Member said that the hon. and gallant Member for Bournemouth (meaning myself) voted for the Tea Duty last year. There is a great difference. All the time that the Liberal party were in power, long before the Coalition days, I never voted against these duties when I knew that they had not the money. It has been said against me on 15 different occasions during those 15 years that I voted for the Tea Duty or something of that kind, because I could not honestly go into the Lobby and vote for the reduction of a duty knowing that the Government had not the money for the reduction to take place. I submit that the situation is entirely different from that which existed on previous occasions, when it was impossible to make any great reduction without upsetting the whole Budget. In this case we are not upsetting the Budget. The Chancellor of the Exchequer is upsetting it. He has got his £2,500,000 in another connection. All we are asking him to do is to reduce the food duties of the people and at the same time to give encouragement to the Empire, and to make a gesture to his friends, and, by keeping on the McKenna Duties, keep the men employed in the industries which have grown up since they were established.


If we were to take it for granted that it is assumed by hon. Members who table Amendments for reductions of taxation that if I were to agree to them I should find compensation by not repealing the McKenna Duties, it would save a wearisome reiteration of the arguments which have been put forward so often this afternoon. I have heard a great deal in this short Debate about the general principle of Imperial preference, but hardly a single word bearing upon the Amendment which is now before the House. The hon. and gallant Member for Uxbridge (Lieut.-Commander Burney), who seconded the Amendment, evidently had a conviction at times that he was not keeping very strictly to the subject before the House, and in the middle of his speech I anticipated that we were about to hear something on the merits of the Amendment which he was supposed to be seconding. I am not going on any of these Amendments to be led into a discussion on the general question of Imperial Preference. The Government have, I think fairly and generously, offered to the House to give time for the discussion of the Resolutions of the Imperial Conference, and that will be the time for the discussion of that subject.

The hon. and gallant Member who has just sat down complained of the absence of the Colonial Secretary from the Debates this afternoon. It is not the duty of the Colonial Secretary to be here this afternoon. We are not discussing the question of Imperial Preference. We are simply discussing the question of the taxation of food. I do not complain of hon. Members attempting to discuss the question of Imperial Preference, but the fact that they are discussing, in my opinion, irrelevantly, the general question of Imperial Preference is no reason why I should wander outside the actual confines of the Amendment before the House. The hon. and gallant Member who seconded the Amendment said that he, generally, was in favour of a reduction of taxes upon food. That may be so, but he does not, as a rule, up to this year, at any rate, take action to express his sympathy with a reduction of the food duties. I think that if I were to look up his Parliamentary record, extending now, I believe, over a period of four or five years, I would hardly find an occasion on which he went into the Division Lobby in favour of a reduction of the taxation on food. The hon. and gallant Gentleman who has just sat down says that circumstances have changed this year. Circumstances have not changed except in one respect, and that is in the allocation of the surplus available from taxation. Last year the Chancellor of the Exchequer had at his disposal almost exactly the amount which I have had at my disposal this year, but he chose to allocate it differently. He decreased the duty on beer. We are giving a preference) this year to a reduction of taxes upon food.

But in another respect, says the hon. and gallant Gentleman, circumstances have changed. If I had not carried out my intention of repealing the McKenna Duties I should have money available for all these purposes. But that was not the opinion expressed by the right hon. Gentleman the Member for Colchester (Sir L. Worthington-Evans) last week. He did not say that. He said that there was going to be a deficit next year in the Budget, that I was not going to realise the surplus of £4,000,000 and that, therefore, in the words of the accredited spokesman of the party opposite, if I made any further concessions in taxation my deficit was going to be still bigger, and then where is all the money to come from for housing, unemployment and the like about which the right hon. Gentleman was so very anxious? However, I have already said more than I intended to say about this Amendment. The answer is in a nutshell, that it is a question of revenue. But it is not merely that. May I turn again to the observations made by the hon. and gallant Member for Uxbridge? He talked a great deal about our juggling with Preference. I have done no juggling with preference. I have kept strictly to the statutory conditions under which preference has been given, which is exactly what happened when the right hon. Gentleman the Member for Hillhead (Sir R. Horne) reduced the Tea Duty from 1s. to 8d. He kept within the statutory conditions and kept to the proportion, which is precisely what I have been doing this afternoon. Therefore the complaint of the hon. and gallant Member falls entirely to the ground.

Coming more closely to the Amendment, the figures given by the hon. Member who proposed the Amendment in reference to cost were approximately accurate. To sweep away the duty on Empire cocoa would cost £530,000 this year and £550,000 in a full year. The figures given by the hon. and gallant Member for Bournemouth (Sir H. Croft), in reference to the proportion of cocoa which comes to us from the Empire, were not quite accurate. The amount of cocoa consumed in this country which is of Empire origin is about 90 per cent. But the hon. and gallant Member was mistaken in attributing all the increase that has taken place in the production of Empire cocoa to preference. Preference is not responsible for it at all. As a matter of fact the increase of the import of Empire produced cocoa is due mainly to the increase from West Africa, and the reason of that is that the cost of production there is very low. But only a small part of the cocoa produced in West Africa comes to this country. Therefore preference had no effect whatever in increasing the production in that part of the Empire. As I have said, the cost involved by this Amendment would be over £500,000. That is a reduction which we cannot afford.

And now in reference to the charge of juggling with Imperial Preference, may I point out that there is a symmetry in the preferences as they exist at the present time. The, rate is one sixth on almost all the articles though it is higher in the case of certain wine duties. What do hon. Members, who are responsible for this Amendment, propose? They propose to destroy altogether the symmetry which exists at present, and in the case of Empire cocoa, coffee and chicory they are going to remove the duty altogether. The hon. and gallant Member for Bournemouth did not even propose that in connection with the Amendment which the House has just rejected. He proposed still to retain the duty on Empire tea. Who is it then who is juggling with preference? It is those who are responsible for the proposals which they have placed on the Paper in these instances. I hope that the House will reject the Amendment.


I rise to intervene very briefly in view of the statement of the Chancellor of the Exchequer, that he did not propose to deal with the question of preference proposals on their merits, because there was another occasion on which Preference could be discussed, I cannot, for a moment, accept that as a reason for suggesting that when Amendments are put down in this House it is not the duty of the Chancellor of the Exchequer to deal with them on their merits. It does not rest with him to say that it is up to the House to wait until the Government are ready—


I said that I declined to be drawn into a discussion on the general question of Imperial Preference and would confine my observations to dealing specifically with the Amendments on the Paper.


The right hon. Gentleman is entitled to make any speech he likes, but if he wishes to carry conviction to the House he ought to deal with Imperial Preference and any aspect of it which is affected by the Amendment moved by my hon. Friend. It does not rest with him to say that he will not allow any discussion now on Imperial Preference, when he has prejudged that issue in a Budget Statement and the Resolutions which are submitted to the House. Therefore my hon. Friends are fully entitled to move the Amendment and discuss it on the merits and to expect a reply. If the right hon. Gentleman had wished to rely upon that point of view it was open to him to put down the Resolutions of the Imperial Economic Conference at an earlier date, and, indeed, it would have been a more convenient course than taking a considerable part of the time of the House with the discussion which took place on the Evictions Bill. If we had had a discussion on the Imperial Conference Resolution we could then have come to a conclusion before the Recess, and the right hon. Gentleman would have been in a position to frame his Budget in accordance with the general sense of the House.

I do not propose to travel over ground which has been already covered. Unlike some hon. Members, I do not believe in repeating things over and over again. Therefore, I endorse what was said in the excellent speech delivered by my hon. and gallant Friend below the Gangway, particularly what he said about the position in East Africa. In reference to the observations of the hon. and gallant Member for Leith (Captain W. Benn), who is always ready to spring into a Debate on these occasions, he asks who would benefit if Measures of this kind were carried out? The cocoa supporters of his own party would benefit, by learning a great deal about the Empire, and all those who trade in cocoa would benefit by the mutual trade, and this country as a whole would benefit. The hon. and gallant Member spoke of an outrage upon the sovereignty of Parliament May I point out that what is proposed in this Amendment, rightly or wrongly, is not to put on duties for a term of years, but that the duty should be taken off altogether. Therefore the objection of the hon. and gallant Gentleman has no reason in it. But even if his objection were relevant to the Amendment proposed, we on this side will never accept the proposition that you may make as many commercial treaties as you like with foreign countries, and never make such treaties with the Dominions or Colonies.

Lieut.-Commander KENWORTHY

I presume from the speech of the right hon. Member who has just spoken that he is supporting the Amendment moved by the hon. Member for East Hull (Mr. Lumley). That Amendment is to remove all further duties on Empire-grown coffee, chicory, cocoa husks and shells, cocoa butter, etc. According to hon. Gentlemen opposite, and the leaders of their party who speak outside the House, the whole Empire depends for its cohesion and future existence, in fact the future of Britain depends, on these duties being reduced. That is the main argument put forward from the other side, the great Imperial argument which I shall not follow in detail. According to the hon. and gallant Member for Uxbridge (Lieut.-Commander Burney), the British Navy floats in liquid cocoa. The extraordinary thing is that when right hon. and hon. Gentlemen opposite were in power last year they did not take the opportunity of doing the things which they now want done. They could have chosen between wiping out these duties on Empire-grown commodities and dealing with the Beer Duty, and they chose to deal with the Beer Duty. That shows the real depths of their conviction upon the matter.


The Conservative party last year initiated these preferences.

Lieut. - Commander KENWORTHY

The hon. and gallant Member who interrupts reminds me that the right hon. Member for Hillhead (Sir B. Horne) initiated these preferences. He did not. It was the right hon. Member for West Birmingham (Mr. A. Chamberlain) who initiated these preferences. They were then accepted as adequate by the hon. and gallant Member for Bournemouth (Sir H. Croft), but they are not sufficient now. Hon. Members opposite have, therefore, lost their opportunity for all time.

Lieut. - Commander BURNEY

There was an Imperial Economic Conference last year to consider the matter, and the Government could not make its programme then.

Lieut. - Commander KENWORTHY

This has nothing to do with the Imperial Economic Conference. The principal Resolution analogous to these duties related to the imposition of fresh taxes on certain sorts of food in order to give a preference. If this policy is accepted by the House, we shall never be able to reduce food taxes and to reach the goal of the free breakfast table. It is much more important, by economy and sound finance, to bring about further reduction of taxes on food than to pass this Amendment. I refuse to subscribe to the doctrine that the future and prosperity, or even the good feeling, of the Empire, depends on sweeping away a three-halfpenny tax on cocoa butter and 2s. a cwt. tax on cocoa husks and shells. The Empire depends on finer things than wretched little concessions of that kind. According to the hon. and gallant Member for Bournemouth, the preference already given has increased Empire trade. Let him be satisfied with that.

Viscount WOLMER

The attitude of hon. Members opposite fills one with amazement and despair. Whenever we bring forward any proposal that may possibly have the effect of increasing inter-Imperial trade, it is vetoed both by the Liberal party and the Socialist party. Even when we propose to increase inter-Imperial trade by reducing the amount of food taxes in this country, they will have nothing to do with it. The Chancellor of the Exchequer has announced that he declines to discuss the ulterior motives of Imperial Preference in this Debate, and he confines the considerations on which he justifies these taxes entirely to questions of revenue. If that be so, we are entitled to say that the Socialist party would take taxes off the rich man's motor rather than take them off the poor man's tea and coffee. The reasons why we object to that policy are that we believe that the taxes on the rich man's motor have an effect on employment in this country, and that a reduction of the taxes on the poor man's tea and coffee can be effected in such a way as to increase Imperial trade.


We want the poor man to have his motor.

Viscount WOLMER

The hon. Member wishes the poor man to have his motor. Then he has been able to find a new cry and policy for the Liberal party. We must not be led away by interruptions from discussing the question before the House. What conceivable objection can there be to the proposal of the Amendment? It is true that the great bulk of the cocoa consumed in this country already comes from the Empire. That is excellent. But is not equally true of coffee. There is room for an enormous increase in the proportion of Empire-grown coffee consumed in this country. We have in Nyasaland and in other parts of Africa, and also, I believe, in Australia, thousands of acres of land capable of coffee production, and we have in this country unemployed men who would be only too glad to go out and grow that coffee for consumption in this country, if only there were encouragement given to the starting of the new industry. The hon. and gallant Member for Leith (Captain W. Benn) asked who would benefit by these duties. I reply that everyone would benefit. In the first place, the producer would benefit, until the number of producers had so increased that the consumer would share the benefit with the producer. As a whole, the Empire would benefit enormously. Instead of getting our coffee from foreign countries, we would get it from our Dominions. We would be increasing our trade with the best customers we have in the world; we would be increasing our export trade in other things, because the colonies buy more per head than any foreign country. [HON. MEMBERS: "No!"] I should have thought that hon. Members were aware that the Dominions buy more, per head, of British manufactured goods than any countries in the world The more we can increase the population of the Dominions, the more we increase the number of those who are our best customers. Therefore, from every point of view we would benefit. What we would be doing would be something contrary to the dogmas and doctrines of Cobdenite Free Trade. I regret very much that the present Chan cellor of the Exchequer is adopting those doctrines. I had hoped that when we got rid of the Liberal party—


The hon. Member is now transgressing the rules. He must confine himself to cocoa.

Viscount WOLMER

I am confining myself to cocoa. The Chancellor of the Exchequer has declined to agree to this Amendment on grounds which I maintain that I am justly entitled to call grounds of Cobdenite doctrine and dogma, and I venture with all respect to submit that I have a right to comment on that fact and to deplore the attitude of the Chancellor of the Exchequer. The Chancellor of the Exchequer has shown a lamentable doctrinaire view in the way in which he has approached this question. He told us this afternoon that he would consider this question only from a revenue standpoint, and that he was not prepared to consider it on the wider issues that were involved. That is a very short-sighted attitude indeed. It is because we believe that he has within his grasp an instrument by which he can do a great deal to develop the trade and the prosperity of the Empire that we so greatly regret his action. I had hoped that when the Socialist party obtained the reins of government and the strings of finance, they would be willing to use the Budget in order to develop inter-Imperial trade. But when we come to them, and, in regard to such few articles as tea and cocoa and coffee and chicory, plead for something which would increase inter-Imperial trade, we come up against the stone wall of Cobdenism every time. We might as well be talking to members of the Liberal party; we might as well be trying to make some impression on the Eighty Club. Of course, if the Chancellor of the Exchequer had been one of the converted Radicals who have gone over to the Socialist party with a great many of their Radical dogmas, we could understand his attitude, but I have always understood that he was a pure, unsullied and untarnished Socialist. I regret that Socialism should be identified with Little Englandism. If we were able to lift this question out of the realm of party politics altogether, I would welcome the fact. As foreign policy and matters of defence have, to a large extent, become non-party questions, so it would be a great blessing if all parties could unite in order to do everything possible for the development of inter-Imperial trade.


I am sorry that an Amendment which stands on the Paper in my name has not been selected, but I am able to speak on this Amendment. My wish is to call the attention of the House, and particularly that of the Chancellor of the Exchequer, to the fact that there is no necessity for any tax to be put on cocoa. Cocoa does not require a tax. Cocoa should be entirely free of import duty.


Because the hon. Member's Amendment has not been selected, it does not mean that he must not keep in order on this Amendment.

6.0 P.M.


I presume that what I was about to say would be in order. However, I will not pursue that point, The Chancellor of the Exchequer, in his Budget statement, said that the Tea Duty reduction carried with it a similar reduction in the correlated duties on cocoa, coffee and chicory, which he proposed to reduce by one-half at a cost of £800,000

this year, or £840,000 in a full year. I did not quite catch whether the Chancellor said that in that coffee as well as cocoa, was calculated, but it is only a small affair in any case. I would point out that coffee and chicory, on being imported, are immediately converted into a beverage, and are used only in that way, whereas all the cocoa which comes in is not necessarily used as a beverage, but forms part of the chocolates which are bought by the people, and is not, therefore, to be compared with coffee You cannot turn coffee into anything else but coffee. By taxing cocoa, however, you are also taxing chocolates. I am sure the Chancellor of the Exchequer is anxious that when people sit in their sixpenny seats in the cinematograph theatres everything should be made as pleasant as possible for them, and that they should be supplied with cheaper chocolates. As I say, by taxing cocoa you are taxing chocolates and protecting an industry which, in itself, does not require protection and does not ask for protection. There ought not to be an Excise Tax upon cocoa at all, and if the Chancellor is there next year, as I very much hope he will be—[HON MEMBERS: "Hear, hear!"]—because I am sure by that time he will be very glad to give it up, I trust he will take off the whole of the taxation on cocoa.

Question put, "That those words be there inserted."

The House divided: Ayes, 177; Noes, 267.

Division No. 67.] AYES. [6.4 p.m.
Agg-Gardner, Rt. Hon. Sir James T. Briscoe, Captain Richard George Davies, Alfred Thomas (Lincoln)
Alexander, Brg.-Gen. Sir W. (Glas. C.) Brittain, Sir Harry Davies, Maj. Geo. F. (Somerset, Yeovil)
Apsley, Lord Buckingham, Sir H. Davies, Sir Thomas (Cirencester)
Astor, Maj. Hn. John J. (Kent, Dover) Bullock, Captain M. Davison, Sir W. H. (Kensington, S.)
Astor, Viscountess Burman, J. B. Dawson, Sir Philip
Atholl, Duchess of Burney, Lieut.-Com. Charles D. Deans, Richard Storry
Austin, Sir Herbert Butler, Sir Geoffrey Doyle, Sir N. Grattan
Baird, Major Rt. Hon. Sir John L. Butt, Sir Alfred Eden, Captain Anthony
Baldwin, Rt. Hon. Stanley Campion, Lieut.-Colonel W. R. Edmondson, Major A. J.
Balfour, George (Hampstead) Cautley, Sir Henry S. Elveden, Viscount
Banks, Reginald Mitchell Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Eyres-Monsell, Com. Rt. Hon. B. M.
Barnett, Major Richard W. Cecil, Rt. Hon. Sir Evelyn (Aston) Falle, Major Sir Bertram Godfray
Barnston, Major Sir Harry Chamberlain, Rt. Hn. J. A. (Birm. W.) FitzRoy, Captain Rt. Hon. Edward A.
Becker, Harry Chamberlain, Rt. Hon. N. (Ladywood) Frece, Sir Walter de
Beckett, Sir Gervase Clayton, G. C. Fremantle, Lieut.-Colonel Francis E.
Benn, Sir A. S. (Plymouth, Drake) Cobb, Sir Cyril Galbraith, J. F. W.
Bentinck, Lord Henry Cavendish- Colfox, Major Wm. Phillips Gates, Percy
Berry, Sir George Conway, Sir W. Martin Gaunt, Rear-Admiral Sir Guy R.
Betterton, Henry B. Cope, Major William Gibbs, Col. Rt. Hon. George Abraham
Birchall, Major J. Dearman Courthope, Lieut.-Col. George L. Gilmour, Colonel Rt. Hon. Sir John
Blades, Sir George Rowland Cowan, Sir Wm. Henry (Islington, N.) Greene, W. P. Crawford
Blundell, F. N. Craig, Captain C. C. (Antrim, South) Gretton, Colonel John
Bowater, Sir T. Vansittart Crooke, J. Smedley (Deritend) Guinness, Lieut.-Col. Rt. Hon. W. E.
Bowyer, Capt. G. E. W. Curzon, Captain Viscount Gwynne, Rupert S.
Brass, Captain W. Dalkeith, Earl of Hacking, Captain Douglas H.
Brassey, Sir Leonard Davidson, Major-General Sir J. H. Hannon, Patrick Joseph Henry
Harmsworth, Hon. E. C. (Kent) Marriott, Sir J. A. R. Sinclair, Col. T. (Queen's Univ., Belfast)
Hartington, Marquess of Meller, R. J. Smith-Carington, Neville W.
Harvey, C. M. B. (Aberd'n & Kincardne) Milne, J. S. Wardlaw Somerville, A. A. (Windsor)
Hennessy, Major J. R. G. Mitchell, W. F. (Saffron Walden) Spender-Clay, Lieut.-Colonel H. H.
Herbert, Capt. Sidney (Scarborough) Newman, Sir R. H. S. D. L. (Exeter) Spero, Dr. G. E.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Newton, Sir D. G. C. (Cambridge) Steel, Samuel Strang
Hogbin, Henry Cairns Nicholson, O. (Westminster) Stuart, Hon. J. (Moray and Nairn)
Hogg, Rt. Hon. Sir D. (St. Marylebone) Nicholson, William G. (Petersfield) Stuart, Lord C. Crichton-
Hogge, James Myles Nield, Rt. Hon. Sir Herbert Sueter, Rear-Admiral Murray Fraser
Hohler, Sir Gerald Fitzroy Norton-Griffiths, Sir John Sutcliffe, T.
Hood, Sir Joseph Ormsby-Gore, Hon. William Sykes, Major-Gen. Sir Frederick H.
Hope, Rt. Hon. J. F. (Sheffield, C.) Pennefather, Sir John Thompson, Luke (Sunderland)
Howard, Hon. D. (Cumberland, North) Penny, Frederick George Thomson, Sir W. Mitchell-(Croydon, S.)
Howard-Bury, Lieut.-Col. C. K. Percy, Lord Eustace (Hastings) Titchfield, Major the Marquess of
Hughes, Collingwood Perkins, Colonel E. K. Tryon, Rt. Hon. George Clement
Hunter-Weston, Lt.-Gen. Sir Aylmer Perring, William George Turton, Edmund Russborough
Iliffe, Sir Edward M. Philipson, Mabel Waddington, R.
Inskip, Sir Thomas Walker H. Pielou, D. P. Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Jackson, Lieut.-Colonel Hon. F. S. Pilditch, Sir Philip Warrender, Sir Victor
James, Lieut.-Colonel Hon. Cuthbert Pownall, Lieut.-Colonel Assheton Watson, Sir F. (Pudsey and Otley)
Jenkins, W. A. (Brecon and Radnor) Ralne, W. Wells, S. R.
Jephcott, A. R. Rawlinson, Rt. Hon. John Fredk. Peel Wheler, Lieut.-Col. Granville C. H.
Joynson-Hicks, Rt. Hon. Sir William Rawson, Alfred Cooper Wilson, Sir Charles H. (Leeds, Central)
Kindersley, Major G. M. Reid, D. D. (County Dawn) Windsor-Clive, Lieut.-Colonel George
King, Capt. Henry Douglas Remnant, Sir James Wise, Sir Fredric
Lane-Fox, George R. Rhys, Hon. C. A. U. Wolmer, Viscount
Laverack, F. J. Richardson, Lt.-Col. Sir P. (Chertsey) Wood, Major Rt. Hon. Edward F. L.
Lloyd-Greame, Rt. Hon. Sir Philip Roberts, Samuel (Hereford, Hereford) Wood, Sir H. K. (Woolwich, West)
Locker-Lampson, G. (Wood Green) Ropner, Major L. Worthington-Evans, Rt. Hon. Sir L.
Lord, Walter Greaves- Samuel, A. M. (Surrey, Farnham) Yate, Colonel Sir Charles Edward
Lorimer, H. D. Samuel, Samuel (W'dsworth, Putney) Yerburgh, Major Robert D. T.
Lyle, Sir Leonard Sandeman, A. Stewart
McNeill, Rt. Hon. Ronald John Shepperson, E. W. TELLERS FOR THE AYES.—
Makins, Brigadier-General E. Simms, Dr. John M. (Co. Down) Mr. Lumley and Brigadier-General
Sir Henry Croft.
Ackroyd, T. R. Dickie, Captain J. P. Henderson, Rt. Hon. A. (Burnley)
Acland, Rt. Hon. Francis Dyke Dickson, T. Henderson, T. (Glasgow)
Adamson, Rt. Hon. William Dodds, S. R. Henderson, W. W. (Middlesex, Enfield)
Adamson, W. M. (Staff., Cannock) Dudgeon, Major C. R. Hindle, F.
Alden, Percy Dukes, C. Hirst, G. H.
Alexander, A. V. (Sheffield, Hillsbro') Duncan, C. Hobhouse, A. L.
Alstead, R. Dunn, J. Freeman Hodge, Lieut.-Colonel J. P. (Preston)
Aske, Sir Robert William Dunnico, H. Hore-Belisha, Major Leslie
Asquith, Rt. Hon. Herbert Henry Edwards, C. (Monmouth, Bedwellty) Howard, Hon. G. (Bedford, Luton)
Attlee, Major Clement R. Edwards, G. (Norfolk, Southern) Hudson, J. H.
Ayles, W. H. Edwards, John H. (Accrington) Jackson, R. F. (Ipswich)
Baker, W. J. Egan, W. H. John, William (Rhondda, West)
Banton, G. Falconer, J. Johnston, Thomas (Stirling)
Barclay, R. Noton Finney, V. H. Jones, J. J. (West Ham, Silvertown)
Barker, G. (Monmouth, Abertillery) Fisher, Rt. Hon. Herbert A. L. Jones, Rt. Hon. Leif (Camborne)
Barnes, A. Fletcher, Lieut.-Com. R. T. H. Jones, Morgan (Caerphilly)
Batey, Joseph Foot, Isaac Jones, T. I. Mardy (Pontypridd)
Berkeley, Captain Reginald Franklin, L. B. Keens, T.
Birkett, W. N. Gardner, B. W. (West Ham, Upton) Kennedy, T.
Black, J. W. Gardner, J. P. (Hammersmith, North) Kenworthy, Lt.-Com. Hon. Joseph M.
Bondfield, Margaret Gavan-Duffy, Thomas Kenyon, Barnet
Bonwick, A. George, Major G. L. (Pembroke) Kirkwood, D.
Bramsdon, Sir Thomas Gillett, George M. Lambert, Rt. Hon. George
Briant, Frank Gosling, Harry Lansbury, George
Broad, F. A. Gould, Frederick (Somerset, Frome) Law, A.
Bromfield, William Graham, D. M. (Lanark, Hamilton) Lawrence, Susan (East Ham, North)
Brown, A. E. (Warwick, Rugby) Greenall, T. Lawson, John James
Brown, James (Ayr and Bute) Greenwood, A. (Nelson and Colne) Leach, W.
Buchanan, G. Grenfell, D. R. (Glamorgan) Lee, F.
Buckie, J. Griffith, Rt. Hon. Sir Ellis Lessing, E.
Burnie, Major J. (Bootle) Groves, T. Lindley, F. W.
Buxton, Rt. Hon. Noel Grundy, T. W. Linfield, F. C.
Chapple, Dr. William A. Guest, J. (York, Hemsworth) Livingstone, A. M.
Charleton, H. C. Guest, Dr. L. Haden (Southwark, N.) Loverseed, J. F.
Church, Major A. G. Hall, G. H. (Merthyr Tydvil) Lowth, T.
Clarke, A. Hamilton, Sir R. (Orkney & Shetland) Lunn, William
Climie, R. Harbord, Arthur McCrae, Sir George
Cluse, W. S. Hardie, George D. MacDonald, Rt. Hon. J. R. (Aberavon)
Clynes, Rt. Hon. John R. Harris, Percy A. McEntee, V. L.
Collins, Sir Godfrey (Greenock) Hartshorn, Rt. Hon. Vernon Macfadyen, E.
Cowan, D. M. (Scottish Universities) Harvey, T. E. (Dewsbury) Mackinder, W.
Crittall, V. G. Haycock, A. W. Maclean, Neil (Glasgow, Govan)
Darbishire, C. W. Hayday, Arthur Macnamara, Rt. Hon. Dr. T. J.
Davies, Evan (Ebbw Vale) Hayes, John Henry Macpherson, Rt. Hon. James I.
Davies, Rhys John (Westhoughton) Healy, Cahir Maden, H.
Davison, J. E. (Smethwick) Hemmerde, E. G. Mansel, Sir Courtenay
March, S. Richards, R. Thomson, Trevelyan (M iddlesbro, W.)
Marks, Sir George Croydon Richardson, R. (Houghton-le-Spring) Thorne, G. R. (Wolverhampton, E.)
Marley, James Ritson, J. Thornton, Maxwell, R.
Martin, F. (Aberdeen & Kinc'dine, E.) Robertson, J. (Lanark, Bothwell) Thurtle, E.
Martin, W. H. (Dumbarton) Robertson, T. A. Tillett, Benjamin
Maxton, James Robinson, S. W. (Essex, Chelmsford) Tinker, John Joseph
Meyler, Lieut.-Colonel H. M. Robinson, W. E. (Burslem) Toole, J.
Middleton, G. Romeril, H. G. Tout, W. J.
Millar, J. D. Royle, C. Trevelyan, Rt. Hon. C. P.
Mills, J. E. Scrymgeour, E. Turner, Ben
Mitchell R. M. (Perth & Kinross, Perth) Scurr, John Varley, Frank B.
Mond, H. Seely, H. M. (Norfolk, Eastern) Viant, S. P.
Montague, Frederick Sexton, James Vivian, H.
Morris, R. H. Shaw, Rt. Hon. Thomas (Preston) Wallhead, Richard C.
Morrison, Herbert (Hackney, South) Shinwell, Emanuel Walsh, Rt. Hon. Stephen
Morrison, R. C. (Tottenham, N.) Short, Alfred (Wednesday) Ward, G. (Leicester, Bosworth)
Mosley, Oswald Simon, E. D. (Manchester, Wellington) Warne, G. H.
Muir, John W. Simpson, J. Hope Watts-Morgan, Lt.-Col. D. (Rhondda)
Muir, Ramsay (Rochdale) Sinclair, Major Sir A. (Caithness) Webb, Lieut.-Col. Sir H. (Cardiff, E.)
Murray, Robert Sitch, Charles H. Webb, Rt. Hon. Sidney
Naylor, T. E. Smillie, Robert Wedgwood, Col. Rt. Hon. Josiah C.
Nichol, Robert Smith, Ben (Bermondsey, Rotherhithe) Weir, L. M.
Nixon, H. Smith, T. (Pontefract) Welsh, J. C.
O'Connor, Thomas P. Smith, W. R. (Norwich) Westwood, J.
O'Grady, Captain James Snell, Harry Wheatley, Rt. Hon. J.
Oliver, George Harold Snowden, Rt. Hon. Philip White, H. G. (Birkenhead, E.)
Oliver, P. M. (Manchester, Blackley) Spears, Brig-Gen. E. L. Whiteley, W.
Owen, Major G. Spence, R. Wignall, James
Paling, W. Spencer, George A. (Broxtowe) Williams, A. (York, W. R., Sowerby)
Palmer, E. T. Spencer, H. H. (Bradford, S.) Williams, David (Swansea, E.)
Parry, Thomas Henry Stamford, T. W. Williams, Lt.-Col. T. S. B. (Kennington)
Perry, S. F. Starmer, Sir Charles Williams, Maj. A. S. (Kent, Sevenoaks)
Pethick-Lawrence, F. W. Stephen, Campbell Willison, H.
Phillipps, Vivian Stewart, J. (St. Rollox) Wilson, R. J. (Jarrow)
Pilkington, R. R. Stewart, Maj. R. S. (Stockton-on-Tees) Windsor, Walter
Ponsonby, Arthur Stranger, Innes Harold Winfrey, Sir Richard
Pringle, W. M. R. Sturrock, J. Long Wintringham, Margaret
Raffan, P. W. Sullivan, J. Wood, Major M. M. (Aberdeen, C.)
Raffety, F. W. Sunlight, J. Wright, W.
Ramage, Captain Cecil Beresford Sutherland, Rt. Hon. Sir William Young, Andrew (Glasgow, Partick)
Rathbone, Hugh R. Sutton, J. E.
Raynes, W. R. Tattersall, J. L. TELLERS FOR THE NOES.—
Rea, W. Russell Thomas, Rt. Hon. James H. (Derby) Mr. Frederick Hall and Mr. Allen
Rees, Capt. J. T. (Devon, Barnstaple) Thompson, Piers G. (Torquay) Parkinson.
Rendall, A.

Question, "That the Question be now put." put, and agreed to.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


On a point of Order. May I now move the Amendment which stands in my name on the Paper—in line 4, after the word "duties," to insert the words, "except that all coffee and chicory imported from the British Empire shall be free of duty"—without any discussion?


In view of the discussion which we have just had on a parallel point, I do not select the hon. Member's Amendment.


I beg to move, in line 2, after the word "sugar," to insert the words "made in foreign countries."

I have another Amendment on the Paper, which is consequential upon this, namely, at the end of line, 20, to insert (b) In lieu of the existing customs duties on sugar consigned from and made in any of His Majesty's Dominions outside Great Britain and Northern Ireland, and any territories under His Majesty's protection, including India, there shall, on and after the thirtieth day of April, nineteen hundred and twenty-four, be charged the following reduced preferential duties:

s. d.
Sugar of a polarisation exceeding ninety-eight degrees, the cwt. 7

and so on in proportion, as set out in paragraph (a) of this Resolution."

These Amendments raise the question of the maintenance of the Preferential Duty on Empire sugar at existing figures rather than at the reduced rate of ⅙th of the reduced Duty. The Sugar Duty is, as hon. Members may know, calculated on a sliding scale, and it varies with the polarisation of the sugar. That is a technical term, but it means substantially that the Duty varies with the grade of the sugar, and on the old Duty of 25s. 8d. a cwt., the preference of ⅙th was 4s. 3½d. On the new Duty, a sixth only amounts to 1s. 11½d. per cwt., and the effect of my Amendments being adopted, as I hope they will be, would be to put the preference back at the figure of 4s. 3½d. rather than at the reduced figure of 1s. 11½d. May I make a personal explanation as to why I am moving this Amendment? I am no longer connected with the sugar industry, though, as some hon. Members know, for a good many years I was actually engaged in sugar planting. I do know the capabilities and resources of practically all the great sugar-producing countries in the world, and, therefore, I have perhaps some small title to speak on this question.

I should also like to observe that this is the first of the substantive recommendations of the Imperial Economic Conference which comes before the House. It was a recommendation of the Imperial Economic Conference that the Sugar Duty should be stabilised at the figure of a preference of 4s. 3½d. per cwt over a period of 10 years. It is quite true that I cannot propose that it should be so stabilised for 10 years, but I can propose, at least, that it shall be stabilised for one year—that is what I am doing by this Amendment—and it seems to us that it was perhaps convenient that the question should be raised in this form, because there is a distinction between the other preferences, which may be debated on a later day, and this particular preference. The distinction is, broadly speaking, this, that whereas the other preferences which were proposed by the Imperial Economic Conference in the main affect the trade relations between this country and the self-governing Dominions, this particular set of preferences affects the trade relations between this country and, almost exclusively, the Crown Colonies. In regard to the Crown Colonies, the Government and this House occupy a peculiarly fiduciary capacity. In the counsels of His Britannic Majesty the Secretary of State for the Colonies is not merely the representative of the views of His Majesty's Government and of the interests of Great Britain. He is the representative of the Crown Colonies, he speaks for the Crown Colonies, and he is charged with the representation of the interests of the Crown Colonies.

I take leave to say that, if we enjoyed in this country some other form of constitution than that of Cabinet Government, if our form of Constitution were modelled on some of those continental countries in which you have Departmental Ministers reporting on the affairs of their Departments to a Chamber, this proposition which I am making to-day would be being made on that side of the House by the Secretary of State for the Colonies, and I propose to say a word or two to justify that statement. As it is, I have to deputise for the right hon. Gentleman. I have been asked by the representatives of some of those Colonies to state their case to the House and to the country, and I am going to try and do it as fairly and as moderately as I can, because it is, to my mind, an absolutely overwhelming case. I quite recognise, of course, that constitutionally speaking, the responsibility for presenting Budget proposals in this form is, and must be, that of His Majesty's Government, but I venture to say that, in presenting the Budget proposals in the form in which they have presented them, the Government—and everybody in the Crown Colonies knows this perfectly well—are overriding the expert views of their responsible advisers who are responsible for administration in those Colonies. I am not saying that that is necessarily an improper thing for a Government to do. On the contrary, I accept the constitutional doctrine, and I think it is sound, that it is the right and duty of His Majesty's Government, if they think the public interest so requires it, to override the views of experts, but I do say that, having regard to the peculiar position which the Government of Great Britain occupy as trustees for the affairs of the Crown Colonies, if you are going to override the views of your expert advisers, you ought to exercise a most scrupulous and meticulous care to make sure that you do it only upon grounds which can be justified as the very highest measure of public policy. That those are the views of the experts, I do not think there will be, indeed, any dispute.

In a part of the Crown Colonies that I know very well, the British West Indies, they do not possess full responsible Government. They have only a system of quasi responsible Government, and they have Governors, with Legislatures in many cases partly elected and partly nominated, but those Legislatures represent, after all, the discharge of the constitutional functions of government in those possessions. In the British West Indies the Legislatures of Trinidad, of Jamaica, and of the Leeward Islands have all, in full session, unanimously, elected and non-elected members alike, passed Resolutions asking the Chancellor of the Exchequer—challenging his Budget—to maintain this preference at the rate of 4s. 3½d. per cwt. Those resolutions have been sent home officially by the Governors to the Colonial Office, and are, I believe, lying in the Colonial Office at this moment. If any corroboration were needed, I would refer, only for a moment, to the very valuable Report which was presented by my right hon. Friend the Member for Ripon (Mr. E. Wood), after he visited the West Indian Colonies officially, as Under-Secretary of State for the Colonies, and I would remind the House that this very proposal which I am now making, and which was subsequently made by the Imperial Economic Conference, was recommended after his visit to the spot, and recommended in the very strongest terms, in the Report which he subsequently presented to the Government.

In case there is any question, such as I have heard raised earlier in the afternoon, in regard to the difficulty of reducing duties if you have a system of Preference, let me repeat the claim, the appeal, which the Crown Colonies are making. It is that they shall be given a stabilised preference of 4s. 3½d. per cwt., the old rate of Preference, on their sugar, or the amount of the full duty, whichever is the less. The effect of what the Chancellor of the Exchequer has done by the way in which he has presented his Budget is, as I say, to reduce the effective money value of the preference from 4s. 3½d. to 1s. 11½d. per cwt. I have read and re-read the Budget speech of the right hon. Gentleman, and I have failed to find, and I do not think anybody else will find, any shred of argument to justify this reduction in the rate of Preference on merits. It is quite true that the right hon. Gentleman expressed himself, as he has this afternoon also, as being averse to committing this country to a course of action over a period of years, and I quite believe that no Parliament can bind its successors, but when the right hon. Gentleman says that, I must observe that that comes a little quaintly from a set of Ministers who are proposing, in regard to matters which are the interests of Great Britain and not the interests of the Colonies, in regard to great matters like pensions and insurance, to commit this country permanently, and in regard to other matters, such as housing, are proposing to commit it for a long term of years.

Although the Chancellor of the Exchequer, as I said, has so far—I hope he will not continue the practice—avoided arguments on the merits, I am going to try to present some of the merits to the House now. I hope I shall succeed in persuading the House. If I fail it will be because of my own shortcomings as an advocate, and not because there is any lack of material, because the case is simply overwhelming. I must ask the House to bear with me for a few moments while I give a few figures. I hate giving them, but there are one or two relevant figures, and it is almost impossible to discuss a question of this kind without some figures, but I promise they shall be as short as possible.

The world's production of sugar in 1913, was 18,430,000 tons, of which we imported here in Great Britain 1,971,000 tons. Of that world's production in 1913 there was produced outside the Empire 82 per cent. Of the sugar imported into the United Kingdom there was produced outside the Empire 96½ per cent. In 1923 the world's production of sugar was 18,038,000 tons, while we imported during the same period 1,568,000 tons. I must pause just for a moment to say that these figures of 1923 are not strictly comparable with the figures of 1913, because the Irish Free State is left out on the second occasion, though it does not a great deal matter. Of the world's 1923 production 78 per cent. was produced outside the Empire, while the United Kingdom imported 67.9 per cent.


Does that figure of percentages take into account the production of British India?


Yes, I am including British India, though, as a matter of fact, British India really is in the nature of a "cross-entry," since she figures on both sides of the account, consuming practically all she produces. I ask that hon. Members should notice two things about the figures. The first is that there has been a very satisfactory progression towards independence of foreign supplies with regard to sugar. We have progressed towards a considerable independence of foreign supplies. But there is still the alarming and disturbing fact that for our sugar supplies in this country at the present time we as a consuming country are still dependent upon foreign sources for two-thirds of our supplies. With this distinction as compared with the pro-War, that whereas in those days the foreign supplies on which we depended were continental they are now Javan and Cuban. Just as in the old days Hamburg was predominantly the leading market now it is Cuba operating over the New York market which dominates the fiscal position and very largely sets the tone of the world's markets. I may here interpolate one observation in regard to something said the other day by the hon. Gentleman opposite, the Financial Secretary. I am speaking as a consumer. I share his optimism as to the estimated crop next year for the world being something over 19,000,000 tons, but I am afraid that it will be fully offset by increased consumption. Estimates about this time are notoriously unreliable. I have seen a good many of them. The hon. Gentleman may be right—I hope for the sake of the consumer he is—but a great many people in the trade do not agree with him, and personally I am very much afraid that a not inconsiderable proportion of the 1½d. which the. Chancellor of the Exchequer has remitted is going, in December and January next, into the pockets of the Cuban producer. I hope that will not be so, but that is my impression. I would add one word on the question of consumption.

From the figures I gave a moment ago the House will see that substantially the consumption here as compared with pre-War has been comparatively stationary, while the consumption in the United States, within the last four years, has increased in the most amazing manner—by no less a figure than 17 per cent. Our consumption is 1,500,000 tons, roughly speaking, in the year, while the consumption in the United States is 4,750,000 tons, and is still increasing. I give these figures of consumption because I want to ask the House, first of all, to look at this question, and this aspect of it, from the point of view of the consumer. I want to look at it for the moment from the point of view of the British consumer, though I must say I think that would be a mistaken thing to do having regard to the relations between this House and the Crown Colonies, and something very like a breach of trust. But I approach this question, first of all, from the point of view of the British consumer, and I ask: Is the state of preference hitherto existing, and now changed for the ensuing year, going to be detrimental to the British consumer?

First of all I must make one general observation with regard to the attitude of some hon. Members, although I will keep strictly within the limits of your ruling, Mr. Speaker, as to not discussing the general question of preference. There are some hon. Members to whom any preference at all, whether as a revenue duty or otherwise, is repugnant as being contrary to their ideals of Free Trade. To them I would say in a sentence that they must remember that the principle has been incorporated into our fiscal system in the Budget of the Government of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), and that he followed the Paris Resolutions, and followed the recommendations of the Imperial War Cabinet and the Imperial War Conference at which Unionist, Liberal, and Labour were alike represented. Further than that, in regard to this general question, and in relation to sugar, may I refer to the answer made by so distinguished a Free Trader as M. Yves Guyot who, speaking on this question of sugar, pointed out that submitting to the unrestricted market manipulations of the producers was not Free Trade, but madness. That observation gains additional weight in the circumstances of to-day, because to-day you have the predominant producers, the Cuban and the United States, being assisted financially in the most direct manner by the dominant consumer, which is the United States. Porto Rica, Hawaii and the Philippine Islands receive from the United States preferences of £10 5s. per ton over all other sugars and £8 4s. over Cuban sugars. Whilst that is taking place in regard to the United States, look for a moment at the effect of the war upon our own Colonies. It is one of the facts, one of the aftermaths of the war, that those Colonies have got to bear taxation, and the operation of that taxation deprives them still further of that equality of opportunity which is the ideal Free Trade policy.

Let me illustrate. In the West Indies the class of sugar produced is what is technically called in the trade 96 per cent. polarization. On that was based a sliding scale of preferences, say, in round figures, £3 15s. a ton until last week. It is now reduced, under the proposal of the right hon. Gentleman—unless it is amended—to a preference of £1 13s. 10d. per ton. At the same moment the taxation which is being borne per ton of sugar produced is £2 15s. in Imperial taxation, and £1 5s. in local taxation—that is to say, £4 per ton, or more than two-and-a-half times the figure to which the right hon. Gentleman proposes to reduce the preference. I do put it from the point of view of the consumer—it is his chief interest—that if you are going to have a preference, it should be an effective preference; but I do say that I think the consumer in this country cannot fail to look with a certain amount of apprehension at the present situation in which he is dependent for his main sources of supply on outside producers. To widen the base of supply and to increase the area from which you draw your sugar cannot conceivably hurt, and must in the long run benefit the consumer. Look at what has been happening in regard to the development of production since the granting of preferences, and since the beginning of the War? The imports of Empire sugar into this country in 1913 were 71,000 tons. In 1919 they were 298,000 tons, while last year they were 414,000 tons. The Empire production of sugar was in 1913 18 per cent. of the world's production. In 1919 it was just over 20 per cent., and in 1923 over 52 per cent. I would again call attention to the comparison between 1919 and 1923 in particular, during which the, preference has led to a steady growth and a very satisfactory progression.

It is just at this moment, however, that you want to be careful not to do anything to check that progress. What you are doing now, what the right hon. Gentleman is doing by refusing so far to adopt the recommendations of the Imperial Conference is this: The effect of the reduction in preference does not so much hit the existing estates or the highly cultivated lands or the factories already built; it does hit them, but that is not so much what it does, as to make it extremely difficult and almost impossible to start new developments—precisely what the right hon. Gentleman ought to encourage. Because hon. Gentlemen perhaps do not realise—I speak from the practical point of view in this matter—that in this, question of sugar time is a very important factor. It takes three years at least to bring land from the condition of the jungle to that of sugar in bags. You have to clear your land to begin with, and anybody who has had any experience of this kind of clearance knows it is not an easy proposition. You have to drain your land, and to plough and plant, and then, having planted, it takes 18 months before you will see your first crop. Your factory, too, is a very expensive item. If you want that development to take place it is all important that you should encourage this industry. Therefore, from the consumer's point of view, I say that the Chancellor of the Exchequer would do well to pause and reflect before he starts to reduce this preference. As the right Hon. Gentleman has appealed to us on financial grounds, I feel that I must say something on that point. As a matter of fact the cost of this suggestion to the consumer is nothing, in fact it is less than nothing.

But what about the cost to the Exchequer? If you take it on the assumption that you abolish the whole preference on Colonial sugar on an import of 400,000 tons of that sugar the gain to the Exchequer would be about £1,500,000 for the full year. On last year's figures the cost of the proposal which I am submitting would be something like £800,000, against which you have to set off, firstly, the extra revenue derived from taxation and receipts from investments in new developments in sugar operations in the Colonies, and also the receipts from taxation levied on the profits made by the makers of sugar machinery who are engaged in making machinery and equipment for sugar estates and sugar factories. Not only that, but you have to set off the extra insurance to which I have referred, which the consumer derives from having a wider area from which to draw his supply.

Let me explain this point more fully. The world's sugar market is so sensitive that it takes very little indeed to upset it. Very often a fortnight's unseasonable weather in Cuba will send up the market price of sugar by 1s. per cwt., and less than half of that variation on the amount of sugar which this country consumed last year would more than provide for the £800,000 loss to the Exchequer. So that by widening the area of supply, you will confer a great benefit upon the consumer. I cannot ignore the political consequences, and I do not think the House can, of an argument so cynical as that which has been used by the Chancellor of the Exchequer if it is seriously pressed upon the Colonies. I know the British West Indies very well, and I am not going to employ any language of menace. In the Carribean you have Britain's oldest Colonial possessions—once very rich, now comparatively poor—but always intensely and passionately loyal to the British connection and to British citizenship. Next door to these Colonies you have, cheek by jowl, a rich and prosperous neighbour in the United States, who looks with covetous eyes on these Colonies, because that country fully appreciates the importance to her of the position of those islands.

I do ask hon. Members in this matter to try and put themselves in the position of the West Indies. After all, we are responsible for the peace, order and good government of these Crown Colonies just as much as we are responsible for the peace, order and good government of London. Remember that in this matter of preference the West Indies have already got a grievance against us, because preference was originally designed and recommended by the Balfour of Burleigh Committee as a contribution to Imperial solidarity and Imperial development. In the West Indies it was more than this. It was the result of mutual bargaining between the West Indies and Canada, and as a result of those negotiations preferences were agreed to between the West Indies and Canada, ranging from 33⅓ to 50 per cent. and what happened? No sooner had that been done than this country went to the West Indies and we used our position as the governing body to enforce upon the West Indies the granting to us of the same preferences which have been given to Canada and that for a guaranteed period of 10 years. In return the British West Indies were getting 16⅔ per cent. not guaranteed for any period at all, and now you are reducing the money value of that 16⅔ per cent. by more than half. That is something which rankles in the West Indies at the present time.

It goes further than that. The British West Indies cannot refrain from comparing the treatment given to them in these matters by this country with the treatment given to their nearest neighbour, Porto Rico, by the United States. It is now proposed under these proposals, unless my Amendment be carried, that the preference given to the British West Indies will be reduced to £1 13s. 10d. per ton, whilst at the same time the United States give Porto Rico a preference of £10 5s. per ton. See what the result of that grant has been in the case of Porto Rico. It was first granted in the year 1889, when the exports of sugar were 10,000,000 dollars. In 1923 the exports were 84,000,000 dollars.

At the same time I want the House to realise what the effect of that was the other way round upon Porto Rico, and upon the United States and the world in general. I will give some figures on this point. In 1889 the imports into Porto Rico were 9,750,000 dollars, of which 4,000,000 came from the United States. In 1923 they were 84,500,000 dollars, of which 78,500,000 came from the United States. With an example of that sort before us I do not think anyone will seriously consider what has been described as a loss to the Exchequer of £800,000 if this proposal were carried, because the use of such an argument would have a most disastrous political effect in those islands. I must add that the position is not made any easier by the fact that while you are proposing to cut down what you give to the Colonies to £1 13s. 10d. per ton you are giving to your own beet sugar industry £11 13s. 4d. per ton, and you are trying to find out some means of making that amount up to something like £20. Such a glaring contrast as that in the difference of your treatment cannot fail to have a bad effect upon the West Indies. I will only add that in proportion as you have a deficiency of the supply of Empire sugar in those markets, you have to make it up by the purchase of foreign sugar. You pay for your Empire sugar in sterling, and you buy your foreign sugar in Cuba and Java. The Cubans pay in dollars and Java pays in florins, but both of them are at a premium in regard to sterling, and every pound you buy in either of those Colonics depresses the position of the £ sterling.

There is one more aspect of this question upon which I must say one word, and that is the social aspect. I want to show how this question affects us here in Great Britain and in our Dominions overseas. I said before that a sugar factory is an expensive thing to build. I cannot say that it employs a very considerable amount of labour in the building of machinery and the replacing of machinery, and I am not going to say that the extra employment for the making of such machinery is going to make a very large inroad into the 1,500,000 unemployed, but it is going to make a difference. I will give the House one figure in regard to a 10,000 ton factory of an ordinary size in regard to the making of the machinery here. There is sufficient in this case to provide work for 500 skilled engineers for six months, and it is precisely in that class that we are experiencing at the present time the greatest difficulty in regard to unemployment. Overseas the social side is much more important, because practically the whole of the finance of social services in Crown Colonics in the sugar-producing countries is bound up with the extension of the sugar industry, because the revenue which finances those services is derived mainly from the sugar industry. In those countries unless the extension of the main industries keeps pace with the growth of the population, you must either reduce the standard of your social services, or fall back upon the bad old principle of getting grants-in-aid from the mother country, and if you are driven back upon that course it will cost you many times the £800,000 which this proposal is supposed to cost.

7.0 P.M.

There is a far bigger consideration in regard to the social question overseas than the mere financial aspect. The other points raised by the recommendations of the Imperial Conference are intimately connected with the question of overseas settlement and the settlement of a white population in new fields. It is a fact, however, that no such case as that arises here, because you are not dealing with a white population, but with a population which from climatic conditions is essentially a coloured population, and sugar growing is not a white man's job. Therefore you have nothing to gain by hoping to settle any large white population in those islands. You will not do that; but you have a big moral responsibility for the coloured population which is there already, for this reason. In the West Indies the original inhabitants, the Aborigines, the Carib Indians are practically a dying race. The East Indians and the negroes form the population of those islands now. How did they get there? England brought them there for her own purposes and to serve her own needs. The last generation persuaded the Indians to come. Earlier generations brought the negro from his African home by force. I say, therefore, that to the obligations of the Government, and of this House, as the guardians of the interests of the Crown Colonies, there is added in this sense a very special moral obligation towards the coloured population of those countries.

The value to that coloured population of an expanding sugar industry is twofold. It is valuable, in the first place, as providing direct employment for those who hire out their own labour to go and work as labourers. It is also valuable, and very valuable, to the largo class who grow small quantities of canes find sell them to the factories. For those two reasons, the sugar industry is extremely valuable to the coloured population. While it is quite true, owing to climatic conditions, that the mass of labour is, and must be, coloured, anyone who has knowledge of those countries knows it is true to say that a European element in those islands, with its more virile outlook, and with its wider ideals as regards standards of life, is essential and desirable if there is to be stability and progress in the affairs of the community. Sugar is pre-eminently an industry which requires and demands that there shall be people of the European races as its directing heads.

I am afraid I have delayed the House at great length. I have tried to show that on all grounds, political, social, fiscal, commercial and Imperial, the expansion of an Empire sugar industry is desirable and essential, and that the best way it can be expanded is by giving some assurance of stability in preference. If you feel that you cannot do that, then I ask you at least to maintain the status quo until you are certain that, by departing from it, you are not going to fail in your duty as trustees of the interests of your fellow subjects who cannot come here to speak in your counsels for themselves. I say with deep conviction that, if these proposals are adopted, not only will you be conferring a bare measure of justice upon those who have the right to expect the fullest measure of justice at your hands, but you will be establishing in this country, by widening the area from which you draw your supplies, a lasting benefit for which in the coming years every housewife and every householder in this land will be profoundly grateful.


I beg to second the Amendment.

After the extremely able speech of my hon. Friend the Member for South Croydon (Sir W. Mitchell-Thomson), who has great personal knowledge of the subject dealt with by this Amendment, I do not propose to be long, but I do wish to say to the Colonial Secretary, as he is here, that he has failed lamentably to press on the Chancellor of the Exchequer, his colleague, the interests of the West Indies and of Mauritius on this occasion. This Amendment is brought forward, first and last, in the interests of the British West Indies and of the Island of Mauritius, and it is on the Government's treatment of the native populations of those islands and of British Guiana that they stand condemned in this matter. For some years past you have been telling the natives of Jamaica not to plant bananas, but to plant small cane crops instead, because you do not want to be dependent on American sugar. That has been the policy dictated by the Colonial Office and by the Colonial Government. You have encouraged them to do that. You have set up central factories to take these small amounts of cane from the native growers, and now you come down and slap them in the face, as the Chancellor of the Exchequer has done. This is the worst feature of this Budget—the repudiation of your responsibility to your tropical Crown Colonies and the sugar growing Colonies It has happened before, in the days of the sugar bounties, when we had to pour out millions for grants-in-aid to help these same Colonies. When I visited the West Indies the one demand from all sections of the population was for the stabilisation of the preference. There is absolute solidarity from the highest to the lowest throughout the British West Indies for this demand. The same applies to Mauritius.

Beyond this, that Chancellor of the Exchequer has been guilty of an even greater breach of faith on this occasion When, as the representative in the Imperial Economic Conference of the interests of the Crown Colonies, the Secretary of State was dealing with the Dominions, I ascertained from the Island of Mauritius that if this stabilised preference offered by the Imperial Economic Conference was to go through, Mauritius for the first time would give us a preference. It is absolutely unfair to take that preference, and it is the duty of the Secretary of State for the Colonies to use his official majority in Mauritius to refuse that preference in view of the action of the Chancellor of the Exchequer in repudiating the agreement I made on behalf of the Government and people of Mauritius at the Imperial Economic Conference.

Further than that, what is the Secretary of State for the Colonies insisting on in this motion? That for 10 years he will use his official majority in the West Indies to insist that the preference given by the British West Indian Colonies to this country shall be 50 per cent. or 33⅓ per cent., and you will not do the same in return for them. I say that the Chancellor of the Exchequer on this occasion has shown himself to be unworthy of the Imperial responsibilities which he ought to shoulder on behalf of the poorest and the weakest of the Colonies who have all too few people to speak for them. He has neglected their interests. He has paid no attention to them in making his Budget, and I consider it a most lamentable thing that in the very first Budget after the first Imperial Economic Conference, in which the interests of the Crown Colonies were separately represented, and direct communication was received from their Legislatures and Governments to the effect that this pre- ference was the one thing they wanted and demanded, and which was granted to them, it is repudiated. Let us look to the future, I know two or three firms who offered last autumn to go to Jamaica to set up new factories and start business out there. The Chancellor of the Exchequer, by his action, and still more by his speech on the Budget, is discouraging those firms. In fact, I know that one of them will not look at the proposition now. You are discouraging all hope of increasing the Empire supply of sugar.

What was the position in the War? We were absolutely dependent, as regards quantity and price, on what foreign countries would let us have. Our position in regard to sugar is perilous in the extreme. Thanks to preference in the last few years, thanks solely to the encouragement that preference has given, British firms have been launching out in increased sugar development in our Colonies and Empire. Now you are going to set the clock back, and you are going to make this country dependent on American trusts and combines, who are able to manipulate the price of sugar to the consumer in this country. That is the sole effect of this Budget in this regard. The American Empire has been developing under a system of preference. America took her colonies from Spain in 1898—Porto Rico, Hawaii and the Philippines, and she has built up, by a system of enormous preferences, a very great sugar industry, and now dominates the sugar markets of the world. She has specially cut out everything British. British Guiana cannot get her sugar into America at all. The preference given to America's own colonies is not what we have been giving in the past, £3 15s. a ton; it is £10 5s. a ton, as against what the British islands produce. It is the same with France; her islands are protected and encouraged. Every acre is under canes because they have a preferential system in the mother country. There is no encouragement given by this country for a British source of supply, while these foreign countries are building up this enormously increased output of sugar.

We all know how it is actually operating in Porto Rico and the other American Dependencies. There are enormous combines. I know of one with £7,000,000 in a group of factories. You will see stated in the Report of the right hon. Gentleman the Member for Ripon (Mr. E. Wood) exactly what is going on. What is happening is that combinations of traders in the United States are being formed in order to market the surplus sugar in different countries in Europe. In the United States there is now formed a big organisation called the Sugar Export Corporation for the express purpose of dealing with Cuban and Porto Rican sugars in bond and of marketing the product in Europe. The Chancellor of the Exchequer, by his action in this part of the Budget, is placing the consumers of this country under the heel of the Sugar Export Corporation of the United States of America, at the very moment when he had a chance of enormously increasing the British sources of supply, both in this country, by means of sugar beet, and in the British West Indies. It is the most unfortunate action in the whole Budget, and I, knowing these Colonies, caring for them, anxious that this House should exercise its trust and its responsibilities for them, say, without fear of contradiction from anyone on this side of the House, that since they have been in office this action of theirs in repudiating the bargain I came to on behalf of the Crown Colonies and Protectorates at the Imperial Economic Conference, is the worst thing they have done.


In conforming to the statutory provisions with regard to preference made by the Conservative Government I was not aware that I was committing all the crimes against the Empire which the hon. Member has described.


Only a few individual Colonies.


The hon. Member appears to be under the impression that I ought in my Budget to have taken into account and accepted the recommendation that he made to the Imperial Conference for the stabilisation of the amount of the preference. He appears to have forgotten that these resolutions and recommendations of the Imperial Conference were not final. They were binding neither upon this country nor upon the Colonies. He appears to have forgotten, too, that we had a General Election following that Imperial Economic Conference when these recommendations for increasing the preferences, increasing the number of articles subject to preference and adding to the amount of the preference, was the great issue before the country, and on the verdict their position in this House has been changed. The hon. Member was encroaching, during nearly the whole of his speech, upon the Debate which is to take place upon those recommendations. I stated this afternoon that I was not prepared now to discuss the general question of Imperial Preference, and I am going to confine my observations within the limits of the issue raised by the Amendment. The hon. and learned Gentleman made one of those well-informed speeches made by men who are thoroughly acquainted with their subject to which the House always listens with interest and with pleasure, whatever differences there may be as to the opinions we deduce from the information supplied to the House. There was, however, manifested a difference between his concluding sentence and the opening sentence of the hon. Member who seconded the proposal. In his last words the hon. and learned Gentleman appealed to me to accept his Amendment in order to gladden the hearts and to bring comfort and benefit to every housewife in this country. The first sentence of the hon. Member who seconded was a repudiation of that appeal. He said, "Let it be distinctly understood that first and last this is an Amendment in the interests of the West Indies." Almost the only point I am going to argue in reply to this Amendment is that this is an Amendment proposed in the interests of the West Indian planters at the expense of the sugar consumers of this country. [HON. MEMBERS: "No!"] Wait and see. The hon. and learned Gentleman more than once expressed a doubt as to whether the sugar reduction which I propose in the Budget would reach the consumer. [HON. MEMBERS: "All of it!"] The point I am going to make is not materially affected whether all or a part reaches the consumer. Over and over again he expressed doubt, at times with more emphasis than at other times. If the reduction of the duty is not going to reach the consumer why does he make this proposal? It cannot be that he makes it in the interest of the consumers. May I concede to him that the preference has undoubtedly been beneficial. It has been beneficial to the West Indian planters. Every penny of that preference has gone to increase their profits.


Is it no advantage to the British consumer that he has a wider supply from which to draw, and that a British and not a foreign supply?


That is an argumentative point which is not a fit subject for interruption.


You cannot answer it.


I will answer it, and when I have answered it there will be nothing whatever left either of that point or of the case which has been put. The hon. and learned Gentleman spoke of the very large increase in the proportion of Empire grown sugar consumed in this country, and from that I have no doubt that hon. Members who listened to him jumped to the conclusion that there has been a corresponding increase in the amount of Empire produced sugar.


No, I gave the figures.


Will you repeat them?


At the same moment that I gave the figures to which the right hon. Gentleman refers, I gave the figures for the Empire production. I gave the percentages—[Interruption.] The point is perfectly good—the percentage of the total world production of sugar, and that is the point the right hon. Gentleman wants. In 1913 the Empire production of sugar was 18 per cent. of the world production. In 1919 it was just over 20 per cent., and in 1923 it had risen to over 22 per cent.


That is a favourite Tariff Reform argument—the fallacy of percentages. I will give the House the actual figures. The year 1919–20 would be the first year in which the preference would operate. It probably would not truly operate until the following year. However, I take 1919–20. The total Empire production of sugar was 3,973,000 tons. In 1922–23 it had grown to 4,019,000 tons. There had been, therefore, as the result of the operation of four years of Protection, an increase of less than 100,000 tons in Empire-produced sugar. Let us take the West Indies, because the hon. Member who seconded said this was in the interests of the West Indies, and the hon. and learned Gentleman's speech dealt mainly with the West Indies, speaking from his personal knowledge. In 1919–20 the West Indies produced 191,000 tons of sugar. What has been the increase by the operation of four years of Preference? In 1922–23 it had fallen to 159,000 tons.


The right hon. Gentleman will forgive me for saying this In the first place, he is withholding the fact that the crop in 1922–23 was a short crop, and, in the second place, he is withholding the British Guiana figures, which ought to be added to the West Indian figures.


I have taken the entire Empire production of sugar. I will give the figures for each of the years, which will show that the hon. and learned Gentleman's point makes no material difference. As a matter of fact, he will not dispute this, that never since the preference began to operate has the annual production of sugar in the West Indies reached the figure at which it stood in the four years before the preference began to operate. I will give the figures in thousands, and it will then be easy to follow.


Will the right hon. Gentleman begin with 1913?


I am taking the four years before the preference began to operate. In 1916 it was 195, next year 180, next year 197, next year 191. Then the preference began to operate and it dropped down to 143, dropped again to 166, then 159, and the provisional Estimate for 1923–24 is 166. Need I say another word? The whole case is destroyed by hard facts. I conceded a moment ago that the preference did benefit someone. I said that it benefited the West Indian planters. I repeat, that every penny of the preference goes to increase the profits of the West Indian planters. It is simply a subsidy that is given by the taxpayers of this country to the West Indian planters. It does not achieve the purpose for which it was imposed. It has not encouraged Empire production, but, on the contrary, if these figures mean anything at all, it has had the disastrous effect of reducing the production of Empire sugar by 25 per cent.

Viscount WOLMER

We have just listened to a lamentable speech. In the first place, the right hon. Gentleman takes the figures for West Indian production, starting from a year which was at the height of the War, when sugar was commanding prices which it could never since command, and is never likely to command; and then, when he finds that there has been a reduction, which is partly accounted for by difficulties of agriculture, he says triumphantly to the House, "Need I say another word?" Surely that is a totally inadequate and unworthy attitude for the Chancellor of the Exchequer to take in dealing with so great a problem, as this. But what really appears to excite his enthusiasm and his anger, what makes him bang that Box and glow with fervour as he speaks, is that the West Indian planters have been gaining some advantage out of this preference. Let me put this point to hon. Members opposite. I say quite frankly that the whole object of preference is to make the cultivation of the particular crop more profitable in our British Colonies and Dominions. Unless you can make a crop more profitable you will not attract more capital and more labour to its production; and if the effect of this preference had not been to the advantage of the West Indian planters and those coloured persons who are dependent upon them, it would have failed in its object. But to the Chancellor of the Exchequer it is a positive disqualification, a positive disadvantage, that any of our fellow-subjects in the Colonies should benefit as a result of this preference. It appears to be a small matter to him that those Colonies stretched forth every effort to help this country and the rest of the Empire in the Great War; that they threw in their lot with us, and poured out their treasure and their manhood to fight by the side of our troops in the field. He sees no disadvantage in their not progressing, and would be quite content that foreign countries which did not lift a little finger to help this country during the War should develop their trade, their prosperity and their populations.

If I may venture to say so, the Chancellor of the Exchequer has made no sort of attempt to reply to the case which was so ably put forward by my two hon. Friends who moved and seconded this Amendment. He simply has not dealt with the very important point about the great responsibility that rests on this side of the House, in relation to our fellow-subjects in the Crown Colonies, and especially the coloured populations. They are people who cannot speak in this House. They are supposed to be represented by the Colonial Secretary, but it appears that the Colonial Secretary's advocacy on their behalf, which is confined to Cabinet meetings, has been totally ineffective in gaining the sympathy or even the interest of the Chancellor of the Exchequer. He simply does not consider their position. He says the planters have made a good thing out of this. Does not he realise that the whole prosperity of the Colonies is bound up in the industry—that for those who direct the industry, those who live by the industry, those who work the industry, white men and coloured men, the whole of their future is bound up in the development of this industry? For the Chancellor of the Exchequer to dismiss the case in that sort of way surely shows that he wholly fails to realise the very great responsibility that rests upon the Government in this matter. Further, the Chancellor of the Exchequer has not attempted to deal with the case, so forcibly put forward by my hon. Friend, of the necessity of widening the area of sugar supply in the Empire. I think the House was immensely impressed by the figure quoted by my hon. Friend who moved the Amendment, showing that a single rise of 6d. per cwt. in the world price of sugar would cost consumers in this country a great deal more than the whole of the remission for which he was asking in the taxes on Colonial sugar. My hon. Friend says not a great deal more, but certainly it would be more. Does not that show anyone the importance of widening the area of sugar supply?


You curtail it.

Viscount WOLMER

Does the hon. Member really believe that the effect of preference has been to curtail the area of sugar supply? If he does, I can only reply that, provided a man be a sufficiently bigoted Cobdenite, he would believe anything. Even the Chancellor of the Exchequer admits that the effect of this preference has been to benefit the planters in the West Indies. Do hon. Members opposite think that what benefits the planters would discourage them from continuing to plant? The right hon. Gentleman was arguing, as I pointed out at the commencement of my remarks, from a very short period of very peculiar years, but if one wishes to see the effect of the preference on sugar, one has only to turn to the figures, mentioned by the hon. Member who moved this Amendment, with regard to the American preference to their Colonies in the production of sugar. That shows what could be done. After all, what we are asking for is merely a remission of a portion of the Sugar Duty. The Chancellor of the Exchequer says that this Amendment would benefit the West Indian planters at the expense of the consumers in this country. How he can make out that this is going to cost the consumer in this country a single farthing I cannot see. The remission of taxation will benefit the West Indian industry, and it will also, both immediately and ultimately, benefit the consumers in this country. We are asking that taxes be taken off sugar produced within the Empire. The sole contribution that has come from the Chancellor of the Exchequer is the statement that if you do that you will be benefiting our West Indians. I say that that is a totally unworthy attitude on the part of the Chancellor of the Exchequer of Great Britain, and it is lamentable that the Socialist party should be such bigoted Cobdenites, no better, as I said an hour or two ago, than their Liberal predecessors, so hidebound in the shibboleths and catchwords of the Liberal party, so tied to the traditions of Cobden, Bright and Gladstone, that they have not the imagination or the enterprise to see the opportunity that is open to us in this country of developing the markets of our Colonies and our Dominions.

What the effect in the West Indies will be of the Chancellor's speech I cannot think. What will they think when they know that they are forced, by the official British majority which his colleague the Colonial Secretary controls, to give this country a 50 per cent. preference, while the Chancellor of the Exchequer not only reduces the value of their preference here, but pours forth scorn and contempt, and almost refuses to treat the subject seriously when it is raised on their behalf in a very weighty speech on the Floor of this House. I venture to say that the right hon. Gentleman's attitude will cause dismay, not only in the West Indies, but throughout the whole Empire. He can be perfectly certain that it is even now travelling across the cables to every part of the British Empire, and the damage it will do in causing a feeling of resentment, a feeling of breach of trust, a feeling of lack of confidence, is not easy to calculate and will not lightly be undone. I do hope that the Government will even now repent of the attitude that they have taken up. Why they have taken up this attitude I cannot conceive. There is nothing that it is possible for them to gain by deliberately flouting the Colonies. The Chancellor of the Exchequer said to my hon. Friend that there had been a General Election, in which the question of preference had been definitely turned down. I entirely deny that. The question of preference had already been established. The General Election was specifically held on the question of a general tariff for the protection of home industries, as well as for extending Imperial Preference. I say quite frankly to hon. Members opposite that I believe the great majority of men who habitually vote Labour are thoroughly in sympathy with the idea of Imperial Preference. I am quite willing to admit that many of them would object to any increase in what are called the food taxes in this country, but that is not what we are proposing at the present moment. We are asking for a reduction of the food taxes in this country. Hon. Members opposite are refusing to reduce them because, if we reduce them in the manner we propose, we might, perhaps, help our Colonies by so doing. That, to them, is a sufficient reason why we should not do it. If the Chancellor of the Exchequer says that that was the verdict of the country in the recent General Election, I entirely differ from him. I believe that if the Socialist party become identified with Little Englandism, they will get into exactly the same sore of mess as the Liberal party did. At any rate, we have stuck to our principles—[Interruption.]—and we can face the future with confidence. But I do regret that the Labour party have followed the anti-Imperial trend of the Liberal party. I believe that a great many of their supporters are strong Imperialists, and would gladly do what they can to increase the trade between the different parts of the Empire, and to give Imperial Preference where it can be given without increasing the taxes on food. That is what this Amendment proposes, and I think the Chancellor of the Exchequer has met it in an altogether unworthy and contemptuous spirit.


I do not think any useful purpose is served by hurling wild language across the Floor of the House in discussing this serious matter. If the Noble Lord had endeavoured to follow in the footsteps of the Mover and Seconder, who spoke in terms of studied moderation, he would have done far more to achieve his object. I was very much surprised by the figures given by the Chancellor of the Exchequer, and still more surprised by the deduction he drew from them. Both seem to me misleading. The figures of Indian sugar he gave, as the hon. Mover of the Amendment pointed out, do not, apparently, take into account the sugar production of British Guiana, which has shown a steady increase through all these years, in spite of the slump. The figures for the Empire production as a whole also seem to leave out of account the slump that followed the boom year after the War. If you take the figures as a series, and begin with the 1913–14 figure, you find that for the Empire as a whole there was a gross production of, approximately, 3,250,000 tons, of which 250,000 was in the British West Indies. You find in 1919–20, the year which the right hon. Gentleman chose as his initial year, which was the boom year following the War, a time of inflated prices all round, the gross Empire production was about 4,000,000 tons, and the production of the West Indies 276,000 tons. Then came the slump year, 1920–21, in which the gross Empire production was 3,445,000 tons, and the West Indies production 238,000 odd tons, from which it will be seen that the figures both for Empire and for West Indian production had steadily and largely increased.


I entirely agree with those figures. Where the Chancellor of the Exchequer got his figures, I do not know.


I am sure the Chancellor of the Exchequer will understand I am making no attack on his figures; they were doubtless supplied from the Board of Trade. But the figures I am quoting now, I believe, are the same as those of my hon. Friend and I am quite sure they are correct. [An HON. MEMBER: "Where did you get them?"] These are extracts from the "Sugar Journal." I got them from the West Indian Committee. I think if the figures of the Chancellor of the Exchequer are viewed from this point of view, it will be seen that, following upon the boom in 1919, and the slump in 1920, there was, as to 1920, a steady and cumulative rise in the total Empire and West Indian output of sugar. There was another point in the speech of the Chancellor of the Exchequer with which I must disagree. He asked the House to believe that this question was raised by my hon. Friend opposite solely in the interests of the West Indian planter. I have a great deal of sympathy with the point of view put forward by the Noble Lord in his plea for the West Indian planter, but that, by itself, I do not think is sufficient. It is in the interest of the Empire as a whole, because it is not only in the West Indies that your potential sources of supply exist.

May I refer to one or two cognate figures to support that statement? Just before the War, there was a census taken. This is not a question of any private industrial concern, but the Governments of the various Colonies and Dominions interested in the production of sugar were asked to state what, in their official opinion, were the areas in their respective administrations, at that time not being developed sugar lands, which were capable of being developed into sugar lands. Without going through the long list of Dependencies and Dominions that were communicated with, there were some very striking figures from British Guiana. The Government of British Guiana stated that there were over 900,000 acres of undeveloped land capable, if developed, of producing 2,500,000 tons of sugar a year. Trinidad estimated an additional 30,000 acres, with a potential supply of 60,000 tons, could be developed. The Queensland Government estimated they could put another 150,000 acres, with a potential tonnage of 300,000, under cultivation. Natal estimated they could develop another 180,000 acres, with a possible tonnage of 250,000. British East Africa estimated they could put under cultivation over 300,000 acres. They did not specify the tonnage, but, roughly, you can put it at 2,000 tons to the acre and a conservative estimate would be about 600,000 tons. These figures do not include India or Tanganyika, but on the basis of the reports furnished by the various Governments, I estimate that it would be possible to increase the sugar bearing area of the Empire by 1,600,000 acres, with a total increased production of over 3,800,000 tons a year; that is, if all these lands were put under sugar cultivation. Obviously, all the land would not be put under cultivation, but in all cases these Governments laid it down that an essential preliminary for this Empire sugar-growing development was a substantial preference granted by this country.

This estimate takes no account of the potentialities of an increase in sugar cultivation in British India, which, at present, produces more than 3,000,000 tons a year on its own account; but, of course, almost the whole of that is consumed in the country itself. But in connection with this possible development, a very interesting analogy may be drawn from the case of Cuba. I was rather sorry that my hon. Friend who moved the Amendment had not the figures for Porto Rico, He gave very interesting figures of the value of sugar from Porto Rico, but, unfortunately, figures were not available of the increased tonnage due to preference. It is, however, possible to ascertain, and I have ascertained, the increase in the gross tonnage of sugar cultivated in Cuba from the time when the United States Government gave their preference of £2 15s. a ton—or whatever it is—in 1903 to the present day. In 1903, when the preference was first granted, the total annual amount of sugar cultivated and manufactured in Cuba was just over 900,000 tons. That is a large tonnage, but in 1923 the amount was very nearly 4,000,000 tons, a figure approximating to the output of the whole of British India. The output of the island of Cuba, because of the market assured for it in the United States, came up practically to the total production of British India. It is a very interesting analogy.

Another interesting comparison as to the value of a preference of this kind to the Colony itself—and I am coming in a moment to the question of the value to this country—can be drawn from the respective developments of the American Colony of Honolulu, Sandwich Islands and the British Colony of Fiji. Both territories are, roughly, the same size; both are in, roughly, the same latitude, one North the other South; both are of the same nature, and both have the same climate, but the prosperity of Honolulu and Hawaii is, I estimate, three or four times greater than that of the Fiji Islands, and the principal reason for that is the development of the sugar industry, partly due to the native planters, and, undoubtedly, partly due to the very substantial preference, similar to that of Porto Rico, which the sugar planter in the Sandwich Islands receives in the American market. As a result of the development, due to that preference, the Sandwich Islands, undoubtedly, owe their existing prosperity.

8.0 P.M.

There is a further point, before leaving this aspect of the question. I do not know it is really anything that must necessarily guide this House, but it is interesting. Comparing the existing preference, that is to say, the preference proposed by the Budget in favour of our Colonies, with the preference granted to Cuba by the United States, the balance is in favour of Cuba. Cuba is not a dependency of the United States; it is not a United States Colony. Its foreign relations are, to some extent, supervised by the United States, and it has a commercial treaty with the United States under which it gives a preference of £2 15s. a ton, roughly. You get, as a result, this curious situation, that our Colonial Possessions will, under the Budget, receive substantially less in the way of preference to enable them to develop their sugar than Cuba, which to America is a foreign country, receives from her. As my hon. Friend pointed out quite truly, the bulk of the sugar affected by the Budget comes from Crown Colonies. There is a very substantial difference—you may say in theory it is the same thing—between a preference in favour of a Crown Colony and a preference in favour of a Dominion. The difference is this. As regards the question of Customs Duty and tariffs, Dominions are virtually independent States, while Crown Colonies are not. Crown Colonies are governed from Downing Street. It is true they have their Legislative Council, and that in certain of the more highly developed or older Colonies they have equality of representation for elected members with the official members of the Legislative Council, but, as we have seen from recent reports in Jamaica, the Governor has a casting vote.

In the bulk of these Colonies, however, the Legislative Council has an official majority. All taxation is introduced by the Governor, and before it is imposed, it has to be approved by Downing Street. Downing Street can and docs interfere in the taxation proposals of these Colonies. There is not only the case, which my right hon. Friend quoted, of the West Indian preference of 50 per cent. dictated from Downing Street; but there is a case with which I am personally very familiar, because it was brought to my attention by the Colony concerned. It relates to action taken by two Colonial Secretaries—for it was initiated by Mr. Winston Churchill and carried on by the Duke of Devonshire—in relation to the arbitratory remission of the export tax imposed on sugar by the Colony of Fiji. In that case the Colonial Sugar Penning Company of Australia, which, as everyone knows, is a very powerful combine, finding that an export tax in lieu of Income Tax, which did not exist at that time in the Colony, had been imposed so as to secure some of its profits towards the War Debt, came behind the back of the Colonial Government, went to the Colonial Office, and the Colonial Office, on its own authority, remitted the export tax and excused this corporation from the liability of making payment. In those circumstances, it seems to me there is a very substantial difference between the status of a Crown Colony and the status of a Dominion as far as this kind of thing is concerned.

That leads me to ask the House whether it would not be proper for us to recognise that fact in relation to Crown Colonies, and to recognise also that Crown Colony-grown sugar ought to come into this country at our Excise rates, not our Customs rates. I quite understand that it might create difficulties, which would have to be met in a practical way; but clearly the right of these Crown Colonies, since the taxation is imposed from here, is to be taxed to the same extent on their exports as similar industries in this country are taxed. If that were pressed to its full extent, it would justify the Crown Colonies in claiming to receive the same privileges as the beet sugar growers in this country receive.

May I turn to that side of the speech which answers the commentary of my hon. Friend the Member for Tradeston (Mr. T. Henderson), who wanted to know whether this country was to do all the paying and to get no benefit out of its preferences? In the first place, I do not agree that this country would get no benefit. It would get a substantial benefit, if, as presumably would be the case, the sugar crop increased. If you get a substantially larger area of land under sugar cultivation, you would get a larger world sugar crop. You might have a chance of shifting the balance of power from the Cuban and Porto Rican sugar crops a little more in favour, say, of British sugar. You would, by increasing the world output of sugar, bring down the price of sugar. That is a very simple economic proposition.


That does not follow.


I leave my hon. Friend to worry that out for himself. If he thinks it over very carefully and in no partisan spirit, he will see what I have said is true. That brings me to this further point, in answer to the same interruption. This country can reap a really substantial benefit from this particular preference. I am not discussing preferences in general. My belief is that you must take each preference on its merits, and see what practical result it is likely to bring about. The sugar consumption of this country has decreased since pre-War days. It is quite true that the creation of the Irish Free State has made a certain difference in the area over which you estimate your statistics. In 1913 this country consumed just on 2,000,000 tons. In 1923 it consumed only 1,500,000 tons. That is despite an increase in the population shown by the Census figure, which, though it does not set off the whole of the loss of population due to the creation of the Irish Free State, can, to a certain extent, be set against it.

I warmly felicitate the Chancellor of Exchequer on the courage with which he has reduced the sugar tax. The cheapening of sugar is bound to lead to a great increase of consumption. Very likely— this is a conservative estimate—it may be found that in a full year, with reduced taxation, the consumption of sugar in this country will rise to 2¼ or even 2½ million tons. Perhaps my hon. Friend the Member for South Croydon (Sir W. Mitchell-Thomson) thinks I am putting it too high.


I should not like to hazard an estimate.


If we are supplying that sugar from an increased development of sugar lands in the Empire, it must lead to a considerable relief of unemployment, because it will call for considerable activities in the engineering trade. It would be a great benefit to cities like Greenock, Glasgow and Derby, where they make this machinery. But let the House observe the reverse side of the picture. If this increased consumption is not met with increased British Empire production, it has got to be met from Cuba, Porto Rico or Java. Where does their machinery come from? It comes from America. It really has an important bearing on the problem of unemployment to-day. One last word on this unemployment question. I want to put a point to the Government which doubtless has suggested itself to them. Under the Trade Facilities Act this country is guaranteeing three quarters of the interest on loans made by the Dominions for the purpose of capital expenditure in this country to relieve unemployment. Is not that a preference? What is it, if not a preference? How do you draw the distinction? Of course it is a preference. You are not offering the same terms to France or Germany or America if they will borrow money from you to expend it in this country. You are making that offer to the Dominions, and although you may call it by a different name, it is a preference. Surely then, a similar concession in favour, not of all the Dominions in this case, but of the Crown Colonies, is justifiable on precisely the same ground, namely that of relieving the unemployed, since by enlarging the area under cultivation, it puts increased employment in this country. For those reasons I venture to agree with the Amendment as propounded by the hon. Gentleman who moved it. I am sorry I must disagree with the strictures passed on the Chancellor of the Exchequer by his two supporters. Those strictures were uncalled for. I very much hope that the Government may reconsider the Amendment with a view to seeing whether they cannot give effect to this preference. It does not involve a very large sum.

Lieut.-Colonel JAMES

I cannot altogether agree with the remarks of the hon. and gallant Member for Central Nottingham (Captain Berkeley) in regard to the strictures passed on the Chancellor of the Exchequer. Never have I had to listen to a more lamentable effort than that to which I listened unwillingly a few minutes ago. The right hon. Gentleman the Secretary for the Colonies was, fortunately for himself, absent.

The SECRETARY of STATE for the COLONIES (Mr. Thomas)

I was listening to it.

Lieut.-Colonel JAMES

Yet the right hon. Gentleman laughs when the Chancellor of the Exchequer says, "After all, who is going to pay for it? A few of these Colonies." The right hon. Gentleman is the trustee of the Colonies and of the Dominions, and it is his duty to raise an emphatic voice of protest against any suggestion of belittling them.


I listened very attentively to my right hon. Friend. The hon. and gallant Member's statement of it is a travesty. My right hon. Friend said nothing in the direction suggested by the hon. and gallant Member. He merely said that the preference was a benefit to a few planters.

Lieut.-Colonel JAMES

In the words of the song, it was not exactly what he said, but "the nasty way he said it." The implication I have made was contained in the reference to a, "few planters." They were scornful words, and uttered with a turned-up lip. My description is true, and the right hon. Gentleman knows it. This case rests on solid foundations. Members on the opposite benches frequently complain bitterly of the operations of trusts and societies in restraint of trade. We, on this side, also frequently complain and say they are a plague on our modern society. This very Measure, which the Chancellor of the Exchequer himself supports, is one which is calculated to encourage the operation of trusts and societies in restraint of trade to the detriment of English workers. Those trusts and societies are not English, but alien in origin, and belong to foreign countries. It is well known that the operations of the sugar market are a matter of speculation—engineered speculation—by American rings. I suggest that by deliberately discouraging Empire producers to increase their acreage in sugar we are playing straight into the hands of these trusts and combines whom hon. Members opposite profess to dislike so much. That is undesirable.

I should like very much to subscribe to the remarks made by the hon. and gallant Member for Central Nottingham (Captain Berkeley) in regard to the main proposals put forward by the hon. Member who moved the Amendment. His statistics were thoroughly accurate. In the words of the Chancellor of the Exchequer in regard to the mover of the Amendment, his speech was thoroughly well informed. Surely we have to strain every nerve and to make every possible effort to encourage rather than discourage trade and industry. In his opening remarks in the Budget speech the Chancellor of the Exchequer alluded to the necessity of stimulating trade and industry, and thereby decreasing unemployment. That brings me back to the remarks of the Chancellor of the Exchequer when he said that the recent General Election was fought, first and last, on the subject of Imperial Preference. There again I disagree.

Another speaker truly said that a general tariff was the question that was raised; but there was a much bigger question than that, and that was the question of unemployment. I suggest that this proposal, coming from the hon. and learned Member, would tend to decrease unemployment, and I can assure hon. Members that we on this side of the House do not want words as a cure for unemployment, but deeds and practical evidence of business methods. The Minister of Labour, in the previous Debate, complained that he could not produce schemes from a hat, like so many rabbits. The Leader of the House said that more would follow, but so far nothing tangible has been produced, although many Members on the Government side stand in a position similar to that occupied by General Trochu in the siege of Paris in 1870, when he used to go to the defenders and say, "j'ai un plan"—I have a plan. That plan never materialised, and so it is with regard to the Government's plan for dealing with unemployment.

Here is a definite, concrete and sensible plan, at any rate, to diminish unemployment within the Empire, and within these Islands. I am given to understand that if the whole of the sugar trade in this country went to Empire growers, something like £30,000,000 would be spent at once in machinery. When we consider the distressed and calamitous condition of engineering at the present time, surely it is worth considering whether a step of this kind, which is not going to cost the consumer one penny piece, is not worth trying. At any rate, it would help this country to keep its word with our Crown Colonies and our great Dominions. At the Imperial Economic Conference the word of the Government was given. It is true that the successors of that Government have come in and said, "We repudiate that; we are not bound by the action or the pledges of our predecessors." But there is such a thing as a moral claim, which is very often far more binding upon people than a legal claim. There is a strong moral claim upon us, whatever may be our political complexion, to support the agreements which were reached at the Imperial Economic Conference only a few months ago.

The actual cost in terms of pounds, shillings and pence is infinitesimal, but the value in terms of friendship and good feeling is beyond the wit of man to count. Against that, if we repudiate our Colonial and overseas friends and allies we may be assured that the greatest possible soreness must inevitably result. It will cause them to feel, and not without reason, that they have been thrown over and treated with contumely which, after all the service they have gladly rendered, they have not deserved. Their service in the War one cannot count, their service to the Empire is incalculable. Let it not be forgotten that the preference which they ask us to give them they have given to us as binding evidence of goodwill. Many Colonies and Dominions which could ill afford to throw away one pennyworth of taxation, have said, "As far as the mother country is concerned, we will give her a generous preference," and they have done so. I will not burden the House with statistics, but some of the West Indian Colonies, which we know to be poor, have given a 50 per cent. preference to British trade. Is that nothing? There is an obsession in this country that something for nothing is a bad thing. That was created in the old days when great statesmen went about the country pleading that 9d. could be obtained for 4d. How absurd it all is! Economically the thing is ridiculous, and socially it is dishonest. The Colonies and Dominions have given us substantial benefits, and it is up to us to see that at least there is some reciprocity in this matter, and that we should not be entirely selfish.


Before dealing with the Amendment, may I say a few words in regard to a point raised by the hon. and gallant Member who has just spoken? He referred to the pledges which we gave at the Imperial Economic Conference.

Lieut.-Colonel JAMES

Not your party, but the representatives representing the British Government.


The hon. and gallant Member must have known perfectly well that his Government, when they gave those pledges, had no right to give them without the sanction of this House. It has been said that the remission of these duties will not cost the consumers anything at all. The hon. Member who moved the Amendment gave us his figures, and he said that the loss of revenue by the adoption of the Amendment would be £800,000 in one year. Who is going to pay that? Our strong objection to preference is that the consumer, the British taxpayer, has had to make that amount up the whole of the time. This Debate has served one useful purpose, because it will have emphasised again to the House that when once you adopt a policy of preference or protection, you immediately create vested interests which make it extremely difficult to remove those duties in other years. [HON. MEMBERS: "The McKenna, Duties!"] Yes, the McKenna Duties. Our point is this, that despite all that has been given in preference to our Colonies, dating back to the year 1902, which the British consumer has been paying, the whole of that amount has gone into the pockets of the West Indian sugar planters.

We started in the year 1902 by a grant of £250,000 and in the four years in which the preference on sugar has been operating we have lost in revenue over £5,000,000 to this country. On account of these Colonial preferences on sugar alone, last year we suffered a loss of revenue amounting to over £1,500,000, yet our experience has been that in no single instance has the British consumer got the advantage of what should have been a cheaper rate of sugar. We have found in the operation of these preferences that our consumers, whether they have been the users of sugar direct or those who manufacture jam or sweets, have had to pay, and this fact has something to do with the figures quoted by the hon. and gallant Member for Nottingham (Captain Berkeley) who spoke of the decrease in the consumption of sugar. I am afraid that when he reads his speech to-morrow he will have some searchings of heart with regard to his Free Trade principles. When I heard it I was wondering what connection there is between Sugar and lace. Probably some analogy will be found between the two when we come to discuss—


Why should the hon. Member impute unworthy motives to another hon. Member?


Anybody who knows the hon. and gallant Member would never impute any unworthy motive to him, but one is entitled to ask, can there be any analogy between lace and sugar?


Not as far as I know.


The fact that the hon. and gallant Member does not know does not affect the matter. I ask the Chancellor of the Exchequer not to accept this Amendment, but to stand firm by the attitude which he has taken up in regard to the reduction of taxes on sugar and with it a corresponding reduction in the preference to our Colonies. I hope it will not only have an immediate effect in cheapening the sugar to the consumers in this country, but that it will mark a decided step forward in, regard to the abolition of preference to our Colonies. Years ago the late Joseph Chamberlain preached the gospel that you cannot have Colonial Preference without putting a tax on food. I have accepted that, and for that reason I am prepared to oppose Colonial Preference on food so long as I remain a Member of this House.


I have listened to the last speaker with a certain amount of interest, but I cannot help thinking that he has not travelled in the Dominions. I do not know whether he has or has not, but I feel that anybody who has travelled in our great Dominions or even in the West Indies, as I have done, would not make a speech such as the hon. Member has just made. I appreciate the speech of the hon. and gallant Member for Nottingham. I think that it might have been made from this side. I do not know anything about the interjections that were made, but I support what he says in every way. Tea and cocoa and coffee, which we have already discussed, are different commodities from sugar. In the case of tea and cocoa we have a command of the market, but in the case of sugar we are at the mercy of the United States of America. The United States is the greatest importer of sugar and the third greatest exporter of sugar in the world. The other two biggest exporters of sugar are Cuba first and Java second, but you must remember that the market is in the United States and that the price at which you buy your sugar here depends upon the speculation in the United States.

You have only got to go back one year to realise that the late President Harding found speculation going on and he passed a decree and stopped speculation in the United States, and, therefore, in the world. You thus see how we are at the mercy of the markets of the United States in sugar. Therefore, though I appreciate the reduction that has already been made by the Chancellor of the Exchequer, I hope sincerely that that reduction will go to the consumer. With regard to production, as far as I can gather, the net production for this year is about 18,500,000 tons. Pre-War 45 per cent. of the sugar of the world was grown in Europe. Since the War 23 per cent. of the sugar is produced in Europe. There are two sorts of sugar, the cane and the beet. Let me take beet sugar first. In pre-War days there were about 2,000,000 tons of beet sugar grown in Germany. To-day, the production is about 1,000,000 tons. In pre-War days we bought £12,000,000 worth of sugar from Germany. We were practically in the hands of Germany, and when the War came one of the difficulties in this country was the lack of sugar owing to the large extent to which we were dependent on supplies from Germany. We have now two small beet sugar factories in this country at Kelham and Cantley, and these two factories want encouraging, little as they do produce.

Captain BENN

Are the owners of the Cantley factory non-British?


I think that it is run by Dutchmen. The two factories are amalgamated. As long as the Government had an interest in running the factory they were an absolute failure. The managers of the Kelham factory were Frenchmen and it was not successful as run by Frenchmen, and the Frenchmen were turned out. Dutchmen have the Cantley factory. The two are now amalgamated, and I believe that the output last year, instead of being 6,000 tons, was about 15,000 tons.

Captain BENN

Would the hon. Gentleman be in a position to contradict me if I were to say that 90 per cent. of the capital in the Cantley factory is owned not in this country?


I think that the hon. and gallant Gentleman is perfectly right, but I do not object to foreigners coming here and making sugar for us. That is one of the big assets. We not only have the sugar, but we employ people in the factory, and we also have for the farmers the by-products of the sugar, which, I believe, are most valuable.


May I ask a question? The hon. Gentleman seems to reflect upon the abilities of the people of this country. Is not the success or lack of success of a sugar factory due chiefly to the proportion of sugar in the beet, and not to any lack of ability on the part of those who run the factory? Any man can run a factory to produce beet sugar who has the initial knowledge, if he gets a certain percentage of sugar in the beet.


I do not think so. This was entirely a new industry.


On a point of Order. Is it relevant to this Amendment, which deals with preference to the West Indies, to discuss the question of the industry in this country?

Mr. DEPUTY SPEAKER (Mr. Robert Young)

I was following the hon. Member's remarks, and I did not know how far he was going in that direction.


I apologise, and I suppose that I must leave this new industry to take care of itself. I sincerely hope that it will grow.


Is the hon. Member not entitled to talk about the sugar industry in this country, seeing that under the Budget it is proposed to continue the total preference in favour of home-grown sugar?


On the same point of Order. Surely the hon. Member should not refer to the industry being left to look after itself. Did not the Government guarantee the interest for a period?


We are discussing a particular Amendment before the House.


Surely the argument which has been used is relevant? If a fiscal advantage is given in order to get a reduction on sugar in this country, is it not relevant to argue that the Chancellor of the Exchequer should give similar facilities to other parts of the Empire?


The point of Order raised by the hon. Member for Penistone (Mr. Pringle) had relation to the preferences which were calculated to become effective.


I think I have said enough about Kelham and Cantley to show how important it is that this new industry should flourish in this country. Let me pass to the question of cane sugar. In pre-War days 54 per cent. of the world's consumption of sugar was cane sugar. To-day it is 75 per cent. The more we can encourage the growing of cane sugar, especially in our West Indian islands, the better it is for this country and the less dependent we are on the United States. The hon. and gallant Member for Central Nottingham (Captain Berkeley) referred to Cuba. My idea is that Cuba provides a splendid instance of what we could do in our West Indian islands. After the Spanish-American War, Cuba was independent, but independent only in theory, and to-day it is independent only in theory. What happened after that war? The United States saw prosperity in Cuba and they gave a 40 per cent. preference to Cubans. What did that do? It brought capital and machinery from the United States to Cuba. What did Cuba give in exchange? £2 per ton less on sugar going from Cuba to the United States than from any other part of the world. What was the result? In those days, in 1899, the output of Cuba was 600,000 tons of sugar a year. To-day the output is about 4,000,000 tons. That shows what preference has done and how it brought prosperity to Cuba and the United States and the United States received cheaper sugar and obtained employment for her people in the manufacture of goods.

Cheaper sugar is one of the things that we want in this country. I understand that we consume about 1,800,000 tons a year. It has been suggested that the consumption will increase with reduced prices. Probably it will. Put it at 1,800,000 tons. If it is round about that figure 32 per cent. would be grown in the Empire, of which 18 per cent. comes from Mauritius, and the balance will be foreign. Cannot we do away with some of this foreign sugar? As has been said, whenever you buy American sugar you have to pay the top prices, because of the rate of exchange. If you buy from the Dutch, from Java, you again have to pay a premium on the rate of exchange. All that makes a great difference to the price of sugar. It may sound a very small matter, but if the rate of exchange is three or four or five cents up, as against this country, it will, on the aggregate of the amount bought from the foreigner, especially from the United States, reach a very large sum. It also prevents your paying your debt to America. The more we buy from them the worse it is for that debt and for ourselves. The consumption of sugar in the United States has gone up considerably. To-day the individual American is supposed to consume more sugar than anyone else in the world; the individual consumes 100 lbs. a year. What do we consume? In 1912 this country consumed 79 lbs. per head; in 1920, 51 lbs.; in 1921, 64 lbs.; and in 1922, 75 lbs. I have not the figures for 1923, but they will probably be still higher. The consumption will go up further with a reduction in price. I do not complain of that, but for goodness sake let us encourage our Colonies to grow the sugar which we require. I sincerely hope that something on the lines of this Amendment will be passed, and that we will not be dependent on the United States and other countries for our sugar.

Major G. F. DAVIES

When I listened to the magnificent speech of the Mover of the Amendment, it seemed to me that there was little left to be added to his unanswerable arguments in favour of the view which we are putting forward to-day In his reply the Chancellor of the Exchequer failed to appreciate the real point at issue. When a question dealing so particularly with the subject of sugar comes up for discussion in this House, I feel that I must say something, because I am one of a limited band in this House, and have spent a large portion of my chequered career in endeavouring to produce sugar from the soil at a profit, with varying success. The place where I have spent many years is one that has been mentioned this evening. I imagine that the House has had sufficient figures and percentages given to it, and that there would be difficulty in the House carrying any more. I do not propose to bore hon. Members by adding to that burden, but speaking in general for a few moments I hope to get away from questions of figures and of estimates, which even in themselves are a subject of dispute across the Floor of the House. Questions always arise as to their accuracy and their meaning, whether they relate to questions of volume, of percentages, of purchases or of increased consumption. These things depend on a variety of circumstances, and as we all know, there are lies, damned lies and statistics, and I wish, if possible, to avoid all three in the course of my remarks.

I have lived a great many years in the Hawaian Islands in the Pacific, one of those groups which have been alluded to this evening as an example of what has been done for the encouragement of the sugar industry through a fiscal system, call it what you will. I am sorry to say I am already old enough to remember the days when that group had not been very long developing under the assistance meted out to it by the United States of America, and the policy which was pursued there was very similar to the policy which the United States is to-day pursuing with regard to Cuba. That is to say, the Hawaian group was not in any way connected with the United States, but was an independent monarchy with its own King and Court, and during that time there was a reciprocity treaty between the Hawaian Islands and the United States whereby, for certain returns, the islands received a form of preference for the production of sugar. In the development of affairs and in the course of history, the United States formally annexed the country in the year 1899–1900, but the United States did not place the islands under a Government corresponding to that of Porto Rico or the Philippines or to our relationship with our Crown Colonies, but converted the group into what is called an integral territory of the United States. That is a matter of detailed government with which I do not propose to weary the House. The point is that this is a matter of history and of practical experience, and not of theory at all.

It has been said, in the course of this Debate, that we are faced with a condition and not a theory. I wish to outline briefly how a condition and not a theory has worked out. Honolulu is a name which probably suggests to some hon. Members a comic opera spot with a chorus in the background, curiously garbed and carrying musical instruments. It was actually such a spot in the early days of my recollection. It was a place with little grass cottages, such as the aborigines used to live in, and the people were in a very backward state, and the conditions were just about what hon. Members, who have not had experience of these matters, might figure to themselves as obtaining in a place associated with the beachcombers of South Pacific stories. To-day Honolulu is a flourishing town of 75,000 inhabitants or more, with a magnificent system of electric street cars, electric-light, wireless telegraphy connecting it with all parts of the world, and all the latest developments. The sugar industry there which is particularly under consideration, instead of producing a comparatively few thousand tons, and instead of being in the very backward way in which it was formerly, has developed into a production in excess of 500,000 tons a year, taking an average all round. The sugar industry there, as far as cane sugar is concerned, leads the world for mechanical efficiency and scientific development.

We heard during the Debate this evening about the average production of tons of sugar per acre, and it was said that the average might be two tons. I have seen fields of sugar cane which have produced 18 tons of commercial sugar to the acre. I do not wish anyone to think that figure is an average, but if we get less than 7½ tons there we should begin to wonder what was the matter, that is to say on the irrigated plantations. I adduce these figures to show the House that the development is not merely one that has poured ill-gotten gains into the pockets of a few planters who are battening on the labouring men and are of no particular advantage to anybody. With the trade which has developed in sugar whereby 500,000 tons per annum has been produced and shipped to the United States, there has been developed an enormous industrial machine whose ramifications are absolutely incalculable. Shipping, insurance and all kinds of capital developments have taken place. The sugar planter has made his profits—why should he not?—but he has suffered his losses also. I have been connected with a sugar plantation which for 20 years never paid a dividend. During the slump years, just after the peace, every plantation in that group went behind, but these are the ups and downs of an ordinary commercial career. The general experience is that the place has been developed almost to its maximum capacity. Wherever there is a field which will grow sugar cane at a profit that field has been put into cultivation, which means increased labour and increased purchase of supplies and manufactured goods, primarily from the mainland of the United States, on account of their tariff arrangement.

This is not the occasion, nor would it be in order, to speak on the question of the advantages of a tariff system for our own country, but it is quite pertinent to say after practical experience of the conditions which have been put in operation in that part of the world, that this fiscal and economic arrangement has been of enormous advantage, not only to the people of the territory of Hawaii, but to the manufacturing industry of the United States in regard to machinery of all kinds, cotton and wollen goods, saddlery and every conceivable sort of manufactured article. That is what we want to develop to-day in our own country at a time when so many of our industries are lagging behind through lack of orders. To follow up that point, and to show how the ramifications of this industry have extended, I may say that in connection with this particular sugar industry because of the scale of production made possible by the preference held out by the mother Government of the United States, there has also grown up and developed in Hawaii an organisation for the manufacture of sugar machinery with which I have been closely connected and with which I am connected to-day. I do not wish hon. Members to think that I am endeavouring to get in a cheap advertisement, and I will not mention names, but the long and the short of it is, that as a result of the experience gained by that manufacturing organisation down there in a little spot in the Pacific, it has been able to develop itself and establish itself in the City of New York.

We have heard of the developments in Porto Rico and in Cuba. Some of the biggest and most up-to-date factories in those places, have been constructed by this organisation which gained its experience as a result of the preference offered to the sugar industry of the Hawaian Islands. They were enabled by that experience, by the development of capital and by opportunities properly handled, to spread out and also to make possible the up-to-date condition of the cane sugar industry in Cuba, Porto Rico and many other parts of the world. I only mention this to show that if one goes into the matter fundamentally, and if one wishes to help and foster a particular industry if that industry is soundly established and not artificially produced in a country to which, in normal conditions it is not adapted—[HON. MEMBEBS: "Hear, hear!"] Hon. Members opposite say, "Hear, hear!" I have been speaking of places where the conditions are favourable and which happen to be well adapted to the industry but so are our West Indies, so is Natal, so is Queensland and many large areas which we shall soon see developed in Canada. No man who knows anything about the sugar industry is going to try to develop sugar estates in countries whose climatic and geographical conditions are not suited to sugar growing. On the other hand, there is no reason why, granted your climatic and geographical conditions are right, you should not foster that industry if, following in its train, even one-tenth of the advantages I have experienced are to inure to the benefit not only of the people of this country but of the Empire as a whole.

Leaving that line of argument for one moment, I wish to direct the thought of hon. Members along a somewhat different line. The Chancellor of the Exchequer has taken the attitude in this Debate that he was not concerned with the subsidiary question which is behind this Amendment, that is, the question of preferences, and that he was going to reserve it for another occasion, but we, on this side of the House, find ourselves very seriously handicapped, and "cabin'd, cribb'd, confin'd," in a Debate of this sort, because we know full well that the arguments that appeal to hon. Members opposite below the Gangway—and to which they will give voice if and when we go into the Division Lobbies—are not going to be based on any of the economic or financial arguments that will appeal to, and only be dealt with by, the Chancellor of the Exchequer, but they will face all these questions from the point of view of whether or not the sacred and only doctrines of Free Trade are being violated. I am not levelling that as a charge across the Floor, but merely saying that, knowing that that is the starting point of hon. Members below the Gangway opposite, it becomes unfair that it should be ruled out from our arguments because of the immediate financial question of this Budget.

Those of us who speak of the spirit of Empire, of cementing the bonds of Empire, and who say that these preferences are an essential means of doing so, find cast in our teeth that we are trying to tie the Empire together by pounds, shillings, and pence, a few hundred thousand pounds in the course of the year to this, that, or the other Dominion or Colony. That is a very easy and surface way of dealing with this question, but it really goes so much deeper that I would like to give the House this thought: Going back again to the territory of Hawaii, the great importance of that group of islands to the United States as a whole has not been merely the development of trade, but it has been a question of the solidarity of the feeling of Empire—and Empire is a term which can be used quite rightly for a democracy like the United States of America as for a democracy like ours—and that is, that the channels of thought, the bonds of every conceivable sort which begin on the ordinary lines of business development, are put into the lines which cement identity of political and of other views, which are things that cement an Empire together. As a case in point, the Dominion of Canada has been very largely Americanised from below the border because all their political news, all their magazines, have filtered through an atmosphere of Americanism, and in precisely the same way the goods that they use, their motor cars, for instance, on account of geographic proximity, are all American, and their monetary system is one of dollars and cents. All these things have contributed, and in the case of Canada, in spite of the fact of the intense pride of Empire and in spite of the intense patriotism that there is throughout that extensive Dominion, at the same time there is an element of Americanism which does not obtain in other parts of the Empire.

9.0 P.M.

One of the points in the question of preference and the development of trade between the Mother Country and her own Dominions is not only the question of pounds, shillings, and pence. That is merely the material, behind which the spiritual and much more important matter lies. Far be it from me to indulge in sob stuff in this connection, but the question of sentiment in this Empire is a great deal more real than the question of the profits of commercial transactions, and those commercial profits are merely the outward and visible form of that inward and spiritual grace which we wish to see developed and which we call bonds of Empire. What I feel so strongly about is this—and I have had, like many others, the opportunity of travelling about the Empire—that the more one travels, the prouder one is, not only of the Empire, but of what it practically means to us here at home, because we come back and see in our Mother Country flagging industries, streets filled with unemployed. Looking forward to see how we can do something to alleviate that condition, we believe absolutely that, by fostering our inter-Imperial trade along the lines of this Amendment, we are going to lay the foundation, and, in persisting in that development, it must inevitably result in the cementing of those real and valuable bonds of Empire which everyone in this House, regardless of party, wishes to strengthen.


All who have been fortunate enough to hear the speech of my hon. and gallant Friend the Member for Yeovil (Major G. Davies) will, I am sure, congratulate him and themselves on finding, in a speech of great interest, first-hand practical knowledge conveyed to the House in the most interesting possible way. That is the kind of speech, if I may say so, which really is of value in these Debates on these economic questions, where one does really want to decide on the merits of the case from the practical experience of different parts of the world. It was a really valuable contribution to a very great problem. I should hope that this Amendment, which my hon. Friend the Member for South Croydon (Sir W. Mitchell-Thomson) has tabled and moved in such an admirable and interesting speech, is one of those recommendations of the Imperial Economic Conference which might be accepted in all quarters of the House and by all reasonably unprejudiced people, because I think it is plain that this Amendment is not merely in the interests of one part of the Empire, but equally in the interests of the Dominions, of the Colonies, and of ourselves here at home.

In the second place, this is no question of the imposition of a new duty. This is a proposal to reduce still further the duty upon a first-class article of food. Therefore, no one could possibly suggest in this connection that the result of voting for this Amendment could conceivably make anybody's food dearer. Indeed, as I hope to show, the inevitable result of it would tend to make food cheaper, and I would assure those who cheered my hon. and gallant Friend just now, when he said that there were some who must resist anything which appeared to be a violation of any of the principles of Free Trade, that I also claim—and not on my own but on much higher authority—that this Amendment, so far from violating any of the canons of Free Trade, is entirely consistent with it. Let me read to the House what an unimpeachable contemporary critic wrote the day after I bad introduced this proposal at the Imperial Economic Conference. He said: From the Free Traders' standpoint the proposals involve no further breach of the fiscal principles of the country, and are comparatively unimportant. The programme does not affect cereals, meat, dairy produce, and raw materials—. Then he went on: No one can really grudge the concessions on dried fruits and tobacco, and the stabilising of the Sugar Duty preference. That was written, in a considered leading article, the day after this matter was discussed at the Imperial Conference, a leading article in the "Daily Chronicle." [HON. MEMBERS: "Oh!"] I hope, Mr. Deputy-Speaker, that the entente below the Gangway is so far maintained that the official organ of the more active leader of the party is recognised? But whether that is so or not, I would, at any rate, appeal with confidence to that large section of it which claims, and I think rightly claims, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) as its first love. However, that is the first point that I would make.

The second point I would make is this: that the Chancellor of the Exchequer, in introducing the Budget, claimed that he was giving great remissions to the taxpayer who paid indirect taxation. He was cheered, and very naturally cheered, by his followers; but that claim, can only be maintained, and will only be effective in the General Election which is, I understand, coming in two years' time. [HON. MEMBERS: "Three years!"] That adds further force to the argument I am about to put—to the election which will come in three years' time if, during those three years, the right hon. Gentleman can ensure that the benefit of the remission of this taxation consistently and continuously is finding its way into the pockets of the British taxpayer whom he intends to relieve. On that I would like to say two things. In the first place, it ought surely to be his interest—and he had a good deal to say to us about the maintenance of the exchange of credit—to make as many purchases as possible of essential articles within the Empire where he can make them in sterling, and reduce the purchases he has to make in the United States during the currency of the debt payment period, payments which have to be made in dollars, and every one of which is bound to tend to depreciate, the exchange. If you insist upon a policy which inevitably makes you more dependent upon America for supplies and less upon the supplies within the Empire, you are taking the surest possible way to make your food cost you more.

That would apply even if the hon. Member was satisfied that he could get a complete and adequate supply to meet all emergencies, because, even were the supply superabundant, it would still be to his interest to purchase in the British Empire rather than in the United States. He would still have the primary duty of maintaining the American Exchange by limiting his purchases if he could make them elsewhere. The risk is by no means over. It has been suggested that in the proposal the right hon. Gentleman has made to the House that he is not taking any risk in reducing the duty this year. Certainly there is an increased consumption, but certainly the consumption is going up in other countries. I do not think that there is any dispute in any quarter of the House that it would have been, to say the least, extremely risky to have reduced the Sugar Duty—I note the Parliamentary Secretary to the Board of Trade (Mr. Alexander) dissents in this matter, and in so doing he differs from all the advisers, and all with practical knowledge, whose advice the Government were able to obtain on the last occasion. There is not the least doubt about the facts, and I do not think experience bears out the attitude of the hon. Gentleman. I think the facts have shown that our advisers were, if less optimistic, more accurate than he is. I do not think that the danger has in the least passed. Let me quote from a New York trade paper giving, as ordinary trade papers do, its estimate of what the course of sugar prices is likely to be. That paper—"The Tea and Coffee Trade Journal" of New York—says: After recent heavy purchases of sugar by refiners in the United Kingdom, who are estimated to have bought some 200,000 tons, mostly from Cuba, within a very short period, there have been natural fluctuations, and an analogy is being drawn with the opening months of 1923, when, as will be recollected, violent prices movements were the outstanding feature of the market. Cuba, being practically the only sellers at the moment, is asking and obtaining monopoly prices. If that is the considered view of the commercial opinion of New York at the present time, surely, I am not putting it too high when I say, looking to the future, within the next few months, certainly within the next three years, which hon. Members are so interested in, that there is a real risk of shortened supplies if the right hon. Gentleman does not take every possible step to develop alternative sources. There is only one way in which he can ensure that this remission of taxation will continuously find its way into the pockets of the consumer, and that is by ensuring increasing supplies from other quarters besides those from which we have hitherto drawn our supplies.

The whole issue before the House to-night is whether or not that assurance and that increased supply is or is not likely to come from the stabilisation of the preferences. The right hon. Gentleman challenged my hon. Friend on his figures, and I am going to say a word or two about the figures, and I am going to say this at the start: Can anybody in this House deny that the great American sugar development was entirely built up on preference? You have had evidence given by those of practical experience in all quarters of the House and the figures are unchallengeable. In 1898 production in Cuba, America, the Phillipines, and Hawaii—was about 1.2 million tons where in 1923 it was 7 million tons. Speaker after speaker has frankly acknowledged that that very great increase was due to preference. The right hon. Gentleman the Member for Camborne (Mr. Leif Jones) is more enthusiastic on his subject that even the people of America, for preference was started long before Prohibition, and the whole of this great development was going on long before Prohibition. There is one thing that can be said about Prohibition, and that is that it had enormously increased the consumption of sugar in America. When the right hon. Gentleman gets on the platform again perhaps he will find that a complete source of consolation to the people of this country. But I take leave to doubt it. There is no doubt, therefore, that in that wide field in the United States preference and preference alone made this great development which has been so successful. The same is true of Germany and France where a substantial preference is given.

The right hon. Gentleman challenged my hon. Friend because, in quoting the fact as to the development of Empire production, he gave the percentages. As a matter of fact, this was the only fair thing to do, because it is no good taking, as the right hon. Gentleman did, an isolated year here and there, and then saying that the Empire production was so much. What we really want to do is to take the figures over a period of years for Empire production in proportion to world production. I will give both the figures and the percentages. In 1913 the Empire production was 3,315,000 tons, and the non-Empire production 15,121,000 tons. That is to say, that the Empire production was 18 per cent. and the non-Empire production was 82 per cent. In the year 1922–23 the Empire production was 4,144,000 tons, and the world production was 13,921,000 tons. Therefore, the Empire production had risen from 18 per cent. in 1913 to 23 per cent. in 1922–23, and the non-Empire production was only 77 per cent. in 1922–23, as compared with 82 per cent. in the 1913 period. I submit that that was really the fair figure to give to the House.

Take, for example, the case of the West Indies. For the period between 1913 and 1923, so far from there being a decrease, there was an increase. What the Chancellor of the Exchequer did was simply to take two periods. He told us first what was the production of the West Indies during certain years in the middle of the War and he took the year 1016–17. Of course, production was very much stimulated then, because you had the whole of Europe submerged in the cataclysm of war, and the production of beet sugar had reached its lowest extremity. As a matter of fact only those countries which had escaped the ravages of war could be put under cultivation, and every single pound of sugar had to be harvested. He took another period, purely by chance. He took the year 1919–20, which was the peak period of prices. You will find production statistics up in the peak period of prices wherever you look for it. I shall be interested to know whether the policy of the right hon. Gentleman is to get such a development of sugar growing as to get back to the peak prices of 1919. One might be able to appreciate the policy which he has adopted if that is his intention, and that is very likely to be the result of what he is doing.

This is not merely a question of the West Indies, because there is a place called Mauritius, and this question is not confined to the Crown Colonies. The right hon. Gentleman quoted General Smuts with great keenness, but is he prepared to take General Smut's view as to the importance of a policy of preference for the development of sugar growing in Natal? Is he prepared to take the opinion of Australia as to the importance of preference in regard to sugar growing in Queensland? The whole experience of this country and elsewhere has shown that what we are proposing is the best and the most certain way of obtaining the results which we all desire to obtain, that is, an increased sugar production.

If it be wrong or useless to give a fiscal preference to encourage sugar growing in the Dominions and the Crown Colonies, why is it right to give a fiscal preference by the remission of Excise duties in regard to sugar growing in this country? The Chancellor of the Exchequer has given a preference in the Excise duties in order to get sugar grown in this country, while at the same time he refuses to give a precise equivalent to the Dominions and the Crown Colonies. If his policy is going to produce sugar growing in one case, why is it not going to produce, it in the other? What is really needed here is security. In these cases you require two or three years for the full development of an estate, and this instantly brings great orders for machinery to this country. What was said time after time by representatives at the Imperial Conference was, that what was wanted was security, and that was the whole reason for giving a preference. I feel sure that if the House takes the advice of the Chancellor of the Exchequer to-night and refuses to give this preference in order to implement the promises he has given to the country of giving them cheaper sugar, he will have to stimulate sugar growing in other ways by the expensive policy which has had to be followed before of granting subsidies and bounties. If you give a preference to sugar that is grown within the Empire, the more sugar will come in at the reduced duty, and if you give a subsidy, it will cost more, and it will be a far more unsatisfactory and costly operation.

I want to put another case to the Lancashire Members of this House. I want to ask how does this policy of refusing to stimulate sugar growing within the Empire compare with the policy which is being pursued in regard to cotton growing? Why is it right in one case and wrong in the other case? You have had the whole of Lancashire trying to stimulate cotton growing within the Empire. [An HON. MEMBER: "What did you do towards it?"] We gave £1,000,000 towards it, and carried the Bill to promote cotton growing within the Empire in the teeth of the opposition of hon. Gentlemen opposite.

The position is an exact parallel. There is a shortage of cotton in the world. Everyone in Lancashire admits it. Where do they find the remedy? They find it in taking every means in their power to get cotton grown within the Empire. They come to the Government, quite rightly, and say: "Give us a million pounds in order to start this cotton growing," and the Government gave them a million pounds. That is going to stimulate cotton growing. [Laughter.] The hon. Gentlemen may laugh, but I dare wager this, on any terms—that if he sat for a Lancashire constituency he would not dare to go and turn down the cotton-growing proposition. He would find that, on the question of cotton growing, employers and employed in Lancashire are absolutely united, and that this cotton-growing development within the Empire is being directed by representatives of the trade unions equally with representatives of the cotton spinners and the master spinners. I know what I am talking about, because I had the honour of piloting the Bill, and of being the Chairman of the Trustees, and have sat with trade union representatives as my co-trustees. I am quite certain that the right hon. Gentleman, who is now at the Board of Trade, is going to carry on that policy.

But if it is right to carry it on in the matter of cotton development, it is right to carry it on in sugar development. It is to the interests of the consumer in this country to get this supply of sugar. There is also what has been referred to by other hon. Members—the mutual trade which comes from it. Within a week of the proposals being announced at the Imperial Conference to give this stabilisation of the sugar preference, there came unsought this telegram from Mauritius. The elected and nominated members of Council of Government have requested me to beg you to convey to His Majesty's Government an expression of deep gratitude of the people of Mauritius for the great measure of protection that has been granted to the chief products of this Colony. The Council has agreed to give preferential treatment to a substantial extent on all imports, not affecting essential foodstuffs, being products of the United Kingdom and of such British Dominions, and Colonies as may agree to reciprocal benefits. Is our trade in such a satisfactory condition to-day that we can afford to refuse preferences of that kind? I submit that this is the only method by which the Chancellor of the Exchequer can ensure that the benefit will find its way permanently into the pockets of the consumer. I submit that, so far from violating any canon of Free Trade, it is entirely consistent with it. It makes for cheaper sugar; it is a reduction of the duty, and will encourage mutual trade. I do submit to the House that something which is so characteristically in the interests of every part of the Empire should receive general support. I assume that in this matter, as it is one of the resolutions of the Imperial Economic Conference, we shall have a free vote of the House at once. That was the idea given by the Prime Minister and this is the first of the Resolutions to come before the House. The Amendment put down by my hon. Friend carries out specifically the proposal which was put at the Imperial Conference. The Chancellor of the Exchequer has reduced the duty, and this is a proposal to give for this year the same monetary value to the preference as was hitherto enjoyed. I presume, therefore, that we shall be able to vote upon this in accordance with what each Member of the House believes to be in the true interests both of this country and of the Empire. If that be so, I do ask the House to be in no doubt, and to give its vote in the way in which its interests and sentiments dictate.

Captain BENN

I desire to sketch in a few words why I, and I believe most of my friends, support the Government in this matter. The hon. Member for Central Nottingham (Captain Berkeley) is an exception. We are not discussing the question of Imperial preference as laid down in the Finance Act, 1919. That is not being discussed to-night. I do not agree, myself, with what the Government are doing about that, but they have already announced their decision to continue the preference given in 1919. That is not the issue to-night. The issue to-night is whether you should stabilise the value of the preference on sugar at a fixed figure. I am opposed to that stabilisation, and I will state why. If you stabilise the value of the preference at 4s., as hon. Gentlemen opposite have said, you will encourage people in the Dominions to put down their money, their industry and their energy in the prospect of enjoying that 4s. for an indefinite period. Those hopes will be shattered if ever you come to the point when you wish to reduce your Sugar Duty below 4s. Therefore, really the Amendment is asking this House to commit itself indefinitely to a Sugar Duty of 4s.


I am sorry I cannot agree. The appeal is for a stabilisation of the preference at 4s. 3½d., or the full rate of duty, whichever is the lees. That is the resolution of the Imperial Conference.

Captain BENN

That does not in them least interfere with the strength of my argument. After all, the agreement of 1919 was that they should have a sixth of the duty, and then they came and asked to have that altered into a stabilised 4s.; and, according to the hon. Gentleman opposite, they are going to put their capital down on the strength of a 4s. tax. What sort of position shall we be in if we want to reduce the duty to 3s. or to-1s. 10d., which a Liberal Government once did? What sort of a position shall we be in if we agree to this Resolution tonight? It is in the interests of taxpayers, and the poorest class of taxpayers—the women of working-class homes to whom the sugar expenditure is a very large one—that many of us are opposing this Amendment to-night. The general question of Imperial Preference we can talk about another time, but this is laying upon the taxpayers of this country a permanent, or quasi-permanent, burden of a sugar tax of a minimum of 4s


rose in his place, and claimed to move, "That the Question be now put."

Question put accordingly, "That those words be there inserted."

The House divided: Ayes, 182; Noes, 243.

Division No. 68 AYES. [9.35 p.m.
Agg-Gardner, Rt. Hon. Sir James T. Erskine, James Malcolm Monteith Norton-Griffiths, Sir John
Ainsworth, Captain Charles Falle, Major Sir Bertram Godfray Oman, Sir Charles William C.
Alexander, Brg.-Gen. Sir W. (Glas. C.) FitzRoy, Captain Rt. Hon. Edward A. Ormsby-Gore, Hon. William
Amery, Rt. Hon. Leopold C. M. S. Frece, Sir Walter de Pease, William Edwin
Apsley, Lord Fremantle, Lieut.-Colonel Francis E. Pennefather, Sir John
Austin, Sir Herbert Galbraith, J. F. W. Penny, Frederick George
Baird, Major Rt. Hon. Sir John L. Gates, Percy Percy, Lord Eustace (Hastings)
Balfour, George (Hampstead) Gaunt, Rear-Admiral Sir Guy R. Perring, William George
Barnett, Major Richard W. Gilmour, Colonel Rt. Hon. Sir John Philipson, Mabel
Barnston, Major Sir Harry Gould, James C. (Cardiff, Central) Plelou, D. P.
Becker, Harry Greene, W. P. Crawford Pownall, Lieut.-Colonel Assheton
Beckett, Sir Gervase Gretton, Colonel John Raine, W.
Berkeley, Captain Reginald Guinness, Lieut.-Col. Rt. Hon. W. E. Rawlinson, Rt. Hon. John Fredk. Peel
Berry, Sir George Gwynne, Rupert S. Rawson, Alfred Cooper
Betterton, Henry B. Hacking, Captain Douglas H. Rhys, Hon. C. A. U.
Birchall, Major J. Dearman Hall, Lieut.-Colonel Sir F. (Dulwich) Richardson, Lt.-Col. Sir P. (Chertsey)
Blades, Sir George Rowland Hannon, Patrick Joseph Henry Roberts, Samuel (Hereford, Hereford)
Blundell, F. N. Harland, A. Ropner, Major L.
Bowyer, Capt. G. E. W. Harmsworth, Hon. E. C. (Kent) Russell, Alexander West (Tynemouth)
Brass, Captain W. Hartington, Marquess of Russell-Wells, Sir S. (London Univ.)
Brassey, Sir Leonard Harvey, C. M. B. (Aberd'n & Kincardne) Samuel, A. M. (Surrey, Farnham)
Bridgeman, Rt. Hon. William Clive Hennessy, Major J. R. G. Samuel, Samuel (W'dsworth, Putney)
Briscoe, Captain Richard George Herbert, Dennis (Hertford, Watford) Sandeman, A. Stewart
Buckingham, Sir H. Herbert, Capt. Sidney (Scarborough) Scott, Sir Leslie (Liverp'l, Exchange)
Bullock, Captain M. Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Sheffield, Sir Berkeley
Burman, J. B. Hogg, Rt. Hon. Sir D. (St. Marylebone) Shepperson, E. W.
Burney, Lieut.-Com. Charles D. Hohler, Sir Gerald Fitzroy Sinclair, Col. T. (Queen's Univ., Belfst)
Butler, Sir Geoffrey Hood, Sir Joseph Smith-Carington, Neville W.
Butt, Sir Alfred Hope, Rt. Hon. J. F. (Sheffield, C.) Somerville, A. A. (Windsor)
Caine, Gordon Hall Horlick, Lieut.-Colonel J. N. Somerville, Daniel (Barrow-in-Furness)
Campion, Lieut.-Colonel W. R. Howard-Bury, Lieut.-Col. C. K. Spender-Clay, Lieut.-Colonel H. H.
Cautley, Sir Henry S. Hughes, Collingwood Steel, Samuel Strang
Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) Hunter-Weston, Lt.-Gen. Sir Aylmer Stuart, Hon. J. (Moray and Nairn)
Cecil, Rt. Hon. Sir Evelyn (Aston) Huntingfield, Lord Stuart, Lord C. Crichton-
Chamberlain, Rt. Hon. N. (Ladywood) Iliffe, Sir Edward M. Sueter, Rear-Admiral Murray Fraser
Chilcott, Sir Warden Inskip, Sir Thomas Walker H. Sutcliffe, T.
Clayton, G. C. Jackson, Lieut.-Colonel Hon. F. S. Thompson, Luke (Sunderland)
Cobb, Sir Cyril James, Lieut.-Colonel Hon. Cuthbert Thomson, F. C. (Aberdeen, South)
Colfox, Major Wm, Phillips Jephcott, A. R. Thomson, Sir W. Mitchell-(Croydon, S.)
Conway, Sir W. Martin Kindersley, Major G. M. Titchfield, Major the Marquess of
Cope, Major William King, Capt. Henry Douglas Tryon, Rt. Hon. George Clement
Courthope, Lieut.-Col. George L. Lane-Fox, George R. Vaughan-Morgan, Col. K. P.
Cowan Sir Wm. Henry (Islingtn. N.) Laverack, F. J. Waddington, R.
Craig, Captain C. C. (Antrim, South) Leigh, Sir John (Clapham) Ward, Col. J. (Stoke-upon-Trent)
Croft, Brigadier-General Sir H. Lloyd-Greame, Rt. Hon. Sir Philip Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Crooke, J. Smedley (Deritend) Locker-Lampson, Com. O. (Handsw'th) Warrender, Sir Victor
Curzon, Captain Viscount Lord, Walter Greaves- Watson, Sir F. (Pudsey and Otley)
Dalkeith, Earl of Lorimer, H. D. Wells, S. R.
Davidson, Major-General Sir J. H. Lowe, Sir Francis William Wheler, Lieut.-Col. Granville C. H.
Davies, Alfred Thomas (Lincoln) Lumiey, L. R. Wilson, C. H. (Sheffield, Attercliffe)
Davies, Maj, Geo. F. (Somerset, Yeovil) Macnaghten, Hon. Sir Malcolm Windsor-Clive, Lieut.-Colonel George
Davies, Sir Thomas (Cirencester) McNeill, Rt. Hon. Ronald John Wise, Sir Fredric
Davison, Sir W. H. (Kensington, S.) Maitland, Sir Arthur D. Steel- Wolmer, Viscount
Dawson, Sir Philip Makins, Brigadier-General E. Wood, Major Rt. Hon. Edward F. L.
Deans, Richard Storry Meller, R. J. Wood, Sir H. K. (Woolwich, West)
Dixey, A. C. Mitchell, W. F. (Saffron Walden) Wragg, Herbert
Doyle, Sir N. Grattan Mitchell, Sir W. Lane (Streatham) Yate, Colonel Sir Charles Edward
Dudgeon, Major C. R. Moore-Brabazon, Lieut.-Col. J. T. C. Yerburgh, Major Robert D. T.
Eden, Captain Anthony Morden, Colonel Walter Grant
Edmondson, Major A. J. Nall, Lieut.-Colonel Sir Joseph TELLERS FOR THE AYES.—
Ednam, Viscount Newton, Sir D. G. C. (Cambridge) Commander B. Eyres-Monsell and
Elveden, Viscount Nicholson, William G. (Petersfield) Colonel Gibbs.
Acland, Rt. Hon. Francis Dyke Attlee, Major Clement R. Bondfield, Margaret
Adamson, Rt. Hon. William Ayles, W. H. Bonwick, A.
Adamson, W. M. (Staff., Cannock) Baker, W. J. Bramsdon, Sir Thomas
Alden, Percy Banton, G. Bromfield, William
Alexander, A. V. (Sheffield, Hillsbro') Barnes, A. Brown, A. E. (Warwick, Rugby)
Allen, R. Wilberforce (Leicester, S.) Batey, Joseph Brown, James (Ayr and Bute)
Alstead, R. Benn, Captain Wedgwood (Leith) Brunner, Sir J.
Aske, Sir Robert William Birkett, W. N. Buchanan, G.
Buckie, J. Jones, C. Sydney (Liverpool, W. Derby) Robinson, S. W. (Essex, Chelmsford)
Burnie, Major J. (Bootle) Jones, Rt. Hon. Leif (Camborne) Romeril, H. G.
Buxton, Rt. Hon. Noel Jones, Morgan (Caerphilly) Royce, William Stapleton
Cape, Thomas Jones, T. I. Mardy (Pontypridd) Royle, C.
Chapple, Dr. William A. Kedward, R. M. Scrymgeour, E.
Charleton, H. C. Kennedy, T. Scurr, John
Church, Major A. G. Kenyon, Barnet Sexton, James
Clarke, A. Kirkwood, D. Shaw, Rt. Hon. Thomas (Preston)
Climie, R. Lansbury, George Sherwood, George Henry
Cluse, W. S. Law, A. Shinwell, Emanuel
Collins, Sir Godfrey (Greenock) Lawrence, Susan (East Ham, North) Short, Alfred (Wednesday)
Collins, Patrick (Walsall) Lawson, John James Simon, E. D. (Manchester, Withington)
Costello, L. W. J. Leach, W. Simon, Rt. Hon. Sir John
Crittall, V. G. Lee, F. Simpson, J. Hope
Darbishire, C. W. Lessing, E. Sitch, Charles H.
Davies, Rhys John (Westhoughton) Linfield, F. C. Smillie, Robert
Davison, J. E. (Smethwick) Lowth, T. Smith, Ben (Bermondsey, Rotherhithe)
Dickie, Captain J. P. Lunn, William Smith, T. (Pontefract)
Dickson, T. McCrae, Sir George Smith, W. R. (Norwich)
Dodds, S. R. MacDonald, Rt. Hon. J. R. (Aberavon) Snell, Harry
Dukes, C. McEntee, V. L. Snowden, Rt. Hon. Philip
Duncan, C. Mackinder, W. Spence, R.
Dunn, J. Freeman Maclean, Neil (Glasgow, Govan) Spencer, George A. (Broxtowe)
Dunnico, H. Maden, H. Spencer, H. H. (Bradford, S.)
Edwards, C. (Monmouth, Bedwellty) Mansel, Sir Courtenay Spero, Dr. G. E.
Edwards, G. (Norfolk, Southern) March, S. Stamford, T. W.
Egan, W. H. Marks, Sir George Croydon Starmer, Sir Charles
Falconer, J. Martin, F. (Aberdeen & Kinc'dine, E.) Stephen, Campbell
Finney, V. H. Martin, W. H. (Dumbarton) Stewart, J. (St. Rollox)
Fletcher, Lieut.-Com. R. T. H. Masterman, Rt. Hon. C. F. G. Stewart, Maj. R. S. (Stockton-on-Tees)
Foot, Isaac Maxton, James Stranger, Innes Harold
Franklin, L. B. Meyler, Lieut.-Colonel H. M. Sullivan, J.
Gardner, B. W. (West Ham, Upton) Middleton, G. Sunlight, J.
Gardner, J. P. (Hammersmith, North) Millar, J. D. Sutherland, Rt. Hon. Sir William
Gavan-Duffy, Thomas Mills, J. E. Sutton, J. E.
George, Major G. L. (Pembroke) Mitchell R. M. (Perth & Kinross, Perth) Tattersall, J. L.
Gillett, George M. Mond, H. Thompson, Piers G. (Torquay)
Gorman, William Montague, Frederick Thorne, G. R. (Wolverhampton, E.)
Gould, Frederick (Somerset, Frome) Morris, R. H. Thornton, Maxwell R.
Graham, D. M. (Lanark, Hamilton) Morrison, Herbert (Hackney, South) Thurtle, E.
Graham, W. (Edinburgh, Central) Morrison, R. C. (Tottenham, N.) Tinker, John Joseph
Greenall, T. Mosley, Oswald Tout, W. J.
Greenwood, A. (Nelson and Coins) Moulton, Major Fletcher Trevelyan, Rt. Hon. C. P.
Griffith, Rt. Hon. Sir Ellis Muir, Ramsay (Rochdale) Turner, Ben
Groves, T. Murray, Robert Varley, Frank B.
Grundy, T. W. Murrell, Frank Viant, S. P.
Guest, J. (York, Hemsworth) Naylor, T. E. Vivian, H.
Guest, Dr. L. Haden (Southwark, N.) Nichol, Robert Wallhead, Richard C.
Hall, G. H. (Merthyr Tydvil) Nixon, H. Walsh, Rt. Hon. Stephen
Hamilton, Sir R. (Orkney & Shetland) O'Grady, Captain James Ward, G. (Leicester, Bosworth)
Hardie, George D. Oliver, George Harold Warne, G. H.
Harris, John (Hackney, North) Oliver, P. M. (Manchester, Blackley) Watson, W. M. (Dunfermline)
Harris, Percy A. Paling, W. Watts-Morgan, Lt.-Col. D. (Rhondda)
Hartshorn, Rt. Hon. Vernon Palmer, E. T. Webb, Lieut.-Col. Sir H. (Cardiff, E.)
Harvey, T. E. (Dewsbury) Parkinson, John Allen (Wigan) Wedgwood, Col. Rt. Hon. Josiah C.
Hastings, Somerville (Reading) Parry, Thomas Henry Weir, L. M.
Haycock, A. W. Perry, S. F. Welsh, J. C.
Hayday, Arthur Pethick-Lawrence, F. W. Westwood, J.
Hayes, John Henry Phillipps, Vivian Wheatley, Rt. Hon. J.
Henderson, Rt. Hon. A. (Burnley) Pilkington, R. R. Whiteley, W.
Henderson, T. (Glasgow) Potts, John S. Wignall, James
Henderson, W. W. (Middlesex, Enfield) Pringle, W. M. R. Williams, A. (York, W. R., Sowerby)
Hirst, G. H. Purcell, A. A. Williams, David (Swansea, E.)
Hodge, Lieut.-Colonel J. P. (Preston) Rattan, P. W. Williams, Col. P. (Middlesbrough, E.)
Hoffman, P. C. Raffety, F. W. Williams, Lt.-Col. T. S. B. (Kennington)
Hogge, James Myles Ramage, Captain Cecil Beresford Williams, Maj. A. S. (Kent, Sevenoaks)
Hore-Belisha, Major Leslie Rathbone, Hugh R. Willison, H.
Howard, Hon. G. (Bedford, Luton) Raynes, W. R. Wilson, R. J. (Jarrow)
Hudson, J. H. Richards, R. Wood, Major M. M. (Aberdeen, C.)
Jackson, R. F. (Ipswich) Richardson, R. (Houghton-le-Spring) Wright, W.
Jenkins, W. (Glamorgan, Neath) Ritson, J. Young, Andrew (Glasgow, Partick)
John, William (Rhondda, West) Roberts, Rt. Hon. F. O. (W. Bromwich)
Johnston, Thomas (Stirling) Robertson, J. (Lanark, Bothwell) TELLERS FOR THE NOES.—
Johnstone, Harcourt (Willesden, East) Robertson, T. A. Mr. Spoor and Mr. Frederick Hall.

Question put, and agreed to.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


Before I say anything more, I must make some protest about the way in which this Division has been conducted. My right hon. Friend the Member for Hendon (Sir P. Lloyd-Greame) specifically said that he assumed, in pursuance of the Government's pledge on another occasion, that this, being the first of the Resolutions of the Imperial Economic Conference to come before the House, would be left to a free vote. That was not contradicted from the Government Bench, and yet the. Government Whips were put on for the Division.


Let us have it again.


The hon. Member seems to enjoy breaches of pledges. I did not think such proceedings were usually sanctioned even by the hon. Member. My friends on this side feel that they cannot let this matter pass without registering a very emphatic protest at proceedings which appear to have rendered a general pledge absolutely nugatory. Now I want to say a few general words upon the subject of this duty, and particularly upon the subject of the home industry of sugar-beet growing. I did not move the Amendment in my name because I was informed that it was unnecessary to do so, and that the Resolution as it stands provides for the continuance of the remission of the Excise Duty on home-grown sugar. I understand it is the policy of the Government to continue this remission of excise on home-grown sugar. But we all know that that is not going to be sufficient to enable the home industry to be carried on. We are not here discussing one of those questions which rouse the fullest fury of Free Traders. We are dealing with an industry which is, beyond any possibility of doubt, an infant industry, and such industries have at various times been recognised, even by extreme Free Traders, as being proper subjects for a reasonable amount of protection. The Government have reduced the duty on sugar to a degree which admittedly will make it almost impossible for the home industry to be carried on. [An HON. MEMBER: "Why?"] I do not think that is a relevant question. Everyone knows that that is the effect of the present reduction of duty. That is to say that it must inevitably cause unemployment. I wish Free Traders opposite will occasionally read the writings of the authoritative prophets and apostles of Free Trade. This is called a Free Trade Budget, and the remission of these Sugar Duties is put forward as the most Free Trade part of this Free Trade Budget, and when we accuse hon. Members opposite of running a risk of causing unemployment they say the amount of money which is remitted from these duties, which remains in the pockets of the working classes, will go to increase consumption and so will stimulate employment. That is the argument of hon. Members below the Gangway, including such a rigid Free Trader as the right hon. Member for Rusholme (Mr. Masterman). These Free Traders have just discovered a new economic doctrine, that the demand for commodities is, after all, a demand for labour, contrary to everything that their prophets and apostles said in the last century. Perhaps I may offer to them one quotation from an authority whom they will perhaps accept—John Stuart Mill: No one is benefited by mere consumption except the person who consumes. I am not denying that these duties will benefit the consumer. I am only denying, what is perfectly obvious, that there is anything in these remissions of duty which will create one atom of employment, and in denying that I am adopting an absolutely orthodox Free Trade outlook. [Interruption.] I know hon. Members opposite have not read the apostles of Free Trade.


There are passages in John Stuart Mill that contradict that very statement.


The hon. Member had better read John Stuart Mill and see.


I have.


If he has read that work, he will know that there is nothing which contradicts that statement.


Come into the Library, and I will show you.


The hon. Member must really not, to adopt a quotation from an earlier Debate, go on shaking his head in the teeth of the arguments of his own leaders. It is obvious that the remission of these duties does not in itself cause employment in any degree at all, but in so far as it reduces the preference which the home industry enjoys it is liable to cause unemployment. That, at any rate, is not controversial. What is the Government going to do? What are their intentions in regard to the home industry? They have mentioned them very vaguely. The Financial Secretary to the Treasury has stated that he realises the problem, that he is considering it, that he is con- sulting with the industry, but he has given the impression that he is very doubtful whether the Government will feel able to do anything at all to assist it. I want to ask the Government for some indication of what they intend to do for an industry which they as much as we, I believe, are anxious to preserve and to extend, because in the extension of that industry in the long run lies the main hope, after the result of the last Division, of the Chancellor of the Exchequer realising his hopes and the consumers realising his promises of a real reduction in price. I want to warn the Government and to ask the House to pause before they accept these remissions of duty as a great benefit to the country. This is not the first time that this House of Commons has had to consider great remissions of very high Customs duties.

It is not the first time that Free Trade Governments have had to consider such reductions, but I think it is the first time that any Chancellor of the Exchequer, speaking in the name of Free Trade, has dealt with a high duty as the Chancellor of the Exchequer is dealing with this high duty. Let me recall to the House what happened on a previous occasion in the year 1853, when a Liberal Chancellor of the Exchequer, succeeding within a few months a Conservative Chancellor of the Exchequer, was faced with the question what he was to do with a very high Customs duty. I am referring to Mr. Gladstone's handling of the duty on tea in 1853, and perhaps the House will allow me to quote one or two words from his speech. It was a question of reducing a duty very much in the same proportion as the Chancellor of the Exchequer is proposing to reduce the Sugar Duty. It was a question of reducing a duty from 2s. 2¼d. to 1s. The Conservative Chancellor of the Exchequer, Mr. Disraeli, had proposed to do that. Mr. Gladstone said that he would adopt the suggestion of his predecessor, but he used these word: It would be most unwise to make the reduction to 1s. by a single leap. It is almost demonstrable, so far at least as a negative is capable of demonstration, that you cannot have the slightest hope of such an immediate increase of supply as would … secure the main benefit of the reduction to the consumer. Not the whole benefit, but the main benefit of the reduction to the consumer. Then he proposed to make his reduction in stages, and remarkably slow stages—in 1853, from 2s. 2¼;d. to 1s. 10d., in the succeeding year from 1s. 6d. to 1s. 6d., in 1855 from 1s. 6d. to 1s. 3d., and in 1856 from 1s. 3d. to 1s. In justifying that very slow process, Mr. Gladstone continued as follows: The whole time occupied … would thus be less than three years. We hope with favourable circumstances thus to bring in the supply necessary to meet increased demand, but we could not venture to recommend to the House the adoption of any shorter period for effecting the change. Will hon. Members opposite listen to their great financial apostle when he was faced with a similar problem? [An HON. MEMBER: "DO you accept it?"] I accept it, certainly.


According to the quotation just read, Mr. Gladstone stated that the previous suggestion of Disraeli to reduce it to 1s. at one swoop was unwise.


I am afraid the hon. Gentleman is not quite familiar with the history. Mr. Disraeli, if I remember aright, proposed it in rather slower stages even than that.


Mr. Gladstone did not say that.

10.0 P.M.


I was trying to summarise my remarks. I presumed a certain sediment of historical knowledge on the benches opposite. That was the way in which Mr. Gladstone handled a problem of this kind. The Chancellor of the Exchequer this year is adopting another expedient. In doing so, he has awakened the greatest enthusiasm on the benches behind him—an enthusiasm for as early a General Election as possible, in order that they may reap the advantages of the Budget. I think if the Chancellor of the Exchequer had followed the example of his predecessor, he would have been doing something far more in the interests of consumers in this country, though, perhaps, not so immediately attractive, and not so immediately productive of votes. He had a chance of handling these reductions in a statesmanlike way in the manner of great Chancellors who had preceded him. He has preferred not to take that course. He has preferred to take the easy and more popular one. Speaking entirely for myself, I say, however unpopular hon. Members opposite may try to make it appear in the constituencies, we do not believe they have taken a statesmanlike course. We do not believe they are acting in the interests of the housewives and consumers of this country. We believe they have sacrificed the economic interests of the citizens of this country in order to gain an immediate electoral advantage.

The Chancellor of the Exchequer, at any rate, will not deny that he is engaging in a gamble. The Financial Secretary to the Treasury admitted that it was impossible to rely on the surplus supplies at present existing, that it was impossible to make an accurate prediction. Certainly he will not suspect me of trying to misquote him, but it is admittedly a dangerous and ticklish job to make estimates of this kind. It is always something of a gamble. It must necessarily be a great gamble when you are making a reduction of this kind, and risking an increase of consumption such as you are risking at the present moment. What are the Government going to do to supply the only balance we say they can supply to the possibly great increase of demand, and to meet, an inadequate supply? The one possible makeweight which is not absolutely controlled now practically by New York, is the home production, and I ask the Government to tell us here to-night what they propose to do in the matter.


I have already referred to the sugar beet industry at home, and I repeat my request that the Government should make some announcement this evening as to what they propose to do in order to support the early stages of that industry, in view of the effect which they must know the remission of a Sugar Customs Duty will have upon that development. After many years of struggle, and pioneer work, we have now two modern beet sugar factories working in this country. A third is being erected, and, we hope, may be ready to deal with sugar beet in the autumn of this year. In fact, the directors of the company which is erecting the third factory have sufficient confidence in that hope to place contracts for a considerable cultivation during the present season. A few months ago we had on the stocks certainly three, and probably four, other factories, two of which would have been ready to deal with the crop of this year. Those three or four additional factories have now been put back. Why? Because the capitalists who had provisionally undertaken to provide the capital for them, declined to do so for fear the protection which the infant industry enjoyed might be withdrawn by the present Government. Whether that capital can be made available by some other means of assistance which the Government may be able to offer, I do not know; but it is certain that unless some assistance can be offered by the Government, in substitution for the protection which the Budget is withdrawing, those additional factories will not be erected.

I am not one of those who believe that the sugar industry of this country cannot flourish without fiscal protection. I believe it can—although I am an unre-pentent Protectionist myself—when once it is fully developed, and tuned up to concert pitch. I have hopes that one factory, at all events, in this country, has reached sufficiently close to concert pitch to be able to carry on at a profit, even under the very much reduced protection which this Budget will afford. The second one I am very doubtful of. I am quite confident that the new factory now in course of erection cannot possibly pay its way, or carry on other than at a loss, for some years under the state of things which this Budget is establishing. That is, unless the Government can substitute some other form of assistance. The House has heard sufficient about the beet sugar industry to realise that it is one which Is worth establishing. It is worth while establishing it from the consumers' point of view, because, when established, it will provide a very large additional source of supply of sugar. Last year over 15,000 tons of high grade sugar were produced from home-grown beet in this country, and a larger area is under contract this year. It is worth establishing from the point of view of our international credit and trade balances, because the production at home will automatically reduce the enormous sums which we send out annually in payment for foreign-grown sugar. It is admittedly worth establishing from the point of view of employment. Not only does it employ many men in the factories, but in every arable area where sugar beet is established, it is found that the number of men employed per 100 acres is substantially increased.

That is not the limit of the employment. The employment in the factories is particularly important because it comes at a time when normally employment is at its lowest ebb. The fourth reason why it is worth establishing is the most important of all. It is the agricultural reason, the corn-growing reason. One of the principal elements in the cost of producing wheat and similar crops in this country arises from the fact that arable land has to be cleaned. Corn is grown in rotation. The farmer has to include in his profit and loss account, not only the expenditure and receipts in connection with his wheat-growing years, but he has to take into account the expense of the cleaning years. The heavy burden of the necessary expense of cleaning is a serious element in the cost of wheat production. Not only our limited experience in this country, but the experience of other countries where sugar beet is grown, has been that sugar beet is the best known cleaning crop in an arable rotation. It is a crop that pays from the farmer's point of view. It cleans the land extremely well, and leaves it in better heart for white straw crops to follow than any other cleaning crop. That is not denied.

If we can introduce, generally, throughout our arable districts, a crop which not only is efficient in cleaning, but which pays its way apart from that, we are going to reduce by many shillings a quarter the minimum price at which our farmers can profitably grow wheat. It is going to be the greatest contribution that could be made towards increasing the production of wheat at home. It will go infinitely farther than would any subsidy for wheat or for arable acres, if we can establish this sugar beet industry throughout our arable districts as a cleaning crop. Let me assume that those points are conceded, and that the House admits, and realises, that the industry is worth establishing from the national point of view. Why is it that the development period is so prolonged, and the need for protection, fiscal or otherwise, so great during that period? This is not an industry which can be established at full concert pitch in a few months, or even years. Anyone with any experience of agriculture knows perfectly well that when a farmer is trying to establish a new crop, as, for instance, when he tried to grow during the War wheat and barley on land which hitherto had been devoted to grass or other crops, he found that it was years before he was able to grow the wheat and the barley to the best advantage.

So it is with sugar beet. It is a new crop, and it takes a farmer years of experience before he can grow it to the best advantage. Each succeeding year he will find that the cost of cultivation per acre is a few shillings less. Each succeeding year he will get a few cwt greater weight of beet, and a slight increase in the percentage of sugar. The aggregate of these differences is a material change in the production cost per net ton of sugar produced. It does not end there. It takes years before the transport and handling of the sugar crop can be brought up to economic perfection. It is years before the farmer who is loading it up, learns to do so with the minimum of dirt. Every year that our farmers are growing beet in the Eastern counties, they find that their more efficient handling means that their tare of dirt is reduced.

It is at least five or six years before the beet is handled to the best advantage. We have all these shortcomings before we get to the factory at all, and then when we get to the factory think what a beet factory has to be. It does not have to work seven or eight hours a day, or 5½ days a week, but it has to work continuously, day and night, Sunday and week-day, for something like 100 days. No factory can do that efficiently unless it is tuned up to the very highest pitch of perfection. In fact, it has to crowd a whole year's work into three short months. That is a much more difficult state of things to bring about than is required in an ordinary factory which is not working all the 24 hours, seven days per week.

The first thing that happens in a new factory, or a factory in a new district, is that it is always found that in any new area a great proportion of the beet is not grown to the best advantage, because the cultivation is not as deep as it ought to have been. The farmers are afraid to lower the pan too rapidly. If the pan is not sufficiently deep, the beet forks in growth, and instead of having a single clean root it has two or three prongs at the bottom, and these prongs come into the factory in many cases carrying stones. The first process when the beet comes into the factory is that it goes through the slicing machine, and has to be pulped. I have been through the mill in both the existing factories in this country, and I know that every little stone that goes into the slicing machine means that those razor-like blades fly in all directions. In the early years of a factory it constantly happens that all the slicing machines are out of action owing to the stones brought in by badly grown beet. Directly the continuous flow of beet through a factory ceases there is a loss and a waste in some stage of the process and you do not get efficiency.

All these different causes, agriculture, transport, manufacture, have to be dealt with successfully before you reach that position in which alone the industry can be carried on without assistance. It is generally estimated that 10 years are required for a new factory to reach the stage at which it can stand on its own feet. I have endeavoured to show, first, that the industry is worth having, and, second, that new capital will not come in to enable the industry to extend unless there is confidence that the necessary-support, will be provided during the earlier years. I think that the House is satisfied that the present Budget proposals, unless there is some alternative policy announced by the Government to assist the industry, will stop the development even if they do not close the existing factories. Consequently I ask the House to agree that an alternative must be proposed, and to urge the Chancellor of the Exchequer to announce what proposals he will make to enable this industry to carry on.

The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham)

The Noble Lord the Member for Hastings (Lord E. Percy) made a charge at the beginning of his speech to the effect that there had been some breach of an understanding between this side of the House and the Opposition. I want to make it clear that there must have been some misunderstanding upon that point. As I understood the reference made earlier in to-night's discussion, it was concerned solely with the forthcoming Debate on the programme of the Imperial Conference and the fact that the decision will be left to the free vote of the House in reference to the Resolutions which were then proposed. The Amendment that is before the House to-night was to make for the stabilisation of Preference, and an Amendment upon the Budget programme is, of course, an altogether different consideration, and I am assured that there was not at any time any understanding that the division would be taken on other than the lines usual in a case like that. The other point raised by the Noble Lord was a very large issue concerning the present reduction of the duty on sugar. In effect the Noble Lord's criticism came to this, "Are we, by this very large reduction, likely to stimulate the demand to such an extent that benefit will not inure to the mass of the consumers in this country?" In other words, that there will be great pressure upon the available world resources. On that point I tried to make it as clear as I could, in the speech which I made at an earlier stage in the proceedings, that the most reliable estimate which we have secured for a year ahead is that there will be over 19,000,000 tons available.

It is true that the demand for sugar is more elastic in this country and, I should imagine, throughout the world, than the demand for tea, but I did argue that the difficulty, in so far as there was a difficulty at all a year ago, turned more upon the comparatively small amount available by way of carry-over, and the danger that, if the duty were then reduced, having that small carry-over on one side and the increased demand on the other, you might have a situation in which the rings would manipulate the price against the consumers, and there would be no advantage to the people in the reduction of the duty. The conditions this year are different, first of all because we have a larger amount available by way of carry-over, and, secondly, because we are entitled to rely on the estimate which, I am advised, is a careful estimate—the speech of the hon. Member for South Croydon (Sir W. Mitchell-Thomson) notwithstanding—that there will be an output of rather more than 19,000,000 tons. Having taken all the facts into consideration, my right hon. Friend felt justified in making this drastic reduction, at the same time keeping in view the possible effect on the demand of the other conditions. But there is one part of the Noble Lord's case which as an economic proposition I do not understand. He criticises us on the ground of this being a drastic reduction. Admittedly it is a drastic reduction, because the duty had passed beyond all recognition to a figure at which, by common consent, it could never be maintained, and the reduction had to be drastic if my right hon. Friend was to make any concession at all expressable in terms of price. Earlier this evening the Noble Lord supported preference Amendments, and used arguments which altogether destroyed the position which he now seeks to set up.

Let me say a word or two about the Government's view on the other question raised by the Noble Lord—the question of the production of home-grown sugar. A short time ago a deputation was received by my right hon. Friend the Minister of Agriculture and myself, and there were then very clearly summarised the proposals which the supporters of the production of beet sugar in this country were putting forward. The deputation said that if there was a reduction in the duty below the 25s. 8d. at which it stood, the position of the home-grown sugar industry in Great Britain would be one of very great difficulty indeed, but the deputation were perfectly frank in stating that they did not for a single moment suggest that we should maintain a very high duty on imported sugar in order to give protection to an industry which was growing up in our midst and which it is our common purpose to support What the deputation said, in effect, was, "We can carry on, on the whole, if the duty falls to, say, about 21s. per cwt."—they did not tie themselves to a precise figure—"but, if it falls below that, the Government of the country will have to step in with a subsidy between the amount of the new duty imposed and that figure of 21s. per cwt." That, in substance, is the argument which is put forward to-night, and the House will realise that it is very difficult for any Government, whatever its political complexion may be, to pronounce at once on a problem of that kind, because hon. Members supporting this request say openly and candidly that a subsidy is desirable from the taxpayers as a whole on behalf of, and in the interests of, an industry growing up in Great Britain.

The Noble Lord the Member for Hastings, I think, went to extremes in suggesting that this new industry was a kind of last line—something on which we could fall back in view of the little we were doing by way of Colonial Preference and, perhaps, because of the danger of the increased demand pressing heavily upon the world supply. That might be an argument at some later date, but it is not an argument which can be seriously pressed at the present time, because, if I remember the statistics aright, the home-grown sugar would only give, in the aggregate, about three days' supply at the present time. Let us in perfect fairness to each other put the matter in its proper proportions. The real question, as I see, it, is this: Are the taxpayers, or the Government, of this country to give a subsidy to home-grown sugar, an open and unabashed subsidy, for a period of five or 10 years until it is established and finds its feet and is able to compete, or are we to find other ways of helping this industry in Great Britain? It is not unfair to remind the House—with every desire to be generous to this industry—that, at all events, during part of the period in which the duty was as high as 25s. 8d. per cwt., the home-grown industry enjoyed protection to that extent, because, since 1922, the Excise Duty on the home-grown article has disappeared, and they have, therefore, had the advantage of the very high duty on the imported article. There is no proposal to-day to interfere in the least with the absence of the Excise Duty on the home-grown article, so that they will still enjoy protection to the extent of the preferential rate in the case of Empire sugar, which is 25 per cent. of the total consumption and to the extent of the full duty on the 75 per cent of non-Empire sugar.

That protection remains, and I put that argument before the House because it is a prefectly fair argument on any Budget statement in this country, when we are dealing with a fiscal difficulty which goes far beyond the immediate proposal to give some kind of help to sugar growing here. Hon. Members in all parts of the House will no doubt question the idea of a subsidy to any industry, new or old, and will require very powerful arguments to convince them that the State should stand behind an industry, and perhaps even more powerful arguments if there is an element of doubt about the success of the industry, the subsidy notwithstanding. That is the case on one side. There are other ideas and proposals which, in justice, I am bound to put to hon. Members. There is, first, the point which I have just mentioned about the absence of the Excise Duty. The next consideration is whether we shall be able to do anything with this industry in Great Britain by way of agricultural credits or agricultural co-operation. There are undoubted possibilities in a development of that kind, and then there are further possibilities in the operation of the Trade Facilities Act. It is true, as I was bound to inform the deputation, that certain requests which have been promoted in respect of capital expenditure in this young and growing industry have been refused because they did not fulfil the conditions which the Advisory Committee under the Trade Facilities Act is bound to lay down, but in another case a guarantee has been given, and I am not without hope that there will be an opportunity in future of extending those guarantees, especially as the case becomes stronger for this industry, and that under that head and to that extent we may be able to encourage the growth of sugar in this country, or the production of home-grown sugar.

Only one point remains. I am not able to speak, because I have no knowledge at all, of the agricultural side of the question, but may I say this, that those of us who are not agriculturists have been very strongly impressed by the importance of this cultivation in British agriculture. But while all the facts are before us, I regret that I am not able to-night to state a definite Government policy. We have had this under consideration during recent weeks, we are weighing up the advantages and the disadvantages of the rival forces which I have reviewed, and we hope to be able to make a definite statement during the later and almost immediate stages of the Finance Bill, but I do assure the two hon. Members who have spoken on this subject that, while we have very carefully in view the large fiscal issue involved, and can give no pledge, on the other hand, we are not blind to the importance of the industry, and the matter will not lack sympathetic and careful consideration on our part.


I should like to say a few words arising out of the speech of the Noble Lord the Member for Hastings (Lord E. Percy), and then for a few moments to say a word about the subject of home-grown sugar. As to the speech of the Noble Lord, I would like to note one matter in passing, which I think may be useful to us and to the House a little later on. He quoted from John Stuart Mill, and asked us to accept the doctrine that increase of demand does not lead to increase of employment. That may be so. I have not looked up the passage, and I have not compared it with other passages from that author, but I assume that if that be true, the converse of it is also true, namely, that decrease of demand does not lead to decrease of employment. We shall find that argument very useful when we come to discuss the abolition of the McKenna Duties and the result with regard to employment in the motor industry, my point being, of course, that hon. Members opposite will argue that there is going to be a great decrease of demand for British cars as a result of the repeal of the duties, and we shall be very glad to be assured in advance that there will be no connection between that decrease of demand and a decrease of employment.

With regard to one other point that he made, my right hon. Friend the Member for Camborne (Mr. Leif Jones) has provided me with a rather interesting parallel in connection with his argument that it was really harmful to remove a large proportion of the duty all at once. I am bound to say that, in listening to his argument, I was not very clear as to the attitude that his party really mean to take up on that matter. I was not clear whether they would really have preferred that only a penny or twopence should have come off. I was not clear whether they really take up the position that the advantage of the remission will not go to the consumer because of shortage of supply or for any other reason, and if it be possible to define the attitude of his party rather more on that matter, I am sure we shall be glad, but everything that he said led logically to the view that they would have been much happier if the reduction proposed had been much smaller. The point on which I would like to remind him, because he will be interested as an authority on history—[An HON. MEMBER: "Sediment!"]—At any rate I will give a little more sedimentary history as to what happened in the rather important Budget of 1845, introduced by Sir Robert Peel. He had what in those days must have been the rather considerable surplus of about 3½ million pounds to dispose of. It must have seemed a large sum in those days. He proposed to surrender no less than 3¼ millions of that. £3,400,000 in remissions and reductions of taxation. He said in his speech: That they had in the first place considered the claims which might be urged in favour of the reduction of heavy taxes on articles of general consumption, and they also had considered what taxes pressed most heavily on the raw materials and manufacture, and what taxes there were, the removal of which would give more scope to commercial enterprise. After doing that he arrived at a rather interesting conclusion—I am quoting from Sir Stafford Northcote's life of him, or rather his book of "Twenty Years of Financial Policy," which I imagine will be known to hon. Members. Having reviewed these matters in regard to what would most help industry and employment, he came to the conclusion that no less than one and a third million of the disposable surplus should be devoted to the reduction of the Sugar Duty, from 25s. 3d. to 14s. per cwt, which was very nearly at one fell swoop a reduction of half in the Sugar Duty!


He was not even a Free Trader!


That even is more elementary. In regard to the question of home-grown sugar, if I may say so, I think the Government is right in reserving their final answer on this subject for another occasion. I happen to be a rather recent convert to the doctrine that it is desirable to do something to help this industry. [An HON. MEMBER "Protection!"] But I have always taken the view that it was a great mistake, and it was a mistake to-night, to urge assistance to the home-grown sugar industry in terms of a Customs duty on imported sugar. The moment the friends of home-grown sugar put themselves in a position to argue that, in order to promote the industry in which they are interested, it is necessary to raise a higher Customs duty on imported sugar than the minimum which the Chancellor needs for the purposes of his revenue, they are putting themselves in the wrong, and are putting forward the false argument that the industry could never be otherwise established in this country. I know it flourishes in Germany and Czechoslovakia, but I also know it depends in those countries on a cheap supply of migratory labour which comes in every winter, and considers the work special, and this labour is not paid anything like decent wages, the wages of labour employed in the district. That is not the case in Holland. After several years in Holland during which they have had Government support in one way or another they are now able to carry on the industry without it, and I believe that to-day labour there has quite a reasonable wage. What is possible in Holland ought to be possible in this country. The industry ought to be able to establish itself without Government assistance. I have also realised, as we all know, that this is a most extraordinary part of agriculture in point of view of giving employment, and that ft does provide labour in a way and at a time of the year which nothing else can do quite in the same way, thus giving the farmers assistance without leaving their land fallow, which has the effect of preserving the arable rotations of a great deal of land which otherwise would go out of arable cultivation altogether and cease to give employment. For all these reasons I think there is a good deal to be said for assistance, perhaps in the form of a bounty for a short term of years. I think this matter ought to be argued out apart from these questions of Customs and Excise, and I am glad the Chancellor of the Exchequer has not closed his mind on this matter. I believe a deputation from the Agricultural Committee of this House is going to ask leave to wait on the right hon. Gentleman during the next few days, and I hope he will not give a final answer now, but postpone coming to a definite conclusion.


The answer of the Financial Secretary to the Treasury was not quite conclusive, and I will only say in that connection that time does press. If we are to have any development of the home growing sugar industry, people will have to make their arrangements at an early date, and, in particular, the farmers will have to know whether or not this industry is going to be carried on. Although the reduction of this duty has been sprung upon the industry, the Government have been made aware of the position of the industry for some time past; indeed, I think it was two months ago that representations were made, and it is almost a month ago that a deputation was received upstairs by the Minister of Agriculture and the hon. Gentleman opposite with great courtesy.

I entirely agree that this industry cannot claim to be bolstered up simply by a high duty, and if that were the only way to carry on the industry, however desirable that may be, I think it would be difficult to get this House, or any other House, to agree to such a measure. The advantages of the industry have only been manifested in this country, as they have in every other country, during the period when it has enjoyed the protection which has been found necessary in all parts of the world to get over the initial difficulties inseparable from it. As the Financial Secretary rightly said, up to 1922 the home grown sugar industry was subjected to an excise of the same amount as the import duty, but the hon. Gentleman omitted to remind us that in 1922 the industry was practically dead, and it was only revived when the excise duty was remitted and when it enjoyed a measure of protection. That protection had the effect of bringing prosperity to the areas in this country where the two factories had been established. It also had the effect of increasing the amount of beet under cultivation to the 23,000 acres which are contracted for this year.

Those are not bad results from two years of the effect of the remission of the Excise duty, and there is no doubt whatever that instead of one factory being started this year if the duties had been maintained at or in anywhere near the level of last year, instead of one factory being started we should have had at least half a dozen started in other parts of the country. As to the advantages which have resulted from the duty the Financial Secretary and I are in agreement. I suggest that the industry is sufficiently valuable not only to agriculture, but to the other industries of the country to justify the Government stretching its dislike to the use of the word "subsidy" as translated into terms of a grant, and to consider whether it is to the advantage of the country as a whole that this industry should be established, and steps taken to help it over the initial stage If help of a permanent character is necessary, then it would be difficult to justify a demand of that sort.

As has been pointed out very clearly, it is in the initial stages, both as regards cultivation and as regards manufacture, that assistance is required. If after a stated period, be it three, four or five years, it is found that the industry cannot carry on with such assistance, then I should be inclined to say that it should be discontinued. So far as we are able to see at present, however, so far from that being the case it has been found that the soils and climate of this country are as suitable to beet growing as any part of the world. It is a strange and unfortunate fact that we and America are the only countries of any note in the world which are content to be dependent on outside sources for a very large proportion of the sugar supply. America is nothing like so much affected as we are. America produces a quarter of her supply, and a further quarter is produced by her own Dependencies, but she is dependent for the other half on outside sources.

May I draw attention to some rather interesting figures which have been published in America with regard to this industry there? It has been pointed out that an acre of wheat is worth to the railways there a dollar and 60 cents, and an acre of sugar beet is worth to the railways 38 dollars and 35 cents. That is to say, the difference in the haulage of the wheat alone, from the place where it is grown to the port where it is shipped, compared with the haulage of the sugar beet and other by-products from the factory to the market, is the difference between 1 dollar 60 cents and 38 dollars 35 cents. When we are trying to do everything possible to develop agriculture to the fullest extent, and which will increase employment on the transport systems as represented by those figures, I think it is worth while going into the matter rather more fully, and to see whether we cannot do the same thing here.

There is only one other figure from the United States that perhaps the House will allow me to give, and that is the difference in the cost of refining imported sugar as compared with the cost of making sugar from home-grown beet. In 1917, according to a United States Commission's report, the cost of refining imported raw sugar was 0.64 of a cent per lb., and the cost of producing sugar from home-grown beet was 5½ cents per lb. If you develop your home-grown sugar industry and, instead of being content with refining sugar grown abroad, you grow the beet at home and give employment to all those connected in this country with manufacture and refining, it seems to me to be perfectly clear that you will do more than any proposal that has been put forward so far to improve andl increase employment in this country, not only in agriculture, but in a great many other industries. For these reasons I hope that the Government will seriously consider this question, and that, in stating that the matter is still under the consideration of the Treasury, the right hon. Gentleman will bear in mind the need of coming to a decision in sufficient time to allow steps to be taken, either to close down those factories which are in project, or, as I hope will be the case, to enable us to expand the industry and set up a great many more factories.


I will only venture to trespass for a moment or two on the time of the House. I am aware that the House is always generous in giving time when a point which appears to certain sections of the House to be one of substance is under consideration. I feel that we should receive some information from the Minister of Agriculture, who, I am glad to see, is now in the House, with regard to the sugar beet position, before this Motion goes to a vote. I should like to ask him how many factories were projected before the Budget was introduced, and how many new factories it is now intended to proceed with. I should also like to ask him how many acres of land will come under arable cultivation as the result of these projected new factories, and what amount of employment will thereby be given amongst our agriculturists in the country. I feel that we should receive a clear line of policy from the Government bench as to what the effect of their proposal will be. There is no agriculturist who desires to see maintained the high rate of duty now obtaining on sugar, on the contrary, there are many agriculturists, and especially the whole great body of fruit growers, who welcome warmly the proposal to reduce the duty, because they realise that, the cheaper sugar is, the more jam will be made from their fruit.

11.0 P.M.

That, however, does not absolve the Government in any way from seeking to formulate some scheme by which this new and nascent sugar beet industry can be established for the benefit of our people in this country. One cannot travel abroad without being immensely impressed by the thousands of acres which are under this crop. We know now that in this country we can grow sugar beet rich in sugar content, and that the sugar beet has been developed from a low yield into a high yield of sugar in this country. We believe that when we have trained the men, and when we have bred the beet—and we are already breeding a high type of beet, giving nearly 16 per cent. of sugar, and that is not finality—we shall, with a reasonable amount of encouragement from the Government, be able to establish more and more factories, to the great advantage and benefit, not only of the workers in the industry, but of the consumers of sugar in this country. Proposals have been submitted quite recently for establishing a wages board. A Bill to that end has already been introduced into this House, and has received a First Reading. It is easy to set up a wages board, but can that board ensure that good, reasonable and proper wages shall be paid? If there is no juice in an orange, you cannot get any juice out of it. One of the ways by which better wages may be paid in agriculture is to encourage new industries in agriculture which are industries of promise. We cannot do like the tramways. We cannot pay a higher wage than the industry can afford.


I think this would be more appropriate on a Bill which we hear is to come on shortly.


I respectfully urge that we may receive further light upon the matter, and that the Minister may give us information on the points which we have raised.

Sir H. CROFT rose




I was not aware that the House had to rise at 11 o'clock. I thought this was a question which probably interests Socialist Members before the election, and after the election Members of the Liberal party. It is a vital question, and, I presume, even if the Government are able to give more time to the discussion of other questions, hon. Members will not wish to dismiss this question quite as lightly as is suggested by those who deny free speech to their opponents. There are one or two matters which arise to one's mind in connection with the results of the reduction of the Sugar Duty. I read in a newspaper supporting the Government two or three days ago that this Budget will be known henceforth as the poor man's Budget. At first I was not quite able to understand that, but now, having listened to these various reductions and Amendments, I understand it is because so many people are likely to be rendered poor unless the Government consider points in this connection. We congratulate the Chancellor of the Exchequer on his courage, because, after all, a great boast has been made in the country of this reduction, and we know it is a substantial reduction, almost as great as previous Conservative Chancellors have carried in days gone by. At the same time it must be realised that in every single case where the Chancellor has been acting so vigorously he has unfortunately appeared to affect the fortunes of the workers of the country to a larger extent than the benefits conferred upon consumers. I will not go through the whole list, but on every single question this matter arises, that unfortunately the Socialist Government has forgotten the employés in the various industries which are affected. My noble Friend was taken severely to task just now for mentioning this question of taxation in relief of consumers. Really in these days of enlightenment and education we have to thank the Socialist party, who have always been keen on advancement in that direction, and who, therefore, themselves have profited in the last year or two. It must be realised by now that the consumers are all important people, but are really not entitled to support at the expense of the producers. There is not a single hon. Gentleman on those benches who would have a coat, or a shirt, or a pair of boots on him, or would be in any way decently covered whatever, but for the fact that he is, like my hon. Friend who comes from Glasgow, a producer himself, or else the father, or the son or grandson of a producer.

What we have to realise, in considering this question of indirect taxation, is that it is production which has made this country the greatest country in the world. I think it is now generally admitted that this industry is a real employment provider, and from that point of view it is really refreshing to hear the Financial Secretary tell us that this is a matter which is receiving the Government's consideration. But, unfortunately, like other major questions, such as housing and unemployment, he is not yet prepared to say whether they have got any remedy. We on this side regard this as a really urgent question. It is true that by the reduction of the Sugar Duty, the Chancellor of the Exchequer is going to bring relief to the working-class households of this country by something like 90 pence per annum. But it is also true that, by stimulating our sugar-beet industry in this country, we can immediately provide employment for 100,000 men, and, if you consider the wage question also, it is not altogether a minor matter. We are really considering, on the one hand, a question of reduction to the consumer, which is very good, but, in doing so, it is to be hoped the Government are going to take alternative measures to provide for £13,000,000 in wages to British workers in country districts, as a result of a sound sugar policy.


May I ask the hon. and gallant Member where the £30,000,000 is to come from?


I do not want to detain the House, but I am always ready to oblige my hon. Friend. I assume the hon. Gentleman will not deny that we are capable of producing in this country with the same conditions of soil and climate as you have in France? I understand the hon Gentleman denies it.

Captain BERKELEY rose


I cannot give way to the whole of the Liberal party, but the hon. Gentleman, apparently, is an authority on this subject. I have endeavoured to study the beet industry in France during the last four or five years, but, of course, I shall give way in the presence of so great an agricultural expert, if the hon. Gentleman insists that the climate and soil of this country are not equally adaptable for beet growing. I say that we are competent in this country of so developing our sugar-beet factories in one-third of the counties of this country that we could absorb, undoubtedly, additional labour to the extent of 100,000 men. If the hon. Gentleman is capable, at this time of night, of making an arithmetical calculation, supposing the paltry wage of £2 10s. a week is paid, he will arrive at something like the sum I have mentioned.

I am extremely obliged to the House for its indulgence. I wish to say in all seriousness that I do hope, in endeavouring to appeal to the country on a popular Budget, such as we are told this is, we will not adversely affect employment in this country, which, thanks to the Measures of the last two years, is just beginning to recover. [Interruption.] I do not suppose that even the greatest optimist in the party opposite would suggest that the reduction of 300,000 in the unemployed is due to any Measure that they have yet introduced. There are indications throughout this Budget, in the question of sugar production, of the method of relief in the Entertainments Tax, in the McKenna Duties and so on, with which I am not entitled to deal this evening, that a great deal of employment will be imperilled. Although it it is true that the Government came into this House after having put before the country certain very definite questions for which they received a mandate, they had no mandate so to interfere with the industries of this country as to throw large numbers of people on the street; and I hope they really will consider alternative methods by which they may, at least, do something for this one great industry which is so capable of expansion. It would really assist British agriculture, for which there is really not one word of hope in the whole of the Budget from start to finish.


I would not have risen except for one or two things which were said by the hon. and gallant Member for Bournemouth (Sir H. P. Croft). He has tried to make out that we on these benches— [HON. MEMBERS: "Speak up!"] You will hear me before I have finished. The hon. and gallant Member is evidently concerned with the attitude of the Labour Government—[HON. MEMBERS: "Socialist Government!"]—which he is pleased to call a Socialist Government. [Interruption.] I, for one, am quite pleased that he should call this a Socialist Government. We are not ashamed of being Socialists, although the hon. and gallant Member was, apparently, ashamed at one time of being called a Conservative, and joined with one other hon. Member in this House to form a National party in opposition to the Conservative party. That National party died because the hon. and gallant Member's twin went out of the House and left him a united party.


Ought I not for that reason to have been asked to form a Government as being the smallest party in the House?


Has that point any connection with sugar?


I am merely trying to sweeten the Opposition. The point I rise to take exception to in the remarks of the hon. and gallant Member is that Members on this side ought to continue the tax on sugar in order to develop an industry which one or two hon. Members opposite—[HON. MEMBERS: "No!"]—have spoken of to-night as one that ought to be developed in this country.

I have no objection to the development of industry in this country, but I fail to understand why any industry should be developed at the expense of the whole country. Hon. Members opposite are always telling us of the risks which capitalists run, and that we ought to give them decent opportunities, and that capital is entitled to the best return because of those risks. The hon. Member who spoke first on the development of the sugar beet industry pleaded that the House should give to this industry something which no other industry in this country obtains, in order that those who put money into it may invest their money with the knowledge that they have the assistance of the British taxpayer behind them in subsidising the industry. We have been told that in other circumstances British capital did not require any subsidies; that it was intelligent and energetic and got through the most difficult problems in production without any assistance. To-night we have listened to a plea put forward that this House should continue the duties upon sugar so that the three factories which we understand have already been established should not go out of production in the manufacture of beet sugar. I do not see why the 45,000,000 people in this country should be taxed to provide this problematical 100,000 people with £30,000,000 in wages. The great proportion of these people would be agricultural workers. If hon. Members will figure it out for themselves they will find that 100,000 workers receiving £30,000,000 a year in wages would receive an average wage of £6 per week, and that is the wage which the hon. Member suggests is going to be earned by the workers in the sugar beet industry. If hon. Members opposite are in favour of £6 a week for workers, why wait for £6 a week for workers in the sugar beet industry? Why wait for that, when in the shipbuilding industry men are working for £2 10s. and £2 156. a week? [HON. MEMBERS: "What has that to do with sugar?"] Are you only going to protect the sugar workers? Have you anything to say to the shipbuilding or to any other workers? [An HON. MEMBER: "We are not talking about ships!"] Hon. Members are only talking about the things with which they want to make play in the country.


Why should they not have the same wage as a dustman in Poplar?


We are not talking about dustmen in Poplar. The hon. and gallant Member need not think that he is going to cast dust in the eyes of the electorate in regard to this matter. Conservative Chancellors of the Exchequer have time and again refused to reduce the taxation upon sugar and other foodstuffs so long as they were a Government, and it has remained for a Labour Government to make such a drastic cut in the tax which has been maintained since the War by the Coalition Government—which the hon. and gallant Gentleman the Member for Bournemouth (Sir H. Croft) opposed, along with the die-hards—and by the other Conservative Government which he supported. Now that the duty is reduced, he makes a plea that it is a vote-catching Measure. We are not concerned about that. We won our seats when the tax was on, and we shall win even more seats now that the tax is off.


I intervene only because of some remarks that have been made by the Financial Secretary to the Treasury. I feel reluctant to intervene because, as hon. Members may know, I have a considerable interest in the sugar industry in this country, but I do wish to say that if the Financial Secretary has indicated that the Government are going to consider subsidising still further the sugar beet industry in this country, then I shall feel bound to make my views heard. I am in sympathy with doing everything possible for agriculture, and it is to my own interest that the supplies of sugar should be increased, and if they are increased from this country so much the better. But the point I wish to make is that it is perhaps not generally realised by the House that there is an industry in this country, named the Sugar Refining Industry. It is an old-established industry, and it is capable of supplying 1,600,000 tons of refined sugar per year. We do not look upon this matter from any dog-in-the-manger point of view. Up to the last Budget the beet sugar industry has had a protection given up to a polarisation scale to refined sugar of over £25 a ton. Up to a year ago they had not been able to make things pay upon that enormous protection. Now they are still going to get a scale of protection equal to over £11 a ton. If that is not enough for the industry to make itself pay, I do not think the Government should bolster it up any further.

This may be an unpopular point of view to maintain from this side of the House, but I feel that in the interests of the large and important sugar refining trade, employing thousands of men directly and indirectly, it is right that this case should be heard; and I would point out to hon. Members that the sugar refining trade do not ask for anything special in the way of protection themselves. They merely ask for fair play, and I say confidently that at the present time, without any subsidy, by the remission of the Excise duty and by the allowance of the remission to take place on sugars polarising 98, the sugar beet industry in this country is being protected to the extent of £11 a ton over the old-established sugar refining industry in this country. Those are facts which cannot be denied. The Excise duty on all sugars is remitted up to 100 degrees of polarisation, and therefore they do get a direct advantage of £11 over British refined sugar. That is not a fair state of things, and before the Government consider further subsidising that industry, they should seriously consider the position from all points of view. A great deal has been said about the possibility of growing sugar beet over here to compete with other nations. I do not wish to say a word against the possibilities of that taking place, but I fear very much that it will be a very hard struggle for the beet people to compete with the cane-growing areas and the large cane fields in Cuba. Therefore it behoves the Government to look very carefully at the situation and all its possibilities before they accept the easy suggestions which are put forward that this is a young industry and wants only a little encouragement in order to make it a success. The Government want to look into the matter very carefully and to judge the question on its merits. There can be no possible logical justification for protecting a special industry in this country against an already established industry. If this protection takes place it should be given only to raw sugar and the scale of polarisation should cease after 98 degrees. I feel it necessary to make my voice heard because a great deal of nonsense has been talked on the subject and it ought to be realised that there is another side to the question.

The LORD PRIVY SEAL (Mr. Clynes)

I beg to move: "That the Consideration of the remaining Resolutions be now adjourned."

We have reason to believe that there is in the House a general desire to avoid a late sitting, and that reasonable time should be found at some early date for the discussion of the remaining Resolutions on the Paper.

Remaining Resolutions to be considered To-morrow.

The remaining Orders were read, and postponed.

It being Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.