§ 13. "That such part of the assets belonging to the Currency Note Redemption Account as is, in the opinion of the Treasury, having regard to the market value of those assets, in excess of the requirements of the Account shall, as the Treasury determines, be realised and the proceeds thereof paid into the Exchequer."
§ Mr. BARRI beg to move, in line 5, to leave out the word "fourpence" and to insert instead thereof the words "one penny."
In asking for a reduction of the Tea Duty from 4d. to 1d. I am asking for a concession which would be universal in its application. This is not an optional duty, imposed on a luxury article, but it is a duty which affects the great mass of the wage earners of the country, because it is a duty on an article of universal consumption. I have here one or two figures showing the great increase in the use of tea in this country. In 1911 the imports of tea retained for home consumption amounted to 293,301,000 lbs., and in 1927 the quantity had risen to 416,152,000 lbs. The consumption per head of the population in that same period of 16 years had risen from an average of 6.48 lb. per head to 8.85 lb., an increase of 35 per cent. Therefore I claim, in the first place, that the reduction for which I am asking would be universal in its application. My second point is this reduction would bring great benefits to the poorest of the people. This is a flat-rate duty, levied at the same rate on cheap tea as on dear tea, on the tea of the rich as on the tea which is more in use amongst the poor. Many of the poor, unable to purchase more substantial forms of food, resort to tea. Further, the duty falls heaviest upon those on whom the economic pressure is greatest. A man with a large family pays out of all proportion to one who has a small family or no family at all; the amount paid is regulated not by the capacity to pay but by the size of the household, and I 1557 think that in that way the duty conflicts with the Chancellor's maxim of aiding the producer.
In the next place, the reduction would lighten the burden of indirect taxation, the greater part of which always falls on the poorest. I know it is argued in favour of indirect taxation that all classes of the community ought to bear their share of the national burdens, but even if this duty were reduced from 4d. to 1d., that burden would in manifold ways still mainly rest on the poorer classes. I know it will be argued that the proportion of indirect taxation to direct taxation has fallen in recent years. I think the figures which the Chancellor gave us last year, although they were not by any means beyond dispute, showed that the proportion of indirect taxation to direct taxation was 42½ per cent. before the War and that it had now been reduced to 37 per cent. Even if that were so, the fact would not carry weight with us on this side of the House, because our object is to abolish indirect taxation as far as possible and to substitute direct taxation therefor. Such a duty as this places on the poor a burden which ought to be borne through direct taxation imposed upon those who are better able to bear it.
Then I would point out that this Budget itself in many ways increases indirect taxation. It may be argued that some of the new taxes are luxury taxes, but, even if that be so, the Chancellor betrayed his realisation of the fact that he was adding to the burdens of consumers through indirect taxation by giving as a reason for remitting one farthing per pound of the sugar duty that it would redress the fiscal burdens being placed on consumers by the kerosene duty and the like. I would press upon him to consider whether by retaining this duty and similar duties the pressure of taxation is not still being allowed to fall with the heaviest weight on the poor, whether the burden put upon them is not out of all proportion to the burden upon other classes of the community, and whether he is not in that way curtailing their ability to purchase the necessaries of life. The relief I am proposing will admittedly reach the consumer. Chancellors and Governments have admitted that in the past. In 1925 the right hon. Gentleman himself admitted quite frankly that the reduction 1558 of 4d. introduced by my right hon. Friend the Member far Collie Valley (Mr. Snowden) had reached the consumer, and the then Financial Secretary to the Treasury, who is now the Minister of Agriculture, made a similar admission. It is quite true that in the fluctuation of prices you may not always be able to put your finger on the exact remission you have made, but it is still there affecting prices and benefiting the consumer. The Chancellor of the Exchequer, in his Budget statement spoke of the steps he had taken to see that the reduction of ¼d. per lb. on sugar would reach the consumer. The right hon. Gentleman told us about the conference he had had with the sugar refiners, and he said that in a few days the benefit would come to the consumer.
In the next place, the relief I am proposing will be immediate, and not in October, 1929. It is a relief in which the Financial Secretary to the Treasury and the Chancellor of the Exchequer would see the work of their own hands and would reap the harvest they had sown, whereas in the other cases they will have to apply themselves that old phrase,
One soweth and another reapeth.It is a relief that would be substantial. It may be argued that what I am dealing with involves only a small sum in each household, but the Colwyn Report is adverse to the continuance of these imposts, and they point out that the sum spent per head on the tea consumed by the population in this country in 1925–26 was 2s. 7d., and that that was not a negligible figure. If you reckon it up in a household of a man, his wife, and three children, it means a matter of 11s. or 12s., and they say quite distinctly that that is a substantial consideration. Of course, that is on an average. There are far heavier burdens of that kind in the case of large families where the expenditure would run into a good many pounds, and in those cases the relief would be substantial.It would also be a relief in the case of a wholesome and a harmless beverage. I know I am now treading on tender ground, because the hon. and learned Member for Argyllshire (Mr. Macquisten) has assured us that the evils brought about by tea drinking are out of all proportion and far greater than those 1559 brought about by strong drink. If the hon. and learned Member for Argyllshire had been in his place, no doubt he would have responded to that argument, and he would probably have told us how tea drinking fills our gaols and leads to in-numerable breaches of the peace. In temperance circles we are often blamed because it is said that we put forward no constructive policy, and that our policy is a negative one with no practical element in it. While I recognise the value of a frontal attack on the great evil of intemperance, I count of equal value a constructive policy, and I may say that in the city of Glasgow we have had for years a policy of opening tea restaurants, and I do not think any city can compare or compete with what has been done there in that respect. In my view, that has been a very positive advance towards temperance itself, and it has proved a counteracting influence in regard to the evils to which I have referred.
§ Mr. MONTAGUEThis is not a teetotal gathering.
§ Mr. BARRI am not ashamed of what I am saying even if it were a teetotal gathering. I am putting temperance on a ground upon which it might very well be supported by every Member of this House. What I am proposing is a relief that can he given. The total revenue to be produced by all these taxes on the new way of reckoning is estimated to be £727,381,000. The total produced in 1927 by this 4d. duty on tea was £5,952,000. I would like to point out that that sum is a mere bagatelle of the whole revenue. If the Chancellor of the Exchequer had the will, he could soon see the way to do what I am asking. The right hon. Gentleman is a man who laughs at impossibilities and says, "It shall be done." If the right hon. Gentleman had been in his place, I would have commended to him as I do to the Financial Secretary, the words of a well-known philosopher,
Thou oughtest and therefore thou canst.The treatment of this question for a long period in the history of this country has been far from creditable to this House. I think this is the diamond jubilee of proposals to reduce the duty on tea. On the 5th of November, 1868, Jahn Bright, speaking in Edinburgh, first 1560 advanced his scheme for a free breakfast table, and he showed how it could be done without disturbing the finances of the country. He said:You may rely upon it that if the people say that these taxes are unnecessary and unjust, and if the people protest against them and resolve to get rid of them, you will not find the slightest difficulty in finding a Chancellor of the Exchequer who will do the work.It is only fair to the present Chancellor of the Exchequer to say that this year he is only doing what he foreshadowed last year. It will be remembered that last year the right hon. Gentleman said he could not see any prospect of lowering the Tea Duty this year, but at the same time he said that he had always regarded the reduction and ultimate extinction of the Tea Duty as an important object of our fiscal policy. The right hon. Gentleman also told us that he had always had the idea of a free breakfast table before him, and that the remission of the Tea Duty had been a long-cherished ambition with him. May I point out that the poor cannot live and thrive on the ambitions of the Chancellor of the Exchequer, who has an unfortunate habit of changing his ambitions from time to time and who now seems to be pledged to brushing aside all his former ambitions. I will not say that his path is paved with good intentions, but it is strewn with noble ambitions. The right hon. Gentleman has had a heroic struggle against his better-self, and it has often ended in the defeat of his better-self. His ambitions have been crushed out by new ambitions, new friendships and new interests, and he can now say in the words of Shakespeare:My stronger guilt defeats my strong intent.I should like to have given the right hon. Gentleman one last opportunity of repentance and of putting into the shape of some practical achievement some of his ambitions so that he would not go down in history as the man of high resolves but unaccomplished achievements of whom Young writes:At thirty man suspects himself a fool;Knows it at forty and reforms his plan;At fifty chides his infamous delay,Pushes his prudent purpose to resolve;In all the magnanimity of thoughtResolves; and re-resolves; then dies the same.
§ Mr. CHARLETONI beg to second the Amendment. On every Budget day, 1561 I find as did Sisyphus, that the stone has rolled back to the bottom of the bill, and one wonders how long it will be before the other side assists us to bring back the stone to the top of the hill. The Chancellor of the Exchequer is fond of using military metaphors. He talks about mass formations, flank movements, and that sort of thing, and the right hon. Gentleman always reminds me of the historians whose books I was forced to read as a child which spoke about mass movements of troops and Kings and Queens, but took no notice of the toiling millions upon whom the armies and all the panoply of war rests. It seems to me that the Chancellor of the Exchequer forgets all about them; he seldom speaks about them and never does anything for them. Tea is a stimulant, a comfort and a cooling beverage to many. It cheers the lonely, the sick and the aged and it stimulates the tired. It is practically the only stimulant which the poor are able to reach. The hon. Member for Silvertown (Mr. J. Jones) chuckles, but I am sure he will be greatly pleased if he could have mild ale brought down to pre-War price.
§ Mr. J. JONESI am prepared to support any reduction in taxes on the workers, but. I object to a matter of this kind being turned into a temperance oration.
§ Mr. CHARLETONI really had no intention of doing anything of the kind, but I thought the hon. Member for Silver-town expressed disagreement with something that I had said.
§ Mr. JONESOn the contrary, I agreed with every word of it, and I swallow the tea and the beer as well.
§ Mr. CHARLETONIt seems to me that in this Budget the manufacturers and the agriculturists are getting something, and the poor are getting nothing at all. The Chancellor of the Exchequer, in unfolding some of his proposals dealing with grants to the railway companies, spoke of the cumulative effect that the remission in rates would have upon some of our heavy industries, and he showed how in the carriage of materials in the iron and steel industry the effect would be cumulative. Previous Budgets introduced by the Chancellor of the Exchequer 1562 have had a cumulative effect upon tea, and yet he does not propose to reduce that duty.
The right hon. Gentleman proposes to tax kerosene which will make it more costly to boil the water in order to make tea. There are proposals in the Budget to tax petrol, cutlery, matches and mechanical lighters. It is true that the Chancellor of the Exchequer is relieving the burden on sugar but the cumulative effects of the taxes imposed under the present Budget tend to make the cup of tea of the working classes very much dearer than it used to be. We seldom see a member of the Kitchen Committee or the Chancellor of the Exchequer in the Tea Room. I suppose they feel that they cannot give us the help we should like and the consequence is that we very seldom see them there. I feel sure if the Chancellor of the Exchequer took the duty off tea he might come in and sample the House of Commons tea. We have an instance of the increase of the burden of taxation on the agricultural labourer by the tax on kerosene. Already the labourer pays a tax of 8s. 10d. on his tobacco and other things and all this has to come out of a wage between 27s. and 32s. a week. It seems to me that these lowly-paid people who support our civilisation get very little consideration.
Then I would recommend to the Chancellor of the Exchequer that he should give some little thought, even if as a political manœuvre, to the millions who are to be enfranchised presently. Has he thought of the effect of his refusal to reduce the Tea Duty on the votes of the women who are to be enfranchised? They will all support a revision of the Tea Duty; I feel sure of that. If the Chancellor gave them some relief, he would be able to speculate more accurately on the result of their votes than he can on the proposal of rate relief which is to be given next year or at some time in the distant future. The Chancellor of the Exchequer, moreover, professes that he wishes to assist trade. We have evidence, so far as previous revision of taxation is concerned, that this is one way of assisting trade. Too much weight is put on the provision of new capital and not enough weight attached to the finding of customers for purchasing material. I have a quotation from the Colwyn Report on this question of tea. The Co-operative 1563 Wholesale Society gave evidence before the Committee, and this is what the Committee say on page 373 of their Report:
The reduction in taxation on tea and sugar under the Budget of 1924 was immediately passed on to consumers, and that trade immediately expanded. While 'the expansion was not uniform throughout the country,. … an increase of 10 per cent. in the sales of tea and of 5 per cent, to 10 per cent, in the sales of sugar may be taken as typical.' During the 14 weeks immediately following these Budget reductions, the English and Scottish Wholesale Societies' sales of tea ncreased by 16.3 per cent., as compared with the corresponding period of 1923, and by 23.8 per cent., as compared with the immediately preceding 14 weeks; while their sales of sugar increased by 24 per cent., as compared with the corresponding period of 1923, and by 26.5 per cent., as compared with the immediately preceding 14 weeks.That shows quite clearly, I think, that immediately the Duty was reduced, the people who were unable to fulfil their desire for tea were able more adequately to meet that desire. On page 218 of the Report we find that the amount consumed per head increased after the Budget of 1924; where it had been 8.5 pounds per individual before, it went to 9 pounds. This is a question which does very directly affect the very poor. The figures show that there are poor families which consume more tea if given the opportunity by reduced taxation. If the Chancellor of the Exchequer likes to do something to assist the poor and trade he can not do better than give a remission of the duty on tea.
§ Mr. PILCHERThere is an aspect of this subject of cheap tea to which I would like to direct the attention of the tea trade and the representative of the Exchequer. As my hon. Friend the Financial Secretary well knows, tea is considerably dearer to-day than it was before the War. There are various reasons for that fact. One of them is, of course, that the workers in the tea gardens in India are treated very much better than they were before the War. Labour is very much dearer. Another reason is that during the great slump in tea consumption and in tea prices in 1920, the tea-producing industry of the British Empire learned the art of keeping prices up to a level which the industry itself regards as economic. Just to show the state of the industry during 1920, it may be mentioned that some of the finest 1564 gardens were actually being grubbed up because tea planting was not an economic proposition. But this is my point: the effect that this limitation of the supplies of Indian tea seems to be producing on the demand here for non-Indian teas, and particularly for Java teas.
It seems to me that in the matter of our tea resources and tea supplies, there is growing up a position a little analogous at least to the position which grew up in regard to the rubber industry under the influence of the Stevenson restriction scheme. I have here the figures showing the growth in our importation of Java teas during the last few years, and I would like to draw the attention of the Government to them. In 1919, the consumption of Java teas here, in lbs., was 18,800,000; in. 1924 it was 45,000,000 lbs.; in 1926 52,000,0000 lbs.; and in 1927, 61,000,000 lbs. Those figures are very striking. Meantime, what was the consumption of Indian tea in the United Kingdom? In 1919, it was 258,000,000 lbs.; in 1924 it was 235,000,000 lbs.; and it has stood steadily at about that figure. In 1927 it was 233,000,000 lbs. The total consumption of tea in these islands since 1919 was 388,000,000 lbs., and in 1927 it had gone up to 916,000,000 lbs.—a growth of only 28,00,000 lbs., or less than the increase in the consumption of Java tea for the whole period.
§ Mr. A. V. ALEXANDERDid the 1919 figure include Ireland?
§ Mr. PILCHERI am afraid that I cannot answer that question. There is, however, no need to go back as far as 1919. If one goes back to 1922 or 1923, it is clear that the Irish figures are not included, and the result is equally remarkabe. There is a very striking growth in the consumption of Java tea in these islands and this is the reason. Java tea is cheaper to produce. I do not know what, if any, arrangement the Java trade have for keeping up prices, but it seems to me that our own tea industry may be giving a very big incentive to the production of tea in Java on cheaper lines than the Indian tea industry is allowing Indian tea to be sold at in this country. [Interruption.] Java tea is generally regarded as an inferior quality tea. Of course Indian teas are graded in six or more different grades. Java tea is a tea which gives a stronger flavour in blending. It would be difficult to go into a 1565 shop in this country and get a packet of Java tea, for Java tea is used for blending.
A point on which I would ask for information is as to the extent to which Java tea is blended with Empire teas which are subsequently sold to the public as Empire tea—not intentionally perhaps, though the public supposes that it is buying an Empire blend while it is really buying a blend which has in it an increasing proportion of Java tea as the years go by. I tried to get some figures dealing with this matter, by means of questions a few days ago, but I was not satisfied. It appears to be impossible to ascertain how much Java tea there is in bond in this country at any moment. Possibly the figures that I have now produced will have the effect that I desire, namely, to direct the attention of the consuming public and the tea trade itself, as well as of the Ministers concerned, to the fact that there is a very striking growth, in spite of the preference that we give to Empire tea, in the consumption of this foreign produced tea. In view of all that has happened in regard to rubber, it is a question to which attention should be directed.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel)Before I turn to the very attractive and temperate speech of the Mover of the Amendment, it would be as well if I dealt with the speech of the last speaker and the point that he made about Empire tea and Java tea. I happen to have had drawn out this morning some figures which I think may be of use to my hon. Friend. The clearance of tea in this country last year was 402,000,000 lbs., of which 330,000,000 lbs. were Empire tea, as compared with an average of only 261,000,000 lbs. of Empire tea before the War and 349,000,000 lbs. in 1926–27. The figures of the 18 per cent. of tea that was not Empire grown is split up in this way: 15 per cent. was Java and Sumatra tea, and only about 3 per cent. was China tea. Although I shall take note of the point and consider what can be done about it, I think I can allay my hon. Friend's fears in some degree by drawing his attention to one fact. Before the War we consumed 261,000,000 lbs. of Empire tea. Last year we consumed 330,000,000 lbs. of Empire tea. Therefore my hon. Friend need not 1566 be apprehensive that any grave attack is being made on Empire produced tea.
§ Mr. PILCHERIt may be an insidious attack.
§ Mr. SAMUELI will look into the facts when the Budget discussions are over. Let me now deal with the very attractive speech of the hon. Member for Motherwell (Mr. Barr). Let me deal with it by means of figures. If his Amendment were carried it would reduce the duty on non-Empire tea from 4d. to 1d. Consequently, Empire grown tea would be subject to a reduction from 3⅓d. to ⅓d. per lb. As almost nine out of every 10 spoonfuls of tea consumed in these islands are Empire grown, the Amendment means that practically the whole of the duty on tea would be wiped out. Between 80 and 90 per cent. of the tea is Empire produced tea, and under the Amendment it would pay a duty of only ⅓d. If the Amendment were carried a further step would have to be taken. Cocoa, coffee and chicory are all linked with tea. Much as we would like to reduce the duty on them, it would cost too much. If cocoa, coffee, chicory and tea were affected by the reduction proposed in the Amendment, in a full year £6,000,000 of revenue would be lost. I would remind hon. Members that it is not what we would like to do, but what we can afford to do. We cannot afford, in a difficult year like the present, to lose £4,300,000.
5.0 p.m.
I have taken particular care to dissect the figures contained in the Report of the Colwyn Committee, quoted by the hon. Member for Motherwell and, I think, by the hon. Member for South Leeds (Mr. Charleton). I think it was the hon. Member for Motherwell who reminded the Committee that the Colwyn Committee calculation of the consumption cost of tea per head per annum on the average for every inhabitant of these islands was 2s. 7d. Our object, of course, is to let the poor bear as little as possible by way of taxation. But, after all, 2s. 7d. a year per head of tax, although it is, of course, a burden, cannot, I think, by any stretch of imagination be described as an onerous burden. As the Chancellor of the Exchequer said last year, and I believe on another occasion during his tenure of office as Chancellor of the Exchequer, he would like to see the taxes on the break- 1567 fast table reduced to nothing, although it was not possible at present to carry that into effect. Although he made no pledge, he said that he would like to see a reduction of taxation on Empire produced goods which form part of the poor people's food. But he went on to say, and I agree with him, and I am strengthened in that, I think, by what has been said about the Colwyn Committee, that if he were looking round—I am paraphrasing his words—and had the money to give relief, much as he would like to relieve the poor man of the 2s. 7d. per head per annum on tea, he felt that there were other taxes which would have an earlier claim for consideration. The hon. Member for South Leeds quoted the very heavy duty on tobacco, which, I think, must be admitted is no longer a luxury but is a necessity—[HON. MEMBERS: "No!"]—and the duty upon sugar. Hon. Gentlemen opposite appear to think that one cannot compare tobacco with tea. That, of course, is true theoretically, but tobacco has now become the innocent and necessary comfort of a large section of the population. It carries a very much larger burden of taxation than does tea, and the duty on tobacco forms a much larger draft upon the pockets of the working man than does tea. There is certainly also another commodity which is equally or even more necessary than is tea, and that is sugar. I agree with the Chancellor of the Exchequer when he says that if he had the money available to relieve taxation he would rather turn to other things which were burdensome on the poor than to tea.
There is another argument which the hon. Member for Motherwell touched upon. It is that the flat rate of 4d. a lb. on tea falls more heavily on the tea of the poor than on the tea of the well-to-do, because, he says, the poor are inclined to buy the cheaper types of tea. Therefore as the cheaper tea bears the burden of fourpence, and the tea used by the better-to-do people bears no more than the burden of 4d., the hon. Member claims that the duty on tea is weighted against the poor. But that is not so. I remember the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) when he was Chancellor of the Exchequer speaking from this Box and saying that that argument was not worth very much. It was said that the flat 1568 rate bore more heavily upon the poorer people, but the right hon. Gentleman said that was not so. He said that the working people had long discovered that the most economical form of buying tea was to buy the better tea, and in consequence the flat rate did not bear more heavily upon the poorer people. [Interruption.] Hon. Members may laugh and deny it, but I have the quotation here. [HON. MEMBERS: "Read it!"] It is from the OFFICIAL REPORT, and the speech Was made when the right hon. Gentleman was Chancellor of the Exchequer. The right hon. Gentleman said:
It is a mistake to suppose that the working people of this country consume wholly cheap tea. As a matter of fact, the working people of this country have discovered that cheap tea is not economical."—[OFFICIAL REPORT, 30th June, 1924; col. 962, Vol. 175]The corollary to that is—[Interruption.]
§ Captain GARRO-JONESWill the hon. Gentleman tell us which of the classes does buy this cheaper tea?
§ Mr. SAMUELProbably the new poor; the people with fixed incomes, who have suffered worst of all by taxation. Then the hon. Member for Motherwell went on to deal with the question of direct and indirect taxation. Every year since I have been in this House we have considered the relative merits of direct and indirect taxation. I have come to the conclusion that when we talk about so much of direct and so much of indirect taxation, the factors which we consider are not applicable to present conditions, and I will give my reason for that. In the first place, people forget that, roughly speaking, out of a total population in this country of, say, 40,000,000, not more than 3,000,000 people pay direct taxation, but all the people who pay direct taxation pay indirect taxation as well. The Income Tax payer and Super tax payer drink tea and consume sugar, tobacco and alcohol. They pay largely in direct taxation by way of Income Tax and Super-tax, and they pay indirect taxation as consumers of those taxable articles. [An HON. MEMBER: "They get relief!"] That may be, but when you put roughly 62 per cent. on one side and 38 per cent. on the other, your argument is vitiated by the fact that the direct taxpayers also pay indirect taxation. The figures are loaded. The 1569 figures for direct taxation are now 62.5 per cent. as against 37.5 per cent. for indirect taxation, but the figures are loaded in this way. The Silk Duties, the foreign Motor Car Duties, and the duties on pianos, are duties on articles which are quite as appropriate to the poor man's house as to the rich man's house, but they are not necessaries. A man is not compelled to buy those articles as he is compelled to buy the necessaries of life. But the Silk Duties and the duties on foreign motor cars and pianos are included in the calculation of indirect taxation which brings up the figure to 37.5 per cent. But they are not necessaries, like tea and sugar. When you concentrate on the relative proportion of direct and indirect taxation and endeavour to get a mathematical calculation in order to arrive at the absolute truth, I think those figures are entirely vitiated by reason of the inclusion of these new luxury duties in the calculation.
§ Mr. WALTER BAKERWhat about the man with £400 a year and three children?
§ Mr. SAMUELPerhaps the hon. Gentleman will allow me to get on with my main argument. The basic comforts and the necessaries of life included in the indirect taxation of the country are as they have always been of late years, they have been very much the same since 1924 until now. The figure in 1924 was 4.05 per cent.; it is now 4.75 per cent. It cannot, therefore, be said, as the hon. Member for Motherwell urged, that there is anything in the argument that the burden of indirect taxation on the poor in relation to the necessaries of life is very onerous. I cannot see how the hon. Gentleman can justify such an argument when the figure remains at about 5 per cent. I have dissected further figures between the year 1924 and the year 1928. I find that notwithstanding the imposition of taxes on luxuries—silk, the McKenna Duties, tobacco, entertainments, alcohol and betting—the increase amounted to 4.7 per cent. on indirect taxation, and the taxes in connection with sugar, tea, cocoa, coffee and matches have, in the aggregate, come down a slight amount—they have come down by .20 per cent. Consequently, I do not think that very much weight can be put upon the arguments put forward 1570 by the hon. Gentleman the Member for Motherwell. In view of the explanation I have given as to the effect of a reduction of the Tea Duty, I must ask the Committee to reject the Amendment.
§ Mr. LEES-SMITHThe hon. Gentleman has spoken about the connection between direct and indirect taxation, and he says that he thinks these discussions are losing their particular application owing to the changes in the nature of taxation.
§ Mr. SAMUELI did not put it in* that way. What I said was that the figures were losing their usefulness, but, of course, the discussions are still useful.
§ Mr. LEES-SMITHI accept the hon. Member's rendering, but the particular point to which we want to call attention is that although these figures may be now getting difficult to analyse there has been behind all these discussions always a most important issue. That was the issue of whether, taking our tax burden, as a whole, it was being reasonably adjusted between the rich and the poor. That was the real question which was always in our minds when we were discussing the burdens of indirect taxation. I notice that the hon. Gentleman in dealing with that laid down a certain principle which he said his Government wished to follow, and the principle was that they wished to reduce the taxation placed upon the poor to the smallest extent possible. I would like to examine what steps they have taken to do that. I would like to take the Colwyn Committee and to quote the table which the Committee drew up to illustrate this point. That gives results of a most striking character. The Committee took the year 1925, and they took a man and his wife and three children and they worked out the taxation paid by a family of that kind, on incomes of different rates. They found that a man who was earning £1,000 a year paid 11 per cent. of his income in taxation. They found that a man who was earning £500 a year paid in 1925 6.2 per cent, of his income in taxation. A man who is earning 28 a week pays 11½ per cent. of his income in taxation, or a higher proportion than in either of the two previous cases; and a man who is earning £2 a week pays nearly 12 per cent, of his income in taxation.
1571 That means that a man who is earning £2 a week pays about 4s. a week in taxation, or a larger proportion of his income than the man who is earning £20 a week, or £1,000 a year, and he pays in taxation twice the proportion of his income that a man earning £10 a week, or £500 a year, pays. That is the fact which lies behind these discussions on direct and indirect taxation. These figures show that the man with between £2 and £3 a week, taking the whole range of incomes below £1,000 a year, is the most highly taxed man in this country. He pays the largest proportion of his income to the State, and he does so with less grumbling and less complaint than those who earn £10 and £20 a week. Nevertheless, there is being perpetrated upon him a most palpable and undeniable injustice, which these figures have now made clear.
The Financial Secretary said that it was the object of the Government that the families in this section should bear the lowest possible proportion of taxation. He has been dissecting certain Budgets, and for the last day or two I also have seen dissecting some Budgets introduced by purely Conservative Governments, that is to say, the three Budgets introduced by the Chancellor of the Exchequer, and the Budget introduced by his Conservative predecessor, the Prime Minister. I have been working out figures to see how far they have attempted to alleviate the burdens of taxation as between rich and poor, and these are the results, which I do not think the hon. Gentleman w ill question. Their alleviation of the burdens of taxation upon the poorer section of the community has been almost entirely through the reduction of the Beer Duty three years ago, and the reduction of the Sugar Duty—I am not arguing about what it really means—in this Budget. Those two reductions were estimated, when the respective Budgets were introduced, to give an alleviation, all told, of £18,000,000 a year. Then, when we come to their alleviations of the burdens of the Income Tax and Super-tax paying sections of the community, the figures are these: The Income Tax has been reduced twice; the Corporation Profits Tax has been reduced—I am talking of Conservative Budgets; the Super-tax has been reduced, and the Death 1572 Duties have been raised. The net result has been that, taking all these taxes together, the alleviation of the burdens of the more comfortable section of the community amounts to, roughly, £100,000,000 a year, or five times as much as in the case of the other section of the community, who have been revealed by the Colwyn Committee to be the most highly taxed class in the country.
Those are the facts that we should have liked the Financial Secretary to face. He says it is the object of his Government that this class should be as lightly taxed as possible, but the effect of the four Budgets that have been introduced by Conservative Governments has been to intensify and perpetuate that essential inequity which the Colwyn Committee revealed and upon which they commented. Every Budget introduced in those four years under purely Conservative Governments has diminished the total proportion of taxation laid upon the wealthy, and has increased to a corresponding degree the total proportion borne by the poorer sections of the State. That is why these discussions on the Tea Duty are far more important than questions concerning the Tea Duty itself. They are a test of the direction in which a Government is facing, and whom they are trying to assist; and, putting this Conservative Government to that test, this discussion is not a revelation so much of the Tea Duty, but is an exposure of the whole trend and tendency of Conservative finance and of the reactionary bias and inequity upon which it is based.
§ Mr. J. JONESIn order to disabuse the minds of some of my friends on these benches, I want to say that I am heartily in support of this Amendment, not because I am particularly fond of tea, but I have had experience of being compelled to buy the poorest qualities of tea in circumstances of a different kind from those in which I now am. Blessed are they who expect little, for they shall not be disappointed. This Amendment has not been moved in the hope or belief that the hon. Gentleman will agree with us. If he did that, it would be admitting that the Government are wrong, and that is the last thing that you would expect a Tory Financial Secretary to do. They have to be here to look after the interests of their friends. Their motto in politics has always been. "You scratch my back and I will scratch your's." Consequently, 1573 when they make up their Budgets, they are always looking where their friends are. They find them, and they always follow the motto, "Unto him that hath shall be given, and from him that hath not shall be taken away even that which he hath."
It is not merely a matter of the fairly comfortable working man who can afford to pay 2s. a pound for tea, but anyone who will come down into the East End of London and look outside the shops on a Saturday night will see the dust that is sold for tea at from 1s. 2d. to 1s. 6d. a pound. And the people who buy that cannot afford to buy pounds of tea; they buy 2d., 3d. and 4d. worth of tea on a. Saturday night, and try to make it last for the longest possible time. They pay 4d. a pound on that stuff. If it were possible to feed dogs on it, dogs would turn their noses up at it, and yet these people have to pay on that the same tax as the man who can afford to buy the highest priced tea. Then indirect taxation is spoken of, but I call it the most direct form of robbery that was ever invented. The people who first brought it into existence were really bigger brigands than the men who are now under sentence of death. Tom King and Dick Turpin were gentlemen compared with our modern Chancellors of the Exchequer in this connection, because they used to rob the rich and give some of the proceeds back to the poor, whereas these modern highwaymen rob the poor and hand the proceeds over to the rich. Either it is the Road Fund or the tax on paraffin, or on tea or any other commodity. It is always to the people who have that consideration is given, and, to the people who have not, no consideration whatever is vouchsafed.
My hon. Friend who opened this discussion gave a sort of temperance lecture. I have drunk beer ever since I was 16 years of age, and I am none the worse for it, as I understand it. I am quite prepared to measure my mental or physical capacity against any of those on the other side who do not agree with me. I do not believe that the world will ever be saved by cold water, but everyone can please themselves—they can go and drown themselves in it if they like, but I will not allow them to stop me from having my glass of beer. If I have to choose between beer and water, however, 1574 if I have to choose between taxation on one of these commodities which go right down into the lives of the poorest of the poor, if I have to give a vote in favour of taxation being levied according to ability to pay, and if I were asked if I would be prepared to agree to a continuation of the heavy taxes on beer and tobacco, while reducing the taxation on tea, both my hands would go up every time for a reduction of the tax on tea.
We can discuss beer at the proper time, but I object to bringing it in like King Charles's head on every possible occasion. I will go and have some later, and I shall not interfere with anyone else going and drowning themselves in tea in the Tea. Room, but I want the Committee to realise that, apart from any question of whether we like this or the other beverage, this is an economic question affecting the mass of the common people of this country, and it is an unfair system of taxation to charge the same tax upon the man with the lowest income as upon the man with a higher income in respect of the same commodity. I am one of those who believe in the abolition of indirect taxation altogether. I think that there should be only one tax, and that a tax in proportion to means. If any allowance is made, it ought to be to the man with a large family as against the man with a small family. There is a kind of glimmering of this kind of policy in the present Budget. It has taken a lot of pressure to bring that idea into the minds of some of our modern financiers—
§ Mr. DEPUTY-SPEAKER (Mr. James Hope)The hon. Member is now going rather too wide. To discuss the question of direct and indirect taxation is in order, but the question of special reliefs from direct taxation is really beyond the scope of this Debate.
§ Mr. JONESSeeing that some of our friends have introduced the question of beer, I thought that I might introduce the question of babies. I support this Amendment proposing a reduction of the Tea Duty, because of the unfairness of the incidence of the duty, and the difference which it makes to large sections of the community, particularly the poor. Therefore, I want to assure my friends here that, while they may differ from me on the matter of beer, I am absolutely united with them on the question of tea.
§ Mr. BARNESOne of the arguments advanced by the Financial Secretary against this reduction was that reductions on the allied commodities, cocoa, coffee, and so on, would have to follow. We do not shirk that issue, and, indeed, we should be quite prepared to face the consequential Amendments that might be necessary if this duty were abolished. As has been previously said, we advance our case for two main reasons. In the first place, we are against any form of taxation on our primary foodstuffs, and, therefore, I would ask the Financial Secretary to consider this Amendment, not primarily in relation to articles like tobacco or similar commodities, but to keep in view our wish to adopt the principle of abolishing all indirect taxation, and, indeed, taxation of any kind, on the primary foodstuffs of the people. We also consider that we have a special claim to consideration in the case of tea, because the incidence of the Tea Duty is most inequitable. In fact, it would be difficult to select any other item of taxation in the Budget that falls with so much inequity as does the Tea Duty, and I hope later on to try to prove that to the Financial Secretary.
Another point that I would like to advance for the hon. Gentleman's consideration is that we do not want an imposition of this sort to be of a static character. We rather look upon the weapon of taxation as something that should be mobile, and should help to redress some of the economic inequalities which occur from time to time; and, while we do not believe that the abolition of the Tea Duty would entirely redress those inequalities, it would at least be some compensation for other forms of taxation that are being imposed. My hon. Friend the Member for Keighley (Mr. Lees-Smith) analysed the financial policy of the Government, and pointed out that something like £100,000,000 of relief from direct taxation had been granted. I should like to add to that point by stating also that in that period this Government has imposed actual additional indirect taxation to the extent of, roughly, £30,000,000. When that is added to their financial policy the situation becomes much more serious.
I should like to pass to the incidence of this tax. I want to quote three main lines of tea, what one might describe as low, medium and high grade, for the pur- 1576 pose of trying to prove that the Financial secretary's point, when he was quoting a comment of my right hon. Friend's in answer to my right hon. Friend the Member for Colne Valley (Mr. Snowden), is entirely incorrect. At the same time I do not disagree with what the late Chancellor of the Exchequer said, because I think these figures bear out the comment and at the same time dispute the Financial Secretary's argument. If we take a low grade tea the selling price of which is 1s. 6d. and remove the duty of 4d., making the actual net selling cost 1s. 2d., the proportion of tax paid on the net price is 28¼ per cent. If we take the medium grade tea and remove the tax, the proportion of tax is 15 per cent. The net cost of high grade tea, which sells at 3s. 8d., is 3s. 4d. and the duty is only 10 per cent. These figures prove conclusively that the flat rate duty on tea imposes an undue hardship on the poorer person who purchases low grade tea.
I should like to refer to the general attitude of the working class consumer towards tea. It is correct that the average working class family has learnt that the medium and better grade tea is the most economic in the long run, but it is not always the knowledge of working men and women that determines what they pay. It is their pockets. I should like the hon. Gentleman to consider these figures. Taking the tea sales of the Co-operative Wholesale Society, which is one of the largest dealers in the country, and of course has special knowledge of working class consumption, in 1926 the average selling price of our main line of tea in the North of England was 3s. 4d. a lb. That bears out what the late Chancellor said. But in 1927 the main line of tea dropped from 3s. 4d. to 2s. 8d. a lb. That proves conclusively that it was not because they do not prefer the higher grade tea but their circumstances have compelled them to purchase a lower grade tea. The argument that the hon. Member for Penryn and Falmouth (Mr. Filcher) introduced of the increase in Java tea in the last two or three years is another case of what I am trying to prove. Java tea is a coarser and cheaper kind and is used for bringing down the grade of tea, but because of the general circumstances that prevailed in working class homes in our large industrial centres because of the 1577 retention of this tax when the general movement of prices was upward, the working class public have been forced to a lower grade type of tea. That is what has happened in the last two or three years, and as the Indian market, owing to Preference and the general policy of the Government, have gone for the higher grade tea and has not expanded to the same extent as the expanding market, the trade has been more or less forced on to these lower grade Java teas. If the Government are really interested in advancing Imperial trade here is an excellent opportunity for diem. The Minister himself pointed out that £330,000,000 of the present trade, out of £416,000,000—
§ Mr. SAMUELI said 330,000,000 lbs. and 402,000,000 lbs.
§ Mr. BARNESI was quoting for 1927. At any rate the figures prove that the bulk of our tea trade is in Indian and Ceylon tea. If the increase in the Java trade is going on for the reasons I have mentioned the Government have an excellent opportunity to redress that. If the Government entirely abolished the Tea Duty that would be immediately reflected in price. As far as I can ascertain, whilst the general conditions of the trade have been inimical to a reduction of price in the last two or three years, because of the enormous expansion following previous reductions in the Tea Duty, I understand that in the near future that process may be reversed and there is a reasonable opportunity for prices to begin to fall. If the Government will accept our Amendment and abolish the Tea Duty, not only will the consumer get practically the whole of the advantage but the effect will be to encourage Indian trade, because with the reduction of price people will be able to go to higher grade teas, which are primarily Indian and Ceylon. Our case is a very strong one indeed and I hope the Government will give it due consideration.
With regard to direct and indirect taxation generally, I find that if we include the present Budget and anticipate the policy of the Government being carried out in full with regard to rating relief, since we have had remissions of taxation, mainly under Conservative Chancellors, the total reduction in direct taxation has amounted to £187,500,000. The total reduction in indirect taxation 1578 for the same period has amounted to £56,000,000, over £30,000,000 of which was reduced by my right hon. Friend when Chancellor of the Exchequer, leaving to the Conservatives in the main a reduction of £26,000,000. As against that must be put the fact that this Government has increased indirect taxation to the tune of £30,000,000, a balance against indirect taxation of over £4,000,000. These figures may be opposed in detail, but in the main they can be substantiated, and I consider we have an overwhelming case for a reduction of the Tea Duty.
§ Mr. RADFORDI have listened to the speeches of several hon. Members opposite. I really think if any person who had not been in this country in recent years had heard them he would have got a totally erroneous impression. He would have gathered that the Conservative Government had been the one to levy this duty on tea for the first time. Hon. Members have moved to reduce it, but the present flat rate of 4d. was levied by the Socialist Government. [Interruption.] I am not talking of what it was in a previous year. If hon. Members pursue that line of argument, the Income Tax was 6s. at one time and then 5s., and the right hon. Gentleman reduced it from 5s. to 4s. 6d. [HON. MEMBERS: "No!"] I may have been giving the right hon. Gentleman the credit wrongly for having reduced Income Tax. I thought he managed to effect a small reduction. At any rate, the point I have raised is not whether the Tea Duty was higher at some earlier date but that the amount the right hon. Gentleman levied was a flat rate of 4d. per lb. I was interested in the figures the hon. Member for Keighley (Mr. Lees-Smith) gave. Possibly owing to negligence or to insufficient time I have never read the whole of the Colwyn Committee's Report with sufficient care, but I agree that if, as the Colwyn Committee found in 1925, the percentage of tax paid by a man with an income of £2 a week is greater than that of considerably higher incomes, that is wrong, and I would willingly pay at the rate of a few more coppers Income tax in order that the injustice might be remedied. But I take it the Colwyn Committee's figures were based on the position that existed in 1924, and therefore surely those facts must also have been present to the mind of the right hon. Gentleman the Member 1579 for Colne Valley. Is it fair, is it honest, for hon. Members opposite now to propose a reduction of the Tea Duty which, however desirable it may be, they would not carry into effect were they themselves in power?
§ Mr. SCRYMGEOURThe special point I feel about this proposal is the strong objection to indirect taxation upon what is really a food. That difficulty stands prominently in the way of those who are anxious to secure an all-round Protectionist policy. The Prime Minister was held back in his Protectionist policy very largely on that ground. Here we have what after all is for the general body of workaday people, a food. Unfortunately, by their circumstances they are obliged to confine themselves largely to this particular product. It would be very much better for them if they had something more substantial in the way of food. The hon. Gentleman was endeavouring to argue that tobacco was a necessity. That is absurd. It is anything but a necessity. The only justification for such an argument is in regard to some of the men who are unemployed and who have been long under the great disadvantage of not being able to obtain food. They have been brought down almost to a condition of starvation, and they have said that it was absolutely necessary for them to have their tobacco in order to stifle the strong desire for legitimate food. That is the only instance where tobacco can be shown to be a necessity.
The real truth is revealed by such figures as have been presented from this side of the House, especially by the hon. Member for Keighley (Mr. Lees-Smith), with regard to the marked disparity between the burden laid upon those who are so well able to meet even the heaviest burdens imposed in the form of taxation and those who have such a terrible struggle for mere existence. It. is regrettable that a duty of this kind should be exacted in regard to a commodity which is so essential to the workers. Often the working man has to drink tea at breakfast time, at dinner time, and at supper time. It is scandalous that any Government should impose taxation on a basis of this kind. It is iniquitous that such a proposition should be made in face of the great relief that Tory Governments have from time to time given to the wealthier classes. We know that the old 1580 time basis of taxation was termed the basis of "means and substance," and that is really the basis upon which we ought to act in all our interests and in the conduct of our national and local government. In every election in which I have taken part that is the principle for which I have stood concerning all taxation. I am thoroughly with the hon. Member for Silvertown (Mr. J. Jones) in his argument, that the best line to pursue is to attack the whole system of indirect taxation. I know that there are special difficulties in the way.
There is one particular direction to which reference has already been made by the hon. Member for Silvertown—there is always the silver lining to every cloud—and that is the difficulty in facing the complete relief of indirect taxation. I submit that if the Chancellor of the Exchequer were really sincere about this—I know his difficulty is the application of his sincerity; the more one becomes attached to a Government position, I admit that it is extremely difficult for one to fulfil one's sincerity—if he really meant business, and took into serious consideration the interests of the mass of toilers to whom he used to address himself, he would very largely concentrate upon this question of indirect taxation instead of being drawn off by the Super-tax payers. Imagine a man talking about his sincerity and desire to help working men and women in regard to tea turning round and saying: "The most unfortunate man troubling my conscience is the man who is a Super-tax payer. I have to relieve him and leave out of consideration the poor fellow who has to pay 4d. on tea."
The situation is so appalling that I wonder when the day is coming when there will be a thorough grappling with such issues. The working people have many times been led to believe that such things will be tackled. It is fair to say to the late Chancellor of the Exchequer that, at any rate, he did give us a substantial proof of his sincerity. I should like to see the Chancellor cut out this particular tax on tea. It is not simply a question of relieving the taxation on tea; it should be a definite signal to the workers of a direct line of advance against the whole system of indirect taxation. The whole burden of our taxation, from whatever it may arise, ought 1581 to be based on what is the income of any given man or woman or any family circle. On that basis there would be no just reason for complaint as far as the incidence of taxation is concerned. An hon. Member who has recently spoken referred to the introduction of a relief of taxation on plant and machinery and so on and the necessity for rearranging the incidence of taxation. There are difficulties in the way, and we cannot discuss those to-day. If it be the endeavour of the Government to meet the case of corporations and business concerns out for profit-snaking and concerns making a substantial profit in normal times, if it be necessary for the Government to face that, why should they have this difficulty in meeting the simple question of the relief of taxation on tea? A Government that cannot face a simple point of that kind ought to stop any Minister from talking about his or the Government's anxiety to relieve the burdens of the struggling mass of the people.
Dr. VERNON DAVIESI should like to intervene for a moment, because I think it is perhaps as well that the House and the country should definitely understand that tea is not a food. For people to come here and talk about taxing the food of the people and giving these harrowing tales, is neither fair nor desirable. Tea is a stimulant. There is not a particle of food value in it. If you took tea alone you would die from starvation. It was originally a luxury. It may now have become a necessity, but, in the way it is generally taken by the bulk of the working people, it is undoubtedly a poison.
§ Mr. SCRYMGEOURIt is not a poison like the other thing.
Dr. DAVIESThere is very much to be said for the argument of the hon. Member for Silvertown (Mr. J. Jones) because when he advocates the advantages of glorious beer he is advocating the advantages of something which has a definite food value. But I really must protest against using this House as a place to deceive the public by statements about taxing the food of the people, and calling tea a food.
§ Mr. GILLETTI am not qualified to g,) into the question which has just been dealt with by the hon. Member for Roy- 1582 ton (Dr. Davies), but I have always been given to understand that there are very great mysteries in the ingredients that go to make beer. I should say that the hon. Member was speaking of beer theoretically. There is one point to which I want to call the attention of the Financial Secretary in connection with the interesting statement made by the hon. Member for Penryn and Falmouth (Mr. Filcher). It is with regard to the figures he gave concerning the increase of Java tea. I think that in regard to that matter every Member ought to consider and bear in mind another important point to which the hon. Member did not refer. While the supply of Indian tea is to a large extent, I understand, being held stationary, the House wants to remember that this is being deliberately done by the tea merchants in order to raise the price of tea. Anyone who was watching the share market in tea about a year or two years ago will remember the extraordinary rise that took place in tea shares when those in the know knew there was to be a determined policy carried out to restrict the use of tea that was introduced from those countries. The point that I want to make, and which I hope the hon. Member will kindly pass on to the Financial Secretary, is that the Government, when they are considering the figures produced to the House by the hon. Member for Penryn and Falmouth, will consider also the question of trades deliberately restricting their output. At any rate, there is this to be said for the rubber trade, that the Stevenson scheme was only put into force when the trade had come to the conclusion that the circumstances were so serious that nothing else could be done. But I do not know that this was the case in connection with tea.
§ Mr. RILEYOn a point of Order. May I ask whether it is not customary for the Financial Secretary or a representative of the Treasury to be present during this discussion?
§ The UNDER-SECRETARY of STATE for SCOTLAND (Major Elliot)An arrangement has been come to by the Chancellor of the Exchequer, in view of the heavy strain of these Debates, to make it possible for other Members of the Government to be present, and, at times, to deal with questions which arise. 1583 The Financial Secretary to the Treasury has only left the Chamber for a couple of minutes. He asked me to watch the proceedings on his behalf and make any apologies which were necessary.
§ Mr. GILLETTI am sure I am quite willing for the Financial Secretary to have his cup of tea, and while I agree with what the hon. and gallant Gentleman says, the point I really want to address to the House will be rather more appropriately addressed to the hon. Member for South Salford (Mr. Radford). The hon. Member forgot one fact when he referred to the Colwyn Report and asked why my right hon. Friend the Member for Colne Valley (Mr. Snowden) had not taken note of the figures in it.
§ Mr. RADFORDWhat I said was this: The Colwyn Committee reported in 1925; therefore, I presume their Report was based on figures which would be known to the right hon. Gentleman in 1924.
§ 6.0 p.m.
§ Mr. GILLETTI did not know that the facts were usually given to the Government before a report was issued. The hon. Member has received the figures evidently with sympathy. Some of the figures in the Report of the Committee were given on the authority of Sir Herbert Samuel and the Committee acknowledged that they were given on the authority of that distinguished statesman, so that the source from which they received the figures was quite apart from anyone connected with the Government. The hon. Member said that he was interested in hearing the figures which were given by the hon. Member for Keighlcy (Mr. Lees-Smith) pointing out how heavily taxation weighed upon the very poorest section of the people, and how the percentage which they had to hear was so much heavier than the percentage of taxation weighing upon other sections of the population. I hope the hon. Member will continue to investigate this matter and will try to become acquainted with some of these figures, because that is the case we are attempting to make in regard to the whole question of the removal of a large part of the duty upon tea. The hon. Member will find that the figures quoted by the hon. Member who 1584 moved the Motion show that while a family with an income of £100 a year were paying duty of 11s. per head, when you came to a family with £500 a year the estimated taxation which they were paying was only one shilling or two shillings higher.
§ Mr. RADFORDIs it not percentage?
§ Mr. GILLETTIt is not percentage. I am referring to the figures supplied by Sir Herbert Samuel, in which he quoted the actual duty which he estimated a family were paying in shillings and pounds, taking families with incomes of £100, £150 and upwards to £500. I think it was an estimate of the actual duty that would be paid upon the amount of tea consumed by persons in the family, and not a question of percentage. I took particular note of some references made by the Financial Secretary to the Treasury in regard to direct and indirect taxation. I do not know whether the figures which he quoted are an estimate of what the position will be provided that the Finance Bill is passed on the lines suggested by the Government, but I notice that the figures given by the "Economist" in regard to direct and indirect taxation are somewhat different from those which the Financial Secretary gave. The "Economist" gives the figure of direct taxation at 59.9 per cent. and for indirect taxation 40.1 per cent. I imagine that under the financial proposals of the Government the figures will he found more unfavourable from the standpoint at which we are looking at the position than they are at the present time. If the figures of the "Economist" are correct, I would like to draw the attention of the House to the fact that the percentage of direct taxation has been steadily falling during the last four years. In 1924–25 it was 62.7 per cent., and in subsequent years it has dropped to 61.6 per cent., 60.1 per cent. and 59.9 per cent. I presume that this year the figure will be still lower. Unless the Financial Secretary is prepared to Drove to me that the figures of the "Economist" are unsound, it looks as if the result of the Tory policy has been steadily and systematically to reduce the percentage of direct taxation and, of course, correspondingly to increase the indirect taxation.
§ Mr. A. M. SAMUELPerhaps it would be better if I gave the exact figures, 1585 so that no incorrect impression may be drawn. In 1913–14 the direct taxation amounted to 57.5 per cent. and the indirect taxation 42.5 per cent. In 1924, the direct taxation amounted to 66.93 per cent. and the indirect taxation to 33.07 per cent. In 1928–29 the estimate of direct taxation is 62.26, and indirect taxation 37.74 per cent.
§ Mr. GILLETTI suppose that I must leave the "Economist" to settle the matter with the Financial Secretary. I imagine that if we examine the figures of the "Economist" we shall find that they are based upon the question of what is actually direct and indirect taxation. I should like to draw attention to one fact which the "Economist" brings out in referring to these figures. They point out that compared with pre-War, two-fifths of the total expenditure is being raised in connection with War Debt. They say:
Against this must be set the fact that interest and sinking fund on the War Debt
§ accounts for two-fifths of the total expenditure and is mainly paid to the class upon which direct taxes are levied. These considerations largely justify an increase in the proportion of revenue raised by direct taxation."
§ While we are discussing this question, the point brought out by the "Economist" is of interest. It means that money is only being transferred from the pockets of one set of people to the pockets of another set of the same class, in connection with the debt and its interest charges, a position to which we had nothing comparable before the War. As the "Economist" points out, the money which we raise by direct taxation to a large extent goes into the pockets of the same class of people, because they are the people who are the holders of the War Debt.
§ Question put, "That the word 'fourpence' stand part of the Resolution."
§ The House divided: Ayes, 290; Noes, 144.
1589| Division No. 94.] | AYES. | [6.9 p.m. |
| Acland-Troyte, Lieut.-Colonel | Burgoyne, Lieut.-Colonel Sir Alan | Ellis, R. G. |
| Agg-Gardner, Rt. Hon. Sir James T. | Burman, J. B. | Erskine, Lord (Somerset, Weston-s.-M.) |
| Ainsworth, Lieut.-Col. Charles | Burton, Colonel H. W. | Everard, W. Lindsay |
| Albery, Irving James | Butler, Sir Geoffrey | Fairfax, Captain J. G. |
| Alexander, E. E. (Leyton) | Cadogan, Major Hon. Edward | Fade, Sir Bertram G. |
| Allen, J. Sandeman (L'pool, W. Derby) | Campbell, E. T. | Fanshawe, Captain G. D. |
| Amery, Rt. Hon. Leopold C. M. S. | Cassels, J. D. | Fermoy, Lord |
| Applin, Colonel R. V. K. | Cautley, Sir Henry S. | Fielden, E. B. |
| Apsley, Lord | Cayzer, Sir C. (Chester, City) | Forestier-Walker, Sir L. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) | Fraser, Captain Ian |
| Astbury, Lieut.-Commander F. W. | Cazalet, Captain victor A. | Frece, Sir Walter de |
| Astor, Viscountess | Cecil, Rt. Hon. Sir Evelyn (Aston) | Fremantle, Lieut.-Colonel Francis E. |
| Atholl, Duchess of | Chamberlain, Rt. Hn. Sir J. A. (Birm., W.) | Gadie, Lieut.-Col. Anthony |
| Atkinson, C. | Chamberlain, Rt. Hon. N. (Ladywood) | Ganzoni, Sir John |
| Baldwin, Rt. Hon. Stanley | Chapman, Sir S. | Gates, Percy |
| Balfour, George (Hampstead) | Charteris, Brigadier-General J. | Gault, Lieut.-Col. Andrew Hamilton |
| Balniel, Lord | Chilcott, Sir Warden | Gilmour, Lt.-Col. Rt. Hon. Sir John |
| Barclay-Harvey, C. M. | Christie, J. A. | Glyn, Major R. G. C. |
| Barnett, Major Sir Richard | Churchill, Rt. Hon. Winston Spencer | Goff, Sir Park |
| Beamish, Rear-Admiral T. P. H. | Churchman, Sir Arthur C. | Grace, John |
| Beckett, Sir Gervase (Leeds, N.) | Clarry, Reginald George | Graham, Fergus (Cumberland, N.) |
| Bellairs, Commander Canyon | Cobb, Sir Cyril | Grattan-Doyle, Sir N. |
| Benn, Sir A. S. (Plymouth, Drake) | Cochrane, Commander Hon. A. D. | Greaves-Lord, Sir Walter |
| Bennett, A. J | Cockerill, Brig.-General Sir George | Greene, W. P. Crawford |
| Bentinck, Lord Henry Cavendish- | Colfox, Major Wm. Phillips | Gretton, Colonel Rt. Hon. John |
| Berry, Sir George | Conway, Sir W. Martin | Grotrian, H. Brent |
| Bethel, A. | Cooper, A. Duff | Guinness, Rt. Hon. Walter E. |
| Betterton, Henry B. | Cope, Major William | Gunston, Captain D. W. |
| Blades, Sir George Rowland | Couper, J. B. | Hacking, Douglas H. |
| Blundell, F. N. | Courthope, Colonel Sir G. L. | Hall, Lieut.-Col. Sir F. (Dulwich) |
| Boothby, R. J. G. | Craig, Capt. Rt. Hon. C. C. (Antrim) | Hall, Capt. W. D'A. (Brecon & Rad.) |
| Bourne, Captain Robert Croft | Craig, Sir Ernest (Chester, Crewe) | Hamilton, Sir George |
| Bowater, Col. Sir T. Vansittart | Croft. Brigadier-General Sir H. | Hammersley, S. S. |
| Braithwaite, Major A. N. | Crooke, J. Smedley (Deritend) | Hanbury, C. |
| Brass, Captain W. | Crookshank, Col. C. de W. (Berwick) | Hannon, Patrick Joseph Henry |
| Bridgeman, Rt. Hon. William Clive | Culverwell, C. T. (Bristol, West) | Harland, A. |
| Briggs, S. Harold | Cunliffe, Sir Herbert | Hartington, Marquess of |
| Briscoe, Richard George | Curzon, Captain Viscount | Harvey, G. (Lambeth, Kennington) |
| Brocklebank, C. E. R. | Davies, Maj. Geo. F. (Somerset, Yeovil) | Harvey, Major S. E. (Devon, Totnes) |
| Brooke, Brigadier-General C. R. I. | Davies, Dr. Vernon | Haslam, Henry C. |
| Broun-Lindsay, Major H. | Dixey, A. C. | Headlam, Lieut.-Colonel C. M. |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Drewe, C. | Henderson, Capt. R.R. (Oxf'd, Henley) |
| Brown, Brig.-Gen. H. C. (Berks, Newb'y) | Eden, Captain Anthony | Henderson, Lieut.-Col. Sir Vivian |
| Buchan, John | Edmondson, Major A. J. | Heneage, Lieut.-Colonel Arthur P. |
| Buckingham, Sir H. | Elliot, Major Walter E. | Henn, Sir Sydney H. |
| Hennessy, Major Sir G. R. J. | Marriott, Sir J. A. R. | Sinclair, Col. T. (Queen's Univ., Belfast) |
| Herbert, Dennis (Hertford, Watford) | Mason, Colonel Glyn K. | Skelton, A. N. |
| Hills, Major John Waller | Meller, R. J. | Smith, R. W. (Aberd'n & Kinc'dine, C.) |
| Hilton, Cecil | Merriman, Sir F. Boyd | Smith-Carington, Neville W. |
| Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Milne, J. S. Wardlaw. | Smithers, Waldron |
| Hohler, sir Gerald Fitzroy | Mitchell, W. Foot (Saffron Walden) | Somerville, A. A. (Windsor) |
| Hope, Capt. A. O. J. (Warw'k, Nun.) | Monsell, Eyres, Com. Rt. Hon. B. M. | Spender-Clay, Colonel H. |
| Hope, Sir Harry (Forfar) | Moore, Lieut.-Colonel T. C. R. (Ayr) | Sprot, Sir Alexander |
| Hopkins, J. W. W. | Moore, Sir Newton J. | Stanley, Lieut.-Colonel Rt. Hon. G. F. |
| Hopkinson, Sir A. (Eng. Universities) | Moore-Brabazon, Lieut.-Col. J. T C. | Stanley, Hon. O. F. G. (Westm'eland) |
| Hopkinson, A. (Lancaster, Mossley) | Morrison, H. (Wilts, Salisbury) | Steel, Major Samuel Strang |
| Horne, Rt. Hon. Sir Robert S. | Morrison-Bell, sir Arthur Clive | Storry-Deans, R. |
| Howard-Bury, Colonel C. K. | Murchison, Sir Kenneth | Stuart, Crichton-, Lord C. |
| Hudson, Capt. A. U. M. (Hackney, N.) | Nelson, Sir Frank | Stuart, Hon. J. (Moray and Nairn) |
| Hudson, R. S. (Cumberl'nd, Whiteh'n) | Neville, Sir Reginald J. | Sueter, Rear-Admiral Murray Fraser |
| Hume, Sir G. H. | Newman, Sir R. H. S. D. L. (Exeter) | Sugden, Sir Wilfrid |
| Hunter-Weston, Lt.-Gen. Sir Aylmer | Newton, Sir D. G. C. (Cambridge) | Templeton, W. P. |
| Huntingfield, Lord | Nicholson, O. (Westminster) | Thom, Lt-Col. J. G. (Dumbarton) |
| Hurd, Percy A. | Nield, Rt. Hon. Sir Herbert | Thompson, Luke (Sunderland) |
| Hurst, Gerald B. | Nuttall, Ellis | Thomson, F. C. (Aberdeen, South) |
| Hutchison, G. A. Clark (Midl'n & P'bl's) | Oakley, T. | Thomson, Rt. Hon. Sir W. Mitchell- |
| Iliffe, Sir Edward M. | Penny, Frederick George | Tinne, J. A. |
| Inskip, Sir Thomas Walker H. | Perkins, Colonel E. K. | Titchfield, Major the Marquess of |
| Iveagh, Countess of | Peto, Sir Basil E. (Devon, Barnstaple) | Tryon, Rt. Hon. George Clement |
| Jackson, Sir H. (Wandsworth, Cen'l) | Peto, G. (Somerset, Frome) | Vaughan-Morgan, Col. K. P. |
| James, Lieut.-Colonel Hon. Cuthbert | Pilditch, Sir Philip | Waddington, R. |
| Jephcott, A. R. | Power, Sir John Cecil | Ward, Lt.-Col. A. L.(Kingston-on-Hell) |
| Joynson-Hicks, Rt. Hon. Sir William | Pownall, Sir Assheton | Warrender, Sir Victor |
| King, Commodore Henry Douglas | Preston, William | Waterhouse, Captain Charles |
| Kinloch-Cooke, Sir Clement | Price, Major C. W. M. | Watson, Rt. Hon. W. (Carlisle) |
| Knox, Sir Alfred | Radford, E. A. | Watts, Dr. T. |
| Lamb, J. O. | Ramsden, E. | Wayland, Sir William A. |
| Lane Fox, Col. Rt. Hon. George R. | Reid, Capt. Cunning ham(Warrington) | Wells, S. R. |
| Lister, Cunliffe-, Rt. Hon. Sir Philip | Reid, D. D. (County Down) | White, Lieut.-Col. Sir G. Dairymple- |
| Lloyd, Cyril E. (Dudley) | Remnant, Sir James | Williams, A. M. (Cornwall, Northern) |
| Locker-Lampson, G. (Wood Green) | Rentoul, G. S. | Williams, Com. C. (Devon, Torquay) |
| Loder, J. de V. | Rhys, Hon. C. A. U. | Williams, Herbert G. (Reading) |
| Looker, Herbert William | Rice, Sir Frederick | Wilson, Sir C. H. (Leeds, Central) |
| Lougher, Lewis | Roberts, E. H. G. (Flint) | Wilson, R. R. (Stafford, Lichfield) |
| Lucas-Tooth, Sir Hugh Vere | Robinson, Sir T. (Lanes, Stretford) | Winby, Colonel L. P. |
| Luce, Maj.-Gen. sir Richard Harman | Ropner, Major L. | Windsor-Clive, Lieut.-Colonel George |
| Lumley, L. R. | Ruggles-Brise, Lieut.-Colonel E. A. | Winterton, Rt. Hon. Earl |
| Lynn, Sir R. J. | Russell, Alexander West (Tynemouth) | Wolmer, Viscount |
| MacAndrew Major Charles Glen | Rye, F. G. | Womersley, W. J |
| Macdonald, Capt. P. D. (I. of W.) | Samuel, A. M. (Surrey, Farnham) | Wood, E.(Chest'r, Stalyb'dge & Hyde) |
| MacIntyre, Ian | Samuel, Samuel (W'dsworth, Putney) | Wood, Rt. Hon. Sir Kingsley |
| McLean, Major A. | Sandeman, N. Stewart | Wood, Sir S. Hill- (High Peak) |
| Macmillan, Captain H. | Sanders, Sir Robert A. | Woodcock, Colonel H. C. |
| Macnaghten, Hon. Sir Malcolm | Sanderson, Sir Frank | Worthington-Evans, Rt. Hon. Sir L. |
| Macquisten, F A | Sandon, Lord | |
| Makins, Brigadier-General E. | Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W) | TELLERS FOR THE AYES.— |
| Manningham-Buller, Sir Mervyn | Sheffield, Sir Berkeley | Captain Bowyer and Captain Wallace. |
| Margesson, Captain D. | Shepperson, E. W. | |
| NOES. | ||
| Adamson, W. M. (Staff., Cannock) | Day, Harry | Hirst, W. (Bradford, South) |
| Alexander, A. V. (Sheffield, Hillsbro') | Dennison, R | Hollins, A. |
| Ammon, Charles George | Duckworth, John | Hutchison, Sir Robert (Montrose) |
| Baker, J. (Wolverhampton, Bilston) | Dunnico, H. | Jenkins, W. (Glamorgan, Neath) |
| Baker, Walter | Edge, Sir William | John, William (Rhondda, West) |
| Barker, G. (Monmouth, Abertillery) | England, Colonel A. | Johnston, Thomas (Dundee) |
| Barnes, A. | Evans, Capt. Ernest (Welsh Univer.) | Jones, J. J. (West Ham, Silvertown) |
| Barr, J. | Fenby, T. D. | Jones, Morgan (Caerphilly) |
| Batey, Joseph | Forrest, W. | Jones, T. I. Mardy (Pontypridd) |
| Bondfield, Margaret | Gardner, J. P. | Kelly, W. T. |
| Bowerman, Rt. Hon. Charles W. | Garro-Jones, Captain G. M. | Kennedy, T. |
| Briant, Frank | Gibbins, Joseph | Kenworthy, Lt.-Com. Hon. Joseph M. |
| Brood, F. A. | Gillett, George M. | Kirkwood, D. |
| Bromfield, William | Gosling, Harry | Lansbury, George |
| Bromley, J. | Graham. Rt. Hon. Wm. (Edin., Cent.) | Lawrence, Susan |
| Brown, James (Ayr and Bute) | Greenall, T. | Lawson, John James |
| Buchanan, G. | Greenwood, A. (Nelson and Colne) | Lindley, F. W. |
| Cape, Thomas | Griffith, F. Kingsley | Lowth, T. |
| Charleton, H. C. | Groves, T. | Lunn, William |
| Cluse, W. S. | Hall, F. (York, W. R., Normanton) | MacDonald, Rt. Hon. J. R. (Aberavon) |
| Clynes, Rt. Hon. John R. | Hall, G. H. (Merthyr Tydvil) | Macdonald, Sir Murdoch (Inverness) |
| Compton, Joseph | Hamilton, Sir R. (Orkney & Shetland) | Mackinder, W. |
| Connolly, M. | Hardie, George D. | Macpherson, Rt. Hon. James I. |
| Cove, W. G. | Harney, E. A. | March, S. |
| Cowan, D. M. (Scottish Universities) | Hartshorn, Rt. Hon. Vernon | Maxton, James |
| Crawfurd, H. E. | Hayday, Arthur | Mitchell, E. (Paisley) |
| Dalton, Hugh | Henderson, Rt. Hon. A. (Burnley) | Montague, Frederick |
| Davies, Rhys John (Westhoughton) | Henderson, T. (Glasgow) | Morris, R. H. |
| Morrison, R. C. (Tottenham, N.) | Shepherd, Arthur Lewis | Tinker, John Joseph |
| Murnin, H. | Shiels, Dr. Drummond | Tomlinson, R. P. |
| Naylor, T. E. | Shinwell, E. | Townend, A. E. |
| Oliver, George Harold | Short, Alfred (Wednesbury) | Viant, S. P. |
| Owen, Major G. | Sitch, Charles H. | Wallhead, Richard C. |
| Palin, John Henry | Slesser, sir Henry H. | Watson, W. M. (Dunfermline) |
| Parkinson, John Allen (Wigan) | Smillie, Robert | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Pethick-Lawrence, F. W. | Smith, Ben (Bermondsey, Rotherhithe) | Webb, Rt. Hon. Sidney |
| Ponsonby, Arthur | Smith, H. B. Lees- (Keighley) | Wellock, Wilfred |
| Potts, John S. | Smith, Rennie (Penistone) | Westwood, J. |
| Richardson, R. (Houghton-le-Spring) | Snell, Harry | Wheatley, Rt. Hon. J. |
| Riley, Ben | Snowden, Rt. Hon. Philip | Wiggins, William Martin |
| Ritson, J. | Stamford, T. W. | Wilkinson, Ellen C. |
| Robinson, W. C. (Yorks, W.R., Elland) | Stephen, Campbell | Williams, David (Swansea, East) |
| Runciman, Hilda (Cornwall, St. Ives) | Stewart, J (St. Rollox) | Williams, Dr. J. H. (Llanelly) |
| Runciman, Rt. Hon. Walter | Strauss, E. A. | Wilson, H. J. (Jarrow) |
| Saklatvala, Shapurj | Sutton, J. E. | Windsor, Walter |
| Salter, Dr. Alfred | Thomas, Rt. Hon. James H. (Derby) | Young, Robert (Lancaster, Newton) |
| Scrymgeour, E. | Thomas, Sir Robert John (Anglesey) | |
| Sexton, James | Thorns, G. R. (Wolverhampton), E.) | TELLERS FOR THE NOES.— |
| Shaw, Rt. Hon. Thomas (Preston) | Thorne, W. (West Ham, Plaistow) | Mr. Charles Edwards and Mr. Whiteley. |
Second Resolution read a Second time.
§ The CHANCELLOR of the EXCHEQUER (Mr. Churchill)I beg to move, in line 3, to leave out the word "all."
I do so for the purpose of inserting a consequential Amendment which I shall read to the House a little later in our proceedings. Here let me say that I have only intervened in this Debate before the right hon. Gentleman the Member for Colne Valley (Mr. Snowden—)—
§ Mr. SNOWDENOn a point of Order. Are we not entitled to have the Amendment which the right hon. Gentleman proposes to move, before he proceeds with his speech?
§ Mr. SPEAKERI understood that the terms of the Amendment were to be given to the House as part of the right hon. Gentleman's proposal.
§ Mr. CHURCHILLI only rise before the right hon. Gentleman with a view to saving him the labour and the stress of delivering a speech which no doubt would have been a great effort, but would not be any longer relevant. I think it would be better, as these are very serious matters, that I should at the earliest moment make any statement in the power of the Government which would tend to abridge this discussion and reduce unnecessary oratory. While the policy of the Budget has been, on the whole, acclaimed, criticisms of detail and of method have made themselves manifest. 1590 I should like to remind the House that, a week ago to-day, I particularly invited the co-operation of Parliament; and of the country in shaping not merely the details but the general aspect of the policy which we have presented and which we are going to carry through. I have endeavoured to profit to the full by all the criticisms which have reached me from every quarter during the last week, and I can tell the House in a sentence what it all amounts to. It. is to this effect: "The plan is very good, but we should like more of it; we should like it sooner, and we would rather not pay so much for it or pay it quite in the manner which you propose." That, I am sure, is a perfectly fair statement of What, irrespective of party, we have all in our minds at the present time. Of course, that is setting me a rather difficult task, because, after all, in the end everything comes back to pounds, shillings and pence. I must, as I have assured the right hon. Gentleman opposite, consider carefully the fortunes of the Exchequer in future years, including the right hon. Gentleman's fortunes should he be so lucky or unlucky as to occupy my present position at any future time. I do not really think he has much to complain of in the fact that I have intervened before him. As is well known, he is so skilled and practised a debater that he can address himself with the utmost agility to any situation, however new, however unexpected, or however unsought.
With these preliminary observations on this Oils Duty, I come to the case of kerosene. There are very good reasons for a duty on kerosene. It helps the coal industry. During the repeated coal 1591 stoppages which have occurred since the War people have bought stoves and grown accustomed to the use of kerosene, and I am bound to say, on the whole, I think it would be better for all our interests if they adapted themselves to using as much coal as possible. Also this Kerosene Duty played a part in helping the development of our shale industry in which the hon. Member for Linlithgow (Mr. Shinwell), I have no doubt, has such an intimate and intense concern. In addition, there is a much simpler chemical frontier between heavy petroleum and kerosene—that is between the "whites" and the "blacks," or "heavies" as they are called—than there is between petrol and paraffin, and I thought myself that the duty would be a better duty, a more scientific duty, one more calculated to help along the interests of the country if it were levied on the whole of these light hydrocarbons which are called "whites."
Therefore, knowing as I did—not finding out at the end of last week as the Labour Party seem to have done that kerosene was much used in the cottages of the rural districts—knowing, as I did, that this was the case, I introduced a measure of compensation which, so far as the Treasury was concerned—[Laughter]—I ask hon. Members not to laugh at sugar; presently we shall reach the Sugar Duty, and we shall be told that it is the commodity of all others which ought to be relieved—I thought that a reduction of more than equal value in sugar might be taken as an offset against the duty on kerosene, and of course, from the Treasury standpoint, from the point of view of the annual Budget, from the point of view of the balance of direct and indirect taxation, from the point of view of the relations of the Exchequer to the wage-earning masses, the answer is complete. The Kerosene Duty would have brought in to the Exchequer £2,900,000 in a full year and the sugar remission gave £2,900,000 in a full year also; so that, as was wittily said by a North-country paper, all you were doing was shifting the burden from the carbohydrates on to the hydrocarbons; and, in addition, the reduction of ¼d. a lb. on sugar was really worth to the consumer a remission of £4,000,000 a year from the Exchequer. It 1592 would have cost the Exchequer, in ordinary circumstances, to procure such a rebate £4,000,000, and not £2,900,000, whereas on the other hand, £2,900,000 was the duty on kerosene, by no means all of which fell on the domestic consumer, and still less on the cottage domestic consumer. One-third was consumed industrially, and of the remaining two-thirds only one-half was consumed in the cottage homes.
The whole matter of the duty on kerosene centralising round the mulcting of the working-class consumers of about £1,000,000 or £1,250,000 per annum, in return for which they get sugar relief, which on the average is much greater—[HON. MEMBERS: "No!"]. I quite agree that, when you come to individual cases, and not only individual cases, but individual districts and individual classes, and when you come to those districts where electric light and gas are not available, there you find that kerosene bulks with greater consequence than it was before believed would be the case; so that, although from the point of view of the national accounts the balance was held even, when you come to important districts and classes in the country, a case of hardship and of altering the balance of the cottage budget undoubtedly can be made out. Before the Budget, it was not possible to go into these matters in great detail. In the Budget of this year, with a policy of this size, it was necessary to consult a great many people, but we could hardly go through the process of ascertaining the opinion of a duty on kerosene in all the rural districts in the country. The habits of the people have changed very rapidly—
§ Mr. KIRKWOODWhen did you find this out? [Interruption.]
§ Mr. CHURCHILLMay I say to the hon. Member that at this moment a smile of seraphic joy ought to be spreading over his countenance?
§ Mr. KIRKWOODWhy?
§ Mr. CHURCHILLBecause I am probably going to do, what he would have been urging me in tones of strident indignation to do, and, in consequence of that, he should adjust his mind to receive, not evil things, but benefits. We have undoubtedly undergone a change, and I think that there is no doubt that the 1593 great interruptions that we have had in the supply of coal have been one of the causes of that change. I am prepared, and I say it quite frankly, to accept guidance from the House of Commons. [Laughter.] Hon. Gentlemen laugh at that, but in this country we are still governed by Parliament, and I hope that we shall long be governed by Parliament. I have never contemplated attempting to press policies through, apart from the opinion of Members of the House. We are not in Russia; we cannot settle these matters by a ukase.
§ Lieut.-Commander KENWORTHYThis is not the Duma.
§ Mr. CHURCHILLAlready by Friday of last week, I had had a good many indications of the anxiety with which this duty was regarded. [Laughter.] I am sure that that is a laugh of rejoicing, and not a laugh of mockery. On Friday last, I directed the experts to prepare proposals for meeting what I had ascertained was a very widespread wish in the constituencies upon this subject, and to make preparations for recasting the duty. It is quite impossible to discriminate, as some have suggested, by the use to which kerosene is put, and to say that kerosene used for domestic purposes shall be exempt, but kerosene used for industrial purposes must be taxed. You have to make up your mind definitely whether paraffin is to be taxed or not. The ground had been very carefully surveyed beforehand, because we had considered the possible necessity of drawing the line between petrol and paraffin, so as to make some transference of the burdens of the duty from the Horse-power Duty to the Petrol Duty. Consequently, we had at our disposal the labours of an expert chemical committee which for three years has been sitting on this subject. A new chemical frontier between petrol and paraffin was drawn up some time ago. As I said a week ago in the Budget speech, it was not such a simple frontier, but the Government Chemist, and the high experts who have been associated with him in this matter, inform me that it is not only capable of definition, but capable of effectual defence.
There is, of course, a danger, if kerosene is exempt from duty while petrol is taxed, that misguided persons will attempt to burn kerosene, or mix- 1594 tures containing it, in their motor vehicles, to the detriment of the duty on petrol. However, I am assured that they will not long continue that practice. The best engineering advice that has been sought is to the effect that lamp oil cannot be used in an admixture with petrol for ordinary road propulsion in an internal combustion engine, without introducing grave disadvantages and dangers to the mechanism. These perils are that it condenses in the cylinder, and dilutes the lubricating oil, with fatal results to the bearings. Again, the use of the heavier oil leads to rapid carbonisation in the cylinders, with the attendant disadvantages of frequent dismantling of the engine, and proneness to "knocking." Under these circumstances, although there may be some use of kerosene for the purposes of propulsion, we are quite sure that those who have employed it will desist after bitter experience of its consequences; and, in the circumstances, vast as is the importance of the Petrol Duty, I am prepared to take the risk of defending the Petrol Duty as apart from the duty on kerosene.
From the moment that the conclusion is reached that dropping the Kerosene Duty will not be fatal or seriously detrimental to the Petrol Duty—from that very moment it is, I am sure, my duty to give effect to the general wishes of the House. If I am going to give effect to the wishes of the House, the sooner I do so the better. Instead of asking all my hon. Friends to vote against an Amendment moved by the right hon. Member for Colne Valley, and to give me a period of a fortnight or three weeks in which to, what may be called, "save my face"—once one has decided that the step is to be taken, take it at once, and the sooner the better. I propose to act now, and to move, while I am still in possession of the House, an Amendment excluding kerosene from the scope of the duty. It is a simple matter. All you have to do is to substitute a new chemical frontier expressed in terms quite unintelligible to all but the experts. That is only the Resolution preliminary to the introduction of the Finance Bill: and this particular formula can be studied at leisure; but, after all, if we are not going on with this part of our taxation, the sooner people outside know the better. Here is the Amendment, which is con- 1595 sequential on my Amendment to leave out the word "all":
To leave out from the word "than," in line 19, to the end of line 21, and to insert instead thereof the words:
hydrocarbon oils or mixtures containing hydrocarbon oils of which oils or mixtures not less than 50 per cent. by volume distils at a temperature not exceeding 185 degrees Centigrade, or of which not less than 95 per cent. by volume distils at a temperature not exceeding 240 degrees Centigrade, or which give off an inflammable vapour at a temperature of less than 22.8 degrees Centigrade when tested in manner prescribed by the Acts relating to Petroleum.The effect of these words, if inserted in the Resolution now before the House, will be to omit kerosene entirely from the scope of the new duty.
§ Lieut.-Commander KENWORTHYWhat about the duty already paid?
§ Mr. CHURCHILLSonic minor confusion may arise in the re-adjustment of such a matter, but that is the consequence of the will of Parliament being made effective. Do you stand for the will of Parliament or the Minister, overriding the moving and guiding opinion of this country? I am assured that the adjustment probably involves a matter of£60,000 or £70,000 altogether, and that will not be a serious difficulty. At any rate, it was a, difficulty that would have been increased with every day. In consequence of the House accepting, as they should do, the Amendment which I propose to move, the oil companies will reduce their price of kerosene to the distributors from to-morrow to the pre-duty level. There is one thing I should say by way of precaution. Under the duty in which kerosene was originally included, I provided a rebate for the farmers who used white liquid fuel for the purposes of tillage. But now that kerosene is no longer taxed. I do not propose to give that rebate in respect of the very small quantities of petrol which are used actually to start up the engines. This kerosene relief deals with the case of a lot of minor industries which were distressed—not all, but a good many, and perhaps the cattle foodstuffs of the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy)—and it certainly deals with the case of chicken raisers and certain other minor cases.
1596 I have stated this to the House, because I thought it would somewhat curtail their discussion, but I am sure you will permit me, Sir, before I sit down to tender some apologies. I should, first of all, like to apologise to the right hon. Gentleman—I have already done so in part—for having deprived him of an opportunity of pouring out the vials of his wrath. A week ago he had no idea of a kerosene problem, but over the weekend he has been accumulating a fury which he has been waiting to burst upon my head. Even more do I apologise to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), and not only apologise to him but condole with him. He has distinguished himself upon this subject in a manner which deserves the widest public notice. He said on Saturday:
You are blessed, for you will not receive, you will give. Every time the lamp illuminates your cottage, and perfumes it, as it used to do in my own days, you will have the feeling that the wick is oozing wealth for Sir Alfred Mond and Mr. Courtauld.That is the contribution to an important public controversy of a man who has been nine years Chancellor of the Exchequer and five years Prime Minister, who, after having held the greatest situation in Europe, looks forward with the utmost gusto to another series of "Limehouse Nights." As to the general finance of the scheme, that, of course, is affected by a loss of nearly £3,000,000 of revenue, and I must study the new situation carefully in the leisure which is open to me before the Second Reading of the Finance Bill. There is, however, let me say at once, no question of going back upon the concession which has been given in respect of sugar. That is an absolutely necessary act of justice to the refiners, and, now that the Kerosene Duty has been removed, it constitutes a definite mitigation of the lot of the agricultural labourer. Neither is there any question of adding to the burden upon the motorist, as I see that it is suggested in some quarters I should do. I merely make these two observations in order to relieve anxiety, and I will venture, in sitting down, to express the confident conviction that T shall be able to bring the substantial and effective help to productive industry which I had planned, while carrying with me at every stage the overwhelming support of Parliament and of the country.
§ Mr. SNOWDENI have always admired the audacity and dexterity of the right hon. Gentleman the Chancellor of the Exchequer, but these qualities never shone more resplendently than they have done in the speech he has just delivered. He began by saying that the reason why he had successfully circumvented the moving of the Amendment which stands upon the Paper in my name was to save me the trouble of making a speech in opposition to the duty upon kerosene. The right hon. Gentleman might have saved himself the trouble. The real explanation is not to be found in any fear that the Chancellor of the Exchequer had of what I might say in moving that Amendment. The right hon. Gentleman on many occasions during his speech has attempted to convey the impression that the decision that he has just announced to the House is one which he has been contemplating for about a week. It was only at Question time this afternoon that the right hon. Gentleman said that he would not admit any intrusion into the sanctity of the Petrol Duty. A few Members of the House who were present during the Debate on the previous Amendment will have noted the absence of the Chancellor of the Exchequer from the Chamber, and it came to my knowledge that he was busily engaged in consultation with experts upon the matter in trying to devise some means by which he could get in this statement before an opportunity was given for us to move our Amendment.
What is the explanation of this sudden change of attitude on the part of the Chancellor of the Exchequer, his abandonment of a proposal which was perfect when he put it before the House only a week ago? Whether or not I was aware that the duty upon petrol included a tax upon lamp oil, the right hon. Gentleman himself was under no illusion about that matter, because he defended the duty a, week ago, and he practically declared that the working of the Petrol Duty would be absolutely impracticable unless the duty on kerosene wag included, but all the practical difficulties have had to be subordinated to the electoral fortunes of the Tory party. The explanation of this sudden change is to be found in the fact of the revolt of the Tory Members of the House of Commons. The Chancellor of the Exchequer can hide many of the taxes which 1598 he has imposed upon the working people of the country. It is much easier to hide the tax he has put upon the working men's cutlery, upon their lace curtains, if they can afford lace curtains, and upon their tobacco, but this was more direct. They were able to appreciate that they were paying this tax. The result was that practically every Member on that side of the House representing a country constituency was inundated with complaints. They had a meeting upstairs, we are told, of 200 Tory Members, and, if rumour be correct, the right hon. Gentleman himself refused to see a deputation of them—
§ Mr. CHURCHILLRumour is not correct.
§ Mr. SNOWDEN—and handed them over to the Chief Whip. [AN HON. MEMBERS: "He is a reasonable man."] I should prefer to put it that he is a pliable man when pressure is sufficiently strong. In fact, the right hon. Gentleman is starting the discussions upon this Budget very unfortunately. The Budget is not a week old, and yet he has had to make this important surrender. The gilt has been coming off the brick that he presented to the House of Commons, and it will be discovered before long that there are nothing at all but useless bricks in the whole construction of this Budget.
The right hon. Gentleman several times during his speech referred to the compensation that he had offered in the way of a reduction in the Sugar Duty. I want to say a word or two about that, because that is no compensation at all. The remission of duty which the right hon. Gentleman is giving to the sugar industry is not going to be of any advantage to the consumer at all. As a matter of fact, for several weeks before the introduction of the Budget the sugar trade had been raising their prices, and where a reduction has since taken place it has merely been a return to the prices that existed a month ago. But it never could have been anything like compensation. Even supposing that they did get the, reduction of ¼d. in the pound, what, would that amount to? The right hon. Gentleman's Kerosene Duty would have cost the average family about £4 a year, and they would have required to consume 8n lbs. of sugar a week in order to get the compensation for that increased cost.
§ Mr. CHURCHILLThe whole yield of the duty was only £2,900,000. How many families would have had to pay £4 a year for that?
§ 7.0 p.m.
§ Mr. SNOWDENDoes the right hon. Gentleman want to enter into that question, as to what the burden would have been if this duty had been maintained? Then he had better refer to the letters which have been received by Members of his own party. There is unanimity in regard to the burden that that duty would have imposed upon those who had to depend on paraffin oil for lighting and heating purposes, and that unanimity amounts to this, that the duty would have been between £3 and £4 per year. Therefore, I repeat that it would have required a consumption of 80 pounds of sugar every week, even if there had been ¼d. reduction, in order to get the compensation. Now the right hon. Gentleman said that he was making this concession to the general wish of the House. How did he know what the general wish of the House was? The House has never had an opportunity of expressing its views. It was not a concession to the House. An hon. Member opposite said that there was an Amendment on the Paper. But there are many other Amendments on the Paper. Does the fact that an Amendment is down on the Paper indicate that the terms of the Amendment express the general wish of the House? The simple fact is that the revolt in the Tory party has become widespread. I congratulate hon. Members opposite on the fact that for the first time in over three years they have been able to muster up sufficient courage. That is the explanation of the statement that the Chancellor of the Exchequer has just made.
§ Mr. CHURCHILLThat is your argument.
§ Mr. SNOWDENIt certainly is not my argument, because the right hon. Gentleman had not the opportunity of hearing my argument, but it is evident that the arguments of Members of his own party had more influence upon him than any arguments I have made. The explanation of that may be that arguments of the kind that hon. Members opposite are able to put before the Chancellor of the Exchequer appeal to his political instincts and his perception of 1600 political expediency rather than anything that I may say. The Chancellor of the Exchequer is going later to move this rigmarole of an Amendment. There is not a Member in the House who knows what it means, who knows whether it means the withdrawal of the kerosene tax or not. We have got to take it on trust. It is what the right hon. Gentleman calls a new chemical frontier and when we come to examine it, we may find it is no more of an impenetrable frontier than the one he has had to abandon. If this rigmarole does mean the withdrawal of the kerosene tax, then we welcome it. [Interruption.] For what purpose were we going to move our Amendment except to try to get the withdrawal of the tax? We welcome the Amendment, but we express no gratitude to the right hon. Gentleman. It has not been withdrawn because it would impose a burden upon a large number of working people; it has been withdrawn solely and simply because the Tory party have come to the conclusion that it would lose them votes wholesale in the next election.
§ Mr. LLOYD GEORGEin a few sentences I wish to support the Chancellor of the Exchequer in the Amendment which he has moved. He has during the week-end been—to use his own phrase—condensing a good deal of vapour against me, and he has discharged it on the present occasion. He has referred to certain rhetorical experiences which he and I had in common in 1909. May I, in all modesty, admit now that he completely outstripped me in language and in doctrine, and that in consequence, after one experience, I retired and left the field entirely to him. As I have already opposed this tax and given my grounds for doing so, I welcome its withdrawal but, as I said to him last week, this is not the last withdrawal he will have to make. I ventured to tell him last week that this was an unconsidered scheme from beginning to end. He has already knocked one of its pillars down. If he had had the slightest acquaintance with the problem, he would never have proposed it. Anyone who had had the slightest experience of rural districts, who had lived there in humble circumstances, knew that the paraffin tax was one that would hit millions of people in this country, and would hit the very poorest, not only for purposes 1601 of illumination, but because it was used for the purpose of their very humble duties. The right hon. Gentleman referred to one of them in a very slighting manner, but there are thousands of people who earn a living by that very simple means and to whom the tax would mean an expenditure of £10 or £20 a year. Anyone with the slightest acquaintance with the problem knew it was an impossible proposition. What I said to him last week, I say again to-day about his other proposals. I know that. I cannot go into it, but I say that the Chancellor of the Exchequer will be bound to withdraw his postponement till October next year, will be bound to recast the whole of his proposals with regard to discrimination. He is just beginning to retreat, and in a very short time he will be scuttling away amid the jeers of his supporters.
§ Mr. TOMLINSONIn rising to address the House for the first time, may I crave the indulgence of the House for a moment or two. I would like, first of all, to say that, as I have not the ability of the ex-Chancellor of the Exchequer in changing a speech that he proposed to make, the House will understand that it is more difficult for me to speak than it was for him under these changed circumstances. Just as I felt there was a very strong case to be made out against the imposition of this tax, so I feel now that my gratitude to the Chancellor of the Exchequer ought to be just as strong as my dissatisfaction was before he made his statement. The other day the Chancellor submitted his scheme to the House with great ability in a very brilliant speech, and proved himself a great Parliamentarian, but there are three words which are the hardest of all to pronounce in any language, and no man who cannot pronounce them can be said to have attained the heights of manhood. These words are, "I was wrong," and the Chancellor of the Exchequer has proved this afternoon that he is not only a Parliamentarian and a statesman but a man in admitting that he was wrong in submitting the proposals he made to the House only last week. I was impressed by his appeal to regard these proposals as a national scheme, and I, for one, will respond to that appeal in the spirit in which it was made. I take strong exception to some of the proposals 1602 submitted by the Chancellor. In my judgment they are not the best way to deal with the great question of rating reform with which he proposes to deal.
The dwellers in agricultural districts and in rural areas will welcome the announcement he has made to-night. I would like to emphasise to Members of the House how serious such an imposition would have been on the very poorest in the land. The Chancellor has referred to the cottagers, but it also affects very seriously those who are engaged in one of our most important branches of agriculture, poultry farming. I have the honour to represent a constituency which is the centre of that industry. I have had letters not from agricultural workers only, but from a very gallant colonel in Lancaster and from the Archdeacon of Lancaster, a man who loves his fellowmen and wants to be of service to them. The Archdeacon in no uncertain voice expresses the hope that the tax will be taken off. He says:
I do not think that Mr. Churchill's advisers know how people in the country live. He would never have dared to tax the gas or electric light of the artisan in the town. The agricultural worker has lower wages than his brother in the town.This tax is not only a tax on illuminants in the home; nearly every house in the country districts has a cooker, and the cost to some of these homes in the country can hardly have been realised. I have an instance of an ex-service man whose rates on his land are 13s. 3d. in the year. If this tax had been imposed it would have cost that man £3 6s. 8d. I spoke to another man, and I got him to take down his rate paper. He said that he paid his rates on agricultural land and they cost him £5, but a tax of 4d. on a gallon of kerosene would have cost him £8 15s. It is not only a relief to the cottagers in the rural areas that the tax is to be withdrawn, but it is a great relief to those in the poultry industry. I want, in their name, and on behalf of many who would have been seriously affected, to express my gratitude to the Chancellor for the change he is making.
§ Lieut.-Colonel HENEAGEI am sure the House has listened with very great pleasure to the speech we have just heard and would wish me to offer congratulation to the hon. Member for Lancaster (Mr. Tomlinson) upon a most able speech delivered under peculiarly trying 1603 circumstances, not only in having to follow three of the acknowledged leaders of the House in debate, but also in having to adapt his speech to a change in the proceedings of the House. In a great Budget of this kind there must be many rough edges, and I think the Chancellor of the Exchequer must be very grateful to the hon. Members on this side of the House for assisting him to remove one of those rough edges. We are heartily grateful to him for meeting us in the way he has done, because, like him, we were convinced that this duty would have been felt as a great hardship by the working classes of this country, and in the agricultural districts it would have meant that the agricultural labourer and his wife were being called upon to subsidise the remission of rates which is going to come into operation later. The growers and smallholders did not naturally in the least desire that any relief which they are to gain should be obtained at the expense of extra hardship to the agricultural labourer. As one who had put down an Amendment dealing with this particular duty, I am very glad to accept the remission which the Chancellor has now offered. I should just like to correct what the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) has said about the question of the deputation, because I feel that he has discovered a mare's nest. I can assure him, as one of the deputation, that there would have been no difficulty in regard to a deputation to any Minister to whom we wished to go. As a matter of fact, we went to the Chief Whip because we asked to see him. On behalf of the agricultural population, I beg to thank him and the Chancellor of the Exchequer for the way in which they have met us.
§ Mr. W. BAKERI will not keep the House more than two or three minutes, but it is important that it should be made perfectly clear to the Chancellor of the Exchequer that he will be judged in this matter not by this afternoon's proceedings but by his intentions. There can be no doubt that it was the intention of the Chancellor, after obtaining the best advice available to him, to place a very heavy burden upon agricultural workers. In many cases it would have been a burden which the agricultural labourer could not bear, and this afternoon we have the spectacle of the 1604 Chancellor throwing over his scientific advisers in order to placate, and, in my view, rightly to placate, the representatives of the agricultural interests throughout the country. When the ex-Chancellor of the Exchequer referred to the financial burden which this tax on kerosene would have placed upon agricultural workers there were queries from the benches opposite, and it is for that reason that I am speaking now. Immediately the Budget statement was disclosed I received a letter from a St. Dunstan's man—with all that that means—who wrote to me to say that in his case, living in a cottage on a cold hillside within 20 miles of London, the duty would mean 1s. 8d. to 2s. 4d. a week extra. The Chancellor of the Exchequer put the figure at 8d. a week in the case of the average agricultural labourer, and I admit the case which I am quoting now is not typical of agricultural workers, the circumstances being peculiar; but if I can make the House understand how the tax affected this man I think there will be no doubt hon. Members will accept the smaller figure which was put before them by the ex-Chancellor.
In order that there might be no doubt whatever as to the facts I wrote to my friend asking him to give me the fullest details of his expenditure, and being a particularly careful man he was able, by consulting his household books, to give me exact figures and exact dates. The figures are taken from his grocery book, which can be inspected, and are as follow: Summer period, from 6–4–1926 to 7–10–1926, a period of 23 weeks, 56 gallons, an average of 2.4 gallons a week when three weeks' holiday are taken into account. There are two winter periods. From 7–10–1926 to 6–1–1927, a period of 13 weeks, 74 gallons, average 5.7 gallons per week. From 6–1–1927 to 30–4–1927, 16 weeks, 110 gallons, average 6.9 gallons. Those figures demonstrate beyond doubt that the statement made by the right hon. Member for Colne Valley (Mr. Snowden) was fully justified. This resident in a country district, with nothing beyond his pension to support him, would have been subjected to a burden out of all proportion to his income; and his case shows that the burden upon the average agricultural labourer would have been at least 8d. per week. 1605 I rejoice to think that sanity has come to the Chancellor of the Exchequer on this matter. I do not think it matters very much to the agricultural labourer how the result was secured, seeing that the danger has been removed, but I am very much inclined to think that the Chancellor of the Exchequer will find, as he has already been told, that the removal of this tax on kerosene will eventually destroy the whole of his scheme.
§ Mr. HANNONI only intervene for a few moments to make certain representations to my hon. Friend the Financial Secretary to the Treasury on a matter concerning the Petrol Duty as it affects the owners of cars. My hon. Friend knows perfectly well that in the motor world to-day one of the difficulties which the ordinary man engaged in selling new cars has to deal with is the question of the second-hand car which he nearly always has to take in part exchange. This tax on petrol affects all cars alike regardless of their age. For example, it a man has a car four years old and desires to purchase a new one, a question which largely affects the price for the second-hand car—
§ Mr. SPEAKERI would remind the hon. Member that we are not now discussing the whole question of the Petrol Duty, but only the question of the Kerosene Duty.
§ Mr. HANNONI apologise, Mr. Speaker. I will say no more now.
§ Mr. MACQUISTENI desire to thank the Chancellor of the Exchequer for the concession which he has made. I represent a district in which there are a great many people who use kerosene for household purposes. In the far outlying islands they have to pay a heavy enough transport tax on this kerosene without this additional impost. Just fancy living in an island where you have a monopolist steam-boat company which charges 10s. for the transport of a barrel of paraffin. Divide that charge over the 40 gallons which that barrel will hold, and you will see that already the people there pay a burden which is far too heavy, and this additional duty would have broken their backs. I think the Chancellor of the Exchequer deserves great credit for what he has done—
§ Mr. KIRKWOODHe is a great man.
§ Mr. MACQUISTEN—and I do not think the concession has been received as graciously as it ought to have been. When the facts were brought graphically before him, by the Members of his own party, who are always—I speak for myself, and I think for all the other Members of the party—out to see that the poor are not oppressed by taxation, it was very gracious of him so quickly to give effect to our representations, and I think the speech made by the hon. Member for Lancaster (Mr. Tomlinson) was made in the right spirit. It was a very gracious act on his part to abandon the speech which he had prepared and to express his thanks in the way that he has done. I think what the Chancellor of the Exchequer has done will satisfy the country that in the great constructive undertaking which he has in hand—the greatest constructive undertaking which any Chancellor of the Exchequer has ever taken up—he and those who support him are out to achieve this object with the minimum of burdens upon those who can least afford to pay. He has great difficulties in front of him, but we all know the end which he is endeavouring to achieve, and therefore a more or less national effort ought to be made by every Member of this House to assist him in that great task.
I am a little surprised at the advice which appears to have been given to the Chancellor by his skilled advisers, because I think some of them might have seen that the Kerosene Duty was going to be a heavy burden. I am surprised, too, at the figure at which the late Chancellor of the Exchequer put the burden, supported as it was by the last speaker. The cases they cited must be those in which kerosene is largely used for cooking. We know perfectly well that as a result of the trouble in the coal industry oil lamps are now spreading all over the countryside, and are being used much more for cooking purposes, and, where that is so, there is no doubt that the burden imposed by this duty would have been much too heavy. The action of the Chancellor of the Exchequer to-day goes to show that he has a very wide, open, sympathetic view in regard to the proposals he is making. I wish he could have taken the taxes off some of the other spirits which are supposed to be so inflammable, because that would have been very beneficial; but though he has not seen his 1607 way to do that, at any rate in this ease his action deserves that he should get the greatest possible credit from all parties, irrespective of their political standpoint.
§ Mr. GROVESWhen the Chancellor proposed to place a duty upon kerosene the bulk of the poor people in the division which I represent were filled with consternation, and I have listened with great pleasure this afternoon to the announcement that that duty is to be removed. We on these benches, however, are not going to be so effusive in giving bouquets to the Chancellor, and in referring to this concession as something which is gracefully given and ought to be gratefully received. It was his intention, when introducing the Budget, to place this duty upon kerosene used in the homes of very poor people. In our lives, we estimate the qualities of our friends according to their intentions towards us. It was the intention of the Government to impose this duty. I have on many occasions listened in this House to questions as to what our party have really done. I think we can claim that as a result of our persistent opposition and the outcry we have raised against the increasing burdens proposed by the Chancellor of the Exchequer the Government has given way. We know that political parties are always much concerned as to the possible effect of their proposals in the country, and we are quite conscious of what has taken place in the constituencies represented by hon. Members opposite. I wish to say that I think what has happened may be claimed as a great victory for the Opposition, because we have since last Tuesday called attention to this particular tax up and down the country. Although I do not wish to use the word "grateful," I, want to say that the Chancellor of the Exchequer and his advisers have been sufficiently perceptive to realise the commonsense which was to be found at the bottom of our criticisms, and it is a pleasure to realise that without going through a lot of speeches the Government have been able to appreciate the force of what has been said by Members of the Opposition upon this tax.
I think the Labour party can justly claim this is a victory. I say this without any hesitation. I say that without the work of the Opposition in Parliament 1608 paraffin would have cost the people 4d. per gallon more. The opposition to this tax was as inflammable as the material itself, and it was caught by some of the followers of the Government who assisted us in our pressure on the Chancellor of the Exchequer, and that has produced the victory which we have achieved. I think the Chancellor of the Exchequer ought not to take too many bouquets, because what has happened is largely due to those who had called attention to the effect of this tax upon the poor people. What we have achieved will give us greater confidence in getting remissions of taxation in other directions.
§ Lieut.-Colonel MOORE-BRABAZONI do not envy the hon. Member for Stratford (Mr. Groves) in the task he is going to undertake of trying to convince his constituents that this change of policy is entirely due to the Labour party. It is well known that anybody who introduces a duty on oil would for administrative reasons like to distinguish clearly between diesel oil and white oil, and I think any Chancellor of the Exchequer is well advised to start with a measure with a cut at this point. It has been found that there are political reasons operating against this tax and the Chancellor of the Exchequer has rightly changed his policy. I want to warn the House that, although hon. Members laughed at the words of the Chancellor of the Exchequer when he read the Amendment he is going to move, yet the House must appreciate what is meant by it, and when you talk about flashpoint and boiling point they are not the silly things they sound like, they have got to be appreciated and understood. It is no good the Chancellor of the Exchequer saying that you cannot use paraffin in motor ears, because it will be found that it can be done. The objections he raises even on the question of spoiling the lubricating oil has already been got over by the use of distilling filters already being fitted on some American cars. By the change in the position of the cut there are going to be many administrative difficulties in the way of operating the tax now, and although I congratulate the Chancellor on his change of policy, which I think is a wise change, yet I commiserate very much with the Customs of this country in the task which faces them in the collection of the duty.
§ Mr. HARDIEWhenever the hon. and gallant Member for Chatham (Lieut.-Colonel Moore-Brabazon) speaks in this House he always does so front personal experience and knowledge, arid that is something which tells especially on a question like the one we are now considering. The hon. and gallant Member has hinted that the reasons for this change of policy were political reasons. That means that whether a thing is good or bad for the country from a scientific point of view political exigencies are sometimes allowed to interfere with the carrying out of something which is undoubtedly for the benefit of the country. That seems to me to indicate a very low type of mentality in dealing with the affairs of the nation. Reference has been made to hydrocarbon oils and the flashpoint of oils, and the dangers that lie in this direction are not understood by Members of this House.
Reference has been made to the technical men who have been advising the Chancellor of the Exchequer, and I entirely disagree with the statements that have been made on that point. Scientific men answer the questions put to them, and they were not consulted as to the incidence of this tax. I think the men who have been advising the Chancellor of the Exchequer have done very well indeed. Let me take the Budget speech of the Chancellor of the Exchequer. He has told us to-day that he has been thinking about this matter for over a week, but I think he must have been thinking about it for a much longer period because he said in his Budget statement:
Weighing the issue between coal and oil, and weighing the issues between road and rail, and contrasting the rapidly expanding pleasure traffic with the depressed and struggling condition of our basic industries, the Government have come to the conclusion that a new duty should be imposed upon certain kinds of imported oils.Then the right hon. Gentleman goes on to say:I am advised that there is no difficulty in establishing a chemical frontier between the light and heavy oils.—[OFFICIAL REPORT, 24th April, 1928; col. 856, Vol. 216.]If the Chancellor of the Exchequer was so definite about the establishment of a frontier what was the necessity for an immediate change? The fact that the right hon. Gentleman has changed his opinion is no reflection upon those who 1610 gave him advice. The fact is that this change is entirely due to political influences. Even in respect of lubricating oil and turpentine the Chancellor was absolutely definite. He was prepared to give the selling prices of petrol; he quoted the prices of petrol per gallon, and he gave the various falls that had taken place in price, but he did not give the selling price of kerosene, although he gave the reductions which have taken place during the last five years and the last 15 months. If the right hon. Gentleman had been certain of what he was doing he would have given the selling prices of kerosene, and ha would at once have realised the burden of his new tax in the case of an average family using kerosene for lighting and cooking purposes. On this point the right hon. Gentleman spoke in no uncertain language and he said:Thus an undoubted stimulus will be afforded to the production of Scottish shale oil and other British oils—the shale miners are extremely distressed—to benzol and liquid fuel manufactured by all the new scientific processes from British coal.Later on the Chancellor of the Exchequer said:This 4d. will have a very great effect in bridging the gap between scientific production, which is now perfectly possible on the large scale, of oil from coal and commercial production, which has not yet been achieved."—[OFFICIAL REPORT, 24th April, 1928; col. 858, Vol. 216.]What does the Chancellor of the Exchequer say now? He is not going to proceed with a large part of the tax which was going to do so many great things. The greatest of those things was that there was going to be a great stimulus given to the shale oil industry, and the same tax was going to give a real life to all the latest methods of distilling coal and getting oil. The right hon. Gentleman made those statements evidently after full consideration, and having stated that this tax was going to build up all those industries, and that it was going to put real life into and electrify all those little industries producing kerosene oil, he now comes forward and tells us that the picture he drew was an exaggeration. My point is that you cannot build up any industry by protecting it either by a tax of 4d. a gallon or anything else. You can never build up any industry by erecting round it a tariff wall. The difficulties of any industry become all the greater the more 1611 you seek to protect it. We have heard what has happened in the case of the people who would have had to pay this tax. I want to know from the right hon. Gentleman whether he is going to listen to the men employed in the shale industry in the same way that he listened to those who met him upstairs in regard to this tax.Is the right hon. Gentleman prepared to listen to those who are interested in the new method of the carbonisation of coal? Is the Chancellor going to consider these things or is he going to act purely for political reasons? If there had been any sincerity in any political party at any time in regard to the development of British industries, no new industry would require to wait for a tax of 4d. or 2d. or anything else; such industries would be taken up in the interests of the whole nation. What we are dealing with to-day is the power of vested interests in relation to oils, and especially kerosene. The kerosene production in Scotland, before it was taken over by the Anglo-Persian, could face anything in the world, but after it was taken over there was a manipulation of financial relations, and as a result of that manipulation it can always be made to appear that oil from shale in Scotland is dearer than oil from abroad. I deny the statement. Given a proper basis of capital charges, you could still face the world in ordinary competition.
In opening his Budget, the Chancellor of the Exchequer spoke as if he was a great angel with white wings, who was bringing new life to a dying industry in Scotland and was giving a great impetus to the new methods of dealing with coal. Yet to-day he comes among us, saying in effect: "I have unhinged my wings. I am only an ordinary politician, only an ordinary type of man who can be dealt with by great numbers in my party. I am ready to say whatever the majority in my party says. I have no principles of any kind. I have no convictions in regard to oil. I am ready to do what my party tells me, so long as they pay me my salary." That seems to be the mentality of the Chancellor. The Amendment is to leave out the word "all." Is this to meet certain vested interests in the oil trade, to give them another way out for making huge profits by swindling the public?
1612 That which has been read to-day makes it possible for anything that can give the flash point to be sold as kerosene. If the proposal is accepted there is an opening for every form of adulteration and misrepresentation so far as oil is concerned. Those who know the oil trade, know how much it lends itself to that kind of thing. My complaint is that the Chancellor of the Exchequer is simply becoming the political football of a party with a huge majority. How can a Chancellor of the Exchequer like that interest anyone? How can he make anyone feel that he is sincere, or that the party behind him is sincere! So far as kerosene is concerned, every kind of political dodge has been used in this matter. I want to warn the Chancellor that he is only at the beginning of his difficulty. I wish to pay a compliment to the technical men, and I hope that what takes place to-day will not reflect on them as being incapable of advising, but that it will be realised that our present position is due rather to the political juggling of a Chancellor of the Exchequer who is ready to become the football of a party.
§ Mr. A. M. WILLIAMSI wish to thank the Chancellor of the Exchequer for his concession. We have been told that it is votes and votes alone that brought about this position. I do not believe that we think more or less of votes than any other political party. It may be that the reason why the right hon. Member for Colne Valley (Mr. Snowden), while welcoming the concession, did not thank the Chancellor of the Exchequer for it, was that he thought he was losing anticipated votes. The real reason for the concession is that this duty almost singled out the agricultural labourer before anyone else in the country. If we abandon the bandying of words about votes we have to admit that the two classes of people whom, above all, the House wants to help are the agricultural labourers and the coal miners. In that fact I believe is to be found the real reason why this concession was made. I believe the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) was wrong when he said that this was the first stage in a big retreat. In the great constructive scheme of the Chancellor of the Exchequer this proposal relating to kerosene seemed to be one of the very few weak points, and on behalf of an agricultural consti- 1613 tuency I wish to thank him for having rectified it. I welcome very much the rest of his constructive Budget.
§ Question, "That the word 'all' stand part of the Resolution," put, and negatived.
§ Mr. WILLIAM GRAHAMI beg to move, in line 8, to leave out the word "fourpence," and to insert instead there of the words "one penny."
This Amendment would have the effect of reducing, from 4d. to a 1d., the duty on imported oils. There is a consequential Amendment which would reduce the Excise to a corresponding amount. Following the practice in these Debates, it would be easier to address ourselves to the general subject on the Amendment I have moved. It would, of course, be out of order to refer to the rate relief scheme of the Government, but this duty on imported oils is intended to supply a very large part of the revenue for these rating proposals, and is defended on these grounds. Our case will be that this is altogether an undesirable method to adopt. First of all, it is, of course, an indirect impost on something which is to a large extent the raw material of an important industry. In the second place, it is so far of a protective character. To both of these principles in the main I and my colleagues are opposed. I do not say for a moment that we press any extreme Free Trade consideration as regards this particular duty on imported oils, but, broadly, we take the view that, in so far as these duties limit or restrict the aggregate volume of trade, they are undesirable, and that is the primary principle which we should apply to a proposal of this kind.
But I pass almost immediately to more important aspects of this scheme. It is perfectly plain that the Chancellor of the Exchequer has been impressed by the undoubted prosperity of the motor industry in Great Britain, and he has taken the view that it is quite possible to impose a duty of this kind, falling in the main on the users of motor-cars, without in any way restricting that advance. Statistics in 1924 indicated that the aggregate volume of the products of the motor industry were probably in the neighbourhood of £100,000,000, including cerain adjacent industries which I need not specify. In 1614 1927 the total had risen to £135,000,000. It was also suggested that the industry was responsible for at least 26 to 30 per cent. of the activity in the engineering trade. We quite recognise that, in spite of the depression in industry and commerce during the past six years, this particular industry has made a striking advance. But that is no reason in the world why in a proposal of this kind we should justify or defend a duty which in our view is levied on a basis which is unfair or wrong.
§ Mr. A. M. SAMUELWould the right hon. Gentleman explain what he means to suggest by that statement?
§ Mr. GRAHAMI was referring to the aggregate value of the products of the motor industry, not to oil companies or anything like that. I was about to argue that, even if an industry is very prosperous, as that industry undoubtedly is, it is wrong to select either the industry or the users or owners of motorcars more particularly for the contribution which is to be devoted in substance to the rate relief of other productive industries in the State. There were all kinds of alternative ways in which the Government might have met the situation. It seems to me perfectly plain That, having regard to the fact that they are going to raise about £14,000,000 within the present financial year, rising to £18,000,000, and proceeding beyond that to the tune of an increase of at least £1,250,000 per annum, they have come to the conclusion that this industry is capable of continually increasing prosperity, and that the financial foundation of their scheme of rate relief, at all events on this head, will never be in very serious danger.
If we are to apply any kind of relief to productive industries, it is elementary fair play that we should seek some tax of a widely national character, preferably based upon pronounced ability to pay or certainly on some form of luxury effort, and that we should not impose it on the raw material of a great industry, even if we make allowances for the commercial elements involved on the lines that the Chancellor of the Exchequer suggests. So on that ground I think there is unfair discrimination in this tax, and that that should be sufficient to enable us to resist it. But the second 1615 and the far more interesting arid important part of the attack lies in certain statements which were made by the Chancellor of the Exchequer as to the relationship of road and railway transport in this country. I find it very difficult indeed to understand why he went out of his way to justify a duty on petrol during what is, after all, a much wider controversy, in which the House has been recently interested and which is at the moment. before a Joint Committee.
8.0 p.m.
The right hon. Gentleman the Chancellor of the Exchequer alluded to the Road Fund, and to the fact that about £50,000,000 per annum is being spent from that and other sources on road maintenance and development. He proceeded from that point, in justification of this duty, to say that, if that scheme of road development diverted classes of traffic from the old-established railways, then this was a step which, as he thought, was definitely undesirable. But the right hon. Gentleman could hardly have forgotten that, during the past two or three years, he had been responsible for raiding the Road Fund to the extent of £21,000,000 of £22,000,000. I should like to remind the House that, so far from that being a surplus in the ordinary sense of the term, by far the greater part of that money was definitely ear-marked for schemes of road maintenance and development which would give employment to a very considerable number of people. Already, therefore, in the quite recent history of this problem, he has done a great deal, directly and indirectly, to penalise the motor car industry and the users of motor cars as far as the roads are concerned. During the general Debate on the Budget proposals, he reminded the House that, under the Railway Rates Act, 1921, the railways have been placed in an exceptional and in some respects a peculiar position.
I entirely agree with the evidence which has been tendered so far to the Select Committee, that what is offered under that Act of Parliament is nothing in the nature of a firm guarantee to the railway amalgamations of the standard revenue of 1913. In the nature of things, I do not believe that you can give a firm guarantee; or a guarantee in the strict sense of the term, to the railway com- 1616 panies. But, at all events, that Act of Parliament did say that, with economical working and subject to a great many technical considerations, the railways were to be safeguarded up to the point that the Railway Rates Tribunal could achieve it, in providing the standard revenue of the last pre-War year. For what it is worth, that is a concession to the four great railway amalgamations, which cover about £1,300,000,000 of capital and which will stand to gain by, I have no doubt, the efficiency and concentration which schemes of amalgamation must bring in due course. When we look to this duty, which was defended by the right hon. Gentleman the Chancellor of the Exchequer as tending to hold the balance evenly between road and rail transport, we must look to that recent change dating from 1921. But from beginning to end of this Debate the right hon. Gentleman the Chancellor of the Exchequer has said not a word on that point. We have already made it clear that, in our view, until you have something resembling public ownership and public control of transport, these services must be regarded as complementary; but you must not prejudge the issue, and, beyond all question, you are prejudging it in this duty of 4d. on imported oils with a corresponding amount on the home-produced article.
I would not have the same argument if the Chancellor of the Exchequer had not made this case of holding the balance evenly. But that is not what you are doing. At this very moment, a Select Committee of our colleagues is engaged in prolonged consideration of an elaborate argument which is being led by the railway amalgamations in defence of their Bills which, if passed, will give them power for development and progress in road transport of the most extensive character. What emerges is that, first of all, you have a kind of regulation, and, as far as it goes, the protection of the Act of 1921. In the next place, you have a large inroad to the tune of at least £22,000,000 on the Road Fund within recent years. Third, and not least important, you have a fresh impost of 4d. per gallon on the raw material of that great road transport industry. In other words, three steps of a very impressive character have been taken while a Select Committee is beginning the investigation of a scheme designed to place road and 1617 rail traffic on some kind of sensible and, I trust, co-operative basis.
For these reasons, I believe this duty to be a very mischievous proposal it does not matter to the House of Commons to what object the Chancellor of the Exchequer intends to devote the proceeds. That object may be perfectly beneficial; it may, be designed to help certain productive industries in the terms of what is to be a very difficult and elaborate scheme. But, in the last resort, economically considered, you are not doing your best for productive industry if you arrest or diminish the progress of what I concede is, in the main, a prosperous industry at the same time. It may be very difficult to trace the exact effects of the increase of 4d. a gallon, but that there must be effects hardly anyone would dispute. For these reasons, and certainly also for the reasons that I believe there are other and better alternative sources where this revenue could be found for the assistance of local authorities, I move this Amendment.
§ Mr. HANNONI am sure that the House will have listened, as it always does, with great interest and great edification to the speech of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham). The right hon. Gentleman, it seems to me, was in serious difficulties in trying to find a real charge to bring against the right hon. Gentleman the Chancellor of the Exchequer in regard to this duty. The right hon. Member for Central Edinburgh and his colleagues on the Front Bench opposite and the benches behind him have always professed the greatest sympathy for productive industry, but they have never been able, as far as I can recollect, to produce any positive scheme which would provide the means of giving assistance to productive industry and to our depressed agriculture, both of which stand so much in need of help. I think the House must congratulate the right hon. Gentleman the Chancellor of the Exchequer and the Financial Secretary to the Treasury on having made provision for the imposition of this duty—objectionable as it may be to great numbers of people—in order to provide against the most serious industrial disaster that has ever afflicted this country. It is quite true that a duty of 4d. on petrol is a serious consideration to the man who uses and 1618 to the man who manufactures a car; but the motor trade of the country as a whole has accepted this duty with general satisfaction.
§ Mr. DUNNICONothing of the kind!
§ Mr. HANNONThere has not been any organised resistance from the manufacturers or users of motor cars in this country since the Budget statement was made.
§ Mr. DUNNICOThe Automobile Association issued a memorandum against it.
§ Mr. HANNONIn our complex community, somebody is always dissatisfied about something. I am not sure that the hon. Gentleman is not sometimes dissatisfied himself, although he is one of the most benevolent Members of this House. But in the imposition of any tax you are bound to have discontent when the imposition is made upon one section of the community and not upon another. But the motor users and manufacturer have not received this duty with the volume of protest which might have been expected. The right hon. Member for Central Edinburgh, who is intimately acquainted with the railway situation and all its complexities, suggests that this is not the right way of balancing the relationship of the two great transport systems of the country. Does the right hon. Gentleman really mean that the competition of petrol-driven vehicles on the roads against the railways is to continue indefinitely as at present? He says that a Committee is examining this question at the moment, but even after that Committee has decided, some means must be found of enabling the railways to carry the heavy traffic on better terms than at present. The right hon. Member for Central Edinburgh has not proposed any means by which money can be provided to make that desirable object possible. I think the Chancellor of the Exchequer is laying the foundation of a new economic system which is bound to have far-reaching results in this country. No one can close his eyes to the unhappy condition of the agricultural industry. From time to time in this House we have proposals made of various kinds for the purpose of improving the conditions of the rural community, but, until those proposals have been presented to the House, completely releasing agriculture from all local rating—
§ Mr. DEPUTY-SPEAKERI have been considering whether a discussion on the objects of this duty would be in order on this Amendment, and have consulted Mr. Speaker on the subject. The result is that hon. Members must devote themselves to the question of this duty by itself. Of course, some reference to its objects would not be out of order, but any detailed examination of the rating proposals would not be in order.
§ Mr. HANNONI shall, of course, observe your ruling, but the right hon. Gentleman did allude to the appropriation of the money realised by the imposition of the duty, and that is why I was referring to the relationship between road and rail transport as affected by the proceeds of the duty. I would like now to put to the Financial Secretary a question which I was out of order in raising earlier, and that is in regard to the difficult position in which motor manufacturers find themselves in relation to this duty and the already existing horse-power tax when they have to dispose of second-hand cars. In this country to-day one of the most embarrassing questions with which the motor salesman has to deal is the disposal of a new car where the possible purchaser has an old one. The first question that is invariably put to him is as to how an arrangement can be arrived at whereby the second-hand car can be taken over by the manufacturer and a new car purchased in exchange, with the necessary balancing compensation in price.
It seems to me that, in regard to the imposition of the horse-power tax on cars, say, three or four years old or more, some consideration ought to be given to the purchaser of one of these secondhand cars, so that he may not have to pay the same tax as is now imposed on a new car. For example, if, say, a 20 horse-power car, with a tax of £20, which has been in the possession of an owner for four years, is being disposed of to a purchaser, and is per horse-power per annum were allowed for the age of the car in the tax, it would mean a considerable encouragement to a purchaser, because the experience of everyone who has had to deal with cars is that people very frequently say that they would be quite prepared to purchase a car but the heavy tax upon it prevents them from doing so. If the Financial Secretary would 1620 take into consideration the possibility of making, in the Finance Bill, some modification of the incidence of this tax, it would be very acceptable to the great body of motorists who are frequently glad to have an opportunity of purchasing a second-hand car.
Indeed, to manufacturers of large cars especially, this problem is a very serious one indeed. There are to-day, in London and the great provincial towns, many large firms who have acquired cars and who find themselves in considerable difficulty when it come to the question of disposing of a second-hand car and replenishing their stock of new cars, and perhaps the Government, in the interests of the motor industry and of increasing the production of new ears, would, when the Finance Bill is before the House, consider whether some change in that direction could not be entertained, I am quite satisfied that this duty, while on the whole it is a burden to the motor car user and manufacturer, will be accepted without any objection on this side of the House, and, in view of the fact that the proceeds of the tax are to be employed in a direction which will enable productive industry and agriculture to find their feet and re-establish themselves with some hope of regaining their old competitive power against the world, I am sure we all warmly approve of the action of the Chancellor in embodying the tax in his financial statement.
§ Mr. RILEYI support this Amendment in the first instance because I am strongly opposed not only to the policy of this duty, but to every similar policy which seeks to impose taxation upon the pleasure or convenience of the public and upon the processes of commerce and trade. I oppose this tax because it will impose an utterly unfair burden upon a certain section of the community who, in respect of the special privileges which they enjoy, or the special uses which they make of motors for convenience or enjoyment or for purposes of trade, have already contributed in taxation a perfectly adequate amount having regard to their class and to the uses to which their cars are put. Roughly speaking, the persons who would he affected by this tax may be divided into three classes. In the first place, there are the users of motor cars, either for personal enjoyment and convenience or for industry and 1621 trade. There is an enormous number of people who have small motor cars for the purpose of increased facilities for recreation, and whose incomes range from £250 to £500 a year. They are already making, for the special privilege of having a small car, a special contribution not called for from other sections of the community, amounting to some £10, £12, or £20 per annum as a special licence fee. I have in mind the tens of thousands of people with comparatively small incomes who, within the limits of their incomes, have tried to secure a small car for family recreation and so forth. Under this proposal, as the duty now stands, that class of user will he compelled to ray an extra. £5 or £6 a year, in addition to the £12 or £20 that they are already paying, and I submit that that in itself is an entirely unjust imposition upon a particular class of the community. There are also other small users of cars. There is the small man whose income may not even reach £250 a year who has his car, not simply for recreation, but as part of his business. He is, say, a traveller using a small car, not simply for pleasure at week-ends, but from day to day in his business, and in his case, on the top of his tax of £10 to £20, this new duty will impose an additional £12 or £13.
§ Mr. SAMUELHow does the hon. Member calculate that?
§ Mr. RILEY—will, according to the evidence of a man in this position, have to pay an additional 5s. per week. You may get £10 or £12 a year according to the use that is made of it. I will not quarrel with the hon. Gentleman as to a pound or two. Say it is £8, £9 or 210 a year. I have a small car and I can only use it at the week-end. I average some 10,000 miles a year. It will mean to me £5, or £6 a year extra.
§ Mr. SAMUELI have made a mental calculation. Take a small two-seater doing the enormous distance of 18,000 miles a year. At 30 miles to a gallon it will cost exactly £10 extra for Petrol Tax at 4d. per gallon.
§ Mr. RILEYReally the hon. Gentleman's interjection has no real point in 1622 it. There can be no question as to the enormous additional burden placed by the tax on the user of the car. I have spoken of the small people with limited incomes whom no party would seek to burden with additional taxation, a very large and deserving class. Let us go to others. Take, for instance, a less deserving section, the wealthy who can afford a Bolls Royce, or a super-Rolls Royce, to whom this impost will be no burden at all, or one hardly worth mentioning, and who can of course contribute through Super-tax. We need not waste time over that. Now I come to a third very large class who consume petrol in commercial vehicles for all kinds of trade and industry. What is going to be the impost in their case? Heavy cars pay a £50 tax, and they will now be called upon to pay probably 230 or £40 more. My right hon. Friend the Member for Preston (Mr. T. Shaw) has handed me some figures. At 20 miles a gallon—
§ Mr. SAMUELThirty.
§ Mr. RILEYAssume it is 30 miles at 500 miles a week, that is 5s., and in 52 weeks £12 10s. We need not quarrel about that. Now let us come to the third class of people. In view of the arguments used by the Chancellor of the Exchequer in introducing the Budget, I wonder in what way the principle of the tax upon the use of commercial vehicles can be justified. In expounding the Budget, the right hon. Gentleman said that this proposal affirmed the principle:
that the tools and plants of production ought not to be subject to taxation, but only the profits arising from their use."—[OFFICIAL REPORT, 24th April, 1928; col. 865, Vol. 216.]What in the world is a commercial car but a tool or plant in connection with the industry? In face of this, and in spite of previous arguments, the Chancellor is placing a direct impost upon trade tools and the means of production. There is no justification for this tax. It is utterly indefensible, and unfair to a very deserving section of the community. It does not help industry but places an additional burden on it, and all it does is to save wealth bearing a burden it ought to bear.
§ Sir JAMES GRANTThough I desire to make some criticism of the incidence of this duty, I think, broadly speaking, 1623 it is a good duty. I wish to call attention to the hardship it entails upon a certain industry. I refer to the motor omnibuses, which play so important a part in the transport of passengers throughout the country, and the burden that falls on these public utility companies which use these omnibuses. I suppose there is no industry in the country that is at present subject to more unfair competition than the motor-omnibus industry, and as a consequence, naturally, the charges to the public in fares are cut down to the lowest point.
§ Mr. T. SHAWIs the hon. Gentleman aware that the fare from Victoria Station to Charing Cross has been raised from 1d. to 2d. since the duty was instituted?
§ Sir J. GRANTI was not aware of that fact. I was dealing more with the industry in country districts. I say fares were reduced before the duty was put on to the lowest terms economically possible. One of the most important raw materials of the industry is petrol. A further thing that these public utility companies have to keep in mind is that the present price of petrol is low. They have to keep in mind the probability, almost the certainty, that before this financial year is through there will be a distinct rise in the price. I say advisedly, and on information on which I can rely, that the tax of 4d. itself will under present conditions turn any margin of profit into a loss, and if the price of petrol goes up to 7d., I do not believe a single company of that nature, which performs great and useful and essential public services will be able to carry on under these circumstances. The only thing will be that fares will he raised and facilities to the public will be decreased. I have information with regard to such a company in my constituency which is a very typical instance of what will happen through the incidence of this duty. It is a large company with a capital of £200,000. In the last financial yeas it made a profit of 15,000, or 7 to 7½ per cent. If under the conditions of last year there had been a tax on petrol there would have been a loss of £20,000. It undoubtedly means that these public utility companies will have to hand the tax on to the public. They are not philanthropic concerns, but business concerns which have to look after the in- 1624 terests of their investors. I do not know if the House quite realises that a duty of 4d. will mean something like 80 per cent. to 100 per cent. increase in the taxation that these omnibuses pay. A big omnibus—one of the omnibuses to which I refer—will run some 40,000 miles in a year. These omnibuses are at present paying a licence duty of £80 or £90 a year. This duty, on that mileage, will mean an increase of cost to each omnibus of from £80 to £100. It will mean something like £80 in the country and £100 in the towns, an absolute increase of 100 per cent. on the taxation of these omnibuses.
I wish to try and point out that these public vehicles stand on entirely different ground from privately owned cars or even of cars which are run for private profit. These cars perform public and essential services. As the hon. Gentleman knows, the advance of public motor traffic in the country districts has relieved the housing problem in many areas. Tens and hundreds of thousands of the poorest workers are taken to their employment daily by this means. It helps education. It takes children to school. Many contracts are made to take children at the cheapest possible rate. There are innumerable services which these omnibuses perform to the social advantage of the country, and probably the greatest service is that they induce people to stop in rural areas instead of drifting to the towns. That is an extraordinarily important thing. I think that the services which these public utility companies render justify them in claiming some consideration, and sympathetic consideration, from the Chancellor of the Exchequer. I would remind the Financial Secretary that the loss might not be confined to these public utility companies, for if he cuts down the profit or does away with the profit which they make at the present moment he will lose his Income Tax and Super-tax. There, again, the industry to which I am referring stands on an entirely different basis from the private individual, in whose case it will make no difference to the Income Tax whatever the petrol tax may be.
I would remind the Financial Secretary that formerly when there was a petrol tax there was a 50 per cent. reduction for these vehicles, because it was recognised what services they were ren- 1625 dering. I think it is against the public interest that some consideration should not be given to these services. I quite recognise and I anticipate that the reply that will be given will be that money will have to be found. I venture to suggest to the Financial Secretary that if the Chancellor of the Exchequer is adamant on this point, probably there is another way of relieving these public utility companies which give such services by dealing with the present license duties on omnibuses. It would make no difference to the Budget. It would certainly reduce to some extent the large amount of money which comes to the Road Fund but it would make no difference to the Budget. I contend that some sympathetic consideration should be given to the staggering amount of this tax which has come upon this industry without a moment's warning.
§ Mr. A. M. SAMUELI listened with pleasure as I always do, to my hon. Friend who has just spoken and I recall the excellent speech he made quite recently when we were debating the rail and road transport question. He is wringing his hands about the terrible prospect facing the industry with which he is associated. I wonder really whether the industry is in as bad as position as he would have us believe from his speech to-day and from his speech the other day. Is it on the brink of bankruptcy Can it not endure the taxation which has been proposed by my right hon. Friend the Chancellor of the Exchequer. Has he forgotten that the Chancellor of the Exchequer has promised 20 per cent. off the licence for the type of vehicle for which he was speaking provided it has pneumatic tyres?
§ Sir J. GRANTIn a year's time.
§ Mr. SAMUELA great scheme like this under consideration cannot be evolved and made perfect in a few days or a few weeks. If the hon. Gentleman will be patient with me for a minute or two let me read these figures. Is this tax going to ruin the industry with which he is connected? I find that the change in wholesale prices of motor spirit delivered in cans has varied very greatly even within the limit of this present Parliament. In February, 1924, it was 1s. 8d., in September 1s. 5d., in 1926 it was 1s. 5d.; and just before the 4d. was proposed it was 1626 11½d. Here you have an industry which has been able to support, I presume, profitably, the price of spirit at 1s. 8d. in 1924 and 1s. 9d. in 1923, and yet to-day you have 11½d. plus 4d.—1s. 3½d.; that is to say, petrol plus tax is cheaper to-day than in 1926 without 4d. tax.
§ Sir J. GRANTCan the hon. Gentleman also inform himself on the reduction of fares?
§ Mr. SAMUELWell notwithstanding all these pluses and minuses in his argument and notwithstanding his fears for it, the industry with which my hon. Friend is connected still lives. I think we must go back to the basis of the scheme and realise this. It is my answer to most of the objections raised by the other side. We have laid ourselves out to embark upon a great policy not for the purpose of doing harm but for the purpose of doing good to the country. The best way for us to obtain the sympathy and support of the nation is to do good. The better we serve the nation the more support we shall get at the polls. It is no use avoiding the main issue and it is better that hon. Gentlemen should face the issue. We have a policy and we wish to help producers, and particularly the heavy industries, iron, coal, steel, engineering and shipbuilding.
§ Mr. T. SHAWCotton.
§ Mr. A. M. SAMUELCotton too if we can by the Budget's proposal. But this House cannot teach the cotton industry how to arrange its internal affairs. If the cotton industry does not understand them, we cannot hope to be successful.
§ Mr. DEPUTY-SPEAKER (Mr. Hope)The hon. Member is raising an entirely new issue not strictly connected with this Duty or with the Finance Bill.
§ Mr. SAMUELI apologise. I was drawn aside by a remark of the right hon. Member for Preston (Mr. T. Shaw). We have embarked upon the policy of assisting the producers and by assisting tie producer we are not merely assisting the employer. He cannot be prosperous unless his men have work. We think that by reducing the rates on the great industries we shall enable those industries to employ men and produce goods at a price which will compete in the markets of the world more favour- 1627 ably than they are able to do at the present time. When the producer arid his workpeople prosper the community prosper. When people earn wages they spend them with the shopkeeper. The shopkeeper will sell more goods and will be prosperous, The small man who has a two-seater car will be prosperous, whether he be a shopkeeper or a commercial traveller or even an investor, because he will share in the general benefits of better trade arising from the alleviation of rates upon productive industry and the increase of employment thus caused.
If the right hon. Member for Central Edinburgh (Mr. W. Graham) had his way—I do not know that he seeks to do so specifically—the proposal which he makes would destroy our ability to give relief of rates. While I listened to his speech I calculated what his proposition would mean. It would mean that we should lose £13,500,000 of the revenue which we need to meet the calls upon the national exchequer for the relief of rates on productive industry and agriculture. Curiously enough—and it was very astonishing to me because no one has a greater regard for the intellectual ability of my right hon. Friend so far as finance is concerned—he did not propose to substitute 1d. for 4d. in the rebate. If his Amendment were carried into effect it would mean a subsidy of 3d. a gallon on heavy oils. That must be an oversight or if not he must not have understood clearly the proposal set forth by my right hon. Friend the Chancellor of the Exchequer. My reply to him is that the object of the Budget is to help to create trade for the producer and his workpeople through the alleviation of rates. The prosperity that it will bring to trade not only to the factories will reach to the shopkeeper, the clerk, the investor and the private person. You cannot have more wealth made in the country through better trade without that prosperity percolating through the hands of the community in general in these Islands. The prosperity of the population arises from the prosperity of the production or exporting industries. The hon. Member for Dewsbury (Mr. Riley) complained that the man with the small car could not afford the £10 extra 1628 or the £12 extra which he worked out as the cost of the new duty at 20 miles per gallon.
§ Mr. SAMUELThere is an old saying in the East of England that you cannot pick up money unless you first put it down. If we increase the productive prosperity of our factories those who use cars for trade either as distributors or commercial travellers will find that their trade will increase, and what they have to put down in extra tax on petrol they will get back by having their share in the general increase of trade prosperity. I think that is the broad answer which I must give to the hon. Member for Dewsbury as to the right hon. Member for Central Edinburgh. We need the money to carry out our policy of helping production. The way in which we think it can best be secured with the greatest benefit and the least injury to the general body of the population is in the form of taxation proposed by the Chancellor of the Exchequer.
The hon. Member for the Moseley Division of Birmingham (Mr. Hannon) put a question to me with regard to secondhand cars and asked whether I would consider a method of relief so that they might be sold. The trouble is not the tax or the method of taxing secondhand cars. The trouble is not confined to this country. The excessive number of secondhand cars is a complaint from which every country, America included, suffers. Alter the method of taxation how you may, you will riot solve the problem of the number of secondhand cars. I do not know the remedy. If the hon. Member for the Moseley Division will put forward a considered scheme by which he thinks the object which he has in view can be obtained, I will consider it. But I cannot pledge myself or commit myself in any way, because I am convinced that the alleviation of the problem does not lie in an alteration of the method of taxation but rather in a remedy for the fact that there are too many secondhand cars and too few buyers of them. I have tried to deal with the various speeches which have been delivered on this Amendment, and I would ask the House now to come to a conclusion and reject the Amend- 1629 ment proposed by the right hon. Member for Central Edinburgh.
§ Mr. CRAWFURDI rise because of the concluding remarks of the Financial Secretary. May I say that he is entirely wrong. If he consults Members of this House on either side and those who are actually engaged in the motor industry, they will tell him that the glut of secondhand cars and the inability to sell secondhand cars is a direct result of the method of taxing cars in this country. Not only will they tell him that, but it obviously stands to common sense—
§ Mr. SAMUELI am not combating the view of the hon. Member for the Moseley Division, nor am I combating the view now enunciated by the hon. Member. I said I did not know. If a scheme can be put forward which is likely to meet the necessities of the case, we certainly will consider it. I have an open mind whether a successful alteration can be made or is possible. I do not know. I will not pledge myself or compromise myself; but if a concrete scheme can be put forward and it is agreed upon by those who bring it forward that it will work, I will spend some time in considering it.
§ Mr. CRAWFURDThat was not what the hon. Member said. He said that the problem of second-hand cars was not confined to this country, that it was prevalent in every other country, including the United States of America. There may be a problem in other countries, but it is nothing like so prevalent as it is here. I am not sure how far I am in order in responding to the invitation of the hon. Member; but let me tell him that a concrete scheme for dealing with this matter was suggested by myself as long ago as the Finance Bill of 1925. My proposal was to alter the method of taxing motor vehicles in this country. The reason why I wish to support this Amendment is because I think this duty is greatly against the interests of the motor trade in this country and against the interests of industry which the Government profess to have at heart. Not only is this additional impost upon the motor industry bad, but the persistent refusal of the Government to respond to the wishes of the motor industry as to the way in which they should be taxed is the most potent cause of keeping back a growing industry. It is not only a 1630 question of second-hand cars. It stands to reason that if you: have a second-hand car which is worth £60, £70, £80 or £100, and the purchaser has to pay in addition a tax of £15, £20 or £25, it obviously makes an enormous difference to the number of people who buy these cars.
The second thing is that under the present arrangements there is a vast difference in the number of new cars, because there are many people, particularly in the country districts, who would be prepared to buy a second ear if they were not compelled to pay a comparatively large tax upon that ear. It may be said that people ought not to have two cars. This is one of those things which is called a luxury article and it is said that whether you pay on petrol or on horse power, you are paying for a luxury. More than once I have contested that view. To talk about motor cars, as a whole, being luxury articles, seems to be the purest nonsense and betrays the state of mind which considers that the use of the motor ear ought to be confined to a particular type of persons. In the view which I take of this matter, and I think it is the view of the motor trade, the more the use of the motor car is extended, the wider the circle of motor users, the better for the trade and the better for the users themselves. One thing which the motor car trade in this country wants at the present time more than anything else is the power, the ability, the scope, the opportunity to build cars in much greater numbers.
It is a commonplace that if one travels in British Dominions like Australia and India or in the countries of Latin America, or in the West Indies, one finds that in those countries the use of motors is increasing enormously. In that increase this country has no part at all. The country which is making headway is the United States of America and the difference is very largely because in the United States they have a rational system of taxation and here we have an irrational system. Only yesterday some people concerned in the motor trade told me that the method by which motor cars have been taxed in this country prohibits manufacturers from making the type of car which is suited to those countries. They are prevented from making an engine which is powerful enough for use in those countries.
§ Mr. DEPUTY-SPEAKERI do not know whether the remarks of the hon. Member for Moseley (Mr. Hannon) were in order or not, and whether the reply of the Financial Secretary to the Treasury was in order. I think it is in order to deal with the question of whether or not the motor car industry is to suffer greater taxation and to argue that additional taxation ought not to be imposed. If, however, the hon. Member is now going into a detailed argument as to methods, I suggest that, while that would be perfectly in order in Committee on the Finance Bill, it is really going beyond the scope of the Resolution at present before the House.
§ Mr. CRAWFURDI apologise if I have been going outside the bounds of order, and I shall endeavour to confine my remarks to the question of any increase in taxation. I know perfectly well that the argument is used, both inside and outside the industry, that this proposal only makes so many pounds a year of difference and that that is not going to deter people from using motor cars. I think it is. Here you have an industry which is growing, which is giving more employment and which, if it is to take its proper place and rank as one of the great staple industries of this country, must manufacture not only for the home market but for every market abroad. We have to give that industry every encouragement to increase its output, and thereby diminish its costs and make cheaper the article which it produces. The additional imposts which are put upon the user of the motor car, as such and as distinct from all other classes, is a direct hit at, and an injury to the motor industry.
§ Mr. SAMUELIs the hon. Member aware that we are taking rates off the motor car manufacturers of this country?
§ Mr. CRAWFURDWe have yet to know, and we have yet to examine the conditions under which that is being done. I am anxious to see the proposals which the Government are going to make and the difference they will make to certain factories in relation to other taxation. The Financial Secretary may know, but I do not think he has given us any enlightenment so far. It is a purely nebulous thing, up to now.
§ 9.0 p.m.
§ Mr. SAMUELThe Chancellor of the Exchequer gave the figures. There is the definite statement that a certain amount of rates will be taken off the factories. That will help to make the manufacture of motor cars cheaper and will do the very thing which the hon. Member says the Government are not doing.
§ Mr. CRAWFURDWhile the Financial Secretary says that, he has not made any sort of comparison as to the saving in the cost of production which a remission of rates is going to produce.
§ Mr. SAMUELThe amount of the rates taken off will be the amount of the remission.
§ Mr. CRAWFURDI know that, but perhaps the Financial Secretary will allow me to finish my sentence. I was saying that he has not instituted any comparison between the benefits to be derived by the industry by this proposal, and the benefit which would be derived by the industry if this taxation were not indulged in, and my objection is against this proposal because, as I contend, it is a blow aimed at the motor industry. For that reason I support the Amendment.
§ Colonel BURTONWhen one thinks of the final blow which the hon. Member would have administered to the motor car trade if he had had the opportunity, one really marvels at the speech such as we have just heard. I had not an opporturity of speaking before the Financial Secretary replied otherwise I should have mentioned to him a matter which has excited a great deal of sympathy in the House. That is the manner in which this duty may affect the agricultural industry. My hon. Friend who mentioned the case of the public utility companies was told that his grievance could be passed on to the customers of those bodies. So far, however, the agricultural industry has never yet been able to do so. During the past week-end I took the opportunity of visiting certain rural areas, especially in the constituency which I have the honour to represent, and I found that in very many places the duty which the farmers would have to pay in respect of this addition to their petrol bill, would be an increase, even in relation to the amount of the rates of which they may eventually be relieved. I do not propose to detain the House with a number of 1633 figures, but I have in mind the case of a farmer whose petrol bill is in a year. To that we are going to add 33⅓ per cent. which means that he is going to pay a further £25 on his petrol; and if he gets a remission of the remainder of his rates, he will still be £13 out of pocket.
We as an industry cannot afford to pay any further taxation. We are told that our rates are being remitted, and that everything is being done to put us on a more satisfactory basis, and yet a suggestion is put forward that we are to pay 20 per cent. more on our propelling power. The railways have driven us on to the road, and they bring Bills to this House, supported, I am sorry to say, by the Chancellor of the Exchequer, to endeavour to drive us back again on to the railways. The Petrol Duty will force us back there, whether we want to go or not. The return of bankruptcies outside London, for the week ending 22nd April, shows that no less than 30 per cent. were in the farming industry. On the 28th of this month it had risen to the appalling percentage of 43. That is a position which cannot exist much longer. We are on the bring of absolute ruin, and the Government are asking us to submit to a Petrol Duty which will increase the cost of marketing our produce, and which will drive us either into bankruptcy or into giving up while we still have something left. I really cannot, on behalf of my constituency, support this duty.
§ Sir ROBERT HAMILTONWe have been invited as Members of the House to make our contributions to the subject under discussion, and I should like to direct the attention of the Financial Secretary to the position of those counties in which there are no railways—agricultural counties where railways do not exist, and where the whole of the traffic is carried by motor transport. The counties which I have the honour to represent are in that position. In addition to that, the great majority of the farmers are crofters, smallholders who pay no rates on their agricultural land, and only a very small ate upon their houses. In these circumstances, the Government propose to put a tax on the petrol which drives the motor ear, which carries the agricultural produce, and which has to distribute goods throughout the counties. On the other hand, the smallholder, as far as I can see, is to get 1634 no relief whatever. The position, I admit, is a somewhat peculiar one. In other parts of the country, there are railways, and there is to be relief in the rating of the railways, which is to be passed on by a reduction in railway freights. We are not going to get any reduction of that sort; we are only going to pay an extra tax. I would point out that these are the very smallest and poorest farmers in the whole community; they have the greatest trouble in the world to make both ends meet, and yet they will have an extra tax put upon them without any hope of getting anything in return, even supposing that the great structure which the Chancellor is planning ever conies to completion.
It is proposed that there should be a reduction in the rating of docks and harbours, so that there should, be some relief given to shipping. Supposing the scheme goes through to that extent, is it intended that the freights charged by the shipping lines, which run to the Islands, shall be reduced, so that the goods which are shipped to and from the Islands can go out and come in on a lower rate than they do at present? Even supposing they do, I can only imagine that the reduction would be a very small one. So the fact remains that we are to be heavily taxed on what is an essential service in the Islands. I have endeavoured to get figures to place before the House, but I regret that the time has not been long enough for me to get figures on which I could absolutely rely; but, so far as the figures which have been supplied to me go, they show that this tax will run into thousands of pounds, for which no relief whatever is to be seen in the offing. I ask the Financial Secretary to represent this matter to the Chancellor of the Exchequer. I am sure that it is not the intention of the Chancellor, and I am more than sure that it is not the intention of the House, that any part of the United Kingdom should be treated unfairly. If a tax of this sort is imposed without any adjustment or variation between the different counties of the country, there is no doubt that counties such as those to which I have alluded will suffer very severely.
§ Colonel WOODCOCKThe Chancellor of the Exchequer asked Members of the House to make suggestions in connection with the Petrol Duty, and I think there 1635 is one class which has been overlooked, probably through forgetfulness, to which no rebate has been given. I refer to the light aeroplane clubs, and especially on behalf of one of the latest formed, namely, the Bristol and Wessex Aeroplane Club. These clubs are doing excellent service in the training of pilots, and in assisting the Air Ministry in every way, and a grant was made in the Estimates to assist them. If there is no rebate, these clubs will suffer very considerably. Every hour which an aeroplane belonging to these clubs flies for instructional purpose, it uses six gallons of petrol; each machine reckons to fly 1,000 hours a year, so that this duty works out at £100 a machine per year. These light aeroplane clubs are doing a national service, and are having a struggle to exist. The assistance which they get from the Air Ministry will be
§ taken away at one blow by this Petrol Duty. The Chancellor is making a rebate to fishing boats and agricultural tractors because they do not use the roads. Light aeroplanes do not use the roads, but they are to be taxed even more severely in proportion than the fishing boats or the agricultural tractors, because the latter use very little petrol compared with an aeroplane. I hope that the Chancellor will give every consideration to the question of a rebate to these clubs. If he will remit the duty in their case, as he is doing for fishing boats and agricultural tractors, he will do a great service to the country, and also to the clubs in their early stages.
§ Question put, "That the word 'four-pence' stand part of the Resolution."
§ The House divided: Ayes, 258; Noes, 128.
1637| Division No. 95.] | AYES. | [9.16 p.m. |
| Acland-Troyte, Lieut.-Colonel | Courtauld, Major J. S. | Hannon, Patrick Joseph Henry |
| Agg-Gardner, Rt. Hon. Sir James T. | Craig, Sir Ernest (Chester, Crewe) | Harland, A. |
| Albery, Irving James | Croft, Brigadier-General Sir H. | Harmsworth, Hon. E. C. (Kent) |
| Alexander, E. E. (Leyton) | Crooke, J. Smedley (Deritend) | Harrison, G. J. C. |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Crookshank, Col. C. de W. (Berwick) | Hartington, Marquess of |
| Allen, J. Sandeman (L'pool, W. Derby) | Culverwell, C. T. (Bristol, West) | Harvey, Major S. E. (Devon, Totnes) |
| Applin, Colonel R. V. K. | Cunliffe, Sir Herbert | Haslam, Henry C. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Davidson, Major-General Sir John H. | Headlam, Lieut.-Colonel C. M. |
| Astbury, Lieut.-Commander F. W. | Davies, Maj. Geo. F. (Somerset, Yeovil) | Henderson, Capt. R. R. (Oxf'd, Henley) |
| Atholl, Duchess of | Davies, Dr. Vernon | Henderson, Lieut.-Col. Sir Vivian |
| Atkinson, C. | Dixey, A. C. | Henn, Sir Sydney H. |
| Baldwin, Rt. Hon. Stanley | Drewe, C. | Hennessy, Major Sir G. R. J. |
| Balniel, Lord | Duckworth, John | Hills, Major John Waller |
| Banks, Reginald Mitchen | Edmondson, Major A. J. | Hilton, Cecil |
| Barnett, Major Sir Richard | Edwards, J. Hugh (Accrington) | Hope, Sir Harry (Forfar) |
| Bennett, A. J. | Ellis, R. G. | Hopkins, J. W. W. |
| Berry, Sir George | England, Colonel A. | Hopkinson, A. (Lancaster, Mossley) |
| Bethel, A. | Erskine, Lord (Somerset, Weston-s.-M.) | Howard-Bury, Colonel C. K. |
| Betterton, Henry B. | Everard, W. Lindsay | Hudson, Capt. A. U. M (Hackney, N.) |
| Birchall, Major J. Dearman | Fairfax, Captain J. G. | Hudson, R. S. (Cumberl'nd, Whiteh'n) |
| Blades, Sir George Rowland | Fanshawe, Captain G. D. | Hume, Sir G. H. |
| Boothby, R. J. G. | Fielden, E. B. | Hurd, Percy A. |
| Bourne, Captain Robert Croft. | Ford, Sir P. J. | Hurst, Gerald B. |
| Bowater, Col. Sir T. Vansittart | Forestier-Walker, Sir L. | Iliffe, Sir Edward M. |
| Bowyer, Capt. G. E. W. | Forrest, W. | Inskip, Sir Thomas Walker H. |
| Brass, Captain W. | Foster, Sir Harry s. | Jackson, Sir H. (Wandsworth, Cen'l) |
| Briggs, J. Harold | Frece, Sir Walter de | James, Lieut.-Colonel Hon. Cuthbert |
| Brocklebank, C. E. R. | Fremantle, Lt.-Col. Francis E. | Jephcott, A. R. |
| Broun-Lindsay, Major H. | Gadie, Lieut.-Col. Anthony | Jones, Sir G. W. H. (Stoke New'gton) |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Gates, Percy | Kennedy, A. R. (Preston) |
| Buchan, John | Gault Lieut.-Col. Andrew Hamilton | King. Commodore Henry Douglas |
| Burgoyne, Lieut.-Colonel Sir Alan | Gilmour, Lt.-Col. Rt. Hon. Sir John | Knox, Sir Alfred |
| Burman, J. B. | Glyn, Major R. G. C. | Lamb, J. Q. |
| Butler, Sir Geoffrey | Goff, Sir Park | Leigh, Sir John (Clapham) |
| Campbell, E. T. | Grace, John | Lister, Cunliffe-, Rt. Hon. Sir Philip |
| Carver, Major W. H. | Graham, Fergus (Cumberland, N.) | Lloyd, Cyril E. (Dudley) |
| Cassels, J. D. | Grant, Sir J. A. | Locker-Lampson, G. (Wood Green) |
| Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) | Greaves-Lord, Sir Walter | Loder, J. de V. |
| Chapman, Sir S. | Greene, W. P. Crawford | Long, Major Eric |
| Charteris, Brigadier-General J. | Grenfell, Edward C. (City of London) | Looker, Herbert William |
| Christie, J. A. | Grotrian, H. Brent | Lougher, Lewis |
| Churchill, Rt. Hon. Winston Spencer | Guest, Capt. Rt. Hon. F. E. (Bristol, N.) | Lucas-Tooth. Sir Hugh Vere |
| Churchman, Sir Arthur C. | Guinness, Rt. Hon. Walter E. | Luce, Maj.-Gen. sir Richard Harman |
| Clarry, Reginald George | Gunston, Captain D. W. | Lumley, L. R. |
| Cochrane, Commander Hon. A. D. | Hacking, Douglas H. | Lynn, Sir R. J. |
| Colfox, Major Wm. Phillips | Hall, Lieut.-Col. Sir F. (Dulwich) | MacAndrew, Major Charles Glen |
| Conway, Sir W. Martin | Hall, Capt. W. D. A. (Brecon & Rad.) | Macdonald, Sir Murdoch (Inverness) |
| Cooper, A. Duff | Hamilton, Sir George | Macdonald, Capt. P. D. (I. of W.) |
| Cope, Major William | Hammersley, S. S. | Macdonald, R. (Glasgow, Cathcart) |
| Cooper, J. B. | Hanbury, C. | MacIntyre, Ian |
| McLean, Major A. | Ramsden, E. | Stuart, Hon. J. (Moray and Nairn) |
| Macnaghten, Hon. Sir Malcolm | Rees, Sir Beddoe | Sutter, Rear-Admiral Murray Fraser |
| Macquisten, F. A. | Remer, J. R. | Sugden, Sir Wilfrid |
| Maitland, A. (Kent, Faversham) | Rhys, Hon. C. A. U. | Templeton, W. P. |
| Malone, C. L'Estrange (N'thampton) | Rice, Sir Frederick | Thom, Lt.-Col. J. G. (Dumbarton) |
| Malone, Major P. B. | Roberts, E. H. G. (Flint) | Thompson, Luke (Sunderland) |
| Manningham-Buller, Sir Mervyn | Roberts, Sir Samuel (Hereford) | Thomson, F. C. (Aberdeen, S.) |
| Margesson, Captain D. | Robinson, Sir T. (Lancs., Stratford) | Thomson, Rt. Hon. Sir W. Mitchell- |
| Mason, Colonel Glyn K. | Ropner, Major L. | Titchfield, Major the Marquess of |
| Meller, R. J. | Ruggles-Brise, Lieut.-Colonel E. A. | Tryon, Rt. Hon. George Clement |
| Merriman, Sir F. Boyd | Russell, Alexander West- (Tynemouth) | Turton, Sir Edmund Russborough |
| Milne, J. S. Wardlaw | Rye, F. G. | Waddington, R. |
| Mitchell, S. (Lanark, Lanark) | Salmon, Major I. | Ward, Lt.-Col. A. L.(Kingston-on-Hull) |
| Mitchell, W. Foot (Saffron Walden) | Samuel, A. M. (Surrey, Farnham) | Warner, Brigadier-General W. W. |
| Monsell, Eyres, Com. Rt. Hon. B. M. | Samuel, Samuel (W'dsworth, Putney) | Warrender, Sir Victor |
| Moore, Sir Newton J. | Sandeman, N. Stewart | Waterhouse, Captain Charles |
| Moore-Brabazon, Lieut.-Col. J. T. C. | Sanders, Sir Robert A. | Watson, Sir F. (Pudsey and Otley) |
| Morrison, H. (Wilts, Salisbury) | Sanderson, Sir Frank | Watson, Rt. Hon. W. (Carlisle) |
| Morrison-Bell, Sir Arthur Clive | Sandon, Lord | Watts, Dr. T. |
| Murchison, Sir Kenneth | Savery, S. S. | Wayland, Sir William A. |
| Nall, Colonel Sir Joseph | Shaw, Lt.-Col. A. D. Mcl.(Renfrew, W.) | Wells, S. R. |
| Nelson, Sir Frank | Sheffield, Sir Berkeley | Williams, A. M. (Cornwall, Northern) |
| Neville, Sir Reginald J. | Shepperson, E. W. | Williams, Herbert G. (Reading) |
| Newman, Sir R. H. S. D. L. (Exeter) | Simms, Dr. John M. (Co. Down) | Wilson, Sir C. H. (Leeds, Central) |
| Newton, Sir D. G. C. (Cambridge) | Sinclair, Col. T. (Queen's Univ., Belf'st.) | Wilson, R. R. (Stafford, Lichfield) |
| Oakley, T. | Skelton, A. N. | Winby, Colonel L. P. |
| Pennefather, Sir John | Smith, R. W. (Aberd'n & Kinc'dine, C.) | Windsor-Clive, Lieut.-Colonel George |
| Penny, Frederick George | Smith-Carington, Neville W. | Winterton, Rt. Hon. Earl |
| Perkins, Colonel E. K. | Smithers, Waldron | Wormersely, W. J. |
| Peto, Sir Basil E. (Devon, Barnstaple) | Somerville, A. A. (Windsor) | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| Peto, G. (Somerset, Frome) | Spender-Clay, Colonel H. | Woodcock, Colonel H. C. |
| Philipson, Mabel | Sprot, Sir Alexander | Worthington-Evans, Rt. Hon. Sir L. |
| Pilcher, G. | Stanley, Lieut.-Colonel Rt. Hon. G. F. | Wragg, Herbert |
| Pilditch, Sir Philip | Stanley, Lord (Fylde) | |
| Power, Sir John Cecil | Stanley, Hon. O. F. G. (Westm'eland) | TELLERS FOR THE AYES.— |
| Preston, William | Steel, Major Samuel Strang | Captain Viscount Curzon and Captain Wallace. |
| Price, Major C. W. M. | Storry-Deans, R. | |
| Radford, E. A. | Stuart, Crichton-, Lord C. | |
| NOES. | ||
| Adamson, W. M. (Staff., Cannock) | Hartshorn, Rt. Hon. Vernon | Salter, Dr. Alfred |
| Alexander, A. V. (Sheffield, Hillsbro') | Hayday, Arthur | Scrymgeour, E. |
| Amnion, Charles George | Henderson, Rt. Hon. A. (Burnley) | Sexton, James |
| Baker, J. (Wolverhampton, Bilston) | Henderson, T. (Glasgow) | Shaw, Rt. Hon. Thomas (Preston) |
| Baker, Walter | Hirst, W. (Bradford, South) | Shepherd, Arthur Lewis |
| Barker, G. (Monmouth, Abertillery) | Hollins, A. | Shiels, Dr. Drummond |
| Barnes, A. | Jenkins, W. (Glamorgan, Neath) | Shinwell, E. |
| Barr, J. | John, William (Rhondda, West) | Short, Alfred (Wednesbury) |
| Batey, Joseph | Johnston, Thomas (Dundee) | Sitch, Charles H. |
| Bondfield, Margaret | Jones, Morgan (Caerphilly) | Smillie, Robert |
| Bowerman, Rt. Hon. Charles W. | Jones, T. I. Mardy (Pontypridd) | Smith, Ben (Bermondsey, Rotherhithe) |
| Briant, Frank | Kelly, W. T. | Smith, H. B. Lees (Keighley) |
| Broad, F. A. | Kennedy, T. | Smith, Rennie (Penistone) |
| Bromfield, William | Kenworthy, Lt.-Com. Hon. Joseph M. | Snell, Harry |
| Bromley, J. | Kirkwood, D. | Snowden, Rt. Hon. Philip |
| Brown, James (Ayr and Bute) | Lansbury, George | Stamford, T. W. |
| Cape, Thomas | Lawson, John James | Stephen, Campbell |
| Charleton, H. C. | Lindley, F. W. | Stewart, J. (St. Rollox) |
| Clute, W. S. | Livingstone, A. M. | Strauss, E. A. |
| Clynes, Rt. Hon. John R. | Lowth, T. | Sutton, J. E. |
| Compton, Joseph | Lunn, William | Thomas, Sir Robert John (Anglesey) |
| Connolly, M. | MacDonald, Rt. Hon. J. H. (Aberavon) | Thorne, G. R. (Wolverhampton, E.) |
| Cove, W. G. | Mackinder, W. | Thorne, W. (West Ham, Plaistow) |
| Crawfurd, H. E. | MacLaren, Andrew | Tinker, John Joseph |
| Dalton, Hugh | Maclean, Nell (Glasgow, Govan) | Tomlinson, R. P. |
| Davies, Rhys John (Westhoughton) | March, S. | Townend, A. E. |
| Dennison, R. | Maxton, James | Trevelyan, Rt. Hon. C. P. |
| Dunnico, H. | Mitchell, E. Rosslyn (Paisley) | Wallhead, Richard C. |
| Edge, sir William | Montague, Frederick | Watson, W. M. (Dunfermline) |
| Evans, Capt. Ernest (Welsh Univer.) | Morris, R. H. | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Fenby, T. D. | Murnin, H. | Webb, Rt. Hon. Sidney |
| Gardner, J. P. | Naylor, T. E. | Wellock, Wilfred |
| Garro-Jones, Captain G. M. | Oliver, George Harold | Westwood, J. |
| Gibbins, Joseph | Owen, Major G. | Wheatley, Rt. Hon. J. |
| Gosling, Harry | Palin, John Henry | Wiggins, William Martin |
| Graham, Rt. Hon. Win. (Edin., Cent.) | Parkinson, John Allen (Wigan) | Williams, Dr. J. H. (Llanelly) |
| Greenall, T. | Pethick-Lawrence, F. W. | Williams. T. (York, Don Valley) |
| Greenwood, A. (Nelson and Colne) | Ponsonby, Arthur | Wilson, H. J. (Jarrow) |
| Griffith, F. Kingsley | Potts, John S. | Windsor, Walter |
| Hall, F. (York, W. R., Normanton) | Richardson, R. (Houghton-le-Spring) | Young, Robert (Lancaster, Newton) |
| Hall, G. H. (Merthyr Tydvil) | Riley, Ben | |
| Hamilton, Sir R. (Orkney & Shetland) | Ritson, J. | TELLERS FOR THE NOES.— |
| Hardie, George D. | Robinson, W. C. (Yorks, W. R., Elland) | Mr. Charles Edwards and Mr. Whiteley. |
| Harris, Percy A. | Runciman, Rt. Hon. Walter |
§ Mr. DEPUTY-SPEAKERThe five following Amendments on the Order Paper should come in as provisoes later on: In line 8, at the end, to insert the words:
- (1) "Except upon such petroleum spirit as may be used as the propelling power of vehicles employed in carrying agricultural produce."—[Colonel Burton.]
- (2) "Except kerosene which is used for incubators on poultry farms."—[Mr. Albery.]
- (3) "Except upon such liquid hydrocarbons as may be used for the extraction of oils in the manufacture of cattle-feeding stuffs."—[Lieut.-Commander Kenworthy.]
- (4) "except upon such turpentine and white spirit as is used in the manufacture of paints and varnishes."—[Lieut.-Commander Kenworthy.]
- (5) "Except upon such oils as may be used for agricultural purposes, including the propelling power of vehicles employed in carrying agricultural produce and farm requirements."—[Mr. Lamb.]
Major DAVIESI beg to move, in line 18, after the word "be," to insert the words:
on all petroleum oils used for the purpose of treating leather in connection with the manufacture of gloves or.While fully sharing the congratulations which have been showered on the Chancellor of the Exchequer, I bear in mind in moving this Amendment that when he opened the Budget the right hon. Gentleman maintained that the scheme had to be regarded as a whole, though the best-advised and most far-seeing Chancellor of the Exchequer may be liable to oversight. It seems to me that in outlining the scheme for the Petrol Duty he has overlooked a certain industry which will be very seriously affected if it does not get some exemption from the provisions of this tax on oil, and that is the glove industry. I have no hesitation in commending this Amendment to the consideration of the House for the reason that the industry is one of those which, in the last year or two, have put in an application to be included amongst those industries which get the benefit of Safeguarding. The case they put up was a sufficiently strong one for them to get favourable consideration from the Board of Trade and from the Committee which investigated the scheme. It has been said that the whole idea was that that industry should receive assistance mainly because of the employment it was able to offer. The success of that is evident from the conditions of the industry at this 1640 moment as compared with what it was before that assistance was offered. But so close on the heels of that assistance comes a tax or a proposed tax which will very largely nullify the advantages they have so recently received in connection with Safeguarding.I have to confess that when I first read the provisions of the Budget it did not occur to me, nor was I aware, that such a large amount of petrol was used in the process of glove-making. Hon. Members may perhaps be interested to know that there is a certain process in connection with the manufacture of gloves which is known technically as de-greasing. Like most technical terms it is an uncommonly unpleasant term and reminds one of some of the processes which we and our clothes had to go through during the War after we had been for a long period in the trenches. If in order to produce efficient soldiers the process of de-lousing was necessary, it is equally important in order to produce efficient gloves that the process of de-greasing should be gone through, and I am informed reliably that there is no alternative to the method at present employed, which is to eliminate the grease with which leather is filled by means of the application of petrol in order that the material for the production of gloves may be rendered fit for that service.
The Chancellor of the Exchequer is himself sufficient of a soldier to know that he could not permit anybody improperly dressed on parade. The same thing applies to leather being improperly dressed for use in making gloves, and it is necessary to utilise petrol in order to have your leather properly dressed. I am told that there is no satisfactory substitute for the use of petrol in this process. The scientists in connection with the glove industry have tried to get many different chemical alternatives to the use of petrol, without success. Therefore, if this tax is applied to the petrol used in the glove industry, it will very seriously increase the cost of the raw material, and therefore of the finished article. I happen to have taken a few figures at random. I do not wish to bore the House with figures which hon. Members cannot carry in their head, but one firm, for example, uses from 300 to 500 gallons a week, another firm inform me that they used last year 52,000 gallons, and another 65,000 gallons in their pro- 1641 cesses. That being so, a duty in the first place of about £350 a year, in the second of £870, and in the third of no less than £1,100, will be placed on them as a duty on the petrol which is an essential for the production of these gloves. It seems to me that, in considering this as a broad proposition, the Chancellor of the Exchequer naturally had not time to consider where the shoe might pinch in a smaller direction, and I feel sure if this question had been brought to his attention before he opened his Budget he would certainly have made an exemption in this particular case.
Therefore, I do appeal to the Chancellor, and, in his absence, to the Financial Secretary, that he should take into consideration, first, that this industry—which is a substantial industry and one that on account of the application of the Safeguarding Clauses has been not only put upon its legs again, but is expanding once more and giving additional employment and taking into its service apprentices, a process which had been lost sight of in the depressed condition since the War—that this industry, which has had the favourable consideration of this House, should not have that favourable consideration now withdrawn at one fell swoop on account of it coming into the very wide net which the Chancellor has thrown over all petrol-users throughout the length and breadth of the country. Therefore, with confidence I would urge the Financial Secretary that he should give this industry as favourable consideration, and provide an exemption from this duty on petrol which must inevitably be used in order to produce that magnificent article which we have to-day—the English-made glove.
§ Mr. GREENEI beg to second the Amendment.
Having had considerable knowledge of the glove industry, I can state with confidence that what my hon. and gallant Friend has put forward to-night is worthy of the consideration of the House.
§ Mr. A. M. SAMUELI hope that my two hon. Friends will not press this Amendment. Nothing would please me better than to give way to everybody if I could please them and so send them away happy, but in this case it is of the utmost importance, in order to carry out the policy laid down by the Chancellor of the Exchequer, that we should 1642 maintain the integrity of the duty. It would be fatal if once we allowed gaps to be made in it. In dealing with the Amendment, I would say that, after all, I do not think this industry will suffer at all. The hydrocarbon oils used in the process are recovered in a very great degree by the manufacturers and with relatively very small loss. I do not think the additional cost to the producer as a result of the duty will be worth talking about. Moreover I must ask hon. Members to consider that gloves are produced in factories, and these factories will receive very much larger advantages in the benefits from rating than they will ever pay under this duty. I would, therefore, ask my hon. Friends to withdraw the Amendment, which I could not recommend to the House.
§ Mr. KELLYI was rather surprised at the reply made by the Financial Secretary. He is evidently as badly advised with regard to the glove trade as his chief has been with regard to other items of the Budget. He told us that gloves are largely manufactured in factories. I think he has forgotten the great number of people employed in the gloving trade who do their work in small places in the country, and if the only justification he can give for refusing this Amendment is the promise of some relief that may come in 18 months' time it is a poor answer to the gloving industry. I support this Amendment, and I hope the hon. and gallant Member for Yeovil (Major Davies), whom I have known for many years, will press it to a division—at least as one who fought with me in that district, of which I think so much even yet, and as one having a great interest in the gloving trade. This is a substantial industry, and I hope the hon. and gallant Member will be able to get the support of enough of the hon. Members sitting around him to bring the same pressure to bear as was brought against the Chancellor last night with regard to another item in the Budget.
§ Mr. HARRISI am not one of those who have felt very great sympathy with the safeguarding system. I have taken the line that if it is given a fair chance British industry is able to stand on its own feet and does not want that artificial support. As long as it is not 1643 handicapped by unfair taxes, it can compete with industry in any other part of the world. Here, however, the Government are deliberately going out of their way to handicap an industry which still depends to a great extent on its export trade. It is true that it is secured from foreign competition by the safeguarding machinery, as long as we have a Conservative Government in office—[HON. MEMBERS: "We will remember that"]—and is allowed to exploit the home market, by getting high prices for its goods, but if an industry is going to have a healthy existence, it must look for world markets. Everybody knows that at the present time it is not the home trade which is bad hut the export trade, but because there are no big battalions behind the hon. and gallant Member for Yeovil (Major Davies) the Government are going to put an unfair tax on this industry, increasing the costs of production. A novel point was made by the Financial Secretary. When there is anything to be given away the Chancellor of the Exchequer is present, but the Financial Secretary is a sort of whipping boy; if there is anything unpleasant to be done, it is left to him to do it. He took refuge in the argument that although this duty would be a handicap, glove-makers were going to get rating relief as a set off. As the hon. Member knows, many of these gloves are made in cottages. It is, especially in parts of Somersetshire and Gloucestershire, largely a cottage trade. The skins are cut in the factory, but they then go out to the cottages, where the bulk of the work is done. Are we to understand that these cottages are to come within the definition of productive industries and to receive relief in respect of three-quarters of their rates? If not, then the Government, while prepared to give concessions to big business, are going to penalise small industry.
§ Sir H. CROFTDoes the hon. Member suggest that petrol has to be provided by the cottagers?
§ Mr. HARRISNo, but the petrol used enters into the costs of production. The Financial Secretary, speaking with expert guidance, admitted that this duty would add to the costs of production, but said that as a set-off manufacturers would get relief from the burden of rates 1644 on their factories. I am pointing out that the gloves are largely made in cottages. I have been down there and seen it. If the hon. and gallant Member goes down to the Sherborne district he will see gloves being given out to the cottages, where the bulk of the work is done.
§ Sir H. CROFTDoes my hon. Friend suggest that a different price is going to be paid to these people for making these gloves?
§ Mr. HARRISNot at all.
§ Sir H. CROFTThen what has that got to do with the case?
§ Mr. HARRISIt has a lot to do with the case, because owing to the increased cost of the skins to the factories, where the petrol is used, there will be less employment for the cottagers. If it was a good argument to say that the relief of three-quarters of the rates on the factories will be a set-off against this duty, I think I am right in asking that the relief should also go to the cottages. All I am contending is that if it is a good thing give a concession in one direction, when pressure can be brought to bear, there ought to be a concession when a good case has been made out for this industry. It is quite possible to secure an undertaking that the petrol will be used purely for commercial purposes. It is not beyond the wit of man to devise some regulation under which there can be a rebate where the petrol is used purely for industrial purposes in the manufacture of gloves.
§ Mr. SKELTONIs it not the case that the process in the manufacture of the leather in which petrol is used is invariably done in factories, even though the gloves are made in the cottages?
§ Mr. HARRISI think that process is usually done in the open air. As far as I know that is so. I have seen the skins being tanned and being prepared in the open air, and I very much doubt whether the rating authorities will hold that these places where the skins go through this process in the open air will come within the definition of a factory. [Interruption.] I think I am right in saying that these skins largely go through that process of manufacture in the open air. One sees these skins hanging out in the yards all round Yeovil. [Interruption.] At 1645 any rate, I am desirous of assisting the hon. and gallant Member to get his concession, and if he presses this Amendment to a Division he can rely upon my support.
Major DAVIESIn view of the lamentable ignorance of the glove trade which has been displayed by the new
§ Daniel come to judgment, I beg to ask leave to withdraw my Amendment.
§ Question put, "That those words be there inserted."
§ The House divided: Ayes, 129; Noes, 262.
1647| Division No. 96.] | AYES. | [9.45 p.m. |
| Adamson, W. M. (Staff., Cannock) | Hardie, George D. | Runciman, Hilda (Cornwall, St. Ives) |
| Alexander, A. V. (Sheffield, Hillsbro') | Harris, Percy A. | Runciman, Rt. Hon. Walter |
| Amnion, Charles George | Hayday, Arthur | Salter, Dr. Alfred |
| Baker, J. (Wolverhampton, Bilston) | Henderson, Rt. Hon. A. (Burnley) | Scrymgeour, E. |
| Baker, Walter | Henderson, T. (Glasgow) | Sexton, James |
| Barker, G. (Monmouth, Abertillary) | Hirst, W. (Bradford, South) | Shaw, Rt. Hon. Thomas (Preston) |
| Barnes, A. | Hollins, A. | Shepherd, Arthur Lewis |
| Barr, J. | Hutchison, Sir Robert (Montrose) | Shiels, Dr. Drummond |
| Batey, Joseph | Jenkins, W. (Glamorgan, Neath) | Shinwell, E. |
| Bondfield, Margaret | John, William (Rhondda, West) | Short, Alfred (Wednesbury) |
| Bowerman, Rt. Hon. Charles W. | Johnston, Thomas (Dundee) | Sitch, Charles H. |
| Briant, Frank | Jones, Morgan (Caerphilly) | Smillie, Robert |
| Broad, F. A. | Jones, T. I. Mardy (Pontypridd) | Smith, H. B. Lees- (Keighley) |
| Bromfield, William | Kelly, W. T. | Smith, Rennie (Penistone) |
| Bromley, J. | Kenworthy, Lt.-Com. Hon. Joseph M. | Snell, Harry |
| Brown, James (Ayr and Bute) | Kirkwood, D. | Snowden, Rt. Hon. Philip |
| Cape, Thomas | Lansbury, George | Stamford, T. W. |
| Charleton, H. C. | Lawson, John James | Stephen, Campbell |
| Cluse, W. S. | Lindley, F. W. | Stewart, J. (St. Rollox) |
| Clynes, Rt. Hon. John R. | Livingstone, A. M. | Strauss, E. A. |
| Compton, Joseph | Lowth, T. | Sutton, J. E. |
| Connolly, M. | Lunn, William | Thomas, Sir Robert John (Anglesey) |
| Cove, W. G. | MacDonald, Rt. Hon. J. R. (Aberavon) | Thorne, G. R. (Wolverhampton, E.) |
| Crawfurd, H. E. | Mackinder, W. | Thorne, W. (West Ham Plaistow) |
| Dalton, Hugh | MacLaren, Andrew | Tinker, John Joseph |
| Davies, Rhys John (Westhoughton) | Maclean, Nell (Glasgow, Govan) | Tomlinson, R. P. |
| Dennison, R. | March, S. | Townend, A. E. |
| Dunnico, H. | Maxton, James | Wallhead, Richard C. |
| Edge, Sir William | Mitchell, E. Rosslyn (Paisley) | Watson, W. M. (Dunfermline) |
| Edwards, C. (Monmouth, Bedwellty) | Montague, Frederick | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Evans, Capt. Ernest (Welsh Univer.) | Morris, R. H. | Webb, Rt. Hon. Sidney |
| Fenby, T. D. | Murnin, H. | Wellock, Wilfred |
| Gardner, J. P. | Naylor, T. E. | Westwood, J. |
| Garro-Jones, Captain G. M. | Oliver, George Harold | Wheatley, Rt. Hon. J. |
| Gibbins, Joseph | Owen, Major G. | Wiggins, William Martin |
| Gillett, George M. | Palin, John Henry | Williams, David (Swansea, E.) |
| Gosling, Harry | Parkinson, John Allen (Wigan) | Williams, Dr. J. H. (Llanelly) |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Pethick-Lawrence, F. W. | Williams, T. (York, Don Valley) |
| Greenall, T. | Ponsonby, Arthur | Wilson, R. J. (Jarrow) |
| Greenwood, A. (Nelson and Colne) | Potts, John S. | Windsor, Walter |
| Griffith, F. Kingsley | Richardson, R. (Houghton-le Spring) | Young, Robert (Lancaster, Newton) |
| Hall, F. (York, W. R., Normanton) | Riley, Ben | |
| Hall, G. H. (Merthyr Tydvil) | Ritson, J. | TELLERS FOR THE AYES.— |
| Hamilton, Sir R. (Orkney & Shetland) | Robinson, W. C. (Yorks, W. R. Elland) | Mr. B. Smith and Mr. Whiteley. |
| NOES. | ||
| Acland-Troyte, Lieut.-Colonel | Bethel, A. | Cayzer, Sir C. (Chester, City) |
| Agg-Gardner, Rt. Hon. Sir James T. | Betterton, Henry B. | Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) |
| Albery, Irving James | Birchall, Major J. Dearman | Cazalet, Captain Victor A. |
| Alexander, E. E. (Leyton) | Boothby, R. J. G. | Chamberlain, Rt. Hon. N. (Ladywood) |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Bourne, Captain Robert Croft | Chapman, Sir S. |
| Allen, J. Sandeman (L'pool, W. Derby) | Bowater, Col. Sir T. Vansittart | Charteris, Brigadier-General J. |
| Amery, Rt. Hon. Leopold C. M. S. | Brass, Captain W. | Christie, J. A. |
| Applin, Colonel R. V. K. | Briggs, J. Harold | Churchill, Rt. Hon. Winston Spencer |
| Apsley, Lord | Brocklebank, C. E. R. | Churchman, Sir Arthur C. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Brooke, Brigadier-General C. R. I. | Clarry, Reginald George |
| Astbury, Lieut.-Commander F. W. | Broun-Lindsay, Major H. | Cochrane, Commander Hon. A. D. |
| Atholl, Duchess of | Brown, Col. D. C. (N'th'l'd., Hexham) | Colfox, Major Wm. Phillips |
| Atkinson, C. | Buchan, John | Conway, Sir W. Martin |
| Baldwin, Rt. Hon. Stanley | Burgoyne, Lieut.-Colonel Sir Alan | Cooper, A. Duff |
| Balniel, Lord | Burman, J. B | Cope, Major William |
| Banks, Reginald Mitchell | Burton, Colonel H. W. | Couper, J. B. |
| Barclay-Harvey, C. M. | Butler, Sir Geoffrey | Courtauld, Major J. S. |
| Barnett, Major Sir Richard | Campbell, E. T. | Craig, Sir Ernest (Chester, Crewe) |
| Bellairs, Commander Carlyon | Carver, Major W. H. | Croft, Brigadier-General Sir H. |
| Bennett, A. J. | Cassels, J. D. | Crooke, J. Smedley (Deritend) |
| Bentinck, Lord Henry Cavendish- | Cautley, Sir Henry S. | Crookshank, Col. C. de W. (Berwick) |
| Culverwell, C. T. (Bristol, West) | Hurd, Percy A. | Roberts, E. H. G. (Flint) |
| Cunliffe, Sir Herbert | Hurst, Gerald B. | Roberts, sir Samuel (Hereford) |
| Davidson, Rt. Hon. J. (Hertford) | Illffe, Sir Edward M. | Robinson, Sir T. (Lane, Stretford) |
| Davidson, Major. General Sir J. H. | Inskip, Sir Thomas Walker H. | Ropner, Major L. |
| Davies, Dr. Vernon | Jackson, Sir H. (Wandsworth, Cen'l) | Ruggles-Brise, Lieut.-Colonel E. A. |
| Dixey, A. C. | James, Lieut.-Colonel Hon. Cuthbert | Russell, Alexander West (Tynemouth) |
| Duckworth, John | Jephcott, A. R. | Rye, F. G. |
| Edmondson, Major A. J. | Jones, Sir G. W. H. (Stoke New'gton) | Salmon, Major I. |
| Edwards, J. Hugh (Accrington) | Kennedy, A. R. (Preston) | Samuel, A. M. (Surrey, Farnham) |
| Ellis, R. G. | King, Commodore Henry Douglas | Samuel, Samuel (W'dsworth, Putney) |
| England, Colonel A. | Knox, Sir Alfred | Sandeman, N. Stewart |
| Erskine, Lord (Somerset, Weston-s.-M.) | Lamb, J. Q | Sanders, Sir Robert A. |
| Everard, w. Lindsay | Leigh, Sir John (Clapham) | Sanderson, Sir Frank |
| Fairfax, Captain J. G. | Lister, Cunliffe, Rt. Hon. Sir Philip | Sandon, Lord |
| Fanshawe, Captain G. D. | Lloyd, Cyril E. (Dudley) | Savery, S. S. |
| Fermoy, Lord | Loder, J. de V. | Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W) |
| Ford, Sir P. J. | Long, Major Eric | Sheffield, Sir Berkeley |
| Forestier-Walker, Sir L. | Looker, Herbert William | Shepperson, E. W. |
| Forrest, W. | Lougher, Lewis | Simms, Dr. John M. (Co. Down) |
| Foster, Sir Harry S. | Lucas-Tooth, Sir Hugh Vere | Sinclair, Col. T. (Queen's Univ., Belfst.) |
| Frece, Sir Walter de | Luce, Major-Gen. Sir Richard Harman | Skelton, A. N. |
| Fremantle, Lieut.-Colonel Francis E. | Lumley, L. R. | Smith, R. W. (Aberd'n & Kinc'dine, C.) |
| Gadie, Lieut.-Colonel Anthony | Lynn, Sir R. J. | Smith-Carington, Neville W. |
| Ganzoni, Sir John | MacAndrew, Major Charles Glen | Smithers, Waldron |
| Gates, Percy | Macdonald, Sir Murdoch (Inverness) | Somerville, A. A. (Windsor) |
| Gault, Lieut.-Col. Andrew Hamilton | Macdonald, R. (Glasgow, Cathcart) | Spender-Clay, Colonel H. |
| Gilmour, Lt.-Col. Rt. Hon. Sir John | MacIntyre, Ian | Sprot, Sir Alexander |
| Glyn, Major R. G. C. | McLean, Major A. | Stanley, Lieut.-Colonel Rt. Hon. G. F. |
| Goff, Sir Park | Macquisten, F. A. | Stanley, Lord (Fylde) |
| Gower, Sir Robert | Maitland, A. (Kent, Faversham) | Stanley, Hon. O. F. G. (Westm'oland) |
| Grace, John | Malone, Major P. B. | Steel, Major Samuel Strang |
| Graham, Fergus (Cumberland, N.) | Manningham-Buller, Sir Mervyn | Stuart, Crichton-, Lord C. |
| Grant, Sir J. A. | Margesson, Captain D. | Stuart, Hon. J. (Moray and Nairn) |
| Greaves-Lord, sir Walter | Marriott, Sir J. A. R. | Sueter, Rear-Admiral Murray Fraser |
| Grenfell, Edward C. (City of London) | Mason, Colonel Glyn K. | Sugden, Sir Wilfrid |
| Grotrian, H. Brent | Meller, R. J. | Templeton, W. P. |
| Guest, Capt. Rt. Hon. F. E. (Bristol, N.) | Merriman, Sir F. Boyd | Thorn, Lt.-Col. J. G. (Dumbarton) |
| Guinness, Rt. Hon. Walter E. | Milne, J. S. Wardlaw- | Thomson, F. C. (Aberdeen, South) |
| Gunston, Captain D. W. | Mitchell, S. (Lanark, Lanark) | Thomson, Rt. Hon. Sir W. Mitchell- |
| Hacking, Douglas H. | Mitchell, W. Foot (Saffron Walden) | Titchfield, Major the Marquess of |
| Hall, Lieut.-Col. Sir F. (Dulwich) | Monsell, Eyres, Com. Rt. Hon. B. M. | Tryon, Rt. Hon. George Clement |
| Hall, Capt. W. D'A. (Brecon & Rad.) | Moore, Sir Newton J. | Turton, Sir Edmund Russborough |
| Hamilton, Sir George | Moore-Brabazon, Lieut.-Col. J. T. C. | Waddington, R. |
| Hammersley, S. S. | Morrison, H. (Wilts, Salisbury) | Wallace, Captain D. E. |
| Hanbury, C. | Morrison-Bell, Sir Arthur Clive | Ward, Lt.-Col. A.L. (Kingston-on-Hull) |
| Hannon, Patrick Joseph Henry | Murchison, Sir Kenneth | Warner, Brigadier-General W. W. |
| Harland, A. | Nelson, Sir Frank | Warrender, Sir Victor |
| Harmsworth, Hon. E. C. (Kent) | Neville, Sir Reginald J. | Waterhouse, Captain Charles |
| Harrison, G. J. C. | Newman, Sir R. H. S. D. L. (Exeter) | Watson, Sir F. (Pudsey and Otley) |
| Hartington, Marquess of | Nicholson, O. (Westminster) | Watson, Rt. Hon. W. (Carlisle) |
| Harvey, Major s. E. (Devon, Totnes) | Nuttall, Ellis | Watts, Dr. T. |
| Haslam, Henry C. | Oakley, T. | Wayland, Sir William A. |
| Headlam, Lieut.-Colonel C. M. | Pennefather, Sir John | Wells, S. R |
| Henderson, Capt. R. R. (Oxf'd, Henley) | Penny, Frederick George | Williams, A. M. (Cornwall, Northern) |
| Henderson, Lieut.-Col. Sir Vivian | Perkins, Colonel E. K. | Williams, Herbert G. (Reading) |
| Heneage, Lieut.-Col. Arthur p. | Peto, Sir Basil E. (Devon, Barnstaple) | Wilson, Sir C. H. (Leeds, Central) |
| Henn, Sir Sydney H. | Peto, G. (Somerset, Frome) | Wilson, R. R. (Stafford, Lichfield) |
| Hennessy, Major Sir G. R. J. | Pilcher, G. | Windsor-Clive, Lieut.-Colonel George |
| Hills, Major John Waller | Pilditch, Sir Philip | Winterton, Rt. Hon. Earl |
| Hilton, Cecil | Power, Sir John Cecil | Womersley, W. J. |
| Hope, Capt. A. O. J. (Warw'k, Nun.) | Preston, William | Wood, E. (Chest'r, Stalyb'dge & Hyde) |
| Hope, Sir Harry (Forfar) | Price, Major C. W. M. | Woodcock, Colonel H. C. |
| Hopkins, J. W. W. | Radford, E. A. | Wragg, Herbert |
| Hopkinson, A. (Lancaster, Mossley) | Ramsden, E. | |
| Howard-Bury, Colonel C. K. | Rees, Sir Beddoe | TELLERS FOR THE NOES.— |
| Hudson, Capt. A. U. M. (Hackney, N.) | Remer, J. R | Captain Viscount Curzon and Captain Bowyer. |
| Hudson, R. S. (Cumberland, Whiteh'n) | Rhys, Hon. C. A. U. | |
| Hume, Sir G. H. | Rice, Sir Frederick |
§ Mr. LUMLEYI beg to move, in line 18, after the word "be," to insert the words "on all hydrocarbon oils used in extracting cattle feeding stuffs and."
I will preface what I have to say by stating that I yield to no one in my admiration of the great effort which the Chancellor of the Exchequer is making to help productive industry, and it is with great reluctance that on this question I 1648 find myself in opposition to his proposal. I would like to say that I am not an expert on the particular industry with which this Amendment deals. My hon. Friend the Member for Darwen (Sir F. Sanderson), who is acquainted with this particular industry, will deal with some of the technical points connected with this subject. I will explain very briefly how this seed-crushing industry is affected by the Petrol Duty. I am in- 1649 formed that there are two main methods of producing cattle feeding stuffs. On the one hand there is what is known as the crushing process, by which the seed—it may be cotton seed, rape seed or soya beans—is crushed and the oil extracted by crushing. That method is not affected by the Petrol Duty.
The other method employed in this industry is what is known as the extraction process, and that is the method employed by the largest and most up-to-date firms. I do not think it is employed by more than six of the largest firms in the country to-day. This extraction method uses petrol for extracting the vegetable oil which is in the seed. The vegetable oil so extracted is then used for a number of purposes—for the making of soap, margarine, linseed oil and other things. The seed which is freed by using petrol as a solvent is then made into what can be described as cattle feeding stuff. It is this second process in this industry which is affected by the Petrol Duty. This is a very large industry in the constituency of Hull which I happen to represent. To extract one ton of cattle feeding stuff I am informed that, generally speaking, 150 gallons of petrol will be used. A large part of that petrol is recovered, but I am also informed that a certain portion of the petrol is not recoverable, and that portion will naturally form part of the cost of production of one ton of cattle feeding stuffs.
I am further informed that, on an average, the amount of petrol that is not recovered in the manufacture of one ton of feeding stuffs, is five gallons. Therefore, the extra cost of production of one ton of cattle-feeding stuffs will, with a Petrol Duty of 4d. a gallon, be 20d. This industry has had to meet very severe competition in the last few years. I shall not weary the House with the figures of unemployment in the industry; but certainly in the last four years the industry has gone through a series of great depression, and it has now to meet severe competition from Germany, Holland, Belgium and other countries. The exports of the industry are delivered in the main to the Scandinavian countries, and, of course, are subject to the competition of Germany and other countries. I understand that when the manufacturers in this country can see a profit of two shillings or even one shil- 1650 ling on a ton of manufactured cattle-feeding stuffs, they close on it at once. The House will see, therefore, that an increase of 20d. in the cost of production means the loss in many cases of the whole profit, and is bound to end in the raising of the price of the products sold to the English farmer.
10.0 p.m.
The House will not need reminding that if an industry of this kind suffers in its export trade, it is unable to export as much as it exported before, the cost of production of what it sells in this country is bound to rise. If the industry is hit in its export trade, the cost of feeding stuff to farmers in this country is bound to rise. A question may be put to me in this way, "If the price of petrol is such a factor in the cost of production of one ton of feeding stuff, can you say that the price went down during the last two years when petrol has fallen by about a shilling a gallon?" I cannot prove that, but, on the other hand, my right hon. Friend the Chancellor of the Exchequer cannot prove that that is not the case, and I will tell him why. I am prepared to assert that for every sixpence by which the cost of petrol has come down the cost of cattle-feeding stuffs has gone down half-a-crown a ton. But that does not mean that the price to the farmer or the export price has necessarily gone down, because the cost of petrol is not the only or by any means the largest factor in the cost of production. The largest factor in the cost of production in an industry of this kind must be the price at which it can buy its raw material, the seed, on the open market, and that price varies very considerably.
In competing with foreign countries the cost of production, as represented by the cost of the raw material bought on the open market, is very much the same; very much the same conditions operate in that case. But if the industry in this country alone is to be burdened with a permanent increase in the price of one, though perhaps a small part of the materials it uses in its processes, then the industry is going to be handicapped in its export trade by just that amount, and that handicap will not be upon the industries of foreign countries which are competitors. I feel sure that my right hon. Friend will say that his Budget is to be taken as a whole and that he can 1651 allow no inroad on the Petrol Duty. With great respect I would like to put one point to him. The organised industry has not been able as yet to collect for him the whole figures with regard to this duty. I had hoped that the Debate on this subject would not have had to be raised at this stage, that we should have collected all the available figures in a few days' time, and that the subject could be raised on the Committee stage of the Finance Bill. The position at the moment is that neither the right hon. Gentleman nor I have the correct figures.
I am informed that, at a rough calculation, the cost to the Exchequer if a rebate were given would be in the neighbourhood of £30,000. That, surely, is not a very great amount, and I would put it to him that, as the whole object of the Budget is to help productive industry, here is a point where his proposal may have an opposite effect. It may hamper the export trade of ails industry and raise the price to agricultural buyers in this country. There may be some difference of opinion between the points which I have raised, and perhaps the points which have been raised by the experts who have advised him. If there is such a difference, I would suggest to the right hon. Gentleman that, as there cannot have been very long discussion about this complicated industry, his experts and those on behalf of the industry should get together and see if there is anything in what I say, or if I merely have been badly prompted. If what I say is not true, and if it will make no difference to the industry, well and good; hut, if there is substance in what I say, surely it would be of advantage to the industry, and, therefore, to the country and to this Budget that the point should be listened to. Will the right hon. Gentleman not take longer time to consider this difficult and complicated question and consult still further the experts in the industry and see whether it is not possible to make a concession?
One further point. I think I am right in saying that, when the old Petrol Duty was in operation during the War, this particular industry was allowed a rebate which there was no difficulty in collecting. I believe what happened was that the directors of the firms concerned were put under bond for a considerable amount, and they signed the requisition to the 1652 suppliers of petrol guaranteeing that the petrol with which they were supplied was only to be used for this extraction process. They were then supplied with petrol free of the cost of the duty, and the suppliers recouped themselves from the Treasury. That worked, I believe, to the satisfaction both of the Treasury and of the industry. If it is only a small amount of £30,000, I feel that the right hon. Gentleman the Chancellor of the Exchequer ought to make some arrangement on this occasion.
§ Lieut.-Commander KENWORTHYI beg to second the Amendment.
I would like to congratulate the hon. Member for East Hull (Mr. Lumley) on the very conciliatory and very lucid speech, if I may be allowed to say so, that he has made. I hope the speech to which we have listened and the few additional facts that I shall give, will complete the process of showing the Chancellor of the Exchequer that there is really a very good case indeed for making this comparatively small concession to an industry which is suffering very severe competition in the world's markets. At Question time the Chancellor of the Exchequer told us that he would view his vast project as a whole, and that our constituents would presently get back relief to their rates. Many things may happen during the next 18 months. We are promised two birds in the bush, but I would point out to the Chancellor of the Exchequer that during the 18 months he is to get his little singing bird in his hand, which I reckon to have cost between £16,000 and £20,000. I, also, in the short week that has elapsed since the right hon. Gentleman's great scheme burst upon an astonished world, have been endeavouring to get all the facts of this great industry, and, as the time was short, I may be a little wrong in detail, but the sum concerned is only £16,000 to £20,000. He will have this little singing bird all the time in his hand, and we are promised a whole lot of birds in the bush in relief of rates.
May I change the metaphor slightly? Perhaps the right hon. Gentleman the Chancellor of the Exchequer has heard of feeding a dog on his own tail? Has he heard of the very mean man who, when he was short of provisions, cut off the dog's tail, took the tail and ate it and threw the bone to the dog? That, 1653 I think, is rather the simile that I would adopt in explaining the policy of the right hon. Gentleman to this industry. These are the details of the industry as far as I have been able to gather them. Altogether about 20,000 gallons a week are used throughout the country in the manufacture of cattle meal. One great firm, the British Oil Mills, use up 10,000 gallons a week, while the Premier Oil Extracting Company use about 5,000 gallons. Both these firms are in Hull. I only have the figures for the production of meal for the largest company of its kind in the world, namely the British Oil and Cake Mills. They make 2,000 tons of meal per week. Therefore, as my hon. Friend has pointed out, about five gallons of petrol are used up, or expended, or lost, in the production of every ton of meal. I had, these figures only last Saturday from one of the leading directors of this company, who is the leading man in the whole industry in the country. That means that the extra expenditure in making a ton of cattle feeding meal will be between 1s. 3d. and 1s. 9d., and the average price for which the meal is sold is about £10 10s. a ton.
Therefore, this represents an additional oncost of 1s. 8d. to 1s. 9d. on the selling price of £10 10s. for a ton of meal. Let it be observed that the prices of the materials used in making this meal are world prices. They are bought in competition. The cotton-seed, linseed, nuts, soya beans, etc., are bought, as against Danish, German and other firms, in competition in the world markets, and therefore, we may take it that our buyers are efficient and buy their raw materials at world prices. But our competitors also buy petrol at the world price, and the world price of petrol is very stable now. They, therefore, start with an immediate advantage, in the cost of their raw materials, of about 1s. 8d. to 1s. 9d. per ton, and that, in these days of keen competition and cut prices, will again and again give our competitors an advantage. This is not a case in which, as the petrol companies have done, the tax can be passed on to the consumer.
I quite appreciate that the right hon. Gentleman wants to help production, and I admire his intentions—his good intentions—very much indeed. I hope they will lead him to Heaven. But I do suggest to him that the case of this industry has been overlooked. It was 1654 necessary, in making the preparations to put on this tax—and I am not attacking the main petrol tax at all—to observe secrecy, and inquiries could not be made in too many quarters. I was not aware until a week ago of the use of this spirit in this industry, nor do I think my hon. Friend was, but our constituencies are intimately concerned. The Premier Oil Extracting Mills are in my hon. Friend's constituency, and the British Oil and Cake Mills are in mine, and these are the two biggest concerns in the country. I can quite understand that the Chancellor of the Exchequer, or even his Treasury advisers, may not have been seized of these facts which have been given to the House by my hon. Friend the Member for East Hull and myself.
§ Lieut.-Commander KENWORTHYI dealt with that. The point is that the price of petrol is a world price, and their competitors in Germany and Denmark have to pay the same price as they do, but we are putting an actual addition on to the price that will have to be paid by the Hull manufacturers. I thought I had made that clear; I hope I have done so now. I must say that I have a sneaking sympathy with the main object of the Chancellor of the Exchequer in putting on this tax. It is putting back, or attempting to put back, the hands of the economic clock, and I always admire romanticism—I always admire a romantic policy. [Interruption.] I do not agree that it is atavism, but I think that to put a tax on a very progressive industry in order to help one that is falling into the background is attractive. To use an Americanism, which the Chancellor and myself have no excuse for misunderstanding, the runabout has beaten the bassinette, and it is necessary to help the bassinette. The arguments the right hon. Gentleman uses are that this pleasure industry of motoring can bear a tax, but at the same time he is putting a tax on the industry of producing cattle meal and using the oil for making margarine and edible fats. He talks of the great advantages of the transport companies on the roads without the rates the railway companies have to pay.
That is all very sound for a Petrol Duty on road users but it is not a sound argument for a Petrol Duty on manufac- 1655 turers who cannot use anything else but these hydro-carbon oils in their business. If you tax this process, eventually the manufacturer will have to pu4 up the price of his oils. If it is right to do that, it is also right to tax additionally in some way or other every industry in the country. We really are not justified in picking out one or two industries for a special tax on their raw material. The House may think the Chancellor is justified in taxing petrol used as power for driving vehicles, he may think it is a good thing to help the coal industry indirectly, but he is not justified, and he has no intention, I am sure, of taxing the raw material of a very important industry, of great importance incidentally to agriculture, and I hope he will be able to give us this comparatively small concession, which has been asked for in the first place by a stalwart Conservative supporter of his. If he does make the concession, I hope no one will accuse him of over-tenderness, and I certainly will thank him very much indeed. I am sure my hon. Friends on this side will recognise that, if he gives way now, it is to fair debate and reason on the Floor of the House and not to powerful pressure in the Upper Chamber such as, I understand, led to the loss of a much greater revenue in the hours of yesterday afternoon. For these reasons, with some confidence, knowing the right hon. Gentleman's willingness to listen to reason, I second the Amendment.
§ Mr. CHURCHILLWe have listened to two very interesting speeches, and I am bound to say I think the City of Hull is to be congratulated on its representatives. I am hopeful that neither of the hon. Members, both of whom, no doubt, are being reported on by their constituents for their excellent rival performances, will be unduly disappointed if I am unable to make any other answer to the Amendment they have proposed than has been made to other proposals of a similar character. If you start to give these exemptions, you will end by attempting to confine the burden of the Petrol Duty exclusively to the road user. You cannot possibly deal with cattle feeding stuffs without also dealing with dyeing and cleaning, with the manufacture of paint, with the making of gloves and all these 1656 interesting and complicated trades of which we have heard. If you did that you would, undoubtedly, have vitiated the tax. [Interruption.] Not everything that is vitiated is vicious. You will have undoubtedly destroyed the tax, and if you have destroyed the tax you have destroyed the policy. After all, calculations were made to show how much the duty would yield. Apparently, the petrol is used over and over again, and we have only to deal with the wastage on each operation. Petrol has fallen in recent history by a shilling, but such, violent movements of the price of petrol have found no reflection in the price of these things as purveyed to the public. The advantage has been added to the strength of these powerful companies. These reserves are there, and now that there is a rainy day, it will be available to meet the extra charges.
For my part, I am bound to say that I do not think it is a great hardship that this tax should be proposed, but even so that is not the end of the story. For if this industry should survive the vicissitudes of a 4d. increase in the price of petrol, as it has already survived without the public realising much about it the convenience of nearly a shilling fall, if it should so survive until after the April rate payment of 1929, it will gain by the reduction of three-quarters of its rates on what are no doubt expensive and highly rated properties, which will give it competitive power far exceeding any drag which the incidence of this tax will impose.
§ Sir FRANK SANDERSONHaving some experience of the industry which is at the present time being discussed, I feel that it is my duty to rise in order to give my right hon. Friend the Chancellor of the Exchequer the facts of the case. Oilseeds are treated by two entirely different processes—one by treating the seed by hydraulic pressure, which is the ordinary process, and this process is not in any way affected by the Petrol Duty. The other is by a process whereby the oilseed to be treated is ground into a fine meal, and placed into a steam-heated jacketed pan, when petrol, that is, solvent, is passed through the meal, and by this means the oil is extracted. The total amount of petrol used and lost 1657 beyond recovery in the course of manufacture is three to six gallons to one ton of seed according to the class of seed treated, and the additional cost of manufacture with the duty will be 2s. 6d. per ton. My right hon. Friend said that the principal reasons for objecting to this duty was because he felt that there would be some form of leakage and possible evasion. I want to make it quite clear to him that there can be no leakage in connection with the oilseed extraction industry, because the petrol is delivered to the manufacturer in bulk and is placed into a large receptacle, where it is physicaly impossible to get at the petrol except after it has passed through the process of manufacture.
A point was raised by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) in regard to the cost of cattle-feeding stuffs. When the petrol has passed though the seeds the ingredients which are left, are oil and meal. The value of that feeding material entirely depends upon the class of seed which has been used in the process of manufacture. Rape seed, soya beans and cotton seeds, castor seeds and a variety of other oil seeds are used. In the ease of rape seed and castor seed the meal from which is used as a fertiliser, the cost per ton is very frequently as low as £3, so that an extra 2s. 6d. per ton in the cost of manufacture is very important. The duty not only affects feeding stuffs but
§ it also affects fertilisers, because these materials are used for fertilising purposes.
§ The total cost to the extractors in Hull and Liverpool is approximately £35,000 per year. This industry has passed through a period of great difficulty and distress, and instead of profits being made there have, in fact, been losses during the past few years. A question has been raised that a matter of 2s. 6d. extra cost on £8 per ton is very small, but I wish to assure my right hon. Friend that the seed crushers are very pleased when they can see a clear 2s. 6d. a ton profit. That is the basis upon which they work. It is true to say that each year thousands of tons of seed are extracted and crushed in this country at a profit of considerably less than 2s. a ton. When the tax was placed upon petrol some years ago and the matter was brought before the seed crushing industry they appreciated the danger to this industry and we were allowed a rebate. Although the Chancellor of the Exchequer has spoken in no uncertain terms, I hope that he will seriously consider the position and not jeopardise an industry which we have literally, by sheer ability, taken from Germany.
§ Question put, "That those words be there inserted."
§ The House divided: Ayes, 137; Noes, 263.
1661| Division No. 97.] | AYES. | [10.36 p.m. |
| Adamson, W. M. (Staff., Cannock) | Dennison, R. | Jones, Morgan (Caerphilly) |
| Alexander, A. V. (Sheffield, Hillsbro') | Dunnico, H. | Jones, T. I. Mardy (Pontypridd) |
| Ammon, Charles George | Edge, Sir William | Kelly, W. T. |
| Baker, J. (Wolverhampton, Bilston) | Evans, Capt. Ernest (Welsh Univer.) | Kenworthy, Lt.-Com. Hon. Joseph M. |
| Baker, Walter | Fenby, T. D. | Kirkwood, D. |
| Barker, G. (Monmouth, Abertillery) | Gardner, J. P. | Lansbury, George |
| Barnes, A. | Garro-Jones, Captain G. M. | Lawson, John James |
| Barr, J. | Gibbins, Joseph | Lindley, F. W. |
| Batey, Joseph | Gillett, George M. | Lowth, T. |
| Beckett, John (Gateshead) | Gosling, Harry | Lumley, L. R. |
| Bondfield, Margaret | Graham, Rt. Hon. Wm. (Edin., Cent.) | Lunn, William |
| Bowerman, Rt. Hon. Charles W. | Greenall, T. | MacDonald, Rt. Hon. J. R. (Aberavon) |
| Briant, Frank | Greenwood, A. (Nelson and Colne) | Mackinder, W. |
| Broad, F. A. | Griffith, F. Kingsley | MacLaren, Andrew |
| Bromfield, William | Grotrian, H. Brent | MacLean, Nell (Glasgow, Govan) |
| Bromley, J. | Groves, T. | March, S. |
| Brown, James (Ayr and Bute) | Hall, F. (York., W. R., Normanton) | Maxton, James |
| Buchanan, G. | Hall, G. H. (Merthyr Tydvil) | Mitchell, E. Rosslyn (Paisley) |
| Buxton, Rt. Hon. Noel | Hamilton, Sir R. (Orkney & Shetland) | Montague, Frederick |
| Cape, Thomas | Hardie, George D. | Morris, R. H. |
| Carver, Major W. H. | Harney, E. A. | Morrison, R. C. (Tottenham, N.) |
| Charleton, H. C. | Harris, Percy A. | Murnin, H. |
| Clarry, Reginald George | Hayday, Arthur | Naylor, T. E. |
| Cluse, W. S. | Henderson, Rt. Hon. A. (Burnley) | Oliver, George Harold |
| Clynes, Rt. Hon. John R. | Henderson, T. (Glasgow) | Owen, Major G. |
| Compton, Joseph | Hirst, W. (Bradford, South) | Palin, John Henry |
| Connolly, M. | Hollins, A. | Parkinson, John Allen (Wigan) |
| Cove, W. G. | Hutchison, Sir Robert (Montrose) | Pethick-Lawrence, F. W. |
| Crawfurd, H. E. | Jenkins, W. (Glamorgan, Neath) | Ponsonby, Arthur |
| Dalton, Hugh | John, William (Rhondda, West) | Potts, John S. |
| Davies, Rhys John (Westhoughton) | Johnston, Thomas (Dundee) | Richardson, R. (Houghton-le-Spring) |
| Riley, Ben | Smith, Ben (Bermondsey, Rotherhithe) | Watson, W. M. (Dunfermline) |
| Ritson, J. | Smith, H. B. Lees (Keighley) | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Robinson, W. C. (Yorks, W. R., Elland) | Smith, Rennie (Penistone) | Wellock, Wilfred |
| Runciman, Hilda (Cornwall, St. Ives) | Snell, Harry | Westwood, J. |
| Runciman, Rt. Hon. Walter | Snowden, Rt. Hon. Philip | Wheatley, Rt. Hon. J. |
| Salter, Dr. Alfred | Stamford, T. W. | Wiggins, William Martin |
| Sanderson, Sir Frank | Stephen, Campbell | Wilkinson, Ellen C. |
| Scrymgeour, E. | Strauss, E. A. | Williams, David (Swansea, East) |
| Sexton, James | Sutton, J. E. | Williams, T. (York, Don Valley) |
| Shaw, Rt. Hon. Thomas (Preston) | Thomas, Sir Robert John (Anglesey) | Wilson, R. J. (Jarrow) |
| Shepherd, Arthur Lewis | Thorne, G. R. (Wolverhampton, E.) | Windsor, Walter |
| Shiels, Dr. Drummond | Thorne, W. (West Ham, Plaistow) | Young, Robert (Lancaster, Newton) |
| Shinwell, E. | Thurtle, Ernest | |
| Short, Alfred (Wednesbury) | Tinker, John Joseph | TELLERS FOR THE AYES.— |
| Sitch, Charles H. | Tomlinson, R. P. | Mr. Charles Edwards and Mr. Whiteley. |
| Smillie, Robert | Townend, A. E. | |
| NOES. | ||
| Acland-Troyte, Lieut.-Colonel | Curzon, Captain Viscount | Hopkinson, A. (Lancaster, Mossley) |
| Agg-Gardner, Rt. Hon. Sir James T. | Davidson, Rt. Hon. J. (Hertford) | Howard-Bury, Colonel C. K. |
| Albery, Irving James | Davidson, Major-General Sir J. H. | Hudson, Capt. A. U. M. (Hackney, N.) |
| Alexander, E. E. (Leyton) | Davies, Maj. Geo. F.(Somerset, Yeovil) | Hudson, R. S. (Cumberland, Whiteh'n) |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Davies, Dr. Vernon | Hume, Sir G. H. |
| Allen, J. Sandeman (L'pool, W. Derby) | Dixey, A. C. | Hunter-Weston, Lt.-Gen. Sir Aylmer |
| Amery, Rt. Hon. Leopold C. M. S. | Drewe, C. | Hurd, Percy A. |
| Applin, Colonel R. V. K. | Edmondson, Major A. J. | Hurst, Gerald B. |
| Apsley, Lord | Edwards, J. Hugh (Accrington) | Iliffe, Sir Edward M. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Elliot, Major Walter E. | Inskip, Sir Thomas Walker H. |
| Astbury, Lieut.-Commander F. W. | Ellis, R. G. | Jackson, Sir H. (Wandsworth, Cen'l) |
| Atholl, Duchess of | Erskine, Lord (Somerset, Weston-s.-M.) | Jephcott, A. R. |
| Atkinson, C. | Everard, W. Lindsay | Jones, Sir G. W. H. (Stoke New'gton) |
| Baldwin, Rt. Hon. Stanley | Fairfax, Captain J. G. | Kennedy, A. R. (Preston) |
| Balfour, George (Hampstead) | Fanshawe, Captain G. D. | King, Commodore Henry Douglas |
| Balniel, Lord | Fielden, E. B. | Kinloch-Cooke, Sir Clement |
| Banks, Reginald Mitchell | Ford, Sir P. J. | Knox, Sir Alfred |
| Barclay-Harvey, C. M. | Forestier-Walker, Sir L. | Lamb, J. Q. |
| Barnett, Major Sir Richard | Forrest, W. | Leigh, Sir John (Clapham) |
| Bellairs, Commander Carlyon | Foster, Sir Harry S. | Lister, Cunliffe-. Rt. Hon. Sir Philip |
| Bennett, A. J. | Frece, Sir Walter de | Lloyd, Cyril E. (Dudley) |
| Bentinck, Lord Henry Cavendish | Fremantle, Lt.-Col. Francis E. | Loder, J. de V. |
| Bethel, A. | Gadie, Lieut.-Col. Anthony | Long, Major Eric |
| Betterton, Henry B. | Ganzoni, Sir John | Looker, Herbert William |
| Sirchall, Major J. Dearman | Gates, Percy. | Laugher, Lewis |
| Boothby, R. J. G. | Gault, Lieut.-Col. Andrew Hamilton | Lucas-Tooth, Sir Hugh Vere |
| Bourne, Captain Robert Croft | Gilmour, Lt.-Col. Rt. Hon. Sir John | Luce, Maj.-Gen. Sir Richard Harman |
| Bowater, Col. Sir T. Vansittart | Glyn, Major R. G. C. | Lynn, Sir R. J. |
| Bowyer, Capt. G. E. W. | Goff, Sir Park | MacAndrew, Major Charles Glen |
| Brass, Captain W. | Gower, Sir Robert | Macdonald, R. (Glasgow, Cathcart) |
| Briggs, J. Harold | Grace, John | McDonnell, Colonel Hon. Angus |
| Briscoe, Richard George | Graham, Fergus (Cumberland, N.) | MacIntyre, Ian |
| Brocklebank, C. E. R. | Grant, Sir J. A. | McLean, Major A. |
| Brooke, Brigadier-General C. R. I. | Grattan-Doyle, Sir N. | Maitland, A. (Kent, Faversham) |
| Broun-Lindsay, Major H. | Greaves-Lord, Sir Walter | Malone, Major P. B. |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Greene, W. P. Crawford | Manningham-Buller, Sir Mervyn |
| Buchan, John | Grenfell, Edward C. (City of London) | Marriott, Sir J. A. R. |
| Buckingham, Sir H. | Guest, Capt. Rt. Hon. F. E. (Bristol, N.) | Mason, Colonel Glyn K. |
| Burgoyne, Lieut.-Colonel Sir Alan | Guinness, Rt. Hon. Walter E. | Meller, R. J. |
| Burman, J. B. | Gunston, Captain D. W. | Merriman, Sir F. Boyd |
| Burton, Colonel H. W. | Hacking, Douglas H. | Meyer, sir Frank |
| Butler, Sir Geoffrey | Hall, Capt. W. D'A. (Brecon & Rad.) | Milne, J. S. Wardlaw- |
| Campbell, E. T. | Hamilton, Sir George | Mitchell, S. (Lanark, Lanark) |
| Cassels, J. D. | Hammersley, S. S. | Mitchell, W. Foot (Saffron Walden) |
| Cautley, Sir Henry S. | Hanbury, C. | Monsell, Eyres, Com. Rt. Hon. B. M. |
| Cayzer, Sir C. (Chester, City) | Hannon, Patrick Joseph Henry | Moore, Sir Newton J. |
| Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.) | Harland, A. | Moors-Brabazon, Lieut.-Col. J. T. C. |
| Chamberlain, Rt. Hon. N. (Ladywood) | Harrison, G. J. C. | Morrison, H. (Wilts, Salisbury) |
| Chapman, Sir S. | Hartington, Marquess of | Murchison, Sir Kenneth |
| Christie, J. A. | Harvey, G. (Lambeth, Kennington) | Neville, Sir Reginald J. |
| Churchill, Rt. Hon. Winston Spencer | Harvey, Major S. E. (Devon, Totnes) | Newman, Sir R. H. S. D. L. (Exeter) |
| Churchman, Sir Arthur C. | Haslam, Henry C. | Nicholson, O. (Westminster) |
| Cochrane, Commander Hon. A. D. | Headlam, Lieut.-Colonel C. M. | Nuttall, Ellis |
| Colfox, Major Wm. Phillips | Henderson, Capt. R. R. (Oxf'd, Henley) | Oakley, T. |
| Conway, Sir W. Martin | Henderson, Lieut.-Col. Sir Vivian | Pennefather, Sir John |
| Cooper, A. Duff | Heneage, Lieut.-Colonel Arthur P. | Perkins, Colonel E. K. |
| Cope, Major William | Henn, Sir Sydney H. | Peto, Sir Basil E. (Devon, Barnstaple) |
| Couper, J. B. | Hennessy, Major Sir G. R. J. | Peto, G. (Somerset, Frome) |
| Courtauld, Major J. S. | Herbert, Dennis (Hertford, Watford) | Philipson, Mabel |
| Craig, Sir Ernest (Chester, Crewe) | Hills, Major John Waller | Pilcher, G. |
| Croft, Brigadier-General Sir H. | Hilton, Cecil | Pilditch, Sir Philip |
| Crooke, J. Smedley (Deritend) | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Power, Sir John Cecil |
| Crookshank, Col. C. de W. (Berwick) | Hope, Capt. A. O. J. (Warw'k, Nun.) | Preston, William |
| Culverwell, C. T. (Bristol, West) | Hope, Sir Harry (Forfar) | Price, Major C. W. M. |
| Gunliffe, Sir Herbert | Hopkins, J. W. W. | Radford, E. A. |
| Ramsden, E. | Skelton, A. N. | Wallace, Captain D. E. |
| Rees, Sir Beddoe | Slaney, Major P. Kenyon | Warner, Brigadier-General W. W. |
| Remer, J. R. | Smith, R. W. (Aberd'n & Kinc'dine, C.) | Warrender, Sir Victor |
| Rhys, Hon. C. A. U. | Smith-Carington, Neville W. | Waterhouse, Captain Charles |
| Rice, Sir Frederick | Smithers, Waldron | Watson, Sir F. (Pudsey and Otley) |
| Richardson, Sir P. W. (Sur'y, Ch'ts'y) | Somerville, A. A. (Windsor) | Watson, Rt. Hon. W. (Carlisle) |
| Roberts E. H. G. (Flint) | Spender-Clay, Colonel H. | Watts, Dr. T. |
| Roberts, Sir Samuel (Hereford) | Sprot, Sir Alexander | Wayland, Sir William A. |
| Robinson, Sir T. (Lanes., Stretford) | Stanley, Lieut.-Colonel Rt. Hon. G. F. | Wells, S. R. |
| Ropner, Major L. | Stanley, Lord (Fylde) | Williams, A. M. (Cornwall, Northern) |
| Ruggles-Brise, Lieut.-Colonel E. A. | Stanley, Hon. O. F. G. (Westm'eland) | Williams, Herbert G. (Reading) |
| Russell, Alexander West (Tynemouth) | Steel, Major Samuel Strang | Wilson, R. R. (Stafford, Lichfield) |
| Rye, F. G. | Stuart, Crichton-, Lord C. | Windsor-Clive, Lieut.-Colonel George |
| Salmon, Major I. | Stuart, Hon. J. (Moray and Nairn) | Winterton, Rt. Hon. Earl |
| Samuel, A. M. (Surrey, Farnham) | Sueter, Rear-Admiral Murray Fraser | Wolmer, Viscount |
| Samuel, Samuel (W'dsworth, Putney) | Sugden, Sir Wilfrid | Womersley, W. J. |
| Sandeman, N. Stewart | Templeton, W. P. | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| Sandon, Lord | Thom, Lt.-Col. J. G. (Dumbarton) | Wood, Rt. Hon. Sir Kingsley |
| Savery, S. S. | Thomson, F. C. (Aberdeen, South) | Woodcock, Colonel H. C. |
| Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W) | Thomson, Rt. Hon. Sir W. Mitchell- | Wragg, Herbert |
| Sheffield, Sir Berkeley | Titchfield, Major the Marquess of | |
| Shepperson, E. W. | Tryon, Rt. Hon. George Clement | TELLERS FOR THE NOES.— |
| Simms, Dr. John M. (Co. Down) | Turton, Sir Edmund Russborough | Captain Margesson and Mr. Penny. |
| Sinclair, Col. T. (Queen's Univ., Belfast) | Waddington, R. |
Question put, and agreed to.
§ Lieut.-Commander KENWORTHYI beg to move, in line 18, after the word "be," to insert the words:
on all turpentine and white spirit used in the manufacture of paints and varnishes.I need not go over the general arguments, but I would point out that, whereas in the last Debate we were dealing with a material used as a solvent, here we are dealing with one of the constituent parts of manufactured articles, namely, paints and varnishes in which a great quantity of white spirit and turpentine is actually used. Whereas in the last Debate we were more concerned with an article for home consumption, the paint, colour, and varnish trade is a great world and Imperial trade, and we do a tremendous export business by sending all over the world our special paints and varnishes, much of which is produced in the constituency of the hon. and learned Member for South West Hull (Mr. Grotrian), who, I am sure, will support me in the Division Lobby, as he did just now. The whole city is very much involved in this important industry, with its great export interest.Already this trade has been hard hit by the restrictions in regard to dyestuffs. They are not able to buy dyes in the cheapest markets, and now this very large ingredient of manufactured paint will have to bear this duty. I will ask the Chancellor of the Exchequer if he will consider the possibility of allowing a drawback on goods exported. If he can allow exported manufactured silk to have a drawback, cannot he allow a drawback on manufactured paints and 1662 enamels? The only other point I would make is that, coming to the home market, the Chancellor is now a great friend of the family man. This duty, as applied to paints and varnishes, will inevitably increase the cost of houses, and it will therefore do something to discourage young couples from setting up house because of the higher cost of house decorating. Therefore, he is taking away something of the remission of the Income Tax for children by the increased cost of houses. For all these reasons, I hope the right hon. Gentleman will be less deaf to this appeal than he was to that in connection with feeding stuffs. Surely the painting and decorating of houses for newly-married couples will appeal to him more than did the question of cattle-feeding stuffs.
§ Mr. KELLYI beg to second the Amendment.
In so doing, I would ask the Chancellor of the Exchequer to say whether or not the Industrial Council dealing with this particular industry has been consulted as to the effect of this duty upon that industry. This industry, which has had great difficulties in London, in Lancashire and Cheshire, and in other parts of the country, is now to have a considerable impost put upon it by reason of this increase in price. This extra charge is put upon a raw material of the paint, colour, and varnish industry, and I think, before anything that is going to cause greater hardship to that industry is imposed upon it, at least those engaged in it might have been consulted by the Chancellor of the Exchequer.
§ Major ELLIOTThe appeal which the hon. and gallant Member has made, and which brings me to my feet, is connected with a subject in which I am particularly interested. The hon. Member made two appeals, one of which I am sure he will be glad to hear has been already granted in advance by the Chancellor of the Exchequer. He asked for a drawback on exported goods, and I am sure he will withdraw all opposition when he hears that that drawback is granted. The hon. and gallant Gentleman said he would not recapitulate all the reasons which led him to move his Amendment, and I am sure he will not expect any spokesman of the Government to recapitulate all the reasons which have led them to reject these arguments of his, because they are very similar to the arguments which he has heard advanced before with far more skill than I can show. On the special plea for exemption on the ground that these articles are used in house painting, I am sure he will realise that this is an industry which has been in receipt of Government assistance to such a tune that it has raised its output to three times that of pre-War, and he will not expect us to believe that it is such a depressed industry that it needs special consideration in this respect. Therefore, I hope that, having gained a considerable portion of his point, because the Chancellor has already dealt with it, he will withdraw his Amendment.
§ Lieut.-Commander KENWORTHYWill it be in the Finance Bill?
§ Major ELLIOTYes. By the regular procedure.
§ Question, "That those words be there inserted," put, and negatived.
§ Mr. CHURCHILLI beg to move, in line 19, to leave out from the word "than" to the end of line 21, and to insert instead thereof the words:
hydrocarbon oils or mixtures containing hydrocarbon oils of which oils or mixtures not less than 50 per cent. by volume distils at a temperature not exceeding 185 degrees centigrade or of which not less than 95 per cent. by volume distils at a temperature not exceeding 240 degrees centigrade or which give off an inflammable vapour at a temperature of less than 22.8 degrees centigrade when tested in manner prescribed by the Acts relating to petroleum.
§ Lieut.-Commander KENWORTHYThe Amendment which has just been read out establishes, we are informed by the Chancellor, a new chemical frontier, though I should myself have said a new political frontier, because my information is that there is nothing more difficult to define exactly than petrol. Although the Amendment as read out earlier in the afternoon sounded very watertight or oil-tight, and I should not on technical grounds be prepared to dispute it as a definition, nevertheless I should like some assurance that the right hon. Gentleman is satisfied that no mixture can now be sold which can be used efficiently for vehicles, especially the heavier sort, so as to escape taxation. He might therefore consider giving the House the technical and scientific arguments with which he has reinforced himself and so satisfy those hon. Members who are more capable of judging these matters than I am. The hon. Members of this House ought to be able to understand the most technical subject if it is properly explained to them in plain language. In these days we have to legislate on a great many complicated subjects, and we ought to be able to understand what is properly explained, however apparently technical it may be; and His Majesty's Ministers ought to be able to explain it. I know nobody better fitted to give an explanation than the right hon. Gentleman, whose faculty for grasping technical complications is so well known, and, therefore, I will be glad if he will give us this information.
§ Mr. HARDIEI put a question to the Chancellor of the Exchequer to-day in his absence, and as it may not have been communicated to him I would like to put it to him now. Does the formula which has been read to the House mean that anything that takes that test is either paraffin or kerosene?
§ Mr. CHURCHILLIt means that anything that complies with the test in a favourable sense will not be subject to duty, and anything that fails to comply with the test will suffer the full penalties of the duty. It is not so complicated a matter as it may appear. The task of grouping-off these petrols, hydro-carbons, from the light kerosenes is one of great 1665 difficulty. The Committee which first started on this subject three years ago consisted of the best scientists we could command, and in addition we also had the services of the chemists of the great oil companies from time to time to advise in this matter, and I think the formula they have arrived at represents the very last word. Certainly for more than a year past all these chemists have been satisfied that this is an effectual manner of differentiating between petrol and paraffin.
§ Mr. HARDIEDo the chemists give any name to these compounds that come under this test?
§ Mr. CHURCHILLWe have heard about the perfumes of these oils, but the name really is not a matter with which we need concern ourselves. Everything that will do what this test says it may not do will be subject to taxation. The Committee will see that it is a very thorough test. There are two distillations and a flash point. As it was put to me by one of those eminent chemists, the frontiers will be defended by two cannon and a flammenwerfer.
§ Lieut.-Commander KENWORTHYThe Hindenburg Line!
§ Mr. CHURCHILLIn that sense, the Hindenburg Line. Whether there will be some infiltration—I believe that was the process adopted in the latter stages of the War—I cannot, of course, say, but we are sure of this, that those people who incautiously use kerosene to drive their motor cars will rue it, and if new cylinders, carburettors and engines are constructed for the purpose of using kerosene, there will be plenty of time to impose some special tax upon that particular form of engine which will more than meet the perverted ingenuity devoted to it. But the serious and important point of this particular resolution is that if the House assents to it at the present time the whole of the oil companies in this country will reduce their charges on kerosene from to-morrow morning to the pre-tax level, and therefore it is a very serious matter that the House should dispose of it with promptitude.
§ 11.0 p.m.
§ Mr. R. MORRISONI should be very grateful if the Chancellor of the Exche- 1666 quer could say whether the new formula would make any difference to the cost of collecting the tax. This afternoon the Chancellor did not make any reference to the cost of collecting. I want to know if the alteration the right hon. Gentleman announced earlier this evening will make any difference to the cost of the collection of the tax? Will the precautions which the Exchequer will have to take to avoid evasion make any appreciable difference?
§ Mr. CHURCHILLIn the case of the frontier between the whites and the blacks, that is the light oils and the heavy oils, things can be easily arranged; but it is much more complicated to draw a frontier betwen the light oils subject to duty and those which are not. Very likely there will be some additional expense in the collection of the duty, but I do not think it will be very considerable.
§ Amendment agreed to.
§ Mr. SNOWDENI beg to move,
That consideration of the remaining Resolutions be now adjourned.I think we have now reached a stage at which it would be convenient for us to adjourn and continue the discussion to-morrow.
§ Mr. CHURCHILLI think the course suggested by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) would best conduce to the convenience of the House. No doubt the proposal in regard to the Sugar Duty will raise a good many contentious points, and I am quite agreeable that we should not press the matter any further to-night. We can then begin with the Sugar Resolution to-morrow. I hope it is understood that we shall get Orders 1, 2 and 3, and the Report stage of the Consolidated Fund (National Debt) Bill by Thursday night without being forced to sit to an unreasonable hour. On that general understanding, I shall be quite content to adjourn now.
§ Third and subsequent Resolutions to be considered To-morrow.
1667§ The remaining Orders were read, and postponed.