HC Deb 19 April 1932 vol 264 cc1439-45

Resolved, That— (a) As from the twentieth day of April nineteen hundred and thirty-two, there shall on the importation into the United Kingdom of tea be payable a duty of Customs at the following rates— Tea, not being an Empire product within the meaning of that expression as used in Sub-section (1) of Section eight of the Finance Act, 1919 the lb. fourpence; Tea, being such an Empire product as aforesaid the lb. twopence: (b) An excise duty at the rate of twopence the pound shall be payable on tea which was imported before the twentieth day of April, nineteen hundred and thirty-two, and is in the ownership or possession of any person who holds more than one thousand pounds thereof, but not including any such tea which is shown to the satisfaction of the Commissioners of Customs and Excise to have been intended for use by the person in whose ownership or possession it was and not to have been intended for sale or for use in the preparation of a beverage for sale: (c) The enactments relating to the allowance of drawback on blended tea prepared from teas on which customs duties have been paid shall extend to blended tea prepared from teas in respect of which either of the duties payable under this Resolution has been paid.


It is the custom, I believe, that on the occasion of the Budget the serious discussion of the Chancellor's proposals is postponed to another day and I do not intend to depart from that custom this evening. It is also customary for someone on the Opposition side, usually either an ex-Chancellor of the Exchequer or someone who has been connected with the Treasury, to offer congratulations to the Chancellor of the Exchequer on his speech. It falls to me to do so this afternoon and if the right hon. Gentleman will allow me to say so, how ever strongly I disagree with him—and no one knows better than he how often and how vigorously I disagree with him—I have never at any time had anything but a keen appreciation of his courage, his ability and his intellectual honesty in putting his case. I have never been under any delusion as to the right hon. Gentleman's policy in connection with anything on which I have disagreed with him, and this afternoon he has presented this very difficult financial statement with his usual ability.

I think in all parts of the Committee there will be agreement that while this statement may be good in parts, and while it may be bad in parts, at least a considerable amount of ability was required to compress it into the very short time occupied by the right hon. Gentleman. There are very few men in the House of Commons who would have performed the task equally well and certainly none who would have performed it better than the right hon. Gentleman has done. Having said so I should like to congratulate the Prime Minister on having persuaded the Cabinet to follow him at least in one direction, and that is in the policy that when you come to a stiff gate you should have a committee. The proposals in this Budget call for further congratulations to the right hon. Gentleman. It is certainly a matter for congratulation to him that he has two of the late high priests of the temple of Free Trade sitting side by side with him and supporting him in the heresy put before the Committee this afternoon.

As to what Lord Snowden thinks about it all I would like to put him before the mirror of truth and compel him to reveal his mind. I should like also to know something from him upon another subject in regard to which I can again congratulate the Chancellor of the Exchequer personally. That is the question of the Land Tax valuation. The Chancellor of the Exchequer last year prophesied that Lord Snowden's Budget would be the last Free Trade Budget and I hope that the Home Secretary glories in the fact that he is taking part now in the presentation of the first Protectionist Budget after a long number of years. The right hon. Gentleman the Chancellor also prophesied last year that a lot of things would happen before the land valuation was put into operation. To-day he has the satisfaction of knowing that he has wiped that proposal out of our financial arrangements and any hon. Member who takes the trouble to read Lord Snowden's speech on the introduction of that proposal will find that Lord Snowden then said that if only the taxation of land values were adopted we would remove one of the greatest hindrances to trade recovery. What is a poor humble person like myself to say when these giants in the business of high finance disagree and agree to differ in this fashion?

I was much struck by the Chancellor's statement that we had reached the limit of direct taxation and I would like to ask someone who speaks to-morrow on behalf of the Government to tell us from where this other money is coming. It is not coming from heaven or out of the sea. It is coming out of the pockets of people somewhere or other. The right hon. Gentleman may say, "Oh, the foreigner pays." [HON. MEMBERS: "Hear, hear!"] That is all very well but I ask hon. Members to recall that when the import duties were being discussed hon. and right hon. Gentlemen were on their feet declaring that this industry must be exempt and that industry must be exempt, or else British industry would be ruined. If the foreigner is paying what is the difference? The thing is too absurd. It is the people who consume who will pay.

I only wish to say this in conclusion, because my hon. Friend the Member for Limehouse (Mr. Attlee) will deal faithfully with this Budget to-morrow. The fundamental difference between ourselves and the Government on this question of the condition of trade in this country is that we say that a restoration of trade and industry cannot be hoped for on any sort of policy which involves economic nationalism. You cannot expect and you never will secure any advance in the condition of the world except by international co-operation. We who sit on these benches hope that when the Prime Minister goes to Geneva he will go there determined that, not merely the question of War debts and reparations will be dealt with, but that the whole question of international trade and international exchange will be dealt with also. I could not be expected to understand completely all the Chancellor's proposals for dealing with exchange, but we are quite certain that stability will never be achieved in the world until there is a stabilised currency which applies not to one country, but throughout the world. We also believe that there can be no real peace in the world until the consumption of goods matches the production of goods. We do not believe that the world is suffering from want. We believe, on the other hand, that it is suffering because mankind has not yet discovered how to distribute the abundance produced by mankind. That is the position which we shall take up in the discussion of these Budget Resolutions.


I wish to record my keen disappointment at the fact that the Chancellor of the Exchequer has not seen fit to make any alteration in the Silk Duties. I wish to enter the strongest protest against the fact that this should be the one industry of the country to be deprived altogether of any sort of protection. I think that is a monstrous thing, and I wish to indicate to the Chancellor of the Exchequer that Amendments having been drafted, in anticipation of the absence of any mention of the silk industry in connection with these proposals, we propose to move those Amendments during the Committee stage and to fight for those Amendments by every means known to Parliamentary procedure.

5.30 p.m.


I hope that as chairman of the Income Taxpayers Society of Great Britain I may be allowed to say a few words on their behalf with regard to the Budget which has just been opened by the Chancellor of the Exchequer. I need not say that we regret that he has not felt justified in reducing the standard rate of Income Tax. This great load of Income Tax cannot be borne indefinitely by taxpayers. We know the expedients by which taxpayers met that Income Tax in January of this year, by borrowing from their banks and by postponing expenditure which was needed, thereby causing further unemployment. Indeed, the Chancellor in his speech to-day said that no longer is it possible to meet this taxation out of revenue, and that capital has to be sold in order to meet it. The Chancellor's speech has shown how the annual capital levy of the Death Duties has fallen off. The springs are gradually drying up; estates are halved and quartered by Death Duties, and the incentive to thrift is being undermined in all classes of the community. The hopes of the Income Tax payers were raised by speeches from you, Sir, earlier in the year on 4th February, when you introduced your tariff proposals—


I do not quite understand the hon. Gentleman's reference suggesting that the occupant of the Chair introduced these proposals.


I was saying that the hopes of the Income Tax payers of the country were raised by the remarks of the Chancellor of the Exchequer in his speech introducing his tariff proposal on 4th February, when he testified to what the Income Tax payers had already done to help the country in its emergency. He said then: I do not believe you can find anywhere else in the world such an exhibition of self-sacrificing and devoted patriotism as has been shown by the British taxpayer during the last year."—[OFFICIAL REPORT, 4th February, 1932; cols. 280–1, Vol. 261.] Later in the same month the President of the Board of Trade said: The strain placed upon those direct taxpayers has gone fax enough, and the time has come when we ought to relieve them of some of that burden. If we do not relieve them we shall undoubtedly be doing injury to the people who are dependent upon them in the industries which are now requiring more and more capital".—[OFFICIAL REPORT, 9th February, 1932; col. 696, Vol. 261] It is indeed a serious thing for the industries of the country that this war taxation should be continued in time of peace. In our opinion, there is only one remedy. The Chancellor himself has said that we have come to the extreme limits of direct taxation. The only remedy is a drastic reduction in expenditure. Only yesterday I asked the Financial Secretary to the Treasury to give me particulars of the total numbers employed in the various Government Departments in 1913 and last year, and the total amount of expenditure in each of those departments. He put me off by giving me a long list of Blue Books in which I could obtain the information. I think that it would have been better in a matter of this importance if he had given this statistical information; it would not have taken an officer of his Department long to get it out.

In the short time available, I have been able only cursorily to look into the matter, but it seems to me that there is not a single department, as compared with 1913, which has not enormously increased its expenditure and largely increased its staff. We shall never get a proper reduction of expenditure until the various departments of State are rationed on the 1913 basis. Is it indeed an extravagant proposal that, after a great war involving the loss of capital to this country of something like £7,000,000,000, we should put our expenditure at the limit of the year immediately before the War? Mr. Bonar Law, that very wise statesman, said that if we paid our debts and did not receive payment of our expenditure from our enemies, it would mean that the standard of living in this country would be reduced for two generations. The standard of living has not been reduced; to all classes it has been improved. Hence we have this enormous amount of unemployment and the large numbers of unfortunate people who are dependent on the dole.

It is not usual for a long speech to be made on the opening day of the Budget, but as chairman of the Income Taxpayers Society, and on behalf of Income Taxpayers throughout the country, I wanted to voice the view that the limit of direct taxation has been reached, and that the only way in which the country can be restored to prosperity is by drastic reductions in expenditure. We do not want any further Commissions or in- quiries. This Government of all the talents may very well go down in history as the Government of impartial inquiries into truth. We want the Chancellor himself in the months that are coming to go wholeheartedly into this question of the reduction of expenditure. It is the only way in which taxation can be reduced, prosperity restored, and employment revived.

Question put, and agreed to.

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