HC Deb 10 June 1937 vol 324 cc2024-43

(1) The customs duty chargeable on tea shall cease to be charged.

(2) This Section shall be deemed to have had effect as from the twentieth day of April, nineteen hundred and thirty-seven.—[Mr. Watkins.]

Brought up, and read the First time.

6.22 p.m.

Mr. Watkins

I beg to move, "That the Clause be read a Second time."

This subject has been discussed many times during the history of the House of Commons. I believe that the Tea Duty was originally imposed in the reign of William and Mary, and I have no doubt that from then till now Opposition speakers have urged the Government to decrease or abolish it. I would like the Financial Secretary to the Treasury to realise that the Tea Duty is a relic of olden times. It existed when glass was taxed to prevent the sunlight and daylight from going into people's homes. We have got rid of that, but the Tea Duty still remains. In looking up the Debates on this matter, I find that other Members who, like myself, have been called upon to move the abolition of the Tea Duty, have always apologised on the ground that they have had nothing fresh to say; but I think that, if one is urging a self-evident proposition, it is always extremely difficult to find anything original to say about it, and this, indeed, seems to me to be a proposal which on the surface carries its own recommendation.

The Tea Duty was abolished by the right hon. Gentleman the Member for Epping (Mr. Churchill), when he was Chancellor of the Exchequer, in the Budget of 1929, and we are very disappointed that it was ever reintroduced, as it was reintroduced, by the present Prime Minister when he was Chancellor of the Exchequer in 1932. The arguments in favour of the abolition of the Tea Duty are quite simple. First of all, it violates the first principle of just and fair taxation in that it does not lay burdens upon people according to their ability to pay; and, secondly, it is a tax that hits the very poor most severely of all. Tea has become the most usual beverage in this country, and I suppose it is true to say that, the smaller the amount of money spent on food in a family, the higher is the percentage of that amount that is spent on tea. The highest percentage of the family budgets of the poorest people is spent on tea. Among poor people the monotonous meal, the bread and something of which most meals consist in poor homes, is sought to be varied by a cup of tea. Poor people drink tea, not merely at tea-time, but at every meal during the day from breakfast till suppor, if they are fortunate enough to get them. Miners take tea down into the ground; engine-drivers have tea on the footplate; office girls have tea in the office; in every phase of working-class life tea plays a very important part. I suggest to the Financial Secretary and the Chancellor of the Exchequer that they should abolish this tax on a most essential part of the dietary of working-class people.

When we urge this from time to time—and it has been urged annually in recent years—if the yield of the tax is high, the Chancellor says he would have difficulty in finding that sum of money from any other source of revenue; while if the yield is low, he opposes the proposal by saying that it is too small to matter. Between the two the duty is kept on, and the tea drinkers of the country are obliged to pay it. It does not involve a great deal of money in this particular Budget. The Chancellor of the Exchequer is now considering what proposals he is going to bring forward to take the place of the National Defence Contribution proposals which he has abandoned. If, in framing his new proposals, he can increase them in order to yield a sum that would cover the abolition of the Tea Duty, it would give very great satisfaction on these benches and, I am certain, very great satisfaction throughout the whole country.

If it is urged that it is necessary for the Tea Duty to be in existence because of the Imperial Preference involved, that difficulty can easily be got over by allowing Empire tea to come in free of duty, and placing a very small duty on tea that comes from China and other places outside the Empire. For the reasons that the tax is a burden on people who are least able to pay it, that it is a burden upon poor people, and that people are now finding a difficulty in meeting the cost of food on account of the rapid increase in the cost of living, I hope that the Chancellor of the Exchequer will take this tax off tea. If it is urged, as it may be urged, that it is only a matter of a penny or two a week in working-class homes, I would like Members of the Committee to realise—it is a tragedy, but it is true—that there are numbers of families in this land of ours to-day to whom a penny or two means something. It is difficult for more fortunate people to realise that, but there are homes where even a penny or two makes a difference, and, if only for the sake of those homes, I would ask the Chancellor to remove this tax and give us tea in future free from duty.

6.28 p.m.

Mr. Leonard

I desire to associate myself with this Motion, because it conforms to my general desire to see a reduction in indirect taxation. I also have perused the Debates that took place on this matter last year, and I did so particularly to see what had been said on the other side of the House as to why this tax should continue. I found a continual reiteration from the other side that the tax was desirable from the point of view of allowing even the poorest to recognise their connection with defence and the wellbeing of the country. I wonder at that being put forward, because obviously, if you want to allow people to feel pride in anything, you have to make them conscious of the fact that they are taking part in it, and you should not impose a tax that is in any way applied in order to allow people to feel their pride of place by paying a tax.

I doubt whether the payment of a tax creates pride. The hon. Member for South Kensington (Sir W. Davison) is intimately associated with a journal that comes to us pretty regularly, and in it the Income Tax payer definitely shows signs, not of pride, but of anger at the calls that are made upon him. I noticed that last year it gave a great deal of space to advertising a book which had as its intention the taking advantage of the alleged ineptitude of the officials, and thereby rendering the essential difficulties of tax gathering even more substantial than they are. That does not sound as if they were very proud of paying the taxes. Why, then, should this be put forward as it is? It does not give the poor a sporting chance, because the wealthy people are able to practice evasion, but the poor must pay for every pound of tea that they buy. It is a means of taxing those who earn too little, and must therefore spend everything that they earn for the advantage of those who earn more than they spend or can spend in some cases, and from that point of view it is by no means a just tax. Great appreciation was expressed in 1929 when the tax was removed, and it was only reimposed in 1932 because we were deemed to be in the midst of a great national difficulty, and it was looked upon as an emergency measure. It was not the only emergency imposition that was put on, but it is about the only one that is left. Last year we saw an addition to the tax, and we are now paying 6d. on foreign and 4d. on Dominion or Colonial tea. We are paying a duty of nearly 33 per cent. on the wholesale price before blending.

From time to time the wholesale price fluctuates. On the 5th instant the "Grocer" quotes an increase on nearly all grades of tea from 2d. to 3d. per 1b. If we want guidance as to retail prices, the Ministry of Labour figures show that on 1st May the average was 2s. 2d. as against 2s. on the same date last year, so that you have a combination of a heavy tax added to restriction of supplies, because we were told last year that foreign and British growers had come together, and there is an international tea scheme Quality has to he considered, and there can be no doubt that in the conditions that we have endeavoured to portray there is a tendency for people to go to the cheaper grades notwithstanding the 2d. preference given to Colonial tea. In addition, there are certain trade practices the result of which is that customers, in the main working class customers, are paying 6d. on all tea. This means that customers are being forced through this process to subsidise Colonial tea through increases that should go to the Treasury. I agree with my hon. Friend that the tax is not equitable at all. It would be more just in its incidence if it were ad valorem. The poorest people, buying the cheapest tea, pay as much as the rich buying the very best. To repeal the duty would help to balance the domestic budget, and the country would be much more happy if we spent as much time in trying to balance the domestic budget as we do in trying to balance the national budget. This is a boom year and this is the time at which we should do it. The Inland Revenue Commission Report says that there are 824 millionaires or persons with incomes exceeding £30,000 per year, and that is an increase of 49 in a year. We are certainly in a boom period with regard to millionaires. There is also an increase of 2,000 in the year in the number of persons with incomes of £2,000 a year and upwards. There is an avenue for the Chancellor of the Exchequer to explore to get what he might lose by repealing the duty.

6.36 p.m.

Colonel Ropner

There is a certain fallacy in the arguments used by hon. Members opposite when they assume that only indirect taxation is paid by the poor and only direct taxation by the rich. It is self evident that the rich pay a certain proportion of indirect taxation, although it is true that in the case of the poor indirect taxation bears a higher proportion to the whole of the taxation that they pay. In many cases they pay no direct taxation at all, and it is very largely because direct taxation is extremely high that in the case of the rich the proportion of indirect taxation that they pay is very small. But it really is not fair, when discussing the whole question of taxation, to pick out one particular indirect tax and say that it presses more heavily upon the poor than upon the rich. It is true, no doubt, that the tea tax falls more heavily upon the poor, but that is not the whole of the picture, and we must go over the whole range of taxation before we can say whether one particular tax is good or not. I would suggest to hon. Members opposite that the real question to which they should devote themselves is the proportion of direct to indirect taxation over the whole field of taxation. I hope the Chancellor will resist this Clause, but that does not mean that I shall not always be ready to closely examine the proportion and incidence of direct and indirect taxation taken as a whole.

6.39 p.m.

Mr. Riley

I believe that on all sides of the House for many years past there has been a general desire to bring the tax on tea to an end. In 1929 the right hon. Gentleman the Member for Epping (Mr. Churchill) was delighted to be able to abolish it, as he thought for ever. Its abolition has been attempted from time to time by all parties in the House. When the War broke out, the tax stood at 5d. In 1915 it was raised to 8d. and in 1920 to a shilling a 1b. In the Budget of 1922, 4d. was knocked off, though it is true that the reduction was accompanied by Is. off the Income Tax. In 1924 the late Lord Snowden reduced it to 4d. and expressed regret that he could not wipe it out altogether. Following Lord Snowden came the right hon. Gentleman the Member for Epping. May I recall what he said in wiping it out altogether: There is no other comfort which enters so largely into the budget of the cottage home or the still humbler budgets of the old, the weak, and the poor. There has been a tax on tea ever since the reign of Queen Elizabeth, and I am glad to think that the reign of His Majesty King George V will witness the total, immediate and, I believe, final abolition. And while the bubbling and loud hissing urn throws out a steaming column, and the cups that cheer but not inebriate wait on each, So let us welcome peaceful evening in."—[OFFICIAL REPORT, 15th April, 1929; col. 64, Vol. 227.] Now in 1937 it is George VI, and the Tea Tax is 6d. for foreign and 4d. for the Empire product. No doubt, it will be said that we have to consider the menace of war and the expense of defence, but I believe all enlightened people want to see the great mass of consumers of tea, including the poorest of the population, have that luxury without a sense of taxation.

There is also attached to the duty two features which are indefensible. In the first place, the duty is a fixed tax. It means that the poorest purchaser of tea, whether the unemployed workman, the aged widow or the pensioner who can only afford to buy the cheapest possible quality of tea, has to pay the same amount of duty per 1b. as is paid by the richest millionaire. There is a second consideration—that the duty is not needed for trade protection. Tea is not a commodity which competes with any other home products. The duty is not required to protect home industry, but is purely for revenue purposes. I submit to the Committee that, with the resources which are now available in this country, as evidenced by the enormous sum that we are raising for defence purposes, it is not a legitimate kind of public policy to continue a duty which is not needed by the trade, but which is imposing hardship on the public. I associate myself with my colleagues in asking the Committee and the Government to take their courage in their hands, and, in this year of growing prosperity, revert back to 1929, and once more abolish the Tea Duty.

6.47 p.m.

Mr. Tinker

I wish to associate myself with my colleagues in making a plea from these benches for the repeal of the Tea Duty. I remember that last year a great attempt was made to resist the duty. We were told that it was a question of getting the poorer classes to pay something towards the armament schemes, and the Chancellor of the Exchequer would not respond to our appeal. Unfortunately, this is one of those forms of indirect taxation, the effect of which is very difficult for the Government to realise. The hon. and gallant Gentleman the Member for Barkston Ash (Colonel Ropner) argued that the rich pay their proper contribution, but, surely, he must realise the position of the poor in regard to the Tea Duty. The richer classes can obtain other forms of liquid refreshment besides tea, but tea is the staple liquid diet of the poorer classes. There is tea at every meal time. There is no question of a change for them. Therefore, the incidence of the duty on tea hits that class much harder than it does the rich. Hon. Members opposite may say that a duty of 6d. and 4d. a 1b. spread over so many cups of tea does not mean very much—that it is almost infinitesimal. But I would ask them to review the position and think what it means to many poor families. To the old age pensioners, man and wife with a pound a week, and in some cases only Dos. a week, who have to eke out their money, even a copper is a lot.

Last night we discussed a Clause which gave something to the people who could well afford to pay more. The Male Servants Tax was repealed last night. I asked what it meant, and I was told that it did not mean very much—a matter of £126,000 a year. If the Government can make a relaxation for the very rich people who alone benefit by the repeal of that tax, surely we may ask the Chancellor of the Exchequer in this case to view the matter in the same light. He should turn his attention to this class. We are trying to get something for a suffering class which is very much in need of some relief at the present time. We have been arguing on these benches, although we have not yet been able to get the Government to realise the truth of the argument, that the cost of living has gone up and to take off this duty would be the means of checking the rise in some slight way. I know that we can find the money in other directions. I gathered from what the Chancellor of the Exchequer said, that it is quite easy to get another £5,000,000 from the City of London with regard to the new Profits Tax. If that is so, and money is so easy to get from these people who are willing to give another £5,000,000 because of the change in the Profits Tax, the Chancellor of the Exchequer can very well afford to forego the Tea Duty and balance the amount in another direction. An hon. Member opposite said that they had been returned as Members of Parliament by working-class votes. I do not deny that; many hon. Members opposite would not be here but for the folly of the working class in voting for them.

Mr. Denville

Not in every case.

Mr. Tinker

It is the folly of the working class people in returning hon. Members whom I see before me and behind me. Here is an opportunity for hon. Members opposite to tell the country at the next Election that they repealed the Tea Duty. I hope that they will accept the opportunity and so bring relief to the poorer classes.

6.50 p.m.

Sir W. Wayland

The last two hon. Members who spoke rather overstated their case. If they had spoken truly, in pleading that the working classes were suffering, they would have taken into account the fact that when the working man drinks a pint and a half of beer, he is paying more in taxation than his wife when she buys a 1b. of tea. That is where the injustice comes in. The average working class family probably consumes about half a 1b. of tea per week, and that would mean an addition in taxation of 2d. Surely, that is not very much to ask them to pay as their share of taxation. I have always pleaded that where the working man is wronged is in having to pay such a heavy duty, not only upon his beer, but upon his tobacco as well. He really pays considerably more than he should be paying in indirect taxation considering the amount of his wage, but when you come to the question of tea and sugar I certainly do not think that anyone pays more than his share, and I refer to the working classes as well as to the middle classes, who probably drink just as much, and perhaps more, tea than the working classes.

6.53 p.m.

Mr. David Adams

It is the duty of Members who come from the poorer districts of the country whenever the question of indirect taxation crops up, to do their best to try to persuade The Government to show mercy to the depressed classes of the community. Obviously, we are an extremely illogical nation. The admission on the part of the country generally that there is grave malnutrition is still in its infancy, and when it is generally admitted and recognised that this is a serious problem, which ought to engage the attention of all Governments and of the community generally, then, there will be a move made towards relieving the pressure on the lowest-paid members of the community, and in no direction could this be done more successfully than by the removal of indirect taxation. Is there anything more illogical than the attitude of this Government and previous Governments in making appeals to the local authorities of the country to use their resources in providing cheap or free milk for the depressed section of the community on the one hand, and, through the Department of the Chancellor of the Exchequer, imposing taxation especially upon this identical class?

There have long been upon the food of the people of this country indirect taxes which ought to be removed, and the recognition of that new responsibility in connection with malnutrition will mean that Parliament must turn their attention in the direction of the removal of these taxes. If the duty, as has been stated, were upon the value of the tea, an ad valorem duty, it would be much more just, but to charge it upon weight merely means that the consumers of the more costly teas are bearing identically the same burden as the poorer section of the community who have to drink the cheaper kinds of tea. There is this distinction, that the rich cannot only afford to pay the duty, but the prices of the better quality teas are frequently so high that the duty is not passed on to the consumers. The poorer section of the community not only pay the duty, but they often have to pay a substantial amount in addition. I am advised that in some cases it amounts to an addition of 50 per cent. in actual cost to the poor consumer. Tea has become one of the prime and essential food beverages of the poor. It forms part of the ingredients of every meal, not only of adults but of children. Anyone who is accustomed, as I am, to visit the homes of the poor will see a continual supply of tea available, particularly in miners' homes. Where the membership of the family is large—and one at least of my colleagues is a member of a family of 17—the Committee will realise how great the consumption must be in a family of that description where the wage-income is invariably low.

I ask, therefore, that the Chancellor of the Exchequer should seriously consider what a magnificent gesture it would be if he were to say that here is an opportunity of amending this tax by making it an ad valorem duty, or of abolishing it altogether. I must confess surprise when reading the Finance Bill to find that the tax on tea was to be continued. It is generally admitted that the new Defence proposals are bound to result in a rise in the cost of living, and here is an opportunity for the new Chancellor to distinguish himself above all others except the Chancellor who was in office in 1929.

7.1 p.m.

Mr. Kingsley Griffith

There have not been many speeches made in favour of retaining the duty, and I should like to answer one of them. It is no good the hon. Member below me trying to play off one form of taxation against another, and saying that the working man already pays too much for his tobacco and beer, and therefore it does not matter if he pays too much for his tea. That is a curious argument. The hon. Member also seemed to be trying to play off the working man against his wife, by saying that she does not have to pay as much on her tea as her husband has to pay on his beer. That is the wrong way of dealing with these liquids. Tea is the food of the working man just as much as it is of his wife and family, and if any justice is to be done to the family as a whole in the reduction of indirect taxation, the way to do it is through this tax.

Sir W. Wayland

The hon. Member referred to tea as food. I believe tea is a stimulant, but beer is a food.

Mr. Griffith

I hope that both are, but I am not going into that scientific question. I was using the word "food" in its obvious sense, that tea is an article of consumption that has become a necessity. I would ask the Chancellor to reflect whether the yield from this tax is really worth the irritating effects it produces. There is a good deal in the psychology of taxation, and it is not worth while putting on something that is resented out of all proportion to its yield. I would like to see the standard of living in this country maintained, and not depressed, and this duty, which drives people to use inferior classes of tea, does depress the standard of living. I want people to get decent stuff and be able to cultivate tastes of their own, and not by arbitrary methods of taxation to be driven to inferior classes of an article of consumption which means a great deal in their lives.

7.4 P.m.

Mr. T. Smith

I am hopeful that the Committee is going to pass this new Clause. We have a new Chancellor of the Exchequer who has a long connection with a political party that used to say, "No taxes on the breakfast table." I think I could pick out a few speeches of his against this tax. Surely he is not going to shed all his beliefs on the acceptance of office. We are hopeful that he is going to live up to his past reputation. I hope he will tell us the yield of this tax. We heard a good deal of discussion on the National Defence Contribution about a simpler and bigger yield. I do not think there is any doubt that in the last few years indirect taxation has increased more than direct taxation. I would like to suggest to the Committee a way in which the ordinary housewife might be given a lesson in politics. I have listened to Conservative Members demanding that eggs from foreign countries should bear on them a statement of their origin. Why should we not have a little slip on the various things that are sold telling the housewife what taxation she is paying on them? If that were done the women would have some questions to ask of Conservative Members. There is nothing in this Bill giving any reduction to the indirect taxpayer, and the repeal of this duty would be a gesture in the right direction. To-day the cost of living is higher than it was 12 months ago, and Minister after Minister refuses to do anything to increase the purchasing power of the people, or to reduce the cost of living. I appeal to the Chancellor to live up to his past reputation and accept this new Clause.

7.9 p.m.

Sir J. Simon

The hon. Member has made an appeal to me, and I can assure him that there is nothing a new Chancellor would more gladly do than spread the benefits of his administration all round and make everybody happy. But I do not think his good-tempered criticism was entirely apt. He pointed to the fact that this Budget does not reduce indirect taxation, but if we are to look at the thing fairly and as a whole we must observe a little more than that. It has been an almost constant practice, in Budget after Budget, when it has been necessary to raise more money, to seek to fill the gap both by increasing some form, or finding some new form, of direct taxation, and by increasing some form of indirect taxation. Just as it would be wrong to try to raise the additional money merely by using the instrument of indirect taxation, so as a rule it has been thought unnatural to seek to get the whole of the increased money from direct taxation.

In this Finance Bill we have departed from what has been the common practice. There has been an additional sum of money to be found. We have not hesitated to find some of it by direct taxation, but I would ask the hon. Gentleman to mark that this is a Budget which, in spite of there being extra sums to raise, does not attempt to raise any portion by increasing indirect taxation. That is a consideration that should be borne in mind. No doubt at this moment in the various by-elections the conduct of the Government is being loudly explained and proclaimed. Permit me to invite any of my colleagues who happen to have engagements in the by-elections to make this simple statement in their addresses—that this country this year has to raise a large sum in new taxation, and that this Government has done what in recent times is most unusual, and almost without parallel, and is raising the whole of it by the method of direct taxation, and is not seeking to increase indirect taxation at all. If a fair statement is made to the electors nobody can leave out a reference to that remarkable fact.

I do not think there is any high economic principle which can settle the proportion of direct and indirect taxation. I rather suspect the pundits who would find some formula which could be applied in all cases and without regard to circumstances. When the Prime Minister introduced his Budget and he had announced certain changes which he was making in direct taxation I am certain that there was on the part of hon. Members opposite a feeling, I will not say of relief, or of astonishment or grief, but rather of distress, revealed in their demeanour, because they were certain that they would soon be able to attack the Chancellor of the Exchequer for having increased indirect taxation.

Mr. George Griffiths

That is a wrong summing up.

Sir J. Simon

I only ask that the facts which I have stated should be thoroughly borne in mind, and should be made a topic in the addresses which hon. Members will be making to those who are particularly interested in the by-elections.

My answer to the mover of the new Clause is very simple. The revenue which the Tea Duty will raise is revenue which the Chancellor of the Exchequer cannot give away. I have heard one hon. Member ask how much it is. The cost to the Exchequer of accepting the new Clause and wiping out the existing Tea Duty this year, as far as can be estimated, would be close upon £7,000,000—£6,750,000, to be exact. There was forestalment before this year's Budget, which shows that some people thought that the Tea Duty was going to be raised. It is estimated that £7,750,000 would be lost in a full normal year. That is something which in the present circumstances the Treasury cannot afford to lose.

The duty on tea, which has been sanctioned by a long line of Chancellors of the Exchequer belonging to all parties in the State, is a duty which I cannot give myself the pleasure of dispensing with in the present year. It is, of course, right that hon. Members should raise this question, which is a very important one. They raise it every year, and it has been raised by them with sincerity. The only time when the Labour party is in any difficulty on this subject is when they are in office. The records of the House show that when the Labour Chancellor of the Exchequer was faced with a similar Amendment on the subject of the Tea Duty, it became his painful duty to do what I am doing now. That was the moment when the embarrassment of hon. Members opposite arose. Do not let hon. Members think that I am reproaching them. When I had the pleasure of sitting with my hon. Friends below the Gangway opposite, and when I was in that happy position of comparative irresponsibility, I joined my voice and gave my vote for the repeal of the Tea Duty, without any regard to the balancing of the Budget. I admit myself as one of those who took that course.

Mr. Watkins

Can the right hon. Gentleman tell the Committee which Member it was on the Government Benches of that day who urged the Labour Chancellor of the Exchequer to remove the Tea Duty?

Mr. David Adams

Is the Chancellor of the Exchequer not overlooking the fact that the Labour Chancellor of the Exchequer was not imposing import duties, which add to indirect taxation?

Sir J. Simon

It is a most futile proceeding to take extracts from past Debates, but I was about to observe that Mr. Snowden, as he then was, when the question came forward, said: You cannot reduce the Tea Duty alone without following precedent and destroying the important relations which exist between the Tea Duty and the duties on coffee, cocoa, chocolate and chicory. There is a great deal of force in an observation made by one hon. Member, that we cannot treat this matter as if we were dealing with tea and nothing else. Tobacco, liquors, and other things have to be considered in the general scheme. As my hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner) said, it is necessary to survey the whole field. For my part, I give an answer which is not in the least affected by what anybody may have said, myself included, in previous Debates. I simply say that as Chancellor of the Exchequer I am invited by this new Clause to cut out from the proceeds of the Finance Bill a sum of money amounting, roughly, to £7,000,000, and I cannot do so, and neither could any other Chancellor of the Exchequer.

Every time that the Finance Bill is discussed we have this subject before us. Nobody would be better pleased than I if I could in any direction reduce this duty or any indirect taxation. But let us recognise and rejoice in the fact that at a time when increased revenue has to be found, this Government is not attempting to increase the burden of indirect taxation. That is a fact which is not recognised as it should be. I do not think that there is any other answer which anyone in my position and with my responsibility could give. One hon. Member said that, with one exception, this duty had been imposed ever since the time of Queen Elizabeth. I might observe that the exception was due to my right hon. Friend the Member for Epping (Mr. Churchill). It is not a practical proposition at this time to make such a concession and it would not be right to do so.

Reference has been made to "the cup that cheers but does not inebriate, "but when one looks at this question, one has to have regard also to the cup that inebriates as well as the cup that does not inebriate. I am reminded that when Sam Weller visited the Fleet Prison he came across a gentleman there who was in very reduced circumstances and was smoking. The poor man said to Sam Weller: "Tobacco is food and drink to me." Weller remarked that it would be a very good thing if it was washing, too. This hardy annual comes before us every year and is argued with great sincerity and with impressive argument, but, none the less, I am compelled with equal sincerity to say that I cannot make the concession.

7.25 p.m.

Mr. Alexander

The Chancellor of the Exchequer has chosen in his answer to link up this question with the by-election campaigns. After listening to him, I can say confidently that there is nothing which my hon. Friends on these benches will welcome more than to examine his speech to-night in some detail on the by-election platforms, because although it has been full of clever phrases, it has really missed the whole point of the financial situation. It is no answer to the overwhelming case which my hon. Friend put up in regard to tea for the right hon. Gentleman to say that the.Government are very good boys this year, and that in face of the heavy commitments which they have undertaken in regard to armaments they have not increased indirect taxation. That is no answer. When the Chancellor of the Exchequer has been at the Treasury long enough to examine the figures in complete detail, he will know that the Prime Minister, when he was Chancellor of the Exchequer, in drafting the Budget for this year, knew perfectly well that he was increasing indirect taxation for the current year even before he produced his Budget. I hope the Chancellor of the Exchequer will not mind if we point out this fact on the election platforms.

For example, the Government have been forced by their agricultural friends to continue the largesse to the farmers. This year we shall have to pay ¾d. a 1b. extra taxation on our meat in order to provide the subsidy. Is not that an increase of indirect taxation? Perhaps the Chancellor of the Exchequer will oblige us before we come to debate the later Clause, where we shall be dealing with the whole question of the repeal of duties upon imported food-stuffs, by looking at the prices of some of the food-stuffs which have risen in the last two or three months. He will then see what is the real basis of our criticism and what the policy of the Prime Minister means in this regard.

That is not the only answer to what the right hon. Gentleman has said about indirect taxation. He speaks as though the Government are to be congratulated on not having increased the duty on tea or the duty on beer, at which he was apparently hinting. Having undertaken such huge commitments in regard to armaments they are not raising what ought to be raised in the year from direct taxation, but are proceeding to borrow £400,000,000, spread over four or five years. So far from that procedure not having any effect upon the living standard of the people, it is having a very considerable effect. The whole policy of the Government in not meeting their proper obligation in regard to direct taxation but resorting to borrowing, means that they are raising the price level to such an extent that every one of the existing duties on the people's food becomes more burdensome than before.

As regards tea, I happen to know that the Food Council at this moment are so concerned about the rise in the price of common tea, which four years ago was selling at 6d. a 1b., and is now is. 3d. to 1s. 4d., and also about the general rise in the price of tea, that they are instituting immediate and specific inquiries in regard to the prices of this very important commodity to the working classes. In the face of these facts the Chancellor of the Exchequer ought to realise that we are not asking for anything unreasonable in regard to this matter. If the right hon. Gentleman feels that there is any insuperable difficulty in removing most of the maximum duty of 6d. or the preferential duty of 4d. he would relieve us by promising between now and the Report stage to make some concession. The large increase in commodity prices to-day is putting far too large a burden on the working classes, and in a period of rising prices a tax of this kind becomes more repressive. We have a perfectly good case in asking for the acceptance of the new Clause or some concession, and unless he can give us some hope in that direction we shall certainly divide now, and the right hon. Gentleman will certainly hear all about it on the election platform.

7.32 p.m.

Mr. Foot

In view of the fact that the Chancellor of the Exchequer was giving his followers some hints for the by-election, of which I think they may stand in considerable need, and has preened himself on the fact that he was a member of a Government which in this financial year was not imposing more direct

taxation, I hope that when his followers do address the electors in the various constituencies they will not forget to remind them that he is also a member of a Government which has imposed more direct taxation than any Government in recent years.

Question put, "That the Clause be read a Second time."

The Committeee divided: Ayes, 119; Noes, 185.

Division No. 212.] AYES. [7.31 p.m.
Adams, D. (Consett) Henderson, A. (Kingswinford) Pritt, D. N.
Adams, D. M. (Poplar, S.) Henderson, J. (Ardwick) Rathbone, Eleanor (English Univ's.)
Adamson, W. M. Henderson, T. (Tradeston) Richards, R. (Wrexham)
Alexander, Rt. Hon. A. V. (H'lsbr.) Hills, A. (Pontefract) Riley, B.
Ammon, C. G. Holdsworth, H. Ritson, J.
Barr, J, Hopkin, D, Roberts, Rt. Hon. F. O. (W. Brom.)
Bellenger, F. J. Jenkins, A. (Pontypool) Rowson, G.
Brown, C. (Mansfield) Jenkins, Sir W. (Neath) Salter, Dr. A. (Bermondsey)
Brown, Rt. Hon. J. (S. Ayrshire) Johnston, Rt. Hon. T. Sanders, W. S.
Burke, W. A. Jones, A. C. (Shipley) Seely, Sir H. M.
Cape, T. Jones, Sir H. Haydn (Merioneth) Sexton, T. M.
Chater, D. Kelly, W. T. Short, A.
Cluse, W. S. Kennedy, Rt. Hon. T. Simpson, F. B.
Clynes, Rt. Hon. J. R. Lathan, G. Sinclair, Rt. Hon. Sir A. (C'thn's)
Cooks, F. S. Lawson, J. J. Smith, Ben (Rotherhithe)
Cove, W. G. Leach, W. Smith, E. (Stoke)
Cripps, Hon. Sir Stafford Lee, F. Smith, T. (Normanton)
Daggar, G Leonard, W. Sorensen, R. W.
Davidson, J. J. (Maryhill) Leslie, J. R. Stephen, C.
Davies, R. J. (Westhoughton) Logan, D. G. Stewart, W. J. (H'ght'n-le-Sp'ng)
Davies, S. O. (Merthyr) Lunn, W. Strauss, G. R. (Lambeth, N.)
Dobbie, W. Macdonald, G. (Ince) Taylor, R. J. (Morpeth)
Dunn, E. (Rother Valley) McGhee, H. G. Thurtle, E.
Ede, J. C. MacLaren, A. Tinker, J. J.
Edwards, Sir C. (Bedwellty) Maclean, N. Viant, S. P.
Evans, D. O. (Cardigan) Marshall, F. Walkden, A. G.
Foot, D. M. Mathers, G. Walker, J.
Frankel, D. Maxton, J. Watkins, F. G,
Gallacher, W. Messer, F. Watson, W. McL.
Gardner, B. W. Milner, Major J. Wedgwood, Rt. Hon. J. C.
Garro Jones, G. M. Montague, F. Welsh, J. C.
Gibbins, J. Morrison, Rt. Hon. H. (Hackney, S.) Westwood, J.
Green, W. H. (Deptford) Morrison, R. C. (Tottenham, N.) Williams, D. (Swansea, E.)
Greenwood, Rt. Hon. A. Muff, G. Williams, T. (Don Valley)
Griffith, F. Kingsley (M'ddl'sbro, W.) Nathan, Colonel H. L. Windsor, W. (Hull, C.)
Griffiths, G. A. (Hemsworth) Naylor, t. E. Woods, G. S. (Finsbury)
Griffiths, J. (Llanelly) Oliver, G. H. Young, Sir R. (Newton)
Hall, G. H. (Aberdare) Paling, W.
Hall, J. H. (Whitechapel) Parker, J. TELLERS FOR THE AYES.—
Harris, Sir P. A. Pethick-Lawrence, Rt. Hon. F. W. Mr. Charleton and Mr. Groves.
Harvey, T. E. (Eng. Univ's.) Price, M. P.
Acland-Troyte, Lt.-Col. G. J. Campbell, Sir E. T. Crowley, A. C.
Adams, S. V. T. (Leeds, W.) Cartland, J. R. H. Cruddas, Col. B.
Albery, Sir Irving Carver, Major W. H. Culverwell, C. T.
Alexander, Brig.-Gen. Sir W. Cayzer, Sir C. W. (City of Chester) Davies, Major Sir G. F. (Yeovil)
Allen, Lt.-Col. J. Sandeman (B'kn'hd) Cayzer, Sir H. R. (Portsmouth, S.) Davison, Sir W. H.
Anderson, Sir A. Garrett (C. of Ldn.) Cazalet, Thelma (Islington, E.) Donman, Hon. R. D.
Anstruther-Gray, W. J. Chamberlain, Rt. Hn. N. (Edgb't'n) Denville, Alfred
Apsley, Lord Channon, H. Doland, G. F.
Balfour, G. (Hampstead) Chapman, Sir S. (Edinburgh, S.) Drewe, C.
Balniel, Lord Clarke, F. E. (Dartford) Duggan, H. J.
Beamish, Rear-Admiral T. P. H. Clarke, Lt.-Col. R. S. (E. Grinstead) Duncan, J. A. L.
Bennett, Sir E. N. Colville, Lt.-Col. Rt. Hon. O. J. Dunglass, Lord
Birchall, Sir J. D. Cooper, Rt. Hn. T. M. (E'nburgh, W.) Eastwood, J. F.
Boothby, R. J. G. Courthope, Col. Rt. Hon. Sir G. L. Edmondson, Major Sir J.
Boulton, W. W. Cox, H. B. T. Elliot, Rt. Hon. W. E.
Bower, Comdr. R. T. Cranborne, Viscount Emery, J. F.
Braithwaite, Major A. N. Craven-Ellis, W. Emrys-Evans, P. V.
Brown, Brig.-Gen. H. C. (Newbury) Crooke, J. S. Erskine-Hill, A. G.
Bull, B. B. Crookshank, Capt. H. F. C. Fox, Sir G. W. G.
Burton, Col. H. W. Cross, R. H. Fremantle, Sir F. E.
Furness, S. N. Mabane, W. (Huddersfield) Sassoon, Rt. Hon. Sir P.
Ganzoni, Sir J. MacAndrew, Colonel Sir C. G. Selley, H. R.
Gibson, Sir C. G. (Pudsoy and Otley) Macdonald, Capt. P. (Isle of Wight) Shaw, Captain W. T. (Forfar)
Gilmour, Lt-Col. Rt. Hon. Sir J. McEwen, Capt. J. H. F. Simon, Rt. Hon. Sir J. A.
Glookstein, L. H. McKie, J. H. Somervell. Sir D. B. (Crewe)
Goodman, Col. A. W. Maclay, Hon. J. P. Spears, Brigadier-General E. L.
Gower, Sir R. V. Makins, Brig.-Gen. E. Spene. W. P.
Graham, Captain A. C. (Wirral) Manningham-Buller, Sir M. Stanley, Rt. Hon. Oliver (W'm'l'd)
Grattan-Doyle, Sir N. Margesson, Capt. Rt. Hon. H. D. R. Stewart, J. Henderson (Fife, E.)
Gridle[...], Sir A. B. Markham, S. F. Stourton, Major Hon. J. J.
Gritten, W. G. Howard Maxwell, Hon. S. A. Strauss, E. A. (Southwark, N.)
Guinness, T. L. E. B. Mayhew, Lt.-Col. J. Strauss, H. G. (Norwich)
Gunston, Capt. D. W. Meller, Sir R. J. (Mitcham) Strickland, Captain W. F.
Guy, J. C. M. Mellor, Sir J. S. P. (Tamworth) Stuart, Lord C. Crichton- (N'thw'h)
Hannah, I. C. Mills, Sir F. (Leyton, E.) Stuart, Hon. J. (Moray and Nairn)
Harvey, Sir G. Mills, Major J. D. (New Forest) Sueter, Rear-Admiral Sir M. F.
Haslam, H. C. (Horncastle) Mitchell, H. (Brentford and Chiswiek) Tasker, Sir R. 1.
Haslam, Sir J. (Bolton) Moore, Lieut.-Col. Sir T. C. R. Tate, Mavis C.
Heilgers, Captain F. F. A. Morris, O. T. (Cardiff, E.) Taylor, Vice-Adm. E. A. (Padd., S.)
Hepburn, P. G. T. Buchan- Morrison, G. A. (Scottish Univ's.) Thomas, J. P. L.
Higgs, W. F. Neven-Spence, Major B. H- H. Thomson, Sir J. D. W.
Hills, Major Rt. Hon. J. W. (Ripon) O'Connor, Sir Terence J. Touche, G. C.
Holmes, J. S. Ormsby-Gore, Rt. Hon. W. G. A. Train, Sir J.
Hope, Captain Hon. A. O. J. Orr-Ewing, I. L. Tufnell, Lieut.-Commander R. L.
Horsbrugh, Florense Peat, C. U. Wallace, Capt. Rt. Hon. Euan
Hudson, R. S. (Southport) Perkins, W. R. D. Ward, Lieut.-Col. Sir A. L. (Hull)
Hume, Sir G. H. Ponsonby, Col. C. E. Ward, Irene M. B. (Wallsend)
Joel, D. J. B. Procter, Major H. A. Waterhouse, Captain C.
Jones, Sir G. W. H. (S'k N'w'gt'n) Radford, E. A. Watt, G. S. H.
Jones, L. (Swansea W.) Raikes, H. V. A. M. Wayland, Sir W. A
Keyes, Admiral of the Fleet Sir R. Ramsay, Captain A. H. M. Wedderburn, H. J. S.
Knox, Major-General Sir A. W. F. Ramsbotham, H. Wells, S. R.
Lamb, Sir J. Q. Ramsden, Sir E. Wickham, Lt.-Col. E. T. R.
Law, Sir A. J. (High Peak) Rathbone, J. R. (Bodmin) Windsor-Clive, Lieut.-Colonel G.
Law, R. K. (Hall, S.W.) Rayner, Major R. H. Winterton, Rt. Hon. Earl
Leckie, J. A. Reid, Sir D. D. (Down) Wise, A. R.
Lees-Jones, J. Rickards, G. W. (Skipton) Wood, Hon. C. I. C.
Leighton, Major B. E. p. Ropner, Colonel L. Wragg, H.
Lennox-Boyd, A. T. L. Ross Taylor, W. (Woodbridge) Wright, Squadron-Leader J. A. C.
Llewellin, Lieut.-Col. J. J. Russell, Sir Alexander
Loftus, P. C. Russell, S. H. M. (Darwen) TELLERS FOR THE NOES.—
Loval-Fraser, J. A. Salmon, Sir I. Captain Dugdale and Mr. Crimston
Lyons, A. M. Samuel, M. R. A.

Question, "That this House do now adjourn," put, and agreed to.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[Captain Margesson.]

Committee report Progress; to sit again upon Monday next.