HC Deb 28 June 1938 vol 337 cc1745-69 As from the first day of September, nineteen hundred and thirty-eight, customs duties chargeable upon foodstuffs imported for human consumption under the provisions of the Import Duties Act, 1932, or the Ottawa Agreements Act, 1932, shall cease to be chargeable, and the provisions of the first-mentioned Act shall be deemed not to authorise the imposition of customs duties upon such foodstuffs.—[Mr. A. V. Alexander.]

Brought up, and read the First time.

4.23 p.m.

Mr. A. V. Alexander

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

We have just, I think lamentably, passed the First Reading of a Measure to restrict liberty. This is an attempt from this side of the Committee to free the consumers of this country from the shameful restriction which is at present put upon their purchasing power, and which is helping to keep such a large number of people below what is a proper standard of life. This Clause is two-fold in its purpose. It asks for the repeal of the food Customs Duties under the Import Duties Act and the Ottawa Agreements Act and it also asks the Committee to agree that in future the Import Duties Act shall not be used for authorising the imposition of new food duties.

Since 1931 the House of Commons has witnessed a very great revolution in regard to taxation on food. I do not know whether the Chancellor of the Exchequer is likely to answer the case which is put for this Clause, but if he does I shall be very interested to hear how he reconciles the present position of himself, as the principal holder of the keys of the power to impose food taxation, with all his lifelong work for the free breakfast table for the people. The fact is that as a result of this revolution we are labouring to-day under the effect of duties imposed under the Ottawa Agreements Act upon wheat, butter, eggs, condensed milk, fruit and other things, and under the Import Duties Act we are being taxed in respect of potatoes, tomatoes, fruit, poultry, vegetables, and so on. I am unable to make any specific comment upon another important duty which is operating to-day, because it was passed under a separate Act. I refer to the duty on meat. I shall not be able to argue about that particular duty. All I can say is that all the duties I have mentioned are in addition to £5,000,000 on the people's meat.

Recently the President of the Board of Trade gave a most gloomy view of the trade outlook. If he is found to be a true prophet, we must expect a continuous increase in unemployment and a consequent decline in our national standard of living unless the Government take some effective steps to check that tendency. It is imperative, therefore, in our view, that some steps should be taken to reduce the cost of living of the people. In 1933, as we have often reminded the House, the British Medical Association came to the conclusion that a family of five, consisting of the parents and three children aged, say, from 6 to 14, would cost to maintain on the British Medical Association minimum diet 22s. 6d. a week. A publication issued by the British Medical Association only last week showed that there has been an actual rise, according to the Association, in the cost of that diet of 4s. in the £ since that original statement was made. Therefore, the actual cost to-day of that minimum diet—which all of us on this side agreed at the time was inadequate really as a proper standard—has gone up to 27s. 4d. This rise has been due to the heavy import duties on foodstuffs. It was emphasised at the time that the British Medical Association diet provided the bare minimum necessary to maintain life.

A recent investigation which I am going to recommend to the Chancellor for his personal study is described in a document called "A Report on Socialism and the Standard of Living," prepared and published by the Labour party and submitted to the recent National Conference of Labour Women at Leamington. According to that very excellent document, the cost of the British Medical Association diet last November—during the winter months—varied from 28s. to 32s. They collected that information by making studies in different districts. Many of the women engaged in that particular inquiry commented freely on the very poor qualities sometimes obtainable at the prices quoted. In the light of that situation, we consider it iniquitous that the total yield to the Chancellor of the Exchequer of these taxes on the stomach and health should have amounted to no less than £40,750,000 last year; and, with the addition of the increased Tea Duty, and probably a rather larger import of one or two commodities, you can reckon that the receipts the Chancellor will get from food taxes alone in the current year will be not less than £44,000,000. A very great part of that money going into the Chancellor's purse is at the expense of the stomachs and the health of the poorest people of this country. If you take the comparison between the financial year 1930–31 and the current financial year, our Customs impositions altogether, including the taxes on food, have risen by something like £106,000,000.

I believe the Chancellor has had the matter put to him before, and I daresay some of my hon. Friends may refer to it, so I will not take time to refer in detail again to the very careful, considerate statements which Sir John Orr has made in the past as to what is really necessary if we are to have a fit nation. I do not think anybody is more insistent than he is that, however much you may promote national standards of physical training to secure national fitness, if you cannot have a dietary within the reach of the common people, you will not have an A. 'I nation to face whatever crises the nation comes up against. In the last depression it may be said that while wages fell, they did not fall at the same rate as retail prices fell, that unemployment rose steadily, short-time employment increased, and the standard of life of many sections of the workers was lowered. Since that time it has been a constant struggle for the organised worker, through his trade union, to try and recover the position which he had before the depression, and it is very difficult for the worker to recover that position if every time that he has to purchase his weekly necessities over the counter he has to face this very high and, under this Government, increasing burden of taxation. We are, therefore, only pleading in this respect for justice to the organised worker of the country.

I am afraid also that unless we can get the second part of our Clause adopted, there is no guarantee that these very heavy food duties will not continuously increase. We have had experience of that already. We have had the constant descent upon the Import Duties Advisory Committee each year, as, for example, at Christmas time, with the demand for a special tax to be put on to keep out the cheap turkey required for the working-class household, which is able perhaps to have a little Christmas festivity; and you will find from time to time that without any prior discussion in this House, as the principal taxing authority, food taxes may be imposed and increased by the outside pressure of vested interests upon the Import Duties Advisory Committee. We hope, therefore, that the Chancellor of the Exchequer, in those circumstances and in the light of the fact that we want to see the country on a real and sound basis of prosperity, will give us the right to take out of the hands of the Import Duties Advisory Committee the power to initiate taxation, before this House has considered it, in relation to foodstuffs.

There is one last point that I want to make. Some months ago now—I think it was last February—the Prime Minister said that the time was not yet ripe to discuss the proposals of M. van Zeeland in the direction of freer trade. Nearly five months have elapsed since that suggestion was made by the Prime Minister, and I think it is time that we should ask the Chancellor, having regard to the general trade outlook, whether this country is or is not going to give some lead in the direction of this move towards freer trade. We think that if the Government would accept this Clause, it might be some guarantee that on the general question of a move to freer trade between the nations of the world we were to have sympathetic consideration. I understand that at the present time the discussions with the United States for a trade agreement appear to be hanging fire, because of action taken, I am told—I make this statement on information given and not from my own knowledge—partly by the National Farmers Union and partly by the Federation of British Industries. Why do not the Government, in response to our request to-day, help the negotiations by reducing the Ottawa duties upon American products such as wheat, fruit, etc., in return for substantial reductions, which I believe they would be able to negotiate with the United States, upon our indus- trial manufactures from this country entering the United States? This principle of freer trade with other friendly, democratic countries might be extended to the Scandinavian countries.

Speaking in the Debate on a similar question in 1936, I think on the Committee stage of the Finance Bill, the present Minister of Agriculture, who was then Financial Secretary, said, in regard to my reference to a revolution in fiscal policy: There has been a change, but it was not a change that happened accidentally. It was a deliberate change inspired by policy and a change which, without transgressing the Rules of Order, I may claim has abundantly proved its wisdom and success."—[OFFICIAL REPORT, 17th June, 1936; col. 1037, Vol. 313.] The Government to-day do not adopt the position of the Chancellor of the Exchequer and Lord Runciman, as he now is, in 1931, when they first entered the National Government, that they would not stand for the taxation of food. They take credit to themselves that this taxation of food is a deliberate result of their policy, and they claim that it has been a success. We submit, on the other hand, that in the long run it is an injury to trade, trade taken in the bulk, that it is a wicked encroachment upon the standard of life of the masses of the workers of the country, and that, in the interests both of those workers and of the development of world trade, and therefore of employment and of an increased standard of life, this Clause ought to be accepted.

4.38 p.m.

Mr. Sexton

It gives me very great pleasure to support this Clause. The Finance Bill has the effect of evening out the income among the various sections of the community. One of the fundamentals of taxation ought to be that it should be placed on those who are able to bear it, and the criterion of the ability to bear ought to be the residue left for the purposes of life. Therefore, direct taxation seems to me to be the most desirable, because it can be ascertained how much is left. In my opinion, Income Tax is the most equitable form of taxation. Incomes are easily ascertainable, the burden to be borne is ascertainable, and the residue can easily be calculated. To me, indirect taxation is the most undesirable, for it is virtually a hidden tax, and it violates the fundamental of equality of,sacrifice by mulcting the poor on the same basis as the rich; instead of spreading out more evenly the national income, it causes unevenness. Taxation of food means that, by and large, each individual pays an equal sum in taxes, and surely such seeming equity is the very negation of equality of sacrifice, for the poorer classes have infinitely less substance left.

These impositions of food taxes on people with small, fixed incomes, like widows, old-age pensioners and ex-service men, must lower the standard of life. They have two choices. First, they can buy less of the food which is taxed—and they already get far too little of the food that is necessary for them, as has been pointed out by my right hon. Friend the Member for Hillsborough (Mr. Alexander), when he referred to the reports of Sir John Orr and the British Medical Association—and secondly they can buy the same quantity of food, and then they will have less left with which to buy clothes and other necessities, to say nothing of comforts. It is possible for a family of four people in this country to have an income of £8 a week which is not assessable to Income Tax. The food taxes on those people would amount to about 15s. per head, on the figures quoted by the right hon. Member for Hillsborough, or £3 per year, or a weekly total per family of M. 2d., which works out at 0.375 per cent. of their income. At the same time in this country we could have at other family of four with an income of 21s. a week, whose food taxes would be at least the same, namely is. 2d. per week, more than 6 per cent. of their income, or 16 times as high a percentage as in the case of the higher paid family. What is left? In the first case you have £7 18s. ro10d. per week, and in the second case 19s. ro10d., or eight times less per week for those people to live on.

Those figures are based on the total of food taxation for the past three or four years. The receipts from Import Duties for 1933–34 on food and drink were £5,988,000, for 1934–35 £5,604,000, and for 1935–36, £6,321,000; receipts from the Ottawa Duties in the same three years were 1933–34 £7,704,000, 1934–35 £7,526,000, and 1935–36 £8,117,000; and the total revenue from food taxes during the past three years, including taxes on feeding stuffs for animals and tea, sugar, and cocoa, were, in 1934–35, £31,265,000, in 1935-–36 £36,259,000, and in the last available year, 1936-–37, no less than £38,381,000. The "Ministry of Labour Gazette" figures of the cost of living show that with the increased and increasing food taxation, the prices of our most common articles of diet are rising. During the last four years we have had increases in prices as follows: Streaky bacon 3¼ d. per lb., flour 9½d. per stone, bread 2½d. per 4-lb. loaf, tea 4¾d. per lb., milk i1d. per quart, butter 1½d. per lb. fresh and 2½d. per lb. salt, cheese 1d. per lb., potatoes 62½d. per stone, and so I could go on. As these food taxes go up—and they have gone up—so fixed incomes like old age pensions, widows' pensions, and ex-service men's pensions, decrease in purchasing power, and in 1937, for the same money as was spent in 1933, only four-fifths of the quantity of food can now be purchased. Because these people with fixed incomes cannot afford a lower standard of life, as they are already below the poverty line, and because a great country like this cannot afford to plunge its deserving people farther down into the depths of poverty, I have great pleasure in supporting the proposed new Clause.

4.44 P.m.

Mr. Holdsworth

I think anybody taking his mind back and reading over the history of this House would never believe that we could have had such a small gathering when we were discussing such a vital thing as the taxation of the food of the people. It shows a really remarkable change in the attitude of this House when we can treat almost with indifference what, to my mind, is one of the most vital changes in the whole of our fiscal system. I want to make an appeal to the Chancellor of the Exchequer. During the whole of his political life he has called himself a Liberal, and, as far as I know, he has always been opposed to the taxation of food. I cannot help but think of the phrase "the free breakfast table," and it almost seems ironical that a Chancellor of the Exchequer of the Liberal persuasion should find it possible to get up and oppose a Clause of this nature. At a certain conference during last week it was shown how essential it was to keep in being the Liberal principles throughout the world. One of the first good principle is the freedom to purchase food at its cheapest cost in order to enable the people to enjoy the fullest and most healthy life possible without having to bear the terrible burden of food taxes. Taking my mind back to the great protagonist in this country of the change in our fiscal system, Joseph Chamberlain, almost the arch-Protectionist over the past 500 years, I cannot remember that he ever suggested that there should be taxation of the food of the people. It was always the maxim of those who believed in tariff reform that we should not tax raw material industrially, but, surely, the last thing that we ought to tax is the raw material of life itself. I suggest that the Chancellor of the Exchequer should listen with some sympathy to the case for this new Clause.

I cannot help being struck by the effect of these taxes on the unemployed, particularly those who are relying upon the Unemployment Assistance Board for their very existence. I remember that during the Debates on the Unemployment Insurance Act in 1934, when we were discussing the basis of payment to people after they had got through what they were entitled to draw under ordinary unemployment insurance, the idea was to give these people just sufficient to enable them to live. It is doubtful whether it even does that, when one considers their position after a period of unemployment and they have drawn their insurance benefit for six months. There is a rising tide of people who have been unemployed for 12 months and longer, and to those very people to whom we give what we 'consider to be the lowest sum in order to enable them to live, we go and say, "Not content with seeing you in a position of mere existence, we are going to take a little from your small and inadequate sum in order that you can fulfil the patriotic duty of helping to keep the State going." I sometimes think that they must nearly scream when they hear that sort of nonsense.

I have read with a good deal of interest many books during the past year or two as to whether the people of this country are getting sufficient nourishment or not. Some of the figures, I believe, are exaggerated, but it is undoubtedly true that there are large numbers of people who are really not able, because of the smallness of their incomes, to purchase the food they require. I believe that it is stated that there are 18,000,000 or 19,000,000 people who are not getting adequate nourishment. I listen with a good deal of interest to a lot of this talk about keeping fit. I listen sometimes almost with amazement to the hon. Lady the Member for Sutton (Viscountess Astor), who is always telling me that it is not because people cannot buy the proper things, but because the working folks of this country do not know what to buy and how to cook it. I would say to the Noble Lady and to the Committee in general that the working people of this country would know what to buy if they had the money with which to buy it. To take, as the hon. Gentleman who preceded me said, a sum of almost £40,000,000 out of the pockets of the wage-earners and deprive them in many cases of the real source of nourishment, and then in the next breath to appeal to them to link themselves with some keep-fit campaign is the height of political absurdity. If we enabled the people really to get the food at the cheapest possible price which would give to the producer adequate recompense for his labour, we should be doing far more to produce a really fit nation than anything that we can do by setting up a large number of classes and that sort of thing.

It is usual in these Debates for the Minister to get up at that Box and say, "There is something to be said for all this, but in the year 1931 the price of hay was so-and-so, and now it is a bit less." That sort of argument cuts very little ice with me. My contention against food taxation is not merely based upon a comparison as between one year and another, but upon the fact that you are with deliberate intent making the food of the people dear. That I believe to be a wrong principle. I suggest to the Chancellor of the Exchequer that the best way of getting a healthy nation is to allow the ordinary folk who make up the greater part of the nation to obtain real and adequate nourishment at the cheapest possible price. It is a mistake to tax the vital things which we need. I know that milk is not taxed, but it is in effect, with all these wonderful schemes that you have in regard to meat and butter. My wife told me the other day that even the prices of vegetables almost made them prohibitive to the working classes. I suggest that one of the greatest signs that the Chancellor of the Exchequer can give to the Committee of his belief in Liberalism is to help to carry out the old principle of the free breakfast table. I support the new Clause.

4.53 P.m.

Mr. David Adams

One would have imagined, in listening generally to the discussions which have taken place in the country on the question of national fitness, that the entire.Committee would have been with the proposers of this new Clause. It is certain that if the Clause were submitted to the workers of the country it would be universally accepted. It is an extraordinary commentary upon a Government who persist in describing themselves as a National Government that they should continue to tax the food of the people. There is no direction in which one can turn without attention being drawn to the condition of the people. While the housing problem is being dealt with on national lines, the problem of the condition of the people, as far as their nutritional and health standards are concerned, is still left in abeyance, and, in fact, it is not only neglected but the problem is deliberately accentuated by the National Government. It was interesting to notice that at the last meeting of the British Association some of the leading scientists dealt with the question of the nutrition of the British people and demanded redress. The leading members of the Church of England, Nonconformists, economists, nutritional experts and the National Fitness Campaign are all directing attention to the conditions of the people.

Last Friday's Debate upon the Report of the Unemployment Assistance Board forced public attention very specifically to the problem and no doubt the Government are paying some attention to the matter, seeing that it was to a large extent the voice of hon. Members on the Government side of the House more particularly. The right hon. Gentleman the Member for Sparkbrook (Mr. Amery), who has been a Cabinet Minister, and was First Lord of the Admiralty in a previous Government, directed the attention of the Government to the necessity of family allowances. He did so on the ground that that is an urgent protective measure against outside pressure and influences, such as food taxation, if you are to preserve the population of the future and the health of the nation at large. It was shown that no less than 23 per cent. of the workers are in receipt of 45s. or less; that 47 per cent. receive 55s. or less; and that no less than one-third of the working population are without the necessary resources to maintain themselves and their families in a state of nutrition and health. The report of the Unemployment Assistance Board indicated that in parts of County Durham there was a substantial number of the population whose weekly earnings were 4os. or less.

What possible justification can the Government have in maintaining this intolerable burden upon the masses of the people? Mr. Seebohm Rowntree has shown us that not less than 55s. per week for a family of five is required to maintain a proper state of physical efficiency, and for rural workers 43s., assuming that a modest amount is expended upon rent and kindred outgoings. As I have pointed out, one-third of our population are in so depressed a condition that they are quite unable in a normal way to purchase the requisite foodstuffs for themselves and their families. I suppose that it is not disputed by the Chancellor of the Exchequer that £38,000,000 or £40,000,000 is in this way taken from the pockets of the industrial workers of the country. It is true that, while the cost of living can be overtaken by certain trades by wage agreements, the great mass of the people are excluded from the beneficent operation of such arrangements and their wages are not raised in harmony with the increased cost of living.

It is futile for the Government to anticipate that their fitness campaign can be successful unless they direct their attention to the question of the food of the people. One might say further that, in addition to the taxation of food, the quota system and the exclusion of a considerable proportion of our foreign trade has meant a lessening demand for our coal and other products. Our mining population has particularly suffered, in the first place because the price of their foodstuffs are affected, and further because the production of coal is restricted. It is imperatively necessary, if we are to fulfil our obligations to the day in which we live, for the Government to take steps to deal with this situation. It cannot be said that there are not abundant directions in which they could raise the taxes they require. The National Defence Contribution has not brought in the amount of money that was contemplated, but one does not hear any suggestion from the Government of an increase of tax in that direction. One could point out different directions in which revenue could be raised—the Super-tax, Death Duties and a diversity of ways.

The taxation of food should be the last extremity. It was hit upon by a reactionary Government, which was returned under conditions unprecedented in the history of the country. In 1931 the country was given to understand that taxation of this character would not be introduced before the most careful examination had been made, but no such examination has been made. It is, therefore, the duty of the Chancellor of the Exchequer to retrace the wrongful step taken by the Government and, in the general interest, to support the new Clause.

5.3 P.m.

Mr. Ridley

The right hon. Member for Hillsborough (Mr. Alexander) has delivered such an excellent speech that all that remains for other hon. Members to do is to attempt to underline one or two of the points that he raised. There are three points that I should like to underline. The first point is the effect of these duties on the existing stagnation of world trade. There must have been on the part of the Government some faint recognition of that fact, when they joined with the French Government in inviting M. van Zeeland to undertake an examination of the position. In the report of M. van Zeeland it is clear that everywhere there was a similar recognition of the evil that exists, but everywhere there was a similar reluctance to do anything courageous. In the matter of trade stagnation and in other correlated matters the world is waiting for a lead. One of the most important results of the adoption of this new Clause by the Government would be to give to the world a new hope of some economic recovery, because we should have begun to break down those tariff barriers which year by year have grown higher and higher and have made it more and more impossible for world trade to climb over them and for the ordinary channels of exchange to flow as freely as before.

The second point is the contribution which these duties make to what we regard as the iniquitous balance of taxation. The hon. Member for Oxford University (Sir Arthur Salter) congratulated the Government, the other night, on the fact that the proportion of indirect taxation to direct taxation was steadily falling. That note of congratulation ought to have been conditioned a little by a further explanation of the facts of the case. It must not be assumed that indirect taxation is falling in quantum as it is falling in ratio. It is falling in ratio because of the increase of the ratio of direct taxation, but the quantum of indirect taxation has grown year by year under conditions for which this Government have been responsible, and it will need to fall a great deal further than it has fallen in ratio before it reaches the ratio which existed during the time of the Labour Government in 1930–31.

The third point is the effect of this form of taxation on the lives of the low wage earners and the unemployed. I wish we could make the comfortable living people realise what sort of lives we are condemning millions of our people to experience and endure. It is no exaggeration to say that on the inadequate allowances provided by the Unemployment Assistance Board we are compelling between 2,000,000 and 3,000,000 of people to live a sub-standard life; a life which is steadily lowering their physical capacity and steadily lowering their capacity for disease resistance. We are extracting from their meagre incomes by import duties not less than £20,000,000 to £25,000,000 a year, taking it from their incomes not in mathematical proportions, but we are taking out of their daily diet, a pint of milk, a loaf of bread and an orange for their children. The removal of these import duties would in some families do something considerable to lift this sub-standard life that we are compelling them to endure, and would give them a chance to buy necessities a little less inadequately than is now the case under the allowances granted by the Unemployment Assistance Board.

5.8 p.m.

Mr. W. Joseph Stewart

The reason I intervene is to ally myself with my colleagues against this indirect taxation, which is interfering to an appreciable extent with the standard of living of our people. I was interested in reading a few weeks ago the report of a meeting, held in London, of physical instructors in our elementary schools. The great concern of the instructors was the fact that the physique of the children attending our elementary schools does not reach the standard that it ought to reach. In many instances it had been found necessary to set aside boys and girls so that they should not take part in physical exercise because they had not reached the required standard and, obviously, were suffering from malnutrition.

At the close of the War I remember going through a summary of the findings of the various medical boards who, in summing up their examinations, stated that there was only one man in every nine presenting himself for medical inspection who was perfectly fit. The result was that at that time we concentrated on the physique of our people with a view to raising our manhood from a C3 to an Ar1 category. In the process we were willing to spend millions of pounds. Although we were prepared to do that in those days, by imposing duties on foodstuffs the Government have interfered with the standard of living of our people and prevented them in many instances from having sufficient quantities of food in tens of thousands of homes. The housewife, it will be readily admitted, is more acutely affected than anyone else by a rise in prices. Every rise in the price of necessaries adds to the housewife's work and to the degree of worry, which she cannot pass on to anyone else.

In working-class homes a rise in food prices without a corresponding rise in wages means that something must be done without. If the same amount of food is to be bought, nothing can be spared for household replacements. When the income is already so low that expenditure on food and other things is limited and cut down to the lowest minimum, a rise in price generally means that the only thing to do is to buy less food, and that adversely affects the household. The effect of high prices on the unemployed and the old age pensioners has been referred to. Those with fixed incomes, those who are recipients of unemployment benefit, and those who come under the Unemployment Assistance Board, together with those who receive Poor Law relief, are the people who are the greatest sufferers.

In Durham County, owing to insufficient income going into homes which are further penalised through the rise in prices, we have to pay in Poor Law relief to 52,000 persons no less than £1,690,000 this year. To old age pensioners, upon whose necessaries of life import duties are having a serious effect, we have to pay, in the case of 10,000 people, approximately £4,000 a week to help them to live. Apart from this expenditure, for the provision of dried milk to nursing and expectant mothers and liquid milk to children in our elementary schools, we have to spend another £50,000 or £60,000. We are seeking to do that in Durham in order to help our people to maintain a decent standard of living, so that they will not deteriorate physically, but at the same time the Government, by indirect taxation, are deliberately working in the opposite direction. By these Import Duties they are seriously affecting the health of our people and undoing the work that we are seeking to do.

There is very great concern and alarm at the substantial rise in the indirect taxation levied on things which people need. Indirect taxation has been increased much more than direct taxation on income. In 1931–32 it represented 34.12 per cent. of the revenue, and in 1936–37 it represented 40.29 per cent. of the revenue. It means a shifting of the burden of taxation from the well-to-do to the working classes, who have to pay this taxation in higher prices in the shops. It has been said that since 1932 no less than £109,000,000 has been raised by new food taxes imposed by the Government under the Import Duties Act of 1932, by the Ottawa Agreements and by the Irish Free State Special Duties Act. From 1932 to 1937 under the Import Duties Act, which covers meat, dairy produce, fresh fruit and vegetables, fish, dried fruit and other things, no less a sum than £32,374,000 has been raised in taxation. The Irish Free State Special Duties on live cattle, meat, butter, eggs and cream realised during the same five years £43,000,000, and the Ottawa duties upon wheat, butter, cheese, eggs, condensed milk and fruit realised L£32,000,000. The beef duties imposed in 1936 realised for the first three months £541,000. That is a total of £109,697,000. In addition there is a revenue tax on tea, imposed in 1932.

The Deputy-Chairman

I think we had better keep to the articles of taxation which are directly covered by the new Clause.

Mr. Stewart

Housewives, therefore, since the beginning of 1932 have paid more than £132,000,000 across the shop counter in additional food taxes. The amount for the year 1936–37 was approximately £28,750,000, or nearly 12S. 6d. per head of the population. I submit that if import duties are imposed on poor households with a limited income, without any increase in wages, they are going to have a deterimental effect upon the physique of our people and will militate against the best interests of the nation.

5.20 p.m.

The Financial Secretary to the Treasury (Captain Euan Wallace)

We have listened to six speeches on this new Clause, and it may be for the convenience of the Committee if I intervene now for a short period; it may perhaps enable the Committee to come to a decision on this matter and proceed to the great mass of business which is before us to-day. This Clause, or something analogous to it, has now been put on the Order Paper for five years running. In 1934 and 1935 it was discussed on Report stage, in 1936 on the Committee stage, last year the Chairman did not select it, and this year its scope has been widened to include the Ottawa Agreements Act of 1932, as explained by the right hon. Gentleman who moved it.

The first difficulty which stands in the way of accepting the new Clause is a very real and serious difficulty of interpretation. Many substances, for example various grains, oils and foodstuffs, which can quite well be used as, or made into, food are in fact used for industrial or other purposes. Glycerine, for instance, can be used for explosives or for making sweets, barley can be used for cattle food or for distilling a beverage which by some may be regarded as an important human food. Vegetable oils can be used for washing in the form of soap, or for eating in the form of margarine, and hon. Members will know that there are alternative uses in the case of potatoes and rice. Milk itself is the source of an important industrial material known as casein, which is used for plates, cups, combs and umbrella handles.

If the Clause were applied to all substances which can be used as foodstuffs, it would exclude from consideration under the Import Duties Act many substances which are in fact used for other purposes, like glycerine, potatoes, barley, rice and vegetable oils. If, on the other hand, it is in the minds of the Movers of this new Clause that it should be limited to products actually used for human consumption, I must explain that the Customs cannot at the time of importation make sure of the use to which any particular import is going to be put except by a burdensome and expensive form of control. Therefore the Committee is up against a formidable difficulty of interpretation. I quite admit that these practical difficulties, serious as they are, ought not to stand in the way of the removal of a genuine and widespread grievance, if in fact there is one. I want, therefore, to ask the Committee to consider two questions—first, whether the increase in the cost of food since the War is disproportionate to the general alteration in the value of commodities in terms of pounds, shillings and pence, and, secondly, whether the adoption of the proposed new Clause would in fact reduce materially the cost of living to the working people of the country.

As regards the first question, the cost of food is not in fact so high to-day compared with pre-war levels as other items in the working-class budget. The cost-of-living index for 1st June shows an increase of 55 per cent. over July, 1914, for all items, but the increase is only 38 per cent. for food. That, I think, disposes of the first question. The second point is whether the increase in prices which has taken place in the last 12 months can be attributed to the operation of the Import Duties Act or the Ottawa Agreements Act, both of which were passed in the year 1932. Although we have made one or two minor adjustments, for instance in the duty on peppercorns and in an extension for a fortnight in the duty on foreign tomatoes, it is substantially true to say that no new import duties have been imposed on food during the last 12 months.

I say with all respect to the right hon. Gentleman who moved the new Clause that in the view of my right hon. Friend and of hon. Members on this side of the Committee, comparisons in the cost of living in a working-class budget which start from the bottom of the depression are of no practical value. We had a long Debate before Christmas on this matter and in another capacity I endeavoured to establish the contention, I am afraid not to the satisfaction of hon. Members opposite but I believe to the satisfaction of people in general, that the fairer point of comparison with the conditions obtaining to-day is the year 1929, and if that datum line is taken it is true to say that the cost of living has not risen.

There is another important point. The right hon. Gentleman opposite and most hon. Members who have followed him have advocated the acceptance of this new Clause as something more than a matter of expediency, something more than relieving, as they put it, some sections of the community from certain taxes on food. I understood that they advocated it as a matter of principle. The hon. Member for South Bradford (Mr. Holds-worth) at any rate spoke strongly in favour of a free breakfast table. I must therefore make it clear that this new Clause, if it is passed, is not going to provide a free breakfast table or anything like it. It deals with two specific forms of taxation on food, but there are many articles of general consumption which would not be affected if we accepted the new Clause. It does not touch the revenue duties on tea, cocoa, coffee, sugar and dried fruit, which are responsible between them for about £20,000,000. It does not touch the duties on foreign beef and veal under the Act of 1937 which come to about £3,500,000. In addition it does not, of course, touch the considerable range of foodstuffs already free of duty, which include meat (except foreign beef and veal and canned meat), bacon and all food products from the Dominions, except those which are subject to revenue duty. Hon. Members should realise that to-day over half of our butter, three-quarters of our meat, go per cent. of our cheese, two-thirds of our eggs in shell, the bulk of our vegetables as well as much of our fruit, pay no duty at all.

Therefore, if we accepted this new Clause we should really produce an extremely anomalous position. The beef and veal duties and the revenue duties would remain, and of the £39,000,000 odd which should be collected from food taxes this year—the right hon. Gentleman said £44,000,000 but he did not allow for the disappearance of the Irish Free State duties 'which have now gone—only about £14,000,000 would be affected; and I would remind the Committee that, as the Ottawa duties cannot be reduced without the consent of the Dominions, we should, in order to achieve even that limited result, have to denounce both the Ottawa Agreements of 1932, and the Agreement which was made with Canada as recently as 23rd February, 1937.

Mr. Holdsworth

Are we to understand from the right hon. and gallant Gentleman's speech that if the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) will withdraw the Amendment, the right hon. and gallant Gentleman will bring in a more comprehensive Clause taking off all the duties:

Captain Wallace

I can only say with all respect that if the hon. Gentleman or anybody else has got that impression, he must have got into a profound fog. The denunciation of those agreements would lose us, of course, all the advantages which our trade in the Empire derives from them—that is a subject which I cannot discuss fully now. It would, moreover, deny to our home producers of food any chance of protection either now or in the future against foreign competition; it must be remembered that that is an advantage which is gained already from the Ottawa duties, and can also be achieved by means of the valuable weapon which is available to us through the Import Duties Act.

The loss of revenue that would be involved by this proposal would be L£14,376,000. I think the Committee will appreciate that, whatever arguments may be adduced in favour of this Clause in theory, my right hon. Friend is not, in present circumstances, in a position to give up that amount. When there is added to that the fact that the acceptance of this Clause would mean serious anomalies in food taxation, and the denunciation of our agreements with the Dominions, with consequent damage to our export trade and to home producers of food, and when on the other side there is no evidence whatever of a compensatory advantage, since no one has succeeded in proving that the existence of these duties has had a material effect on the cost of living, I think the Committee will realise that this Clause is one which we shall have to ask them to reject.

5.33 P.m.

Mr. T. Williams

I think the right hon. and gallant Gentleman the Financial Secretary found himself in a profound fog. He said that he could not accept the proposed Clause for one or two reasons, which he explained very clearly. He emphasised the anomaly that would be created if we abolished duties on food amounting to approximately £14,500,000, but left taxation of £26,000,000 upon tea, coffee, cocoa, sugar, beef and so on. He said that the new Clause would have disastrous effects upon home agriculture, since the advantages of protection to it would be entirely gone. What apparently the right hon. and gallant Gentleman did not notice was that neither the Ottawa Agreements nor the Import Duties Advisory Committee was responsible for the duty upon beef. The same Parliamentary machinery that was used in that case could be used if it was desired to provide further protection for any other section of the agricultural industry. Therefore, that argument, which may have appeared to be a fairly sound one to agriculturists, was really not as solid as the right hon. and gallant Gentleman made out.

Another argument which the Financial Secretary used was that if we could not dispose of all the duties on foodstuffs, why should we bother about disposing of some 35 per cent. of those duties, since that would create an anomalous position? But I feel that the items referred to in the Ottawa Agreements are so vital and fundamental from the point of view of nutrition that they cannot be ignored by the Financial Secretary and the Chancellor of the Exchequer. I appreciate the danger of denouncing the Ottawa Agreements, but the right hon. and gallant Gentleman and his right hon. Friend know that hon. Members on this side, from the time when the Ottawa Agreements were originally passed, have never hesitated to oppose the continuance of those agreements, which impose duties upon such foodstuffs as butter, cheese, tea, and one or two other items. I should like to ask the right hon. and gallant Gentleman, apart altogether from the question of the revenue derived from this source, what home agriculture obtains from a duty of 1½d. a pound on imported cheese. The right hon. and gallant Gentleman told us of the Empire butter that is imported duty free, but it is true to say that the duty paid on butter that is imported from foreign countries has a direct effect upon the price of butter imported from various parts of the Dominions. It is fair to assume that if we import 50 per cent. of our butter from the Dominions and 5o per cent. from foreign countries, the imposition of a duty on imports from foreign countries has an effect on the price of every pound of butter which we buy either from the Dominions or from foreign countries. Therefore, that argument of the Financial Secretary does not seem to me to carry much weight.

It is true to say, as has been submitted in arguments from this side of the Committee, that there are millions of people in this country whose incomes are so small, through no fault of their own, that they cannot buy appropriate quantities of nutritious food, either because of one of two things or because of both—their small income, or the price of the article which they want to buy. I will not quote what has been said by the nutrition experts, but it is generally known that, although the average consumption of butter per person per week in this country is seven ounces, in the lower income categories the average consumption is only about three ounces. Clearly, the income of the home or the price of the commodity determines the quantity of butter which families are able to consume. If there is an absence of butter, which is one of the most nutritious of all foods, there is an absence of that physical fitness which all hon. Members are anxious to get in this country. The same thing applies to cheese. The right hon. and gallant Gentleman told us that 90 per cent. of all the cheese consumed in this country is free from duty. Is there any reason why we should impose a duty on the remaining 10 per cent., apart, of course, from the revenue which the Exchequer derives from these duties, which is perhaps a not inconsiderable item?

It seems to me that it is justifiable at all times for the Opposition to safeguard the prices of foodstuffs as long as those foodstuffs are so important in the diet of the common people. We have been told that there are 4,500,000 people in this country in whose cases the income is so small that less than 4s. is available for expenditure on food each week. I noticed that in the "Times" yesterday there was a letter from the joint secretaries of the St. Pancras House Improvement Society, Limited, which is responsible for houses in which about boo families live. They stated that, despite the fact that the rents of those boo houses have been reduced materially, the income of a large number of those homes will not permit of the expenditure of 3s. per person per week on food—a figure far below the Rowntree estimate and the figure of the British Medical Association. Although coppers do not perhaps make much difference to people having an income of£10 or£15 a week, they make a vast difference to people in the lower wage categories.

The only other thing I wish to say with regard to this new Clause has reference to the Import Duties Advisory Committee having further power to recommend to the Government and the House certain forms of taxation on food. I repeat what I have said before, that I do not think the Import Duties Advisory Committee are the appropriate body to recommend taxation upon food. They have no costing system, they have no knowledge of the cost of production of the article on which they recommend that a duty shall be imposed, and they take the figures supplied by the farmers or by the person or persons interested in the production of that commodity. I do not think they are the appropriate body to recommend an increase in the duty on imported tomatoes, potatoes, or any other article. It may very well be that in the case of certain luxury vegetables at certain periods of the year there is ample justification for doing something similar to what was done in the early part of 1932, when the Agricultural and Horticultural Import Duties Act was passed; but broadly speaking, the Import Duties Advisory Committee are not the appropriate body to safeguard the interests of the consumers. I do not think that the interests of the home producer or the taxing machinery of the State would be materially affected if that Committee were deprived of further powers to recommend taxation on food. I consider that on general lines, despite the effect on the Treasury of losing £14,500,000, a not inconsiderable item to them, this new Clause can be justified on the basis of a physically fit nation, and for that reason, I shall support the new Clause.

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

The committee divised; Ayes, 133; Noes, 203.

Division No. 252.] NOES [5.43 p.m.
Aeland, R. T. D. (Barnstaple) Harris, Sir P. A. Poole, C. C.
Adams, D. (Consett) Harvey, T. E. (Eng. Univ's.) Ridley, G.
Adams, D. M. (Poplar, S.) Heyday, A. Riley, B.
Alexander, Rt. Hon. A. V. (H'Isbr.) Henderson, A. (Kingswinford) Ripon, J.
Anderson, F. (Whitehaven) Henderson, J. (Ardwiek) Roberts, Rt. Hon. F. O. (W. Brom.)
Attlee, Rt. Hon. C. R. Henderson, T. (Tradeston) Robinson, W. A. (St. Helens)
Banfield, J. W. Hills, A. (Pontefract) Salter, Dr. A. (Bermondsey)
Barnes, A. J. Holdsworth, H. Sanders, W. S.
Betsy, J. Hopkin, D. Sexton, T. M.
Ballenger F. J. Jenkins, A. (Pontypool) Short, A.
Bann, Rt. Hon. W. W. Jenkins, Sir W. (Neath) Silkin, L.
Benson, G. John, W. Silverman, S. S.
Bevan, A. Johnston, Rt. Hon. T. Simpson, F. B.
Broad, F. A. Jones, A. C. (Shipley) Sinclair, Rt. Hon. Sir A. (C'thn's)
Bromfield, W. Jones, Sir H. Haydn (Merioneth) Smith, Ben (Rotherhithe)
Burke, W. A. Jones, Morgan (Caerphilly) Smith, E. (Stoke)
Cassells, T. Kelly, W. T. Smith, Rt. Hon. H. B. Lees- (K'ly)
Chater, D. Kennedy, Rt. Hon. T. Smith, T. (Normanton)
Close, W. S. Kirby, B. V. Sorensen, R. W.
Clynes, Rt. Hon. J. R. Kirkwood, D. Stewart, W. J. (H'ght'n-le-Sp'ng)
Collindridge, F. Lanshury, Rt. Hon. G. Stokes, R. R.
Cove, W. G. Lathan, G. Strauss, G. R. (Lambeth, N.)
Daggar, G. Lawson, J. J. Taylor, R. J. (Morpeth)
Dalton, H. Leach, W. Thorne, W.
Davies, R. J. (Westhoughton) Leonard, W. Thurtle, E.
Day, H. Leslie, J. R. Tinker, J. J.
Debbie, W. Logan, D. G. Tomlinson, G.
Dunn, E. (Rother Valley) Lunn, W. Viant, S. P.
Ede, J. C. McGhee, H. G. Walkden, A. G.
Edwards, Sir C. (Bedwellty) Maclean, N. Walker, J.
Evans, D. O. (Cardigan) MacNeill Weir, L. Watson, W. McL.
Frankel, D. Mender, G. le M. Wedgwood, Rt. Hon. J. C.
Gardner, B. W. Marklew, E. Welsh, J. C.
Gibson, R. (Greenock) Marshall, F. Westwood, J.
Graham, D. M. (Hamilton) Maxton, J. White, H. Graham
Green, W. H. (Deptford) Montague, F. Whiteley, W. (Blaydon)
Greenwood, Rt. Hon. A. Morrison, R. C. (Tottenham, N.) Wilkinson, Ellen
Grenfell, D R. Muff, G. Williams, D. (Swansea, E.)
Griffith, F. Kingsley (M'ddl'abro, W.) Naylor, T. E. Williams, E. J. (Ogmore)
Griffiths, J. (Llanelly) Owen, Major G. Williams, T. (Don Valley)
Groves, T. E. Palign, W. Windsor, W. (Hull, C.)
Guest, Dr. L. H. (Islington, N.) Parker, J. Woods, G. S. (Finsbury)
Hall, G. H. (Aberdare) Parkinson, J. A. Young, Sir R. (Newton)
Hall, J. H. (Whiteehapel) Pearson, A.
Hardie, Agnes Pethiok-Lawrence, Rt. Hon. F. W. TELLERS FOR THE AYES.—
Mr. Charleton and Mr. Mathers.
Acland-Troyte, Lt.-Col. G. J. Cazalet, Thelma (Islington, E.) Dorman-Smith, Major Sir R. H.
Agnew, Lieut.-Comdr. P. G. Cazalet, Capt. V. A. (Chippenham) Drewe, C.
Albery, Sir Irving Chamberlain, Rt. Hn. N. (Edgb't'n) Duckworth, Arthur (Shrewsbury)
Allen, Col. J. Sandeman (B'knhead) Chapman, Sir S. (Edinburgh, S.) Dugdale, Captain T. L.
Allen, Lt.-Col. Sir W. J. (Armagh) Chorlton, A. E. L. Duggan, H. J.
Anderson, Rt. Hn. Sir J. (Sc'h Univ's) Christie, J. A. Duncan, J. A. L.
Anstruther-Gray, W. J. Clarke, Frank (Dartford) Dunglass, Lord
Asshetan, R. Clarke, Colonel R. S. (E. Grinstead) Eckersley, P. T.
Astor, Viscountess (Plymouth, Sutton) Clarry, Sir Reginald Ellis, Sir G.
Astor, Hon. W. W. (Fulham, E.) Cobb, Captain E. C. (Preston) Emmott, C. E. G. C.
Baillie, Sir A. W. M. Colfox, Major W. P. Errington, E.
Balfour, Capt. H. H. (Isle of Thanet) Colman, N. C. D. Evans, Capt. A. (Cardiff, S.)
Baxter, A. Beverley Colville, Rt. Hon. John Fox, Sir G. W. G.
Beamish, Rear-Admiral T P. H. Conant, Captain R. J. E. Fremantle, Sir F. E.
Beaumont, Hon. R. E. B. (Portsm'h) Cook, Sir T. F. A. M. (Norfolk, N.) Furness, S. N.
Bennett, Sir E. N. Cooke, J. D. (Hammersmith, S.) Fyfe, D. P. M.
Bernays, R. H. Cooper, Rt. Hn. T. M. (E'nburgh, W.) Glyn, Major Sir R. G. C.
Birchall, Sir J. D. Cranborne, Viscount Gower, Sir R. V.
Blair, Sir R. Crooke, Sir J. Smedley Grant-Ferris, R.
Brass, Sir W. Crookshank, Capt. H. F. C. Gretton, Col. Rt. Hon. J.
Briscoe, Capt. R. G. Cross, R. H. Gridley, Sir A. B.
Brown, Col. D. C. (Hexhem) Crossley, A. C. Grimston, R. V.
Brown, Rt. Hon. E. (Leith) Davidson, Viscountess Hambro, A. V.
Brown, Brig.-Gen. H. C. (Newbury) Davies, C. (Montgomery) Hannah, I. C.
Browne, A. C. (Belfast, W.) Davison, Sir W. H. Hannon, Sir P. J. H.
Bull, B. B. Dawson, Sir P. Harbord, A.
Bullock, Capt. M. De Chair, S. S. Haslam, Henry (Horncastle)
Burton, Col. H. W. De la Bern, R. Hely-Hutehinson, M. R.
Gartland, J. R. H. Denville, Alfred Hepworth, J.
Cayzer, Sir H. R. (Portsmouth, S.) Donner, P. W. Herbert, A. P. (Oxford U.)
Herbert, Major J. A. (Monmouth) Mills, Major J. D. (New Forest) Simon, Rt. Hon. Sir J. A.
Higgs, W. F. Moreing, A. C. Sinclair, Col. T. (Queen's U. B'Irst)
Hoare, Rt. Hon. Sir S. Morris-Jones, Sir Henry Smiles, Lieut.-Colonel Sir W. D.
Holmes, J. S. Munro, P. Smith, Sir Louis (Hallam)
Hope, Captain Hon. A. O. J. Pleven-Spence, Major B. H. H. Smith, Sir F. W. (Aberdeen)
Hopkinson, A. O'Connor, Sir Terence J. Smithers, Sir W.
Howitt, Dr. A. B. Palmer, G. E. H. Somervell, Rt. Hon. Sir Donald
Hudson, Capt. A. U. M. (Hack., N.) Peaks, O. Somerville, A. A. (Windsor)
Hume, Sir G. H. Peat, C. U. Southby, Commander Sir A. R. J.
Hunloke, H. P. Perkins, W. R. D. Stanley, Rt. Hon. Oliver (W'm'I'd)
Hunter, T. Peters, Dr. S. J. Stourton, Major Hon. J. J.
Hurd, Sir P. A. Petheriok, M. Strauss, E. A. (Southwark, N.)
Inskip, Rt. Hon. Sir T. W. H. Pickthorn, K. W. M. Strauss, H. G. (Norwich)
James, Wing-Commander A. W. H. Pilkington, R. Stuart, Lord C. Criohton- (N'thw'h)
Jones, L. (Swansea W.) Ponsonby, Col. C. E. Stuart, Hon. J. (Moray and Nairn)
Kerr, Colonel C. I. (Montrose) Radford. E. A. Tasker, Sir F. I.
Keyes, Admiral of the Fleet Sir R. Rathbone, J. R. (Bodmin) Taylor, Vice-Adm. E. A. (Padd., S.)
Lamb, Sir J. Q. Rayner, Major R. H. Thomson, Sir J. D. W.
Lambert, Rt. Hon. G. Reed, A. C. (Exeter) Thorneycroft, G. E. P.
Latham, Sir P. Reid, Sir D. D. (Down) Titchfield, Marquess of
Law, Sir A. J. (High Peak) Reid, W. Allan (Derby) Touche, G. C.
Leech, Sir J. W. Remer, J. R. Tree, A. R. L. F.
Leighton, Major B. E. P. Riekards, G. W. (Skipton) Turton, R. H.
Levy, T. Ropner, Colonel L. Wallace, Capt. Rt. Hon. Euan
Liddall, W. S. Ross Taylor, W. (Woodbridge) Ward, Lieut.-Col. Sir A. L. (Hull)
Lipson, D. L. Rowlands, G. Ward, Irene M. B. (Wallsend)
Mabane, W. (Huddersfield) Royds, Admiral Sir P. M. R. Wardlaw-Milne, Sir J. S.
MacAndrew, Colonel Sir C. G. Ruggles-Brise, Colonel Sir E. A. Warrender, Sir V.
Macdonald, Capt. P. (Isle of Wight) Russell, Sir Alexander Waterhouse, Captain C.
McEwen, Capt. J. H. F. Russell, R. J. (Eddisbury) Whiteley, Major J. P. (suckingham)
McKie, J. H. Russell, S. H. M. (Darwen) Wilson, Lt.-Col. Sir A. T. (Hitehin)
Maclay, Hon. J. P. Salt, E. W. Windsor-Clive, Lieut.-Colonel G.
Maitland, A. Sandeman, Sir N. S. Winterton, Rt. Hon. Earl
Margesson, Capt. Rt. Hon. H. D. R. Samoan, Rt. Hon. Sir P. Withers, Sir J. J.
Markham, S. F. Scott, Lord William Womersley, Sir W. J.
Marsden, Commander A. Seely, Sir H. M. Wright, Wing-Commander J. A. C.
Mason, Lt.-Col. Hon. G. K. M. Salley, H. R.
Mayhew Lt.-Col. J. Shaw, Captain W. T. (Forfar) TELLERS FOR THE NOES.—
Mills, Sir F. (Leyton, E.) Shepperson, Sir E. W. Major Sir James Edmondson
and Major Harvie Watt.