HC Deb 22 June 1939 vol 348 cc2494-513

Motion made, and Question proposed, "That the Clause stand part of the Bill."

4.6 p.m.

Mr. Lees-Smith

I wish to see this Clause deleted from the Bill and to initiate a discussion on the points raised by this increased Tobacco Duty. I have been looking into some of the history of the Tobacco Duty. There was a little discussion of it by the Colwyn Committee, which published some interesting statistics, and I wish to bring these statistics up to date. I find that the average consumption of tobacco in the ordinary family to-day is about six ounces a week, and the Chancellor of the Exchequer has imposed an extra duty which

amounts to 1½d. an ounce, so that the average burden of this duty upon the ordinary family is about 9d. a week. I mention that figure, because the Committee will see that although at first sight it seems rather a small impost, in fact it is a fairly substantial sum for a family of moderate means. I followed the argument of the Chancellor in the Budget Resolutions Debate. The right hon. Gentleman practically admitted that if you take this tax in isolation it cannot be justified according to the ordinary canons of taxation. In fact, as the Colwyn Committee pointed out as a result of their investigations, broadly speaking it may be said that an ordinary labourer smokes just about as much tobacco in a week as a man who is paying Surtax, and since the duty is not an ad valorem duty, the labourer pays about the same amount for this particular luxury as the man who is more fortunately circumstanced. That means that, if you take a labourer earning £2 a week and a Surtax-payer earning £2,000 a year, the labourer, with this duty, is paying about 20 times the proportion of his income that the Surtax-payer is paying. That, of course, is indefensible according to any accepted canon of taxation.

There was a good deal of discussion in the Budget Resolution Debate on a proposal to impose an ad valorem duty on tobacco instead of a duty on quality, and I myself fully realise that so far as the greater range of the tax is concerned an ad valorem tax would be almost impossible to administer. An ad valorem tax means that you have to estimate the value of the article when it comes into port. It is really very difficult indeed with a material like raw tobacco leaf, and that is the reason why the ad valorem tax has not been imposed. But I find that there was an ad valorem tax imposed some years ago upon cigars, and that it was repealed in 1921. The imposition of that tax was easier, because cigars are a manufactured article whose value can be estimated at the port. I think it would be worth the while of the Chancellor to look into the history of that episode, because as far as I have been able to trace it the reason why the tax on cigars was altered in 1921 was not that the ad valorem system was found to be impracticable, but because the tax was in fact too high. It was one of those cases in which the tax was so high and the consumption was reduced to such an extent that the total yield of the tax fell. Though that was the case then it was no condemnation of the ad valorem system as applied to cigars, and it would be worth while to consider whether the system cannot be adopted again for that particular part of our tobacco consumption.

There has come into my possession some correspondence about the subject which was debated on the Budget Resolutions. I am speaking particularly of the tax on cigars. The Chancellor of the Exchequer this year has increased the Tobacco Duty by 2s., and as he has increased the duty upon imported cigars by 2s. the duty on imported cigars is somewhere near double the duty upon manufactured tobacco. But hitherto it has always been the practice that when the duty on manufactured tobacco was increased, the duty on imported cigars should be increased in proportion. That being so, the duty on imported cigars should be increased, not by 2s. but by 3s. 9d. I would like the "Chancellor to look into that subject again, because according to the information I have received since the result of his decision, the increased duty is likely to have a far more widespread effect on employment in this country than he gave us to believe at that time. Particularly I ask him to take into account the fact that the duty on tobacco manufactured in this country is at a great disadvantage as against the cigars imported into this country, The tobacco manufactured in this country, the final product, contains only 14 ounces of tobacco, but the imported cigar contains a full 16 ounces; I am told that in the process of manufacture of tobacco a couple of ounces on which duty has been paid becomes a waste product".

I now come to the Chancellor's argument in the last Debate. His argument was that it was really beside the point to discuss this duty by itself, that it was one of a series of taxes, and that we had to consider the general incidence of taxation as a whole, and that in doing that he could not consent to a proposal which would vary the incidence as between the workers and the wealthier classes, while the Surtax and other taxes have been increased. I will give the right hon. Gentleman our reply, the first part of which is that again you come back to what is happening to-day. A man who is earning £2 a week pays about the same proportion of his total income in taxation as does a man earning about £1,000 a year, and therefore he is overtaxed. This adjustment might well be made, and still leave the equities of the whole system untouched.

Then there is another answer which applies particularly to this Budget. The Chancellor of the Exchequer feels that the poorer section of the community must pay its portion, but, as a matter of fact, in this Budget he is making them pay in a manner in which they have not been called upon to pay in most previous Budgets. The right hon. Gentleman must take into account the fact that he is borrowing about £400,000,000, and instead of balancing the Budget he is merely increasing the National Debt and making the poorer classes pay by that method. The two great rivals for the expenditure of the State are the social services and the interest upon the National Debt, and the more you spend upon one, broadly speaking, the less you can spend upon the other. By the method of taxation adopted this year the right hon. Gentleman increases the National Debt and the interest which will have to be paid upon it in future, and is, therefore, curtailing the possibilities of advancement in the social services. The poorer classes are paying in that way by the very nature of this Budget. If the right hon. Gentleman imposes this tax upon them they will be paying twice over. When the right hon. Gentleman says that the poorer classes wish to take their share, out of some feeling of pride in bearing their portion of the burden, I must really say that his argument descended to bathos.

We can argue a good deal on the Floor of the House about the incidence of taxation and the relative proportion which different classes should pay, but in the final resort our opinion is confirmed because they are influenced by considerations rather wider than any which you can reach by such discussions. We are influenced by the fact, now recognised, that tobacco, tea and sugar are conventional necessaries and that if you increase the taxation on them you cause the consumption of other articles to diminish. The consumption of other and even more fundamental necessities has to cut down. That is the conclusion which various committees have reached after the most careful estimates. We are very greatly impressed by the conclusions which have been come to by the British Medical Association and by that school of scientists which now calls itself nutritionist. They have clearly shown that from one-third to one-half of the children of this country do not receive the sheer necessities for physical growth and that they enter life with jerry-built bodies. This tax, as far as it goes, diminishes the amount of income available to bring children into manhood in full health and strength and for that reason, in opposing this taxation, we are defending the people's standard of life.

4.21 p.m.

Mr. Watkins

I desire to add a word or two to the case that has been put forward by my right hon. Friend who dealt at the beginning of his remarks with cigars. I do not intend to say very much about cigars, because, in the main, the people who can afford to buy cigars can afford to pay the tax upon them. I remember that Kipling has a line to this effect:

There is peace in a Laranaga, There is calm in a Henry Clay. Too much taxation may disturb that peace and decrease that calm. I am much more concerned, as was my right hon. Friend, with the ordinary poor people of the country to whom this additional taxation will be something in the nature of a burden. At the present time, thousands of millions of ounces of tobacco are sold in this country. The Chancellor of the Exchequer follows every one of them, and collects from the purchaser and consumer 8⅝d. That scale of taxation seems entirely out of proportion. That an ordinary working man can buy 20 cigarettes for 1s. and pay twice as much in duty as he pays for the cigarettes seems to be a reversal of the normal and reasonable taxation principle.

I desire gently to chide the Chancellor of the Exchequer for his unchivalrous conduct in taxing My Lady Nicotine and preventing her, as a ministering angel, conferring pleasure upon mankind. My right hon. Friend spoke about the burden on the working classes being 9d. a week. In many homes that sum might be an understatement. It might easily be more than that. To collect an additional £8,000,000 from tobacco consumers of the country seems to be entirely out of proportion. I know some of the problems that arise for the Chancellor of the Exchequer. If he gives way on this he will have to find some other source from which to obtain the £8,ooo,ooo. I have no doubt that the Chancellor of the Exchequer for the purposes of this discussion would like to be the taxation authority in the United States of America where, I understand, the consumption of tobacco is twice as great as it is in this country. The consumption of tobacco is spreading fairly rapidly, and by that means the yield is becoming greater year by year without increasing the duty. I believe that in this country in 1927 the consumption was 3 lb. per head and that in 1936, which is the latest year for which I can find the figure, it had risen to 3¾ lbs. per head. Now that the gentler sex are indulging in smoking the present duty will bring a still further increased revenue to the Chancellor. An increase in the rate of duty will indeed put a burden upon the poor, upon the man who smokes Woodbines and Gold Flake and the ordinary cheaper brands of tobacco.

Mr. Charles Brown

Woodbines are not tobacco.

Mr. Watkins

Whether they are tobacco or not, the Chancellor of the Exchequer will put his duty upon them. I am concerned about the people with low wages from which they cannot very well afford to bear any additional burden.

4.26 p.m.

Lieut.-Colonel Sir William Allen: We have all received communications with regard to the various taxes which the Chancellor of the Exchequer is putting on, and I have been wondering where, if he paid attention to all those demands, the Chancellor would get the money which he requires.

Mr. MacLaren

From land values.

Sir W. Allen

It would be very difficult for the Chancellor of the Exchequer to give all the rebates that are asked for. In what condition would the Treasury be? Those who send us various communications do not give us any idea of the other sources from which the Chancellor of the Exchequer might get his money. I should be very glad if they would. At the same time we all feel very much that the poor man is so taxed that he ought to be allowed to have his

pipe of tobacco. That is a little luxury which the poor man enjoys, one of the very few that he can enjoy. I have often wondered whether the Chancellor of the Exchequer or those responsible for looking into these questions have ever examined the possibility of separating luxury smoking from the poor man's pipe of tobacco. I have not very much sympathy with the man who indulges in the luxury of a good cigar.

Viscountess Astor

Why not?

Sir W. Allen

Because the individual who purchases that cigar and who is able to purchase it is also quite able to pay the tax.

Viscountess Astor

Not always.

Sir W. Allen

Then he should not smoke it. The man who indulges in his pipe of tobacco thoroughly enjoys doing it. The Chancellor should separate in some way or other that type of tobacco from the luxury tobacco. I suppose he cannot do it now, but perhaps he might look into that. I sincerely hope that something will be done to relieve the man who smokes his evening pipe of tobacco in his little house.

4.30 p.m.

Viscountess Astor

I have no great sympathy with anybody who is comforted by a pipe, and certainly I have never found that comfort myself. A lot of nonsense is talked about smoking. I think it is almost one of the crimes of the age, and I think the Chancellor of the Exchequer is perfectly right to tax it. I do not think people realise what a menace smoking is to this generation. Young people, men and women, hardly ever have a cigarette out of their mouth, and I think it is good for the nation that smoking should be taxed. In fact, I think it should be, if not entirely prohibited, at least limited.

Mr. Bracken

Is not this strange language from a daughter of Virginia?

Viscountess Astor

When I was in Virginia a woman hardly ever smoked a cigarette, and I remember the Bishop of Virginia coming on a visit to England 30 years ago and saying he would rather see his daughter drunk than smoking a cigarette. But, all mirth aside, I think that anybody who asks the Chancellor of the Exchequer to take off the duty on tobacco is asking him to do something which would be bad for the State, and I am glad he is keeping it on. We are asked by some hon. Members to suggest another tax, and I can suggest something to the Government. Let them tax betting pools. Everybody knows that that is one of the scandals of the age. Every Member of the House of Commons knows about the money that is spent in that way. I have only just come back from a devastated area, a town with a high rate of unemployment, and yet money is being spent there upon betting pools. I have never in my life been very much interested in the very rich. They can look after themselves; make no mistake about that. I am talking from the point of view of the great mass of the people of the country, and those particularly who have to count everything from the woman's point of view, and I say that these betting pools are one of the greatest scandals, and why on earth the Chancellor has not had the courage to tackle them, I do not know.

The Chairman

I am sure the hon. Lady will thank me for warning her that she is going a little far a field.

Viscountess Astor

I thank you very much, Sir Dennis, and I think the Chancellor knows by now what I mean. I have had many appeals from my constituents to vote against this or that, but on the whole I think there has never been a fairer or a more moderate Budget than this one. I should not have the heart to ask my right hon. Friend to do anything, really. I congratulate him on the Budget, and I would ask him not to repeal the duty on tobacco. I know it is not a popular thing to say, but what is the good of saying popular things? We are here in the House of Commons to say what we think is best for the nation, and I say now—and I think most hon. Members will agree with me—that the rate at which we are consuming tobacco is in many ways a menace to the country, so I hope my right hon. Friend will not listen to appeals on this subject—this passionate plea for the poor man's pipe. I think that sometimes people in public life have gone astray by smoking pipes. [Interruption.] Far from making you think, you do not think. I think it is a positive danger even for the workman. I want to congratulate the Chancellor on his very moderate and fair Budget, and to remind him that next year there are other things that he could tax with great profit to the State and great help to the people.

4.34 p.m.

Mr. Naylor

I think the Noble Lady is arguing under a misapprehension as to what are the duties and the intentions of the Chancellor of the Exchequer. If the Chancellor were to take the advice of the Noble Lady and put a prohibitive tax on tobacco, it would simply mean that he would not get the revenue that he requires. Consequently, not being a Minister for the reform of the habits of the people of this country, he naturally fixes his taxation with a view to getting the greatest possible return. The law of diminishing returns applies particularly in the case of taxation, and, therefore, the Noble Lady, while she might be an instrument for reforming the habits of the people who smoke tobacco, would be doing a great disservice to the Chancellor of the Exchequer if she were able to persuade him to increase the duty on tobacco to the extent of making it impossible for the poorer people to purchase what they want.

Viscountess Astor

I did not say that I wanted to prohibit it entirely. I said that I wished we could limit smoking. Does the hon. Gentleman know that when people give up smoking, they oat more, and, I might say, sometimes eat and drink more too?

Mr. McCorquodale

As a non-smoker, may I protest against that statement, that non-smokers drink too much?

Mr. Naylor

The Noble Lady is still arguing under an economic and a financial misapprehension. Whether she desires the duty to be prohibitive or merely limited in character, the effect is the same, and the only difference is one of degree. Surely the Chancellor of the Exchequer is the best man to judge as to whether the return from a certain level of taxation is going to give him more or less. I wish to join with those who have spoken from these benches in the protest that is made against taxing a commodity which has become more or less a necessity for those who use tobacco, and I believe the Chancellor would be well advised, if the circumstances of his position admitted it, to consider whether he is not committing an injustice against the poorer users of tobacco. For that reason I hope that some consideration will be given to the position of the man who looks upon tobacco as a great soother. As one who does indulge occasionally, I can assure the Noble Lady that smoking does add to one's powers of thinking, and for that purpose I would recommend the Noble Lady to try a cigarette or two occasionally as it might add to her powers of reasoning and she might be less inconsistent when she enters into a discussion of this character.

4.39 p.m.

Mr. Gurney Braithwaite

When the hon. and gallant Member for Armagh (Sir W. Allen) said that in the event of the repeal of this duty the Chancellor of the Exchequer would be faced with a difficulty in raising the revenue thus lost, I felt that he was on dangerous ground, in view of the presence in the Chamber of the Noble Lady the Member for the Sutton Division (Viscountess Astor) and the hon. Member for Burslem (Mr. MacLaren), whom I see opposite. I felt that the door was being opened to the riding of certain hobby horses which we have seen from time to time. I wish, however, to congratulate the Noble Lady on having intervened, for the first time in my experience, in a Debate on the Finance Bill without the word "beer" passing her lips.

If I understood the right hon. Member for Keighley (Mr. Lees-Smith) aright, he made a suggestion which I thought was casting something of an aspersion upon the working classes whom we are all here to represent, when his argument seemed to me to develop along the line that if a duty of this kind remained on, they would have to reduce their expenses on the necessities of the household while smoking was maintained. I am bound to say that I think the average working-class family have a very much better sense of proportion than that. I know that all of us—it is not confined to those who may have low wages—may have bad times—I have had them myself—and one of the first things that I reduce on those occasions is this sort of expenditure upon smoking, and I am certain that the working classes will have the same sense of proportion. If it is suggested that they maintain cinema-going and smoking in exactly the same circumstances when taxation of this sort is imposed, to the detriment of the children, I am bound to say that that is not the experience that I have had of working-class families; and, if I may say so with respect, I think the right hon. Gentleman was rather straining that argument for the purpose of discrediting this duty.

The hon. Member for Central Hackney (Mr. Watkins) also, in speaking of My Lady Nicotine, was, I thought, in danger of exaggeration when he said that this duty would prevent the comfort which we derived from her society. I would only say that I think it might result in some of us seeing a little less of her than heretofore, and that it might be a good thing for the other ladies if we saw rather less of My Lady Nicotine. The hon. Member, when he suggests that we are prevented from seeking that company, is in fact suggesting that it may be that we shall have to smoke less, and I agree with the Noble Lady that that might not be a bad thing. Finally, I would emphasise the point that the Chancellor of the Exchequer, in framing his Budget, has, I think, been right in imposing taxation upon luxuries in a time of emergency. After all, however much we may enjoy our smoking—and I enjoy it as much as does any hon. Member—the fact remains that it is a luxury, and in times of national emergency the taxation of luxuries is something which we ought to support. Although, as I say, I enjoy smoking as much as does anybody in this Committee, I shall go into the Lobby in support of this Clause.

4.43 p.m.

Mr. David Adams

We fully recognise the difficulties under which the Chancellor of the Exchequer labours and the burden that is laid upon his shoulder of securing the revenue in this particular year, but no one believes that the right hon. Gentleman has really exhausted the various directions in which additional revenue could have been obtained. It is singular in that connection that the National Defence Contribution, which has not brought in the amount anticipated by the Chancellor himself, has not been increased, for here was surely a very fertile field for additional revenue for the Chancellor. The crowning point of our argument, I think, ought to be that until the standard of life in the country is raised considerably higher and there is no such thing as a population living upon or below the poverty line—and we know that there are many thousands, in fact millions, who are in that position—then the Chancellor of the Exchequer is not morally entitled to add at all to the burdens and the budgets of that class of the population. It is for that reason that we contend that the Tobacco Duty, and also the Sugar Duty are immoral taxes and ought to be resisted by this House, and that the Chancellor of the Exchequer ought to yield to the entreaties that this should be done. It has been stated that the Tobacco Duty is a luxury tax. Surely, no one who knows the habits of the working classes in particular would support that statement. The Noble Lady is little entitled to argue on that subject, first, because she is not associated with the working classes and, secondly, because she has not experience of smoking.

Viscountess Astor

The hon. Member says that I am not associated with the working classes. What kind of people does he think I represent in Plymouth, and have represented for 20 years? If they are not the working class, what are they?

Mr. Adams

I agree that the Noble Lady does represent a section of the industrial workers, but what I meant was that her life has not been cast on such lines as enable her definitely to make the assertion that she did. Far from tobacco being a luxury it is an urgent and imperious necessity of the industrial workers. If there be some people who do not avail themselves of the advantages, socially and individually, which are provided by tobacco, that is no argument against our case. We say that even if this tax has to be imposed, it is imposed in a very crude way. It is a basic tax. It will mean an increase of something like 1½d. per ounce upon tobacco users. That is a most severe tax. The heaviness of the tax will be realised when we bear in mind that it will produce £8,000,000 in a full year, while the National Defence Contribution, which is imposed partly on those who are making large profits out of munitions is supposed to bring in only £25,000,000. Clearly, that is a most inequitable distribution of the burden. I contend that the tax should have been an ad valorem one. That would impose a much lighter tax upon ordinary raw tobacco, which the workers use mostly, and would increase the tax upon such things as cigars. I have no doubt that the Chancellor of the Exchequer would have obtained the amount for which he has estimated by making the tax more equitable than it is.

There is another aspect of this tax. For a quarter of a century, at least, whenever there has been an increase of the basic duty on tobacco it has been accompanied by an increase in the tax on foreign cigars in the same proportion; but for a reason which has not been explained to the House the Chancellor of the Exchequer has abandoned that, and is thereby conferring a benefit on the producers of foreign-made cigars, manufactured in the United States of America and the Island of Cuba. I fail to see any justification for that course. I understand that the Chancellor of the Exchequer has received very strong and urgent protests from cigar manufacturers in this country with regard to the way they are being prejudiced, as against the manufacturer of foreign cigars.

I should have been glad to have been able to congratulate the Chancellor of the Exchequer upon this form of taxation, but as long as you have a tax which undoubtedly adds to the burdens of our underpaid section of the community, a statement which cannot be challenged, then it is a bad tax, a pernicious tax and an unjust tax. In spite of the desire of the Virginian lady that tobacco smoking should be prohibited, we honour the memory of Sir Walter Raleigh too much to desire that smoking should be prohibited. Probably one of the greatest benefactions, far beyond the introduction of the potato, which we have received at the hands of this Elizabethan voyager, was the introduction of tobacco. I am surprised to find the Noble Lady disloyal to the land of her birth, and I hope the time may come when the example of tobacco smokers may be such as to cause the Noble Lady herself to become an indulger in this excellent habit.

4.51 p.m.

The Financial Secretary to the Treasury (Captain Crookshank)

It may be for the convenience of the Committee if I intervene and reply to the Debate before we adjourn. There has been argument as to whether it is a good or a bad thing to smoke, whether people smoke too much or too little, and whether people spend too great or too small a part of their wages on tobacco. Of course, everybody has his or her own opinion on the subject, and hon. Members have expressed theirs. The Noble Lady, who wishes people to give up smoking, is adding one more to the many unpopular causes which she champions in this House. She always does it so charmingly that we look forward to whatever may be the next cause that she will champion.

The hon. Member for Consett (Mr. David Adams) says that smoking is an imperious necessity, and he calls this an immoral tax. That is rather a strong adjective for what my right hon. Friend is proposing. The real answer to the arguments against the Clause is that we cannot possible afford to leave out the Clause. It would mean that the extra imposition which the Chancellor of the Exchequer outlined in his Budget statement would not be made. It is true, as the hon. Member for Central Hackney (Mr. Watkins) said, that the increase in the consumption of tobacco is very considerable year after year, and my right hon. Friend, on the basis of the present duty has been getting more and more revenue. When the duty was put up to 9s. 6d. in 1931 the amount of tobacco retained for home consumption was about 145,500,000 lbs. in the financial year of 1931–32; in 1938–39 the figure had risen to over 192,000,000 lbs. Now the time has come in the opinion of my right hon. Friend when we shall ask for a further increase in the income from this commodity, by raising the duty. The hon. Member pointed out the increased revenue from the increased consumption, but he forgets the increasing need for money, owing to the position in which we find ourselves. If we were to give up this proposal we should be losing what we anticipate will amount to £7,000,000 this year and £8,000,000 in a full year. The mere mention of that figure will be quite sufficient for the great majority of hon. Members to realise that we cannot accept the deletion of the Clause.

It has been said that this increased duty imposes a burden upon the poorer section of smokers. My right hon. Friend has frankly admitted that. It would be very foolish not to do so. We have to face the fact and recognise it. On the 2nd May my right hon. Friend said that a common tax, dealing with a widely used article like tobacco, is bound to be felt by all who use that article, and is bound, in proportion to the total income, to be felt more severely by the person with a small income than by a person with a larger income." — [OFFICIAL REPORT, 2nd May, 1939; col. 1741, Vol. 346.] We have, however, to take full account of all the circumstances in which we find ourselves and for that reason I ask the Committee to support the Clause.

Let me say a few words about the rate of duty on imported cigars. The hon. Member for Mansfield (Mr. C. Brown) raised that question, and I have had an opportunity, on behalf of my right hon. Friend, of receiving a deputation on the subject. The short answer is that while it is true that in the past when the tobacco duty was increased, the derivative rates on all forms of manufactured tobacco were increased in the same proportion as the basic rate on leaf, this is the first time that the increase has been on a flat rate in both cases, and the view of my right hon. Friend is that the margin between the two duties was already as high as was reasonable. The protection at present duties, after allowing for wastage in manufacture, amounts to no less than 7s. 8d. a pound. That is a good protective margin. In all the circumstances, my right hon. Friend thought that the margin had been extended sufficiently and that the increase should be on a flat rate. I hope, therefore, the Committee will decide to maintain the duties as they stand in the Bill.

4.59 p.m.

Mr. Pethick-Lawrence

The right hon. Gentleman says that the protection that existed was justified, but there was no justification for increasing in. The case that we are making is that, whether the protection was adequate or not, it is being decreased. There was a difference between the tax on the manufactured and the unmanufactured tobacco as far back as 1887, when the tax was first introduced, and that differentiation continued and was increased during the period that Liberal Governments of those days were in office. The right hon. Gentleman, however much he may have abandoned his Free Trade principles to-day, was-then an ardent Free Trader. He was not in the House during the early part of the period.

The Chancellor of the Exchequer (Sir John Simon)

Did the right hon. Gentleman say 1887 or 1787?

Mr. Pethick-Lawrence

1887. The right hon. Gentleman was not in the House then, but he was, and was a member of the Liberal Government, before 1914. The differentiation was increased in 1909 and during the War years the proportion was maintained. The position broadly is that, owing to wastage, the amount of unmanufactured tobacco produces only 14 ounces. If we keep the flat rate of difference, as the Chancellor

is proposing to do, it means that he is taking off a protective difference of about 3½d. a pound. He keeps the actual margin between the two prices the same, but inasmuch as there is wastage, of course that is to the detriment of the manufacturer in this country. The tax, therefore, is vicious and ought to be resisted.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 257; Noes, 127.

Division No. 189.] AYES. [5.5 p.m.
Adams, S. V. T. (Leeds, W.) De la Bère, R. Keeling, E. H.
Allen, Col. J. Sandeman (B'knhead) Denville, Alfred Kerr, Colonel C. I. (Mentrose)
Allen, Lt.-Col. Sir W. J. (Armagh) Doland, G. F. Kerr, H. W. (Oldham)
Amery, Rt. Hon. L. C. M. S. Donner, P. W. Keyes, Admiral of the Fleet Sir R.
Anstruther-Gray, W. J. Dorman-Smith, Col. Rt. Hon. Sir H. H. Kimball, L.
Apsley, Lord Drewe, C. Knox, Major-General Sir A. W. F.
Aske, Sir R. W. Dugdale, Captain T. L. Lamb, Sir J. Q.
Assheton, R. Duggan, H. J. Latham, Sir P.
Astor, Viscountess (Plymouth, Sutton) Dunglass, Lord Law, R. K. (Hull, S.W.)
Baillie, Sir A. W. M. Eastwood, J. F. Leech, Sir J. W.
Baldwin-Webb, Col. J. Edmendson, Major Sir J. Leighton, Major B. E. P.
Baxter, A. Beverley Ellis, Sir G. Lennox-Boyd, A. T. L.
Beaumont, Hon. R. E. B. (Portsm'h) Elliston, Capt. G. S. Levy, T.
Beechman, N. A. Emery, J. F. Liddall, W. S.
Beit, Sir A. L. Emmott, C. E. G. C. Lipson, D. L.
Bennett, Sir E. N. Emrys-Evans, P. V. Little, J.
Blair, Sir R. Entwistle, Sir C. F. Lloyd, G. W.
Bossom, A. C. Evans, Capt A. (Cardiff, S.) Loftus P. C.
Boulton, W. W. Everard, Sir William Lindsay MacAndrew, Colonel Sir C. G.
Boyce, H. Leslie Findlay, Sir E. McCorquodale, M. S.
Bracken, B. Fleming, E. L. MacDonald, Rt. Hon. M. (Ross)
Braithwaite, J. Gurney (Holderness) Fox, Sir G. W. G. MacDonald, Sir Murdoch (Inverness)
Brass, Sir W. Furness, S. N. Macdonald, Capt. P. (Isle of Wight)
Briscoe, Capt. R. G. Gilmour, Lt.-Col. Rt. Hon. Sir J. McEwen, Capt. J. H. F.
Broadbridge, Sir G. T. Goldie, N. B. McKie, J. H.
Brooke, H. (Lewisham, W.) Gower, Sir R. V. Macquisten, F. A.
Brown, Brig.-Gen. H. C. (Newbury) Graham, Captain A. C. (Wirral) Magnay, T.
Browne, A. C. (Belfast, W.) Grant-Ferris, Flight-Lieutenant R. Makins, Brigadier-General Sir Ernest
Bull, B. B. Granville, E. L Manningham-Buller, Sir M.
Burgin, Rt. Hon. E. L. Grattan-Doyle, Sir N. Margesson, Capt. Rt. Hon. H. O. R-
Burton, Col. H. W. Gretton, Col. Rt. Hon. J. Markham, S. F.
Butcher, H. W. Gridley, Sir A. B. Marsden, Commander A.
Campbell, Sir E. T. Grimston, R. V. Mason, Lt.-Col. Hon. G. K. M.
Cartland, J. R. H. Guest, Lieut.-Colonel H. (Drake) Maxwell, Hon. S. A.
Carver. Major W. H. Guinness, T. L. E. B. Medlicott, F.
Cary, R. A. Gunston, Capt. Sir D. W. Meller, Sir R. J. (Mitcham)
Castlereagh, Viscount Hambro, A. V. Mellor, Sir J. S. P. (Tamworth)
Cayzer, Sir C. W. (City of Chatter) Hannah, I. C. Mills, Major J. D. (New Forest)
Cazalet, Thelma (Islington, E.) Hannon, Sir P. J. H. Mitchell, Sir W. Lane (Streatham)
Cazalet, Capt. V. A. (Chippenham) Halsam, Henry (Horncastle) Mitcheson, Sir G. G.
Chapman, A. (Rutherglen) Haslam, Sir J. (Bolton) Moore, Lieut.-Col. Sir T. C R.
Chapman, Sir S. (Edinburgh, S.) Heilgers, Captain F.F. A. Moore-Brabazon, Lt.-Col. J. T. C.
Chorlton, A. E. L. Hely-Hutchinson, M. R. Moreing, A. C.
Churchill, Rt. Hon. Winston S. Heneage, Lieut.-Colonel A. P. Morgan, R. H. (Worecster, Stourbridge)
Clarke, Colonel R. S. (E. Grinstead) Hepburn, P. G.T. Buchan- Morris-Jones, Sir Henry
Cobb, Captain E. C. (Preston) Herbert, A. P. (Oxford U.) Morrison, G. A. (Scottish Univ's.).
Colville, Rt. Hon. John Higgs, W. F. Morrison, Rt. Hon. W. S. (Cirencester)
Conant, Captain R. J. E. Holdsworth, H. Muirhead, Lt.-Col. A. J.
Cook, Sir T. R. A. M. (Norfolk, N.) Holmes, J. S. Neven-Spence, Major B. H. H.
Cooke, J. D. (Hammersmith, S.) Hopkinton, A. Nicholson, G. (Farnham)
Cooper, Rt. Hn. A. Dun (W'st'r S.G'gs) Horsbrugh, Florence Nicolson, Hon. H. G.
Cox, H. B. Trevor Howitt, Dr. A. B. O'Connor, Sir Terence J.
Croft, Brig.-Gen. Sir H. Page Hudson, Capt. A. U. M. (Hack, N.) O'Neill, Rt. Hon. Sir Hugh
Crooke, Sir J. Smedley Hudson, Rt. Hon. R. S. (Southport) Orr-Ewing, I. L.
Crookshank, Cant. Rt. Hon. H. F. C. Hulbert, Squadron-Leader N. J. Peat, C. U.
Crowder, J. F. E. Hunloke, H. P. Petherick, M.
Cruddas, Col. B. Hunter, T. Pickthorn, K. W. M.
Culverwell, C. T. Hutchinson, G. C. Pilkington, R.
Davidson, Viscountess Jarvis, Sir J. J. Ponsonby, Cot. C. E.
Davison, Sir W. H. Jennings, Ft. Pownall, Lt. Col. Sir Assheton
De Chair, S. S. Jool, D. J. B. Purbrick, R.
Radford, E. A. Smith, Bracewell (Dulwich) Tufnell, Lieut.-Commander R. L.
Raikes, H. V. A. M. Smith, Sir R. W. (Aberdeen) Turton, R. H.
Rankin, Sir R. Smithers, Sir W. Wakefield, W. W.
Rathbone, J. R. (Bodmin) Snadden, W. McN. Ward, Lieut.-Col. Sir A. L. (Hull)
Rawson, Sir Cooper Somervell, Rt. Hon. Sir Donald Wardlaw-Milne, Sir J. S.
Reed, A. C. (Exeter) Somerville, Sir A. A. (Windsor) Waterhouse, Captain C.
Rickards, G. W. (Skipton) Southby, Commander Sir A. R. J. Watt, Lt.-Col. G. S. Harvie
Robinson, J. R. (Blackpool) Spears, Brigadier-General E. L. Wedderburn, H. J. S.
Ropner, Colonel L. Spens, W. P. Wells, Sir Sydney
Rosbotham, Sir T. Stanley, Rt. Hon. Oliver (W'm'l'd) Whiteley, Major J. P. (Buckingham)
Ross, Major Sir R. D. (Londonderry) Stewart, J. Henderson (Fife, E.) Wickham, Lt.-Col. E. T. R.
Russell, Sir Alexander Stewart, William J. (Belfast, S.) Williams, Sir H. G. (Croydon, S.)
Russell, S. H. M. (Darwin) Storey, S. Willoughby de Eresby, Lord
Salmon, Sir l. Strauss, H. G. (Norwich) Wilson, Lt.-Col. Sir A. T. (Hitchin)
Salt, E. W. Strickland, Captain W. F. Windsor-Clive, Lieut.-Colonel G.
Samuel, M. R. A. Stuart, Rt. Hon. J. (Moray and Nairn) Winterton, Rt. Hon. Earl
Sandeman, Sir N. S. Sutcliffe, H. Wise, A. R.
Sanderson, Sir F. B. Tasker, Sir R. l. Womersley, Sir W.J.
Sandys, E. D. Tate, Mavis C. Wood, Rt. Hon. Sir Kingsley
Scott, Lord William Taylor, C. S. (Eastbourne) Wragg, H.
Selley, H. R. Taylor, Vice-Adm. E. A. (Padd., S.) York, C.
Shaw, Captain W. T. (Forfar) Thomas, J. P. L. Young, A. S. L. (Partick)
Shepperson, Sir E. W. Thorneycroft, G. E. P. TELLERS FOR THE AYES. —
Simmonds, o. E. Thornton-Kemsley, C. N. Mr. Munro and Lieut.-Colonel Herbert.
Simon, Rt. Hon. Sir J. A. Titchfield, Marquess N
Smiles, Lieut.-Colonel Sir W. D. Touche, G. C.
NOES.
Acland, Sir R. T. D. Gibson R. (Greenock) Naylor, T. E.
Adams, D. (Consett) Graham, D. M. (Hamilton) Paling, W.
Adams, D. M. (Poplar, S.) Green, W. H. (Deptford) Parker,
Adamson, W. M. Greenwood, Rt. Hon. A. Parkinson, J. A.
Alexander, Rt. Hon. A. V. (H'lsbr.) Grenfell, D. R. Pethick-Lawrence, Rt. Hon. F. W.
Ammon, C. G. Griffiths, G. A. (Hemsworth) Quibell, D. J. K.
Banfield, J. W. Griffiths, J. (Llanelly) Ridley, G.
Barnes, A. J. Groves, T. E. Ritson, J
Barr, J. Guest, Dr. L. H. (Islington, N.) Roberts, W. (Cumberland, N.)
Bartlett, C. V. O. Hall. G. H. (Aberdare) Robinson, W. A. (St. Helens)
Batey, J. Hall, J. H. (Whitechapel) Rothschild, J. A. de
Beaumont, H. (Batley) Hardie, Agnes Sanders, W. S.
Bellenger, F. J. Harris, Sir P. A. Seely, Sir H. M.
Benn, Rt. Hon. W. W. Hayday, A. Sexton, T. M.
Benson, G. Henderson, A. (Kingswinford) Shinwell, E.
Bevan, A. Henderson, J. (Ardwick) Simpson, F. B.
Bromfield, W. Hills, A. (Pontefract) Sinclair, Rt. Hon. Sir A. (C'thn's)
Brown, C. (Mansfield) Hopkin, D. Sloan, A.
Buchanan, G. Isaacs, G. A. Smith, Ben (Rotherhithe)
Burke, W. A. Jagger, J. Smith, E. (Stoke)
Cape, T. Kennedy, Rt. Hon. T. Smith, Rt. Hon. H. B. Lees- (K'ly)
Chater, D. Kirby, B. V. Smith, T. (Normanton)
Cluse, W. S. Lansbury, Rt. Hon. G. Sorensen, R. W.
Clynes, Rt. Hon. J. R. Lathan, G. Stephen, C.
Cocks, F. S. Lawson, J. J. Stewart, W. J. (H'ght'n-le-Sp'ng)
Collindridge, F. Leach, W. Strauss, G. R. (Lambeth, N.)
Cove, W. G. Lee, F. Summerskill, Dr. Edith
Cripps, Hon. Sir Stafford Leonard, W. Taylor, R. J. (Morpeth)
Daggar, G. Lunn, W. Tinker, J. J.
Davidson, J. J. (Maryhill) Macdonald, G. (Ince) Tomlinson, G.
Davies, R. J. (Westhoughton) McEntee, V. La T. Viant, S. P.
Davies, S. O. (Merthyr) McGhee, H. G. Walker, J.
Dobbie, W. MacLaren, A. Watkins, F. C.
Ede, J. C. Maclean, N. Watson, W. McL.
Edwards, A. (Middlesbrough E.) Mainwaring, W. H. Wedgwood, Rt. Hon. J. C.
Edwards, Sir C. (Bedwellty) Mander, G. le M. Welsh, J. C.
Evans, E. (Univ. of Wales) Maxton, J. Westwood, J.
Fletcher, Lt.-Comdr. R. T. H Messer, F. White, H. Graham
Frankel, D. Montague, F. Wilkinson, Ellen
Gallacher, W. Morgan, J. (York, W.R., Doncaster) Windsor, W. (Hull, C.)
Gardner, B. W. Morrison, Rt. Hon.(Hackney, S.)
George, Major G. Lloyd (Pembroke) Morrison, R. C. (Tottenham, N.) TELLERS FOR THE NOES. —
George, Megan Lloyd (Anglesey) Muff, G. Mr. Whiteley and Mr. Mathers.

5.13 p.m.

At this juncture the sitting was suspended to enable the House to take part in the welcome to the King and Queen on their way to Buckingham Palace.

6.0 p.m.

Sitting resumed.