FINANCE — IMPORT DUTIES. (Hansard, 10 February 1845)

§ Lord Monteagle

rose to move for the Annual Balance-sheet of Income and Expenditure and for certain Accounts relating to Trade and Navigation in various branches. Their Lordships were aware that he had during the last Session called more than once, for Returns of Accounts and Papers exposing the financial and commercial resources of the kingdom. The object which he proposed to himself in pursuing the same course at present, was to put the House, as soon as was possible, in possession of the grounds upon which an intimation contained in the Speech from the Throne must have been based, in order that their Lordships might be enabled hereafter to form an opinion upon the financial policy which Ministers were about to submit to the country. He was not desirous of raising any contentious question with respect to the Royal Speech, further than so far as it was connected with the subject on which he was about to enter: he had avoided any expresion of an adverse opinion during the recent discussion, considering it to be most expedient that the Address to the Sovereign should be unanimously assented to. But there was one paragraph in the Speech from the Throne relating to the public Finances on which it was most essential that their Lordships should be able to arrive at an immediate and full understanding. It was the paragraph respecting the Property and Income Tax. That paragraph stated, that "The Act which was passed for imposing a tax upon income will shortly expire. It will be for you in your wisdom to determine whether it may not be expedient to continue its operation for a further period, and thus to obtain the means of adequately providing for the Public Service, and at the same time of making a reduction in other taxation." Now, this paragraph had been interpreted, not in this House, he admitted, but elsewhere, as implying that the purpose of Government was to submit a project not for the temporary but for the permanent continuation of the Income and 229 Property Tax. Now, to a temporary continuation, so far was he from entertaining an objection, that he thought it was impossible for any one who dispassionately considered the subject to feel any objection—on the contrary it was obvious that there existed an absolute necessity for this measure. But he must beg to call their Lordships' attention to the fact that the sentence which he had read from Her Majesty's Speech, had been construed to infer that the Property Tax was not to be enacted for a limited time, fixed beforehand, but that the Speech raised the large and important question of direct, in preference to indirect taxation, and by some it had been argued that a Property Tax might be very advantageously substituted in lieu of the present system of indirect taxation. Now, he could not believe this to be a correct view of the national interests. But, if it were, it behoved Parliament all the more on that account to look at the subject with a calm and deliberate eye, and to give to the whole question the most searching and serious consideration; if it was intended by the Government, as some apprehended, to render this Property Tax part of the permanent Ways and Means of the country, then, indeed, it was imperatively necessary that the country at large should be acquainted with the real intentions of Ministers, and that Parliament should approach the consideration of the extension of that tax with a previous knowledge of what was contemplated, and with a due sense of its incalculable importance. It was one thing to have to bear an inconvenience for a time, and another to have it sanctioned as a permanency. No one who considered the state of the country could doubt the expediency of the continuance of the tax for the present. The public had been led to consider that there had arisen within the last few years a large augmentation of revenue, and that a very large fund had been created, upon which every class of the community, anxious for the remission of certain branches of taxation, considered that they had an undoubted right to draw. Such, however, would not be found to be the real state of the case when it was rigorously examined. There certainly did exist at present a surplus, in round numbers, of about three millions sterling. But that surplus was only created by the Property Tax, which exceeded five millions, and which Property Tax was—as their Lordships were aware—only a temporary tax expiring in April. The result was, therefore, that, deducting 230 the Property Tax, so far from there being an excess or surplus of revenue over expenditure—looking to the permanent taxation of the country—there existed, on the contrary, a deficiency amounting to two millions. This blank was at present only filled up by the Property Tax. Were it proposed, therefore, that Parliament should allow that tax to expire, it was obvious to every one that neither Government nor the public could consent to such suggestion. The great object to be kept in view was not only to maintain the public revenue SO as to make it equal to the public expenditure, but also to permit Parliament with prudence to give a relief to our taxation; and then the question arose, what were the taxes the repeal of which would be most generally beneficial, and useful to the community? Unless the taxes which it was proposed to repeal were judiciously selected, and unless such remissions were made as were likely to lead to a future increase of revenue, and that at no remote period, the House would in all probability find that, even with the Property Tax, a deficiency of revenue must again ensue. Considering only the ordinary revenue, the country now stood in precisely the same position as when the Whig Government resigned in 1841, and before Sir R. Peel's changes in the financial arrangements were carried into effect. There was at that time a deficiency of between two and three millions, and it appeared that such would have been the case now, had it not been for the great effort which Parliament and the public had properly made to supply that deficiency by a temporary tax. When the subject of continuing the Property Tax came to be considered, the solution of that question would be found to turn upon the taxes which it would be proposed to remit. The object, therefore, of some of the Papers which he was about to call for, would be illustrative of the workings of the Tariff and of the late alteration in our fiscal system. The noble Lord at the head of the Board of Trade—and he would take that opportunity of congratulating him upon his appointment—that noble Lord had presented to the House a document, which he (Lord Monteagle) had intended to move for, but by the production of which he was glad to have had his wishes anticipated. This document, would, he hoped, be in the course of delivery to-morrow. It was one of the most important and valuable Papers, illustrative of our Customs' Laws, which had ever been prepared and submitted 231 to Parliament. Undoubtedly, this document was calculated to suggest inferences of the most important kind, and were he disposed to comment upon the way in which it was drawn up, he should say that it was designed purposely to give rise to the inferences in question. Though unwilling to analyze this return at any length, he must be allowed to devote to it a few words in passing. The document showed the state of the Customs' Duties during the two years preceding the operation of the late Tariff, and during the two years subsequent. It was cast under two systems of classification—the first analysis presenting the different heads of duty according to the amount collected, and varying from an annual produce of 100l. to 100,000l. and upwards; the other analysis had reference, not to the amount of revenue, but to the nature of the articles on which duty was levied. It was a curious fact, in respect to the amount of duty raised on different classes of articles, that out of 22,720,000l. raised upon 813 articles, there were 585 of these articles, or nearly three-fourths of the whole, which only produced the insignificant sum of 42,000l. Therefore Parliament would have it in its power, if no practical objection should be offered, to abolish the whole amount of Customs' Duties payable on about two-thirds, or, perhaps, three-fourths of the whole number of articles now subject to this taxation, and this at no greater loss than that of 42,000l. But if any such course should be under consideration, then he should wish to throw out one suggestion to Government upon the subject. He would wish to remind them, that in their anxiety to give relief to trade they should not deprive themselves of the means of obtaining most valuable statistical information, or they would lose the advantage of considering the moral and political consequences of the change. Take as an example of the ill consequences of such mistake, the cross Channel trade between England and Ireland. Let them not, in their anxiety to free trade from all restrictions, and to repeal all duties, forget that by so doing, without due care, they might take away the necessity for having Custom House entries at all. This was unfortunately the case in the Irish trade, and the result was that the problem, on the solution of which a just estimate of the condition of Ireland so much depended—on a satisfactory answer to which so much would depend for putting down the agitation for Repeal—the power of 232 demonstrating to the people of that country that their condition was improving, that they were gaining a greater command over the comforts and necessaries of life, that consumption was, day by day, extending among them, this problem could not be worked out. The means of raising that most important argument were for ever gone in our anxiety for free trade, and the course pursued of putting the cross Irish trade on the footing of a coasting trade, thus doing away with the necessity for any Custom House entries whatever. He wished to guard the public against a repetition of the same mistake on a still larger scale. He knew that there would be a great pressure for the total repeal of many of the small duties to which special interests were liable; but he trusted that care would be taken, in carrying such arrangements into effect, to preserve, for the purposes of Parliament and Government, as well as for those of the political economist, and as proof and evidence of the fluctuation of trade, that information which could only be well obtained through the medium of regularly kept records at the Custom House. To return, however, to the main subject in hand. He had shown that, out of 22,720,000l. raised upon 800 articles, 585 of these articles produced only 42,000l. There were some other curious facts noticeable in the document from whence he had taken this result. It appeared that by the reductions made under the late Tariff in articles of minor importance, a considerable loss had been sustained, and that the increase which had taken place had occurred only on articles producing each above 100,000l. of duty. It was also shown, that in reference to the nature of the articles taxed, there was a considerable loss on the duties received on articles of raw material, and a considerable loss likewise on goods partly manufactured, but that the great increase had occurred in the classes of articles falling under schedule D, headed "Articles of food." It was under that schedule that the alterations made in the Customs' laws produced any equivalent for the sacrifice made in other articles. He should not, in connexion with this part of the subject, refer to old grievances by calling their Lordships' attention to the amount of the duties on corn and to the working of the sliding-scale; he should content himself with pointing attention to what he had referred to as a remarkable fact. They must not, however, be led astray by the word "food," because a variety of articles 233 was classed under that head, which would not in common parlance be designated as food. All stimulants, such as brandy, tobacco, and tea, were classed under it, yet the greater part of this increase arose on articles where no variations of duty had taken place. There had been on tea alone an immense increase, exceeding ten-fold the total gain on the Tariff; but the cause of that increase could be easily explained. There had been no alteration in the rate of duty on tea: it continued as it was originally 2s. 1d. per lb., but there had been a great alteration in prices; and whether prices were increased by duty or by other causes was wholly immaterial to the consumer. He did not care whether the difference rose from increased taxation, or from increased cost of production—it was the absolute price he paid that was of importance to him. Now there was an increase of revenue upon tea amounting to more than l,000,000l. sterling. The fall in the price of the article had been from 2s. 6d. to 1s. 6d. per lb., thus fully accounting for the increase in question. Again, however, he would say, that those who looked to those accounts for ground for the repeal of such great imposts as the Malt Tax, the Tobacco Duties, the Paper Duties, or the Soap Tax, would be disappointed in their search. There was no available surplus that could warrant such mighty changes. He referred to these facts to show, that after all, the amount of surplus revenue, available for the purposes of relief from taxation, was not so great as the public imagined. Something effectual should, however, be done. Among the Papers, for the production of which he would move, there was one illustrative of a subject discussed at great length last year. He meant the duties upon sugar. He believed that their Lordships were aware that they had then fixed the Sugar Duties upon three separate classes of sugar—the first the class of British-grown sugar; the second sugar the production of foreign states wherein it was produced by free labour, such as China, Java, and Manilla, with the power of adding such other countries to the list as were found to come within the prescribed conditions; there being also a clause in the Bill by which those countries with which we had treaties of reciprocity were entitled to claim the benefit of this reduced rate of duty for their produce. The third or last class were foreign sugars the produce of slave labour, on which the duty was prohibitory. Amongst the Papers which he now called for was 234 an account to show whether there had been any importation and admission for home consumption of the second description of free-labour sugar, not the produce of British possessions, which the Bill had proposed to admit. It would be remembered by their Lordships that the Ace had not come into practical operation until November in the last year; and its working during the short period between November and February, could not pea-haps be considered as a just or at least a conclusive exponent of the future operation of the measure; but it was nevertheless material that their Lordships should have before them the result of the present system, as exhibited during those two or three months; and it would be curious, if it should appear that while the whole policy and object of the Bill, and the intentions of its framers, had been to give a preference to foreign free-labour sugar over foreign slave-labour sugar, no free-labour sugar of any description had been admitted to home consumption; but that the only foreign sugar that had come in was that very slave-labour sugar which it was obviously and declaredly the object and intention of Parliament to exclude. With regard to Venezuela sugar, he believed there had been an Order in Council for its admission. It had been declared last year, by an Order in Council, that sugar the produce of Venezuela, with which state we had treaties of reciprocity, should be entitled to come in under the Act at the reduced rate of duty, He believed there might also have been some sugar brought in from Manilla, but some difficulty had occurred to prevent its introduction for home consumption. Under these circumstances, and feeling confident that ere long the whole subject of the Sugar Duties must be reconsidered, he was sure that the noble Duke opposite would agree with him, that Parliament had a right to ask any information that could be furnished officially, and which was illustrative of the working of the Bill of last year, the more especially as the noble Duke's assent to the production of these Papers need not imply any intention on the part of Government upon the subject, one way or the other. There was another point to which he would advert, the alteration which had been made in the duty on Irish spirits. Their Lordships would recollect that an increased tax had been put upon Irish spirits in the first instance, the result of which was, that a deficiency, instead of an increase, had been occasioned to the revenue in regard to that item. Her Majesty's 235 Government, in consequence, had very properly taken the matter into consideration, and in a subsequent Session had brought in a Bill to repeal the additional duty they had themselves previously imposed. Now, he was anxious that their Lordships should be informed of the working of this measure. There was another account as to excisable articles, which he wished to be produced, and which, as it was usually made up quarterly would occasion no additional trouble to the department—an account showing the consumption of ex-ciseable articles in the present year, as compared with the average consumption of the three previous years. This would give the same information as to the Excise as the noble Earl (the Earl of Dalhousie) had that evening furnished to their Lordships respecting the Customs. There were, besides the articles he had named, two others on which the duty had been altered, and upon which their Lordships would require information as to the result of that alteration. The one was the article timber. That the old Timber Duties required revision, was generally known and admitted; but he must say that a more useless sacrifice than the loss which the revenue had sustained by Sir R. Peel's alteration of the duties on colonial timber had never yet been made. The whole amount of an increasing Revenue on colonial timber had been abandoned without any adequate corresponding benefit to the consumer, and, as he contended, without advantage to the permanent interests of the Colonies. The agriculturist was sacrificed to the Canadian lumberer. The other article to which he alluded was that of coffee. He believed that the measure of Her Majesty's Government with respect to coffee, though not perhaps so comprehensive as might have been wished, was not only a step, but a very great step, taken in the right direction. And he believed the difference in the consumption of that article would confirm in all respects the correctness of the general principles laid down by the framers of the late Tariff, and would justify the carrying those principles into effect on still more important subjects. As a further proof of this, he might refer to the effect of the repeal of the Wool Tax — a subject which had been observed upon before. He might be permitted to say that a better or more politic measure than the repeal of this duty had never been introduced by any Government; and although it had in the first instance excited great alarm in the mind 236 of the agricultural interest, who had indulged in various prognostications as to its evil tendencies, he believed that the working of the measure, while it had greatly relieved the trade and manufactures of the country, had proved that the fears of the agriculturists had been altogether groundless. Before he sat down, he wished to say a few words upon the question of the duty upon raw cotton. He had more than once brought this before the House. Looking at the severe competition this branch of our staple production had to encounter in foreign markets, he was anxious that the Government should consider whether it would not be possible to relieve the cotton trade of this country from all the duties levied upon the raw material; or, at all events, whether some arrangement might not be made so as to allow a drawback upon cotton goods exported, equivalent to the import duty upon the raw material imported. It was a great hardship upon the English manufacturer that he was compelled to send out his taxed cotton goods to meet in the Chinese markets the untaxed goods of other nations. On this subject he had with him the declarations and authority of the First Lord of the Treasury. He begged to apologise to their Lordships for detaining them so long, but in calling for the Papers of which he had given notice, he thought it his duty to explain shortly the grounds of his Motion. With regard to the financial measures of the Government generally, he wished to add his entreaties to those of his noble Friend (the Marquess of Normanby) that the House of Lords should have full time to consider the Bills which the Government might introduce hereafter. It was quite true that that House did not exercise practically the right to alter Bills of this description, or rather, he should say, if they exercised that right, they knew the consequence would be the rejection of such Bills elsewhere; but at all events their Lordships had the right to examine and discuss these measures; and if they did not consider them most carefully, they failed in the duty they owed to the public. Their Lordships had already several times appointed a Committee on the subject of Customs' Duties. He (Lord Monteagle) had, with the noble Earl opposite (Earl of Ellenborough), assisted on a Committee, in which the whole question of discriminating duties between the East and the West Indies had been investigated, and most advantageous had been the result of that inquiry. 237 He trusted the various measures of commercial legislation which would be sent up to that House would not be hurried through, as in former years; he protested against their being brought up at a late period of the Session, read a first and second time without observation, and carried forward for a Third Reading at a time when it was too late properly to consider them.