HL Deb 22 July 1875 vol 225 cc1801-7

, in presenting Petitions from proprietors of Jamaica and Barbadoes praying for some remedy for the system under which refined sugar is at present exported from Prance and other countries, and in asking the Secretary of State for Foreign Affairs, What is the present state of negotiations on that subject?—said, that in 1864 a Convention on the subject of the regulation of the sugar trade was entered into between England, Holland, France, and Belgium. In 1852 France found that her revenues were suffering from the bounties which she was paying on the exportation of refined sugars. France then applied to the other three Powers, and requested them to co-operate with her in considering the question of the different sugar duties. England acquiesced in that request; and the result was that between 1853 and 1864 several Conferences were held, which resulted in the Convention of 1864, the arrangement under which was considered satisfactory for carrying out an equitable system of sugar duties. From that period England loyally acted and carried out the part which she undertook, for the Government lost no time in obtaining an Act of Parliament to enable them to do so. But he was sorry to say that from that time to the present France had continued to evade the fulfilment of her engagements, although it had been framed upon the terms which her Government had suggested, and had used its powers for her own protection. In 1867 there was a Correspondence between England and France on the subject; but France was in such a position at that time as not to be able to make a change, and subsequently became involved in the war with Germany, so that negotiations were prevented from being proceeded with. When peace was restored these negotiations were again commenced, and England requested France that she should carry out her part of the Convention of 1864. But France being evidently unwilling to carry out her engagement, England proposed that the sugar of France should be refined in bond. The system adopted in France and other countries was one virtually of bounties on the exportation of sugar, and it was of that system that England complained. The system of charging complained of was that the duty was charged upon the raw material, the actual produce of sugar when refined being estimated at say from 3 to 5 per cent, when in fact it produced from 80 to 90 per cent; the result, therefore, under that system was that the French sugar refiners enjoyed an advantage of about 80 per cent upon the quantity of refined sugar which they exported. After repeated complaints on the part of England, France last year passed a law for refining sugar in bond, and that system, which would meet so far the requirements of England, was to commence at the end of the present month of July. He believed he was not overstating the facts when he said that the loss of revenue to France in consequence of granting these special bounties upon refined sugars amounted to £800,000 per annum. The position of things being as he had stated, it was, he believed, at the request of France that another Conference was held, in the hope of adopting a system in which the same four Powers would agree, and he understood it was a fact that no less than seven Conferences between the four Powers had been held upon this difficult and complicated question. The result was that a Convention was agreed upon, and about a week ago it was to have been ratified and signed; but he now understood that France had within the last few days, suggested another postponement of the termination of the Convention—which would have come to an end at the close of this month—and had intimated that the system of refining in bond in France would not come into operation until the month of March next year. Under these circumstances, he felt bound to bring the question under the notice of Her Majesty's Government, in the hope that some remedy might be discovered; though he did not think the Petitioners whom he now represented desired the Government or Parliament to depart from that system or policy which had so long been established in this country, though the people of Jamaica, Barbadoes, and other West Indian Colonies found themselves not only exposed to the competition of the slave labour of Cuba and Brazil, but to the bounty-protected sugar of the Continent. He had endeavoured to compress his statement of the case, though it was a most important one. The Petitioners desired to see the whole sugar trade placed upon a fair and equal basis, for the result of the system in France had virtually been to enable the French refiner to undersell the British refiner to a certain extent. His noble Friend the Foreign Secretary would, no doubt, say whether the complaints of the Petitioners were well founded, and he felt that it was for the Government to discover whether any remedy could be found for the evils complained of without resorting to any system of granting protection to the home sugar trade by any countervailing duties. That, he thought, would be a course which the Government would be reluctant to follow. At the same time, the Government might seriously consider whether, under the extraordinary circumstances which he had endeavoured to explain, the bounty-protected sugar of the Continent should not be excluded from the British market until the inequalities complained of should be removed.


I think my noble Friend (Lord Hampton) has done good service by bringing this question under the notice of the House. It is in itself a question of considerable importance, and one which deeply and vitally affects the interests of a very useful and not unimportant section of the community. I will not follow my noble Friend through the historic retrospect by which he has properly introduced the subject. Those who know what a complicated and confused business this question of bounties and drawbacks has been, will not accuse my noble Friend of any unnecessary prolixity in making the very clear statement which he has laid before us. It is quite true, as he says, that for the last 11 years the principal sugar-refining countries in Europe—England, France, Holland, and Belgium—have been occupied in trying to establish a uniform system of duties and drawbacks on sugar. The difficulty has always been to ascertain the quantity of saccharine matter contained in raw sugar—or, in other words, to ascertain with precision what the yield of refined sugar from a certain quantity of raw sugar would be. The object of establishing a common understanding was to prevent any one country from gaining an unfair advantage over others in regard to sugar exported, and to guard against the injury to revenue caused by excessive drawbacks. The way in which such unfair advantage is secured is this—The duty levied on sugar is measured by the estimated yield of refined sugar from a certain quantity of raw material. If this yield is under-estimated, as has generally been the case, then the drawback granted on exportation operates as a bounty. That is to say, suppose a refiner has paid duty on an estimated yield of 90 lb., he really obtains 95 lb., and he gets the drawback on 95 lb. A sum is, thereby, refunded to him which he has never paid, and which is clear gain into his pocket. It is owned that the French Government are paying in this way a bounty of £800,000 a-year. It was in order to do away with the possibility of that abuse that the Convention was signed in 1864 establishing a system of determining the saccharine quality of sugar. That system did not work well; the whole matter was reconsidered in 1872, and again in 1873, and a great deal of care and labour was bestowed on the inquiry—but no satisfactory system of classification could be arrived at. The British Government thereupon proposed the substitution of refining in bond for the system of classification. I need not explain that re- fining in bond is an effectual remedy for the abuse complained of, because where the refiner pays only on the actual amount of refined sugar produced under supervision, he can claim no drawback beyond what he is fairly entitled to on the amount of the actual yield. At first the system of refining in bond was opposed by other countries; but in March, 1874, the French Assembly passed a law to the effect that refining in bond should come in force on the 1st of July, 1875. To that law a good deal of opposition was raised, and to meet some of the objections taken, the French Government proposed another Conference, which was held at Brussels last month. The delegates signed a Protocol proposing to their respective countries a draft Convention, by which France and Holland should agree to refine in bond, and the Belgian Government, which declines to adopt that system, should, as an equivalent, reduce its duties on sugar by one-third. On this draft there has been a good deal of discussion, the Belgian proposal not being considered satisfactory by Holland and France. They required the reduction to be to the amount of 50 per cent, and that, after some correspondence, was agreed to. There remains still an unsettled question as to the date at and manner in which the Belgian reduction shall be made, and upon that a correspondence is still being carried on. England has cut the knot by abolishing sugar duties altogether, and that, no doubt, would be the most satisfactory solution if it could be adopted all round. The only stipulation asked of us is one to which we have no difficulty in assenting—namely, that if we re-impose the duties on sugar we will adopt the system of refining in bond. I need not say that we do not contemplate their re-imposition at any time or in any form, and therefore the pledge costs us nothing. I regret that in one respect I cannot give a satisfactory report of the state of these negotiations. I have stated that the French Assembly last year passed a law establishing the system of refining in bond for France. That law, it was understood, was to come into operation in the course of the present month, or, at latest, on the 1st of August, when the Convention of 1864 expires. We have had repeated assurances from the French Government that it should be brought into operation with- out delay, and it is therefore with regret and disappointment that we have learnt that a Bill has been brought into the Assembly postponing its operation until the 1st of March next. We have remonstrated against this delay as unjust and injurious to the English sugar trade, and have withheld our signature from the Convention until the matter is cleared up. That is the present position of affairs, and I shall be ready to lay Papers on the Table before the Session closes, containing a fuller statement of what has passed. It is, perhaps, only fair to the French Government to state that the Dutch do not propose to bring in refining in bond until the 1st of March, and I understand that is the French defence; they say—"We will begin the new system when others do, but not before." The cases, however, are different; in Holland a law must be passed to make refining in bond legally compulsory, and that the Dutch say cannot be done before next spring; in France the law exists already, and would come into operation of itself. I may point out that it is not merely the delay of nine months to which we object; it is the risk and uncertainty which that delay introduces into the whole arrangement. It is not impossible that before next year the present French Assembly will be dissolved, and no one can tell what may be the feeling on this subject of the next Assembly. Before I sit down I would just remark that I think my noble Friend (Lord Hampton) put this question a little too much as if it affected exclusively the interests of the colonial producer and the sugar refiner. From our point of view, it is also a question affecting the general interests of the public. We are convinced that any advantage of cheapness to the consumer which can be obtained by means of the bounty on foreign sugar will be temporary only; because if the bounty were continued long enough and raised high enough to drive the English sugar refiner and colonial producer out of the market, then it follows that the foreign producer would get the monopoly of the market—in which case the price would not long remain at a low rate.


also wished to express his opinion that the noble Lord (Lord Hampton) had done good service by calling attention to this subject, and that by so doing the hands of the Go- vernment would be strengthened. He was glad to hear the noble Earl's repudiation of any idea of countervailing duties. This country had quite made up its mind to maintain sound principles in reference to matters of commerce; and he was glad to hear from the noble Earl what his opinion was as to the feeling of the people of this country, and as to the policy of the country in that respect. They could not always induce other countries to follow their example, or to believe that the policy of this country was a sound one; and he believed that as regarded France this was one of those questions in which class interests had much greater power than they ought to be allowed to have. It was a case in which those interests received £800,000 or £1,000,000 by way of bounty. That payment to them raised the price of sugar in France to the consumers, and those consumers were a very large class in that country. He believed that this discussion would strengthen the hands of the Government of France, and would be of service to the French public, as they would have an opportunity of seeing that, in consequence of the present system being maintained, there was a large increase to the taxation of that country, and that their interests were opposed to those of the sugar refiners. If this question should be seriously considered by the French people it would at no distant time be brought to a satisfactory termination. House adjourned at a quarter before Seven o'clock, till To-morrow, Eleven o'clock.