THE EARL OF CAMPERDOWNMy Lords, I rise to call attention to the price of bread during the last three months, and to move for Papers. It is hardly necessary to point out to your Lordships that this question has an intimate connection with the shilling registration duty on corn, which has been abolished, and the effect of the abolition of which came into operation on 1st July. I waited until the 1st July, because I wished to see whether up to that time any effect, and, if so, what, was produced upon the price of bread, and I have now in my hand, through the courtesy of the Department of Agriculture, the Returns of the Board of Trade for the month of July this year, which I imagine must be as recent information as they are able to give. These Returns relate to London and twenty-five large provincial towns, and I find that for the last three months—that is, for May, June, and July—no variation whatever of any sort or kind has taken place in the price of bread. I find further, going back as far as 1st July last year, that only one change has taken place in any one of those twenty-five towns during that time, and that was in the Potteries district, where from February of the present year the price has been 4½d., and where in the month of October, 1902, and from then back to the month of July, 1902, the price had been 4d. I think that these figures are very important as bearing upon this registration duty, which has recently been abolished.
It is hardly necessary that I should remind your Lordships of the history of that tax. Most of your Lordships must be familiar with it, but perhaps I may, in a word or two, recall what has happened. After the Corn Laws were abolished that duty existed up to the year 1869, when it was abolished by Mr. Lowe. In those days, fortunately, surpluses were a continual event, and Mr. Lowe, with that logical mind for which he was so well known, thought it desirable to reduce the last vestige of anything that could be called a tax on corn, and he abolished it. At that time the price of bread was not 1047 affected; the consumer got nothing by it, delivered most enthusiastic and animated but the tax, which produced £900,000 at time, was gone. Things remained they persuaded people that this tax was so until 1902, when Sir Michael Hicks Beach re-imposed the tax. He was in search, he said of some new tax which would produce a large revenue and interfere as little as possible with consumer with trade; and he re-imposed the duty, the result far exceeding his expectations. The duty itself amounted, I think, to about £ 2,400,000. The price of bread, expect in few instances, did not in any way rise, and even the volume of imports of wheat from foreign countries in ten months up to June 30 amounted to 67,000,000 cwts., in round numbers, compared with 60,000,000 cwts. In the corresponding ten months of 1901–2, while the imports of wheat, meal, and flour amounted to nearly 16,000,000 cwts., compared with very nearly the same number of cwts. In the preceding ten months. At the same time there was no effect produced, except in certain temporary instances, on the price of bread to the consumer.
So pleased. was Sir Michael Hicks Beach with the result of the tax that he afterwards told us that he intended, when the war had ceased, not to interfere with it but to make it a part of the permanent taxation of the country. It was quite certain, of course, that there would be an outery against this tax. There are two sorts of politicians who are not likely to lose such an opportunity. In the first place there are the philosophic politicians, to whom the mention of the word "corn" is very much what the showing of a red rag is to a bull, and who appear to lose all their reasoning powers. They go back to the days precedings 1846. They decline to think what the effects of the tax may be on the consumer or anybody else, but they immediately lay down as a rule which must not be transgressed that a tax on corn, whatever may be its effect, must be an abominable thing. There is another set of politicians—more worldly minded men—who are well aware of the value of a cry, or of anything that can he elevated into a cry at a time when they are in Opposition: and both these sets of politicians did their best during the antumn of last year. Some of my noble friends on the from Opposition Bench. 1048 delivered most enthusiastic and animated speeches, and I daresay in certain cases they persuaded people that this tax was one which pressed hardly upon them and ought to be removed Their curse was probably as terrible a curse as ever was uttered; but the prosaic result was that the price of bread remained unaltered. I think that that cry was made the most of but I respectfully venture to doubt whether any practical advantage was obtained by all their endeavours. But, however that may be, the important fact is that the price of bread remained the same.
Now, my Lords, that brings us to the present year, and the present Chancellor of the Exchequer, who, I much regret to say, has abolished this tax; and his reasons for doing so, to one person at all events who heard him, did not appear to be very strong. He said that corn was an article of very large consumption indeed, which was quite true; he said that the duty was inelastic, which was true also; and I think he said that corn was a raw material. But the most important thing he said was that it lends itself very readily to "misreprersentation." That arguments, I am afraid was the strongest the right hon. Gentleman could produce, but it was a most unfortunate arguments to use. It was quite certain that the imposition of any tax upon corn would be resented by a certain number of the community, and that the Government of the day which imposed it would incur a certain amount of unpopularity; but all that had been found a very beneficial one, and had not resulted in an increase in the price of bread. Notwithstanding this, the Chancellor of the Exchequer, with, I humbly suggest, insufficient reason, abolished the tax.
Does the consumer benefit in any way whatever by the abolition of this tax? It has been contended with regard to others articles—for instance, in the case of sugar—that although British colonies may be destroyed by bounties given on sugar, yet nevertheless over here the consumer benefits, and that therefore we have no right to object to these bounties, and things ought to be allowed to go on as best they may. In this case, however, this argument will not apply. The consumer suffered nothing when the tax was originally in force, gained nothing when it was abolished for the first time, suffered. 1049 nothing when put on a second time, and the experience of the last few months shows that he will gain nothing by its abolition for the second time. Who has profited? That is just what no one can say. Some people say it is the American railways and the other modes of transportation on the other side of the Atlantic. Some say that in some mysterious manner the consumer over here gains, but how they are unable to show; but the practical result is that the price of bread remains absolutely the same. It is, of course, possible that in some infinitesimal degree the bakers may gain, but, apart from the bakers, I do not know of any other gainer who can be suggested.
All taxes, of course, are bad, but this tax had several merits so far as a tax can have merits. In the first place, it was a new tax, an addition to the number of taxes—a thing which every Chancellor of the Exchequer has been in search of for years. It produced a large revenue not felt in any way by the consumer, and it fulfilled the object of meeting increased expenditure. Do any of your Lordships think that we are likely to see any diminution of expenditure? I would remind the House of the new measures of public education, one of which we have passed, and the other of which we are now passing. It is as certain as anything can be that those Education Acts will mean a large and considerable increase of expenditure. I am not speaking without some experience in this matter, because I happen to be on one of the County Education Committees, and I can see very deafly indeed, even at this early stage, in what direction the operation of that Act is tending. There is another great source of expenditure—namely, the Navy. The expenditure on the Navy is now between £33,000,000 and £34,000,000, and Lord Selborne rather alarmed me, for one, by telling us, as he did not long ago, that we must expect a very considerable increase in that expenditure.
Now, my Lords, what is the purpose of the Navy? Its main and principal purpose is to act as an insurance upon food. A Royal Commission is at the present time sitting to inquire into our food supply in time of war. None of us know. of course, what they may report, 1050 but of one thing I am convinced, that public granaries or any expedients of that sort would not be of the slightest possible value. If that be so, and if no I better expedients can be devised, we have to fall back on the Navy and take our chance; and one of its principal objects is to provide, so far as a Navy can provide, for the security of the' food supply of this country. Public education is given in the interests of the whole body of the nation, and for-securing our supplies of food the Navy is kept up in the interests of the whole body of the nation. Is it, therefore, unfair and unreasonable that to some slight extent, at all events—which was the fact under this shilling registration duty—the body of the nation should pay for better education as well as for the insurance of its food supplies? It seems to me that no fairer application of public money could be made. No tax was so little felt as the shilling registration duty on corn. Yet that revenue has been thrown, as I humbly suggest, into the sea, and I submit that the consumers of bread, the operatives of this country, are by no means the gainers as the result. I regret that this policy has been adopted, and conclude by moving for any further Papers there may be on the subject.
§ EARL SPENCERMy Lords, my noble friend has not spoken in flattering terms of the views held on this subject by the from Opposition Bench. He alluded to two classes of politicians. I do not know in which category I should place myself, and I am not quite sure whether the policy of looking out for a "cry" is to be reckoned as the exclusive privilege of the Opposition. I rather think that the policy of searching for a cry belongs to some members of the Government. There can be no. doubt that there is likely to be larger. expenditure on education and an increase in the heavy charges entailed by the Navy. But I differ from the noble Lord in thinking that a slight tax on corn is permissible in order to relieve the taxpayers in other respects. It is one of the most injurious taxes that could possibly be levied, and I doubt very much whether those who are arguing in favour of the new fiscal. 1051 policy of the Colonial Secretary would be content with what the noble Lord has called a mere registration tax. In order to carry out their views, it is certain that those who support the Colonial Secretary would have to go further in devising new means of taxation.
There is certainly a difference of opinion as to whether the corn tax has or has not raised the price of bread. In some places the price of bread has been raised, and in other places it has remained stationary. I know it is the opinion of many that if the tax had not been put on, the price of bread would have been lower than it was before. That is the answer to a great extent to the argument of the noble Lord. The noble Lord has moved for a Return of the price of bread for three months, but that would not be affected by the retention or the removal of the tax. There are many other circumstances which have to be taken into consideration. If we are to have a Return at all, we ought to have a Return covering a much larger period, and if we bad that Return we should probably find the same phenomenon as that to which my noble friend has directed our attention. I have not seen the Returns to which reference has been made by the noble Lord, but I should like to know whether the prices given are wholesale or retail. If they are retail, it would be a most fallacious argument, because the retail price of bread varies greatly, there being one price for richer persons and another price for poorer persons in the same village. The only scientific Return on which to rely is the wholesale price of bread, and I should like to know from the Government whether the Return is for wholesale or retail.
* THE EARL or ONSLOWMy Lords, when I saw the notice on the Paper I welcomed an addition to the ranks of those who were inquiring into the subject, and I thought that perhaps the noble Lord would express a hope that the Government would by-and-by furnish him with some data on which he could form his opinions on the great questions which are agitating your Lordships' House. But I find that that was not his object, that he was merely flogging a dead 1052 horse—namely, the Finance Act which passed some months ago. The proper time to raise this question was when that Act was before your Lordships
THE EARL OF CAMPERDOWNThe Act did not come into operation until July 1. That was my reason for waiting.
* THE EARL OF ONSLOWAt any rate the abolition of registration duty on corn has this one advantage, that in the consideration of the fiscal policy of the future we start with a clean slate. I think that the noble Lord will feel inclined if we are to enter into the great inquest of the nation to agree with the Leader of the Opposition that there are a great many more circumstances to be taken into consideration in the price of bread beyond the duty, whether it he one shilling or even more. The most potent factor that affects corn or bread is the visible supply of wheat. Threemonths, or even a year, would scarcely be enough on which to found a real judgment on such a question as this. Besides that, the cereal year should be considered as a whole, because the price always rises about now, when the old harvest is exhausted and the new harvest has not made itself felt. If the noble Lord will look at the price of bread and wheat in England and compare it with the price in other countries where there are heavy import duties on corn, he will find that it varies considerably, not by any means in accordance with the duty put upon it; and, further, if the noble Lord tries to make out that because the price of bread has not varied during the last three months that is a clear indication that the taking of the tax off and putting it on had no effect, he is, I think, arguing from premises which he is not entitled to use. The noble Lord attacked the Government for taking off this tax, which had been imposed for a specific purpose. The country was engaged in a great war. It was a difficult task for the Chancellor of the Exchequer to know where he was going to get the finance to carry on the war. The income-tax stood at a high figure, and the working classes were not behind any other class in wishing that the war should be carried on to the end. His Majesty's Government thought they would not he doing wrong to ask even the poorest of the population to contribute to the cost of 1053 the war. When the war was over the income tax, which was a burden on the wealthy, was reduced, and there was naturally a desire to benefit the poorer classes also. In addition to that there was the question of reducing the cost of the raw material which the farming class uses for feeding herds and flocks. The Government thought that under the circumstances they should abolish the tax altogether and have, as I have said, a clean slate in the inquiry which is going on, and a perfectly open mind, and not keep on any tax which might have prejudged the question.
§ LORD TWEEDMOUTHMy Lords, even after the speech that has just been delivered, I am presumptions enough to think that I should like to say a word or two with regard to the observations of the noble Lord who has called attention to this question. Let me first say, with regard to the remarks of the noble Earl the Minister for Agriculture, that the late Chancellor of the Exchequer stated very distinctly in the House of Commons that it was not a tax put on for the circumstances of the war, but it was for the purpose of broadening the basis of taxation. My noble friend Lord Camperdown is very much disturbed, apparently, because he cannot find that either the imposition of this tax or the taking of it off has made any difference in the price of bread. I think the noble Earl is in too great a hurry in drawing any conclusion with regard to this particular tax. In a question of this sort, to come to any definite conclusion as to what the effect of such a tax would by the experience of a single year is absolutely impossible.
There are many considerations. Let me suggest one or two. In the first place, it is possible that the baker has used a less good quality of flour to make his bread with. In that case he would buy his flour cheaper, and keep the price of bread at the same figure. There are also the considerations of the quantity and the quality of the harvests both in this country and in America. It is perfectly well known that last rear the wheat produced in this country was not good wheat. It did not make up into flour that was particularly suitable for bread-making. On the other hand, in 1054 the United States of America there was a wheat harvest which was abundant in quantity and extremely good in quality. The regular course of trade was that these stocks of wheat should be sent to this country. They were so sent, and I think the noble Earl will find that the price of American wheat in this country was considerably raised last year. The makers of bread here were obliged to have it because it gave a better quality of flour, and it was necessary to have it to mix with the inferior quality of flour grown in this country. There is another thing which has to be taken into consideration in considering the question of price. Last year there was in the-United States a great famine in coal, and from this country large quantities of coal were sent to America; the ships that conveyed that coal required to have freights to bring back to this country, and large quantities of wheat were sent back in those ships at a low rate. That is another consideration which should not be overlooked in this matter; and I would advise my noble friend to study these questions a little more closely than he has done, and not he in too great a hurry in drawing conclusions.
* THE EARL OF ONSLOWIn answer to the Question put to me by the noble Earl the Leader of the Opposition, I may say that the prices selected in the Return quoted by the noble Earl who raised this question represent, so far as could be ascertained, the prevailing prices paid at the various places by members of the working classes.
§ EARL SPENCERThen they are the retail prices, and practically of no value.
The subject then dropped.