HL Deb 21 March 1911 vol 7 cc561-72

THE EARL OR DENBIGHrose to call attention to the following net receipts of duty on Irish grown tobacco during the past six years, viz.:—

1905 736
1906 2,155
1907 5,920
1908 5,168
1909 6,232
1910 11,785
and to the fact that these remarkable results are mainly due to the encouragement given to this "infant industry" by remitting one-third of the Excise Duty down to the close of 1909; and to ask His Majesty's Government in what way this encouragement differs from the "bolstering" lately denounced by the President of the Board of Agriculture on behalf of the Government; whether His Majesty's Government will now reconsider their refusal to encourage the production of home-grown sugar on the same lines as they have encouraged Irish tobacco, and, in the event of this refusal being continued, on what principle they base their action.

The noble Earl said: My Lords, I do not know that I need make any apology for bringing this subject again before the notice of the House. I was very much struck by the figures which were given about ten days ago in the House of Commons, and which I have put down on the Paper, relating to the progress of the tobacco industry in Ireland, and I call to mind the fact that when I asked for similar encouragement to be given to the infant sugar industry in this country the noble Earl who responded for the Government—the President of the Board of Agriculture, who I am sorry is not able to be here to-day—informed us that the Government would have absolutely nothing to do with the policy of what he called bolstering or dry-nursing an infant industry. Having regard to that, I think it is only fair to point out; that His Majesty's Government were engaged in this act of bolstering or dry-nursing with very singular success in Ireland up to two years ago, when the encouragement which had been given by this method was replaced by an official grant. Perhaps I shall be told that the Government were only continuing what had been started by the previous Govern- ment. That may be so, but putting aside the fact that I am not aware that one Chancellor of the Exchequer can bind his successor in any way or that there was any real necessity for His Majesty's Government to continue that rebate of Excise Duty, they not only continued it until the five years had expired for which it had been promised by the late Government, but they continued it for another five years and apparently changed their minds later and substituted a definite grant. Therefore when I am told that His Majesty's Government will have nothing whatever to do with encouragement given on these lines, I must say it seems to me nothing short of what I will call official hypocrisy.

Then I may be told that these two particular cases have nothing whatever in common, and that the Irish tobacco industry was a purely experimental one whilst the sugar industry is not experimental. If that is the contention put forward by His Majesty's Government, I am afraid they know very little indeed with regard to the technicalities of the beet-sugar industry, because it is in absolutely time experimental stage as regards cultivation on a large scale, and there is a great deal to be learned both by the farmers and by practical men in this country with regard to the best methods of carrying it out. I am afraid, therefore, that there is only one conclusion to be, drawn, and that is that His Majesty's Government were willing to violate their feelings by encouraging Irish tobacco because the demand was backed up by the votes of eighty Irish Members in the other House, and because if they had refused to do so those eighty Irish Members would have made the situation extremely unpleasant. I do feel that we have legitimate grievance against His Majesty's Government in that they should refuse to English agriculture what they have been willing to allow to Irish industry simply because it was backed up by the persistence of the Irish Members.

What I complain of is the official attitude with regard to this, as exemplified more especially by the Board of Agriculture. I am extremely sorry to speak in the absence of the noble Earl the President of the Board of Agriculture, and I would have put off this Question again if it had not been that the Notice Paper is rather full, and I thought it would he difficult to bring it on in the near future. What I complain of is that the noble Earl and those with him seem unable to see beyond the boundaries of their own blotting pads. What we want them to realise is that this is a very big question, and not one to be treated as if it were a matter of putting up a factory for the manufacture of boots or any article such as that. What we want in this country is to let people back to the land, and it is no use talking about bringing people back to the laud unless you have something to bring I hem back to. Small holdings are all right in their way, but that is a mere trifling with the question. What the country is really crying out for is for industries that will give a great deal of rural employment, which will encourage the building of cottages and give employment in country districts, and I submit that there is no industry in the world which does this to the same extent as the sugar industry, as has been proved in all the countries where it has flourished.

There is an idea amongst many people that you must have cheap labour, and that therefore this is not a desirable industry to introduce into rural districts. I believe that to be an entire mistake. You want a considerable amount of labour, but not by any means necessarily cheap. Wages on the Continent are going up, and although in some places labour is cheap, in a great many places where the industry flourishes the labour is by no means cheap. I was in the Magdeburg district the other day, the great centre of the sugar industry in Germany, and I saw the barracks and other arrangements kept there for housing the large numbers of Polish girls who are brought every year for the beet season. Something like 700 of them are imported every year into the Magdeburg district alone, but they are not cheap. I was told that this labour costs the authorities on an average 3s. a day, which I do not think anybody can say is cheap female labour. Therefore I do ask His Majesty's Government to consider this question on the merits of the case, and not to treat it in the very narrow-minded and short-sighted manner which they have hitherto done. We are doing everything we can to bring employment into rural districts. His Majesty's Government give grants to the unemployed. We know perfectly well that the one thing which is wanted is rural labour. Farm colonies have been established which I am afraid often result in mere waste of 'policy, and if only an industry such as this could be firmly established, more would be done in the way of feeding hungry men than by any other scheme now before the country.

The whole success of the movement depends on the factories, and it is on the factories that the brunt of the difficulties falls. We are not asking His Majesty's Government to aid an industry which cannot stand by itself after it has once got started; it is simply and solely on account of the initial difficulties which must meet the establishment of a new industry such as this. For instance, the successful running of a beet factory depends entirely on being able to get the supplies of beet from within a small circumference round the factory in order to reduce the cost of carriage. Obviously when you first start a factory in connection with an industry with which farmers are entirely unaccustomed you have to cover quite a large area in order to get your supplies of beet. You will not get any one farmer to grow a really large, quantity, and you have to go out a long way over the country to he able to secure the beet supply. The bulk of the expense of carriage to the factory will fall on the factory, and when you are dealing with 50,000 tons of sugar-beet an extra 2s. a ton which the factory would have to pay for carriage amounts to five per cent. on the whole capital of the company and makes a serious difference; whereas after two or three years, when farmers see that it is a paying crop awl when they realise themselves what they are able to do, farmers near the factory will grow larger quantities, and the factories will be able to draw their supplies from nearer areas and the carriage will be correspondingly less.

Those are practical questions which I ask the Government to consider. I do not see that I am asking anything out of the way in urging upon His Majesty's Government to consider whether they cannot do something to help the factories to make a commercial success during the first period of difficulty. I do not care how it is done, but I do not see that there is any practical way of doing it except by the method I suggest. As I said in the previous discussion on February 7 last, it is not practicable to do anything from the Development Fund because by the terms of the Act under which that Fund came into existence it is not allowable to devote money for the purpose as assisting an enterprise trading for profit; and you cannot give grants to the farmers who grow the beet so that they could offer to take lower prices from the factories because there you run up against the Brussels Convention. The grants given by the Board of Agriculture to agricultural colleges for experimental purposes are all very well so far as they go, but they do not affect the question or help the factories. There is only one way in which you can help the factories, and that is by enabling them to sell their finished sugar at a fair profit and by giving them a temporary protection against the established industry that exists on the Continent.


My Lords, t he noble Earl has referred so pointedly to the little assistance given to the experimental growing of tobacco in Ireland that I should like to say a word or two on that point. I am fully in sympathy with my noble friend in his desire to see something done to start the sugar industry in the United Kingdom, but I am not sure that he is entirely wise in basing his request to the Government on the encouragement that has been given to Irish tobacco. I do not see how the sugar industry could possibly be encouraged on the same lines. The cases are so absolutely and entirely different. I do not think the growing of sugar-beet or the manufacture of sugar has ever been forbidden in Great Britain. It must not be forgotten that the cultivation and manufacture of tobacco was a considerable industry and a profitable one in Ireland, and that it was forbidden by law and put down by force. Therefore I think that in an industry of that kind private individuals have at least some moral claim upon the State to help them to re-establish an industry that had been previously destroyed by the action of the State.

I have no doubt, as the. noble Earl says, that there will be a good deal to be done in the way of experimenting in sugar-beet growing, but still I fancy that any practical farmer who can grow manures can grow sugar-beet. But in starting the growth of tobacco in Ireland we were starting the growth of, practically speaking, an entirely new plant, and exhaustive experiments as to the most suitable soil and the most suitable manures, if any, were necessary, and also to determine what varieties of tobacco were most likely to be successfully and profitably grown. Therefore so far as tobacco is concerned the experiments had to be elaborate, lengthy, and exhaustive, and I may say also for those who undertook them exceedingly expensive. It is true that the actual cultivation of tobacco is tolerably easy, but, on the other hand, the harvesting of the crop requires skilled labour; the curing and rehandling of the crop is an exceedingly difficult and technical business, and labour had to be trained in order to undertake that kind of work. I take it that the process of converting the raw material of sugar into the manufactured article is perfectly well understood in Great Britain, as it is on the Continent. The two commodities are in totally different. categories.

Sugar, after all, is a food, and tobacco a luxury. I quite admit that it is such a universal luxury that. it may be looked upon as a necessity, but still it is a luxury, whereas sugar is a food, and that is recognised in the enormous difference between the duty on the two articles. The duty on sugar is 10d. per cwt.; the duty on tobacco is 3s. 6d. on the lb. If you look at it ad valorem the duty on ordinary tobacco, the tobacco that ordinary people smoke, is from 1,000 to 1,200 per cent., whereas the duty on sugar is about 3 or 4 per cent. That makes an enormous difference in itself. I do not see how it is possible for any Government, however willing they may he, to encourage the growth of sugar by differentiating between the Excise Duty and the Import Duty, because the Import Duty is already so very low; and I do not think that any Government could stereotype an Import Duty and say that in no circumstances should sugar be admitted absolutely duty free. On the other hand the duty on tobacco is so enormous that it is perfectly easy to discriminate between the Excise Duty and the duty on the imported leaf.

And I am bound to point out, in the matter of Irish tobacco, that the Treasury have made a very good thing of it. May I speak for the moment of my own experience? In the three years 1907, 1908, and 1909 the Treasury received from me £6,300 in the way of duty, and I received by way of assistance from them £1,387, so that the Treasury made a net profit out of me of, practically speaking, £5,000—not a bad business for the Treasury. At the present moment I have in store 30,000 lbs. of tobacco, which will be worth to me £750 and will be worth to the State £5.500, so that on the whole transaction the Treasury arc getting a good deal out of it, and I venture to suggest that they are getting rather more than a fair share. My noble friend behind me, Lord Denbigh, perhaps rather over-estimates what has been done for tobacco growing in Ireland. The Department of Agriculture in Ireland have done a great deal. They got expert opinion and all the information that it was possible to acquire, and the Treasury made an allowance for a time, and for a limited quantity of tobacco, of 1s. in the lb. off the duty. After a while—I think two years ago—instead of ls. in the lb. a definite sum of £5,000 a year was given to be divided amongst those who were experimenting over 100 acres in different parts of Ireland. The Treasury, I am sure inadvertently, got much the better of the growers by that bargain. They calculated that £5,000 a year was equivalent to the rebate, but they unaccountably forgot to take into consideration all the tobacco that was in bond at the time. The result is that the £5,000 a Year is not nearly the equivalent of the 1s. in the lb. rebate.


The amount of the grant was £6,000.


I thought it was £5,000, but it is immaterial to my argument. As far as I am personally concerned, I know by experience that the change from the rebate to the fixed sum reduced the grant that I received for the seven acres I am allowed to cultivate by exactly 50 per cent. Speaking again of my own personal experience, I get this allowance for seven acres only. Seven acres is quite sufficient to make a small experiment, but it is absolutely insufficient to demonstrate with any kind of certainty whether tobacco can be grown and cured and made a commercial success of. As a matter of fact. I have been growing for the last three years from twenty-five to thirty acres of tobacco, and if you spread the little assistance I have received over the whole of those acres it conies to something very small indeed—something less than 3d. on the lb. These experiments have been tried in Ireland now for some few years. I would like to impress upon His Majesty's Government that the experimental stage in no way can be said to be completed. We have demonstrated two facts—that you can produce a good article saleable at a fair price, whether of American tobacco or of Turkish tobacco; and that the crop is of immense value as employing labour.

As to the employment of labour, I would like to show how that has worked out with me. In 1909 I grew thirty acres of tobacco. Those thirty acres employed in planting and growing 59 men and boys and 4 girls—a total of 63; in harvesting there were employed 85 men and boys and 69 girls—total 154; and in grading and packing 35 men and boys and 29 girls—a total of 64. Your Lordships will see at once that an industry of that kind would be an enormous advantage in a purely agricultural district. The tobacco is sown at this time of the year. It is planted out in May, it is harvested after the hay is all got in, and the grading and packing goes on up till Christmas or even later. I would emphasise the great value of the industry, especially in the employment of girls who would otherwise get no employment at all. An agricultural labourer with two girls who can get work in this business practically doubles or trebles his income. As I have said, the experimental stage is by no means completed. It takes a long time to push a new article like Irish tobacco on the market. We cannot tell yet how far it can be profitably grown. In the first year or two expenses were very high. Naturally the expenses of cultivation and of curing tend to diminish in proportion as your hands get skilled, and in proportion also as you extend the area; and it is obvious that the proportion of labour diminishes rapidly as the area of cultivation is extended.

At present we get 2d. on the lb. Excise allowance, and I would like to impress on His Majesty's Government that that 2d. does not anything like make up for the great expense to which growers and rehandlers are put in conforming to the Excise regulations. There is a whole volume of very onerous Excise regulations to be complied with. A grower has to take out a licence, which costs him five guineas; he has to find security of £50 if he wants to grow an acre of tobacco; and he is responsible in the sum of £150 for every acre under tobacco in case the Excise regulations are not complied with. He has to keep most elaborate accounts and send in most elaborate returns. I am not complaining of the Excise regulations. I am sure they are necessary and right, and I would like to say from my own knowledge that the Inland Revenue officers do all they possibly can, consistent with their instructions, to avoid being inconvenient. But I do want His Majesty's Government to understand that complying with these Excise regulations is exceedingly onerous and expensive. I hope His Majesty's Government will look into that matter, because to the growers and the whole industry it is of absolute importance. I shall be glad, and Irish growers generally will be glad, to give the Department every assistance in investigating that case, and I am certain that it would then be realised that the present allowance of 2d. in the lb. is absolutely insufficient, and that a much more substantial sum should be given in order to recoup the growers and rehandlers the great expense they are put to in carrying out the Excise regulations.


My Lords, like the noble Earl opposite I am extremely sorry that my noble friend the President of the Board of Agriculture is not in his place, to reply to the Question on the Paper, but I will endeavour to do so to the best of my ability. From the earlier remarks of the noble Earl, Lord Dunraven, I felt considerable encouragement, but in view of the latter part of his speech I am afraid I must treat him as hostile as he came down to the same point as Lord Denbigh and asked for money.

I will first touch on the history of the matter. The growing of tobacco in Ireland was prohibited by Statute in 1660. In 1779 an Act was passed by the British Parliament allowing tobacco to be grown once more in Ireland. Prohibition was again enforced by an Act in the year 1831, by which time the industry had grown considerably and was being carried On at a very fair profit. The noble Earl, Lord Dunraven, stated that a great deal of skilled labour was involved in the carrying on of this industry, and I took considerable pains this morning to find out why there were no records of any kind of the method in which tobacco was grown between the years 1779 and 1831. Apparently no records were kept at all, but I am assured that the conditions were entirely different both as regards wages and the power to get labour. From the time when the growing of tobacco in Ireland was last prohibited in the year 1831 the question was not raised again until 1903, when Mr. Ritchie gave it his consideration, and, as the noble Earl knows, a considerable rebate was allowed.


Only on small quantities.


That is so. The concession allowed by Mr. Ritchie in the first instance was limited to selected growers on a limited area of about 100 acres. The principal growers are Colonel Everard and the noble Earl, Lord Dunraven. That went on till the year 1907, when Mr. Redmond's Bill was passed into law permitting tobacco to be grown again in Ireland. without restriction for commercial purposes. The Government then decided that the whole position of the industry was changed; they reconsidered the position, and in lieu of continuing the rebate, which had been granted for experiments only and which could not properly be granted in respect of tobacco grown for commercial purposes, they provided a lump sum of £6,000 a year. I should have stated that before the rebate was done away with the Department of Agriculture asked for an extension of time in which to carry out their experiments—I believe that was in the year 1906—and the Government allowed the experimental time to be continued until 1913. Therefore when in 1907 Mr. Redmond's Bill altered the whole position of the industry the Government agreed to provide a lump sum of £6,000 a year for each year until 1913, to be spent by the Board of Agriculture at their discretion on experiments in tobacco growing. The object of the change was to avoid the directly protective system of a definite rebate for each lb. produced, and it was hoped that the Department would spend some of the £6,000 in other ways—on grants in aid of buildings or plant and technical instruction. The experiment will expire with the disposal of the crop grown in 1913, and the Department of Agriculture, now charged with the duty of superintending it, will then be able to report finally to the Government on the commercial possibilities of the crop from the point of view of Irish agriculture.

I turn now to the figures which the noble Earl quotes as showing the "remarkable results" of the encouragement given to Irish tobacco, and which are by themselves misleading. The figures were supplied to Mr. Redmond by Mr. Hobhouse in the House of Commons on March 7 with the warning that in comparing them it should be borne in mind that on all tobacco grown in Ireland up to the end of 1909 a rebate of one-third the duty was allowed, while since that date the duty has been charged in full and a fixed grant of £6,000 a year has been paid to the Board of Agriculture instead; also that on April 30, 1909, the duties on Irish and other home-grown tobacco were increased. Mr. Hobhouse pointed out that the figures for 1909, therefore, are swollen by the increased duty, and that the figures for 1910 are still further swollen by the absence of rebate. Though the industry may be progressing most favourably, the figures given hardly meet the actual facts of the case.

The position taken by His Majesty's Government. in the matter has been clear and consistent from the start. On coming into office in 1905 they found that a certain rebate had been given to this industry in Ireland, and they decided to continue it. Had they not continued it there would have been a great deal of expense incurred by those who had actually started the industry in Ireland, and the Government were unwilling to put them to that unnecessary expense if it could possibly be avoided, always on the understanding that it was simply an experiment and not run for profit.

I pass now to the final point—the analogy between the case of Irish tobacco and the cultivation of sugar-beet. The noble Earl, Lord Denbigh, will recollect that in the debate in this House on July 17, 1906, he admitted that he regarded it as proved that. sugar-beet could be grown at a profit in this country, and he acknowledged then that the industry was not entirely in its infancy. In answer to Lord Crewe, the noble Earl pointed out that the growing of sugar-beet was one thing and the manufacture of sugar was another, and he wanted to have the possibility of manufacturing proved. In reply to that Lord Crewe said that the two things were not on an equal basis, because while it was more or less acknowledged that sugar-beet could be grown it was not acknowledged that tobacco could be grown. The whole point is this. The cultivation of Irish tobacco is an experiment altogther, and much as we should like to encourage all industries it is practically impossible to encourage industries which are not experimental. I am afraid that my answer will not be regarded by the noble Earl as at all satisfactory.

House adjourned at a quarter past Six o'clock, till To-narrow, quarter past Four o'clock.