§ MR. JOHN DILLON (Mayo, E.)
rose to move the following clause:—In lieu of the duties of Customs now payable on tobacco there shall, on and after the twenty-first day of May, one thousand eight hundred and ninety-seven, be levied and charged upon 746 tobacco imported into Great Britain or Ireland the duties following (that is to say):—
He said that the tax produced from tobacco which was a very elastic one, and which had been considerably increased in recent times, formed a. very large proportion of the revenue of the country. And not only was it a chief source of revenue, but it was also one of the main incidents by which a financial grievance was inflicted both upon the people of Ireland and upon the poorer classes of this country, because there was no tax which pressed so unfairly upon the working classes as this tax upon tobacco. ["Hear, hear!"] The three taxes which pressed most unfairly upon the working classes were those upon spirits, tea, and tobacco, and while many people had no sympathy with the unfair burdens cast upon the working classes by the tax upon spirits, because they considered that was a grievance which could very easily be remedied by drinking less spirits or beer, he did not think any similar contention could be maintained in regard to the tax upon tobaccos because, while tobacco was undoubtedly one of the main luxuries of the poor in this country, it was not by any means a luxury of an objectionable or deleterious character. ["Hear, hear!"] He was therefore justified in saying that, of all the taxes known to the fiscal system of Great Britain, the tax upon tobacco was that which most unjustly pressed upon the working classes, and more especially upon the population of Ireland. The Financial Relations Return, issued in the Session of 1896, showed that the sum contributed by England to 747 the revenue, under the head of the tobacco tax, was £8,400,000, by Scotland £1,100,000, and by Ireland £1,200,000, so that, out of a total of £10,700,000, Ireland under the tobacco tax paid one-eighth, or something between two and three times more than her fair proportion. [Cheers.] Now the history of the tobacco tax was a very curious one, and, when looked into carefully, the grievance which Ireland suffered under this tax would be found to be very much greater than it appeared at first sight. The tobacco tax was an old tax in the English financial system. Under Mr. Pitt's Bill of 1787 the duties were, for Spanish and Portuguese tobacco, 3s. 6d. per lb., and for tobacco from the colonies, the United States, and Ireland, 1s. 3d. per lb. Under that Bill Ireland, which was a tobacco growing country, was protected to the extent of 2s. 3d. per lb., and up to 1832 tobacco was profitably grown in Ireland, and Ireland enjoyed great advantages from the protection afforded her. In 1827 the duties upon foreign unmanufactured tobacco was 3s. per lb.; upon tobacco from the British possessions, 2s. 9d. per lb.; and upon manufactured tobacco and cigars, 9s. per lb. The production under the tax on an average for the next five years was, for Great Britain, £2,250,000, and for Ireland £600,000, so that for that period Ireland paid more than one-fourth of the amount paid by Great Britain. In 1834 a Commission of Inquiry was appointed by the Excise, which sat for a considerable time and inquired into the whole question of the Excise duties, and into the question of the duties on tobacco, and that Commission recommended a considerable reduction of the tobacco tax, and in a work by Sir Henry Parnell, which was then considered of great authority, he also advocated a reduction of the tax upon tobacco. In 1842 Sir Robert Peel equalised the duty on tobacco from all parts of the world. In 1863 Mr. Gladstone reduced the duty on manufactured tobacco, and increased that on unmanufactured tobacco. Colonel Dunn, Member for Queen's County, then spokesman for the Irish Party, protested against the alteration on behalf of the Irish people, because it bore unjustly upon them, and on account of the injury it would inflict upon what was then an important branch of industry in Ireland. It was advocated 748 on the ground of Free Trade, but Colonel Dunn pointed out that that argument could not be maintained. Free trade in tobacco was, he said, entirely nonexistent, inasmuch as the growth of tobacco had been prohibited in Ireland. Colonel Dunn said tobacco had been grown successfully in Ireland, and when the Act was passed to prohibit its growth the Government purchased the year's crop for £30,000. If the crop were then worth £300,000, it was probable that the tobacco industry would now have been a valuable one in Ireland. By the revision of the tobacco duty in 1863 an additional burden of £100,000 a year was imposed upon Ireland. This was another instance to be added to the many that had already been given of the unfair increase of the taxation of Ireland between 1850 and 1870. In 1877 Sir S. North-cote added another 4d. to the duty on unmanufactured tobaccos, and it was on that scale that the present duties stood. The proposal he had to submit was that the scale on manufactured tobacco should remain as at present, but that the duty should be reduced by 2s. in the pound on all kinds of unmanufactured tobaccos. By such a reduction they would, to a large extent, relieve the financial grievance of over-taxation under which the Irish people laboured, because it was through the instrumentality of the tobacco tax that the British Government managed to extract from the poverty of the Irish people more than their just share of contribution to the Imperial revenue. He recommended the reduction of the duty on unmanufactured tobaccos not only from the Irish point of view, but from that of the English working classes. The tobacco duty pressed unduly on the shoulders of the poorer classes. In the days of William Pitt the tax on cigars was 9s. in the pound. They were smoked by the rich. But in 1863, applying the principle of Free Trade to a case in which it had no application, the 9s. was reduced to 5s., while the tax on the tobacco used by the poorer classes was enormously increased. Mr. Ayrton, Member for the Tower Hamlets, said in the Debate in 1863 that when the growth of tobacco was beginning to flourish in Ireland it was stopped. Nothing was more illustrative or instructive in the history of the government of Ireland by England. When Ireland was allowed in 1779 to 749 grow tobacco, the reason given was that it was
Tobacco, manufactured, viz.: s. d. Segars the lb. 5 0 Cavendish or Negrohead. the lb. 4 6 Cavendish or Negrohead manufactured in bond the lb. 4 0 Other manufactured tobacco the lb. 4 0 Snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof the lb. 3 9 Snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof the lb. 4 6 Tobacco, unmanufactured, viz.:— Containing 10 lbs. of moisture in every 100 lbs. weight thereof the lb. 1 0 Containing less than 10 lbs. of moisture in every 100 lbs. weight thereof the lb. 1 4necessary to give every attention and encouragement to such produce and manufactures in Ireland as would not materially interfere with the commerce and interests of Great Britain.Tobacco was really the sole luxury enjoyed by the poor in Ireland, and yet, while they had reduced to one-half the tax on the cigars of the rich, they had More than doubled the tax on the tobacco of the poor. Moreover, they had killed this industry in Ireland by refusing permission to grow tobacco there. To the poor labouring man in Ireland, and to a large extent in this country, the only solace by way of luxury which he had in the world was a pipe of tobacco, and it was for this reason that he protested against this unjust tax. He begged move the clause.
Clause read the First time.
§ *THE CHANCELLOR OF THE EXCHEQUER (Sir MICHAEL HICKS BEACH,) Bristol, W.
I hope the hon. Member will pardon me if I do not dwell at any length on his observations as to the restrictions on the growth of tobacco in Ireland. I believe in the year 1886 the right hon. Gentleman the Member for West Monmouthshire gave permission for experiments to be made without restriction, and certain experiments were made, but I believe, after a year or two, they invariably failed. I can assure the hon. Member that, if at that time the experiments were not extended to Ireland, if any cases are brought under my notice where it is desirable to try them there, I shall be very ready to grant permission. I fear it will not have the effect imagined, but I say that much to show that it is my desire to treat the two countries equally in that respect. The him. Member has not proposed to repeal the tobacco duty altogether, but only to reduce it, so that it is obvious that if any restrictions are necessary as to the growth of tobacco in this country in order to maintain the present duty, those restrictions would be equally necessary if his proposal were adopted. The argument of the hon. Member is, first, that the duty on tobacco presses more unfairly 750 than any other tax on the working classes; and, secondly, that it is exceptionally unfair to Irishmen as being part of a general system of indirect taxation which, according to the Report of the late Financial Relations Commission, exacts a larger contribution from Ireland than is justified. The hon. Member did not, I think, produce any very strong arguments in favour of his first contention. I must say that, so long as it is necessary, as I believe it always will be, to retain indirect taxation as a part of the fiscal system of this country, I do not agree with his views as to the unfairness of a tobacco tax. ["Hear, hear!"] Perhaps I may be considered to be rather prejudiced against smoking, but I am quite prepared to admit that tobacco, although I think it a luxury, is yet more necessary to the poor, and especially to those who are ill-fed, than to those who are well fed and who have a higher position in the social scale. Therefore to that extent it does press more hardly, as all indirect taxation must press more hardly, upon the poorer classes. The general balance, I believe, is fairly set right by the system of direct taxation, and I do not think it would be easy, assuming that a certain sum is to be raised by indirect taxation, to substitute ally indirect tax for the tobacco duty, which would indict less hardship on the poorer classes. The lion. Member could trot, I think, say that if this duty could he looked at entirely by itself it is specially unfair to Ireland. I find that the produce of the duty per head of the population, according to the best statistics which are at our disposal, is in England 5s. 7d., in Scotland Ss. 5d., and in Ireland 5s. 4d. I would say that I do not think that those statistics, which, of course, were used by the Financial Relations Commission, can possibly be considered final, but they were the best that could be obtained without interfering with trade between the two countries. The produce of the tax per head of the population is increasing in England, largely, I believe, owing to the greater consumption of cigarettes in this country. The duty, though high, does not check consumption in Ireland, and is not, after all, high as compared with the tax on tobacco in Ireland before the Exchequers were united. I find that before the amalgamation of the Exchequers 751 the tobacco duty was 3s. 2d. on the pound. Of course the great bulk of the tobacco duty is paid by unmanufactured tobacco, and the result of the adoption of the hon. Member's proposal would be, I am informed, that the revenue would be reduced by about seven millions a year in order to save Ireland about £800,000. I must say that does appear to me a very wasteful method of dealing with the Irish grievance ["hear, hear!"] —and I do not think it is one which this Committee would care to support. Then, again, this seven millions would have to be found in some other way, and, as I have said, I do not believe it could be raised by any indirect tax which would press less hardly on the people. I am not prepared to find it by adding the sum of 3d. in the pound to the income tax, and therefore I am obliged to resist the proposal of the hon. Member. But if the tobacco duty were to be dealt with at all, I should have a great deal to say as to the method by which lie proposes to deal with it. He took the view that the duty on unmanufactured tobacco should be reduced because that would specially relieve the poor, while the duty on manufactured tobacco should be retained because that was the luxury of the rich. Well, that is true, no doubt, of a part of the manufactured tobacco—namely, Havana cigars, which I am afraid at present are very scarce indeed, but it cannot be said to be true of a very considerable quantity of the imported manufactured tobacco. Cheap cigars come to this country from Manila, India, Ceylon, and European countries, which are certainly consumed by the poor rather than by the rich. In 1863 the relation of the duty between manufactured and unmanufactured tobaccos was fixed by Mr. Gladstone, and what was taken into consideration was this, that the duty should be so fixed as to be fair both to the foreign and the home manufacturer of tobacco. It we were to reduce the duty on unmanufactured tobacco by 2s. 2d. on the pound, leaving the duty on manufactured tobacco alone, the result would be to enable the manufacturer of cigars in this country to sell his cigars at a price which would absolutely deprive the consumer of this country of the advantage of any foreign competition in the matter of manufactured tobaccos. I represent a constituency, the city of Bristol, 752 in which the manufacture of tobacco is a very profitable and a very great industry, and I have never heard from any of my constituents that it required the enormous amount of protection which the Amendment of the hon. Gentleman would give it against the competition of foreign cigars. In fact, if it were necessary for me to go at length into the matter, I could show that since 1863 the changes in the importation of unmanufactured tobacco have been such that the home manufacturer has been placed in a position of greater advantage over his foreign competitor than he held then. The hon. Gentleman spoke of the British and Irish manufacture of cigars as being a small matter. That is not so. It is a very large matter indeed. I am informed that an enormous quantity of tobacco is manufactured into cigars in this country, and that the total amount of cigars manufactured at home very largely exceeds the total amount of imported cigars. Unmanufactured tobacco used to be imported formerly in leaves with the stalks. It is now being imported without the stalks, which were a waste material in the manufacture, and therefore from every pound of unmanufactured tobacco imported the home manufacturer is able to obtain a larger number of cigars than he was when the stalks were imported with the leaves. There is one observation of the hon. Member with which I have some sympathy. He spoke of the high rate of duty on tobacco as compared with the value of the article. There is no doubt that the duty as compared with the value of the article is very high indeed. I have to some extent looked into this matter. At one time I was a little hopeful that I might be able to make some proposal this year in regard to it, but I found that it would require a very considerable remission of duty in order to reach the consumer at all. Tobacco is purchased by the poorer classes in very small quantities, and a mere remission of 4d. in the pound would never reach the consumer. It would be absorbed by the manufacturer and by the dealer in the article. Therefore, until the finances of the country can allow a large reduction in the duty on tobacco, it would not be wise to attempt it. But I will keep the matter before my mind, and if I find myself in a position to reduce indirect 753 taxation tobacco is an article on which I shall look with considerable favour, and all the more because the reduction would give some relief to the country the hon. Gentleman represents. ["Hear, hear!"]
§ MR. T. LOUGH (Islington, W.)
said the right hon. Gentleman had stated that before the single Exchequer was established for Ireland and Great Britain, the tobacco tax in Ireland was 3s. 4d. in the pound, but the Committee should remember that the tobacco tax was at the same time 15s. in England; and the average amount per head of the inhabitants was then not more than 2s. in Ireland, while now it was 5s. 4d. That illustrated the great difficulty in the argument that was sometimes heard in regard to those indirect duties. It was assumed because the amount of duty was reduced that therefore the section of the people who pay this class of taxes was benefited. That was not always the case. The Chancellor of the Exchequer often collected a larger amount from the individual when he reduced a duty than he had collected before. When only a small quantity of tobacco was used per head in Ireland, the people spent their money on something else. For instance, they used more meat than they were able to use now. They did not export the whole meat produce front the country then as they did now. They produced their own flour and oatmeal, and they did not bring in the cheap provisions from America on which they had to subsist now. The right hon. Gentleman the Chancellor of the Exchequer alluded to the fact that the large manufacturers of tobacco, in his constituency never complained of the duty on tobacco. But it must be remembered that the large manufacturers who paid large amounts of duty were interested in the maintenance of the duty for they made a profit out of the duty as well as out of the article. Therefore no argument could be adduced from the fact that the manufacturers were in favour of the duty. He agreed with the right hon. Gentleman that his hon. Friend the Member for East Mayo was taking a rather troublesome way to get a small relief to Ireland by making a proposal which would entail a great loss to the Imperial Exchequer. He was not in favour of indirect taxation, he believed that the indirect taxpayer paid more than he had a right to pay, 754 but he could not say that the Amendment of his hon. Friend would go very far to meet the Irish financial difficulty. The hon. Gentleman referred to the fact that the working classes in Great Britain paid a large portion of those taxes, more of it was paid in Ireland in proportion to the population. In a. very remarkable document furnished by Mr. Micks, the Secretary of the Congested Districts Board, it was shown that the average cost of tobacco to the people who lived in those districts in Ireland was about 1s. per week out of a total weekly expenditure of 6s. or 8s., and Mr. Micks declared that a great advantage would accrue to those people if the tobacco tax was removed, as in many cases it represented more to them than their rent. It could not be shown that in. Great Britain such a large amount was spent on tobacco per head, and, therefore, the grievance of the tax was greater in Ireland than in Great Britain. To his mind the best way to proceed would be to abolish the tobacco tax altogether in Ireland. That would mean a reduction in the revenue of about one and a quarter millions, whereas if his hon. Friend's proposal was accepted, to get this relief for Ireland, would mean a loss to the revenue of 7½ millions. Besides a much stronger case could be made out for relieving Ireland than it could be found for relieving Great Britain. He knew that a prejudice existed against taking off a tax for one part of the kingdom, while leaving it in force in other parts. The argument of his hon. Friend was that there was one common purse, and that any relief that was given should be given all round. No such doctrine prevailed in the Exchequer. There was a precedent in almost every year since 1817 for some tax being taken off one part of the Kingdom and not being taken oft the kingdom altogether. In 1825 there was a tax of nearly half a million remitted in Great Britain but not in Ireland; and from that year down to 1890, continual remissions of taxation were made in Great Britain alone. Thus the difficulty with which they were now struggling was created. This year the Chancellor of the Exchequer had given £800,000 to Great Britain for education, and nothing to Ireland; and the relief for agricultural rates granted last year was not extended to Ireland. Therefore, the precedents were all in 755 favour of giving relief to one island without giving it to the other. If that relief had in the past always been given to Great Britain alone, and not to Ireland alone., it was because there were six British representatives in the House of Commons to one Irish representative. There was a remarkable letter in The Times a short time ago from Mr. Mitchell Henry, recounting how, in the West of Ireland, the coarse tobacco which the peasants used to grow was seized by Revenue Officers and burnt on the spot. Of course, it would be urged that if the Tobacco Tax were remitted in Ireland and not in England, Custom House arrangements between the two countries would be necessary. But there would only have to be a Custom House on the English side, and as the examination would be for tobacco only, the cost would be small. There was no foundation for the assertion that the principle of Free Trade would be interfered with. In many parts of the Empire we had varying duties without any infringment of Free Trade. Under the present fiscal system, applying equally to both countries, the result was that Ireland was heavily taxed while Great Britain was very lightly taxed. He thought his hon. Friend who moved this Amendment would best consult the interests of his country by confining the demand fur relief to Ireland alone. Indeed, the Chancellor of the Exchequer had given a very strong hint in that direction. But he should support the Amendment in any case if it were pressed to a Division.
§ SIR JOHN LUBBOCK (London University)
said that the hon. Member was accurate in his statement that there had been a great many cases in which taxation had been reduced in Great Britain without any corresponding reduction being made in Ireland. The reason was that there had been so many taxes levied in Great Britain which were not levied in Ireland at all. From 1817 to 1821 the people of Great Britain paid on an average £20,000,000 a year in taxes which were not levied in Ireland.
§ SIR J. LUBBOCK
said that the hon. Member was a London Member. Did he think that the London people ought to help to pay £20,000,000 of taxation not levied in Ireland?
§ SIR J. LUBBOCK
said that that was one of the most extraordinary statements he had ever heard. He should have thought that there was as much poverty in many parts of London as in any part of Ireland. [Cheers.] Since the Union £700,000,000 had been paid by this country in taxes which were not levied in Ireland at all. He did not know what would satisfy hon. Gentlemen from Ireland. [Cheers.] The hon. Member for West Islington complained that the recent grant for education had not been extended to Ireland. He forgot that already the Imperial Parliament paid for the education of Ireland. [Cheers, and Mr. Loran: "The Irish taxpayers pay for it."] The hon. Member now advocated the reduction of the Tobacco Duty, but in his evidence before the Royal Commission it was the remission of the Whisky Duty which the hon. Member pointed to as the salvation of Ireland. The Chancellor of the Exchequer had shown clearly that the tobacco tax did not press more heavily on the people of Ireland than on the people of Great Britain. He himself greatly doubted whether we had the real incidence of this tax; but when hon. Gentlemen opposite complained they forgot that whereas every Irishman contributed 9s. to the Imperial Exchequer, every Englishman contributed a much larger amount. In the evidence before the Commission this remarkable fact about the tobacco duty came out—that in Ireland not only did they consume nearly as much tobacco as in England but tobacco of a better quality. The Irish also drank a better quality of tea than the English or Scotch. This seemed to show that the duties did not press unduly on them. The Chancellor of the Exchequer said that tobacco might perhaps be more necessary for a poor man who could not afford a full supply of food. But, though tobacco might give immediate satisfaction, a man who could not afford both had much better purchase good nourishing food. If the Chancellor of the Exchequer found himself in the happy position of being able to reduce 757 indirect taxation he hoped he would lower the duty on tea rather than that on tobacco.
§ SIR THOMAS ESMONDE (Kerry, W.)
said he had found from various Bet urns in the Library that up to 1861 England had remitted taxation of her own amounting, to 63 millions, but only £2,300,000 of Irish taxation. In 1819 the taxation per head in Ireland was 15s. 5d., and in England. £3 14s. 8d. In 1889 the taxation per head in Ireland was £1 13s. 5d., whereas in England it was £2 11s. 5d. That showed that Ireland had been a source of very considerable profit to the English Exchequer. Now it was high time that some remission of Irish taxation should take place. As regarded the tobacco duty some consideration ought to be shown to Ireland, because up to 1830 they were allowed to grow t heir own tobacco, and it was a source of wealth to the people of the country. The Chancellor of the Exchequer doubted whether tobacco could be grown in Ireland. He could inform the right hon. Gentleman that he had himself grown tobacco in Ireland.
§ SIR THOMAS ESMONDE
went on to say that tobacco was formerly grown in Ireland to a considerable extent, whereas it was never much grown in England. He really thought, the Government ought to do something towards encouraging the revival of tobacco growing in Ireland, and he hoped the Chancellor of the Exchequer would take off the taxes upon tobacco in that country.
§ SIR JAMES FERGUSSON (Manchester, N.E.)
demurred to the position taken. up by the lion. Member for Mayo in his objections to the taxation of the working classes. It should not be forgotten that the working classes were not taxed except in their use of articles of luxury. They were exempt from every branch of direct taxation paid by the wealthier classes. Their taxation was confined to articles which they used at t heir discretion, so that by moderating their luxuries they reduced their taxation. It was not at all desirable, now that the working classes had been so largely intrusted with political 758 power, that they should not contribute somewhat to the general expenditure. If they did so contribute they would have an interest in economy. It could not be said that the working classes were unfairly dealt with in being taxed in an indirect manner according to their own consumption and their own requirements. There was hardly any other country, including our own colonies, where articles of necessity were not taxed. In France and Germany, our competitors, the first necessities of life were highly taxed, thereby raising the price of those articles, not only in respect of imported articles but also of homegrown; and it was in competition with countries in which the working classes were so taxed that our people had to pursue their various industries. His contention was that it was not desirable nor just that the working classes should be entirely relieved of taxation. He did not believe they wished it. He believed they were perfectly ready to bear their fair share of taxation. He rejoiced very much that they were relieved from taxation on articles of the first necessity. He would remind the hon. Member for Mayo that at the time when tobacco was taxed at a lower rate in. Ireland the working classes then were obliged to pay higher rates for various articles that were protected by duties. Therefore he would express his belief that the tobacco tax was not a tax that called for reduction; and probably there was a large body of opinion in the House that the working classes, relieved as they were from burdens which pressed heavily upon them in times past, ought now to bear their fair share of the expenditure of the country through taxes in respect of these luxuries.
§ MR. T. P. O'CONNOR (Liverpool, Scotland)
expressed Ids surprise at the speech of the right lion. Baronet the Member for London University. He had spoken of the large remission of taxation which had taken place in this country. No Irish Member had ever grudged any reduction of taxation on the working classes of England. But their own case was entirely different. Their case was that while there had been this enormous remission of taxation in England, there had been an enormous increase of taxation in Ireland. And further their case was this—and it must 759 have given many migivings to hon. Gentlemen even during the Jubilee week, which he did not grudge them as Englishmen—their case was this, that this enormous reduction of taxation in England had been accompanied by an enormous increase in population and prosperity, while the increase of taxation in Ireland bad gone on side by side and step by step with the most enormous reduction of population ever known in the history of any country in any age. Let hon. Gentlemen try to get around the fact that in England during this reign the population had doubled while taxes had been abolished, but that in Ireland the population had decreased one-half and taxation had almost doubled. Any Gentleman, especially one who called himself a Liberal Unionist, who was supposed to be in favour of equality as between England and Ireland, who would get up and say that no case had been made out on the side of Ireland against the present system of taxation was really one of the most marvellous pieces of self-deception he had ever seen even in the Liberal Unionist ranks. The argument of his hon. Friend had met with two sets of criticism. It was said he was far too generous in proposing a reduction of taxation for England as well as for Ireland. Of course the difficulty he saw was that to repeal the tax for Ireland, and leave it operating for England would mean a Custom House as between the two countries. That, no doubt, was a matter which concerned Englishmen a great deal more than Irishmen, at the same time he did not think it was a concession they were likely to obtain, and his hon. Friend had to move by steps. A great deal had been said, especially by the Chancellor of the Exchequer, about the smallness of the relief that would be given to Ireland. He did not think £800,000 would be a small relief at all. He remembered that when they were discussing the Home Rule Bill brought in by the last Government of Mr. Gladstone, they had some doubts as to whether the financial proposals of the Bill were sufficiently favourable, and the able financiers responsible for the Bill told them that they had a free half-million; and if a free half-million was a matter of importance, the relief now proposed by his hon. Friend was surely worth having. 760 The hon. Member who last spoke laid down a principle none of them would be prepared to dispute—viz., that every class of the community should make some contribution to the taxation of the country, in order to bring home their responsibility for the administration of the country and its expenditure. At the same time, it must be remembered that when a country went to war the first class to suffer was the working class. They formed the majority of the rank and file of the army, and they were the first to feel the loss of employment which must come as the result of war; so that the burden fell primarily more heavily on those whose only capital was the wage they earned by their own right hand. As to tobacco being a luxury, personally he considered it an obnoxious indulgence, the fascination of which he had never been able to discover. But that was not the opinion of the majority of the inhabitants of the country, and he was convinced that tobacco in England, and still more in Ireland, was regarded among the working classes as nearly if not entirely a necessity. He therefore sympathised with any attempt to reduce its price.
§ MR. DILLON
said that when discussing the financial relations of Great Britain and Ireland, the Chancellor of the Exchequer triumphantly challenged the Irish Members to name a single tax that bore unjustly on the Irish people. It was in reply to that challenge that he had proposed a reduction of the tax on tobacco. He was criticised because he proposed to extend the same relief to the working classes of this country as it would bring to those of Ireland. He replied that they must endeavour to remedy this Irish grievance in every possible way. That was their platform. A financial system that was good for England, would never be got to suit Ireland. They could not successfully run on the same financial system, a poor agricultural country and a wealthy manufacturing country. What suited the one admirably would break the back of the other. That was their political creed, and he believed that time would prove that they were right. But they had been denied the right, and had been treated with ignominy when they had tried to remedy the Irish situation by establishing a differential system. They were told that the two countries must 761 be treated as one whole and not as two entities. He came forward, therefore, with a proposal based on that. He said, "if you won't apply a separate remedy, apply a general remedy." Then, when he accepted the Chancellor of the Exchequer's challenge and proposed to abolish a tax which pressed cruelly on the Irish people, lie was met with the statement:—Your proposal will make too big a hole in my Budget; the English are well off as they are— they don't grumble.That answer was only an illustration of the impossibility of the situation as regarded Ireland. Then the right hon. Gentleman compared London financially with Ireland. If ever an illustration could be given of the incapacity even of English Members of the highest ability, especially of financial ability, to deal with this Irish question, that certainly was one. It almost led one to despair. In politics all theories were overcome and dominated by practice and results. Whatever might be the opinion of the hon. Baronet the Member for London University, the facts were with them when they said that the existing financial system had robbed and plundered Ireland and had resulted in reducing its population by one-half, while it had plunged the remaining half into deeper poverty than existed 60 years ago. That was a situation which afforded a sufficient answer to the criticisms that had been raised. He knew that he had lain himself open to the charge of showing too much interest in the working classes of England. But that was a charge he was compelled to submit to, for they were obliged to raise this question in every shape and at every opportunity that offered. He himself did not consider it a fair matter of reproach if, in doing some measure of justice to the Irish people, they also applied a remedy to what he considered, even with all England's wealth, to be the unfair taxation of the working classes of this country. An hon. Member had said it was inexpedient and unjust that the working classes should be relieved of all burdens of taxation. He wanted to know who ever proposed such a thing? The fact was generally admitted that in the past the working classes had been made to bear an 762 enormously excessive burden of taxation in proportion to their resources; and what he proposed in this Motion was to continue one step farther that most beneficial tendency of shifting taxation from the shoulders of the working classes on to the shoulders of those who were infinitely better able to bear it. When hon. Members told him that in foreign countries the necessities of life were taxed, and that the burden of taxation on the shoulders of the working classes was much heavier than in this country, then he replied, "So much the worse for foreign countries." The unjust burden of taxation that now lay upon Ireland arose from indirect, and not direct taxation. If the whole of the taxation of this country were raised by direct taxation, Ireland would only have to pay something like one twenty-fourth. It was owing to indirect taxation that the proportion of Ireland was raised to nearly double. It was for those reasons that he moved the Amendment, which he should press to a division.
§ *SIR WILLIAM HARCOURT (Monmouth, W.)
I believe the Report of the Royal Commission establishes that indirect taxation levied in the United Kingdom bears much more hardly upon Ireland than upon England or Scotland. Of that fact there cannot be the least doubt. Indirect taxation bears more hardly upon the poor than upon the rich; Ireland is essentially a poor country, therefore I do believe that to a considerable extent the redress of the financial grievance of Ireland must be looked for in the reduction of indirect taxation. It is also to be looked for in the case of the poorer community in England in the same direction. You may have a state of things where, if you reduce indirect taxation, you must impose additional taxation of a different character. But that is not our case this year or last year. I ventured to point out upon the Second Reading of the Budget Bill that there was a considerable surplus, and that there was money available by which. the tea duty might be reduced by one-half. That would have been another way of appropriating money which was actually in the Exchequer and at the disposal of the Chancellor of the Exchequer, but which has been appropriated in a different manner. The reduction of the tea duty from 4d. to 2d. would have been 763 perfectly within the scope of the financial arrangements of this year, and I should have very much desired that to be done. We are told we are to have a new Financial Commission, which will solve the difficulties which leave not yet been solved. We have the great fact of what I consider the financial grievance of Ireland, which consists in the indirect taxation, and I, for my part, shall always be ready to welcome an opportunity of remedying the injustice by reducing indirect taxation. One of the greatest blessings of this country, not merely financially, but socially and politically, has been the manner in which the wealthier classes have been willing to accept a larger portion of the burdens of taxation than those to which they had been previously accustomed. We have seen in other countries—we have seen it in America—a refusal to accept this principle of increased direct taxation as a substitution for indirect taxation. I believe that unwillingness on the part of the wealthier classes to accept a just share, according to their resources, of the burdens and the increased burdens of the country is one of the greatest evils by which any country can be affected. ["Hear, hear!"] I believe one of the chief sources of the contentment which happily reigns in this country is due to the fact that the wealthier classes have been willing to relieve the poorer classes by increasing the direct taxation of the country and reducing the indirect taxation. ["Hear, hear!"] I concur with my hon. Friend below the Gangway in the view that the whole tendency of future finance ought to be in the direction of still further diminishing indirect taxation in this country, and so making the taxation more tolerable to the great masses of the people of this country and consequently producing greater contentment. [Cheers.]
§ MR. LEONARD COURTNEY (Cornwall, Bodmin)
thought the discussion had turned too much upon the question. between Ireland and Great Britain. The Motion had no reference to the mutual relations of the two islands, but it was a Motion for the relief of taxes which affected the inhabitants of the two islands. The real question did not lie between the inhabitants of one island and another, but between the poorer and the richer classes of the community. If 764 anything had been proved by the recent investigations of the Financial Relations Commission it was that the poorer classes of the United Kingdom, wherever found, paid too large a share in respect of the fiscal burdens which the national establishment required. Their defence as against the Irish remonstrance of injustice was not that too much money was not extracted from Ireland, but that the greater portion was returned to Ireland. If they had a large process of extraction alone, and did not look to what was spent in Ireland above what was spent in Great Britain, they should have to confess that relatively too much had been extracted from Ireland. They saw at once that a confession of that kind involved the confession that their financial system as it at present stood was unjust to the poorer classes. A system which, was properly balanced ought not to be unjust to any section of the islands, and why their system operated more severely in one island than in the other was because there were a larger number of poorer persons there. ["Hear, hear!"] These poorer persons were not more hardly taxed than the poorer persons in Great Britain. The man who bought whisky in Tipperary did not pay more in relation to his means than the poor wretch in Drury Lane who drank gin and whose means were the same. The hon. Member for East Mayo was moving in the right direction in wishing to amend the inequality of the burdens imposed on rich and poor, and he saw in the reduction of the tobacco duty a means of redressing a burden that pressed on the poor in Ireland and the poor in Great Britain also. The hon. Member thought a great wrong had been inflicted upon Ireland because the cultivation of tobacco there had been abolished. But experiments had shown that tobacco and beetroot for sugar could not be cultivated at a profit. The hon. Member objected to the relation between the duty on cigars and the duty on un-manufactured tobacco, and he derided the argument used in 1863 that the revision of the duty on tobacco was founded on the principles of free trade, as if there could be any question of free trade in reference to the production of a commodity which was forbidden in the United Kingdom. But the question of free trade was applicable to the taxation 765 of that commodity, and it was in the interests of free trade that the duty on cigars was reduced, so as to place it more nearly on an equality with the tax on tobacco generally. Cigars were made in this country of un-manufactured tobacco, and if there was a great difference between the duty on unmanufactured tobacco and cigars a premium was offered to the manufacturer of cigars, and Mr. Ayrton, a man of great ability, defended the interests of his constituency, which contained a large proportion of the cigar manufacturers of the United Kingdom, and fought against free trade in the interests of those engaged in the tobacco industry who worked in Whitechapel. The alteration of the tobacco duty in 1863 was made strictly in deference to the doctrines of free trade, and was done to prevent an unjust advantage being given to the manufacturer of cigars at home. The inequality of taxation between the different consumers of tobacco ought to be redressed, and Parliament had endeavoured to redress it by increasing the duty in favour of the consumers of low-priced tobacco. This was not a controversy between two islands, but between the upper and lower social strata. But the inequalities of taxation between the upper and lower social England than in any country in the civilised world, and were certainly fewer than in France or in the United States. But still we had not realised, what must be the aim of every financier, that the proportion of the contribution of every class of the community should bear a right relation to their means. The result of the Financial Relations Commission was an uncontrovertible demonstration of that fact. The Chancellor of the Exchequer had made his arrangements for the year, but the hon. Member for East Mayo might derive satisfaction from the fact that the Chancellor of the Exchequer had intimated that he had been considering the tobacco duty with a view to doing something substantial. For himself, he would rejoice if means could be found, without the imposition of fresh taxation, to gradually diminish and ultimately extnguish the inequalities of taxation which still existed and which were at the root of the complaints of the sister isle. ["Hear, hear!"]
§ *MR. T. P. WHITTAKER (York, W.R., Spen Valley)
said that Ireland was a spirit-drinking country, while England was a. beer-drinking country. In proportion to alcoholic strengths beer was not taxed as heavily as spirits, with the result that the poor man in Ireland, who took his liquor in spirits, paid more than the noun who drank beer.
*THE CHAIRMAN OF WAYS AND MEANS
reminded the hon. Member that the clause referred to tobacco, and not to beer or spirits.
§ *MR. WHITTAKER
remarked that the Chancellor of the Exchequer said no means were provided for making good the loss that would be involved if the proposal of the clause were adopted, and he was suggesting means that might be available. The money taken from tobacco duty should be levied on beer. In that way the inequality would be rectified. The Exchequer would take mere money from the Englishman and less from the Irishman. Early in the century beer was taxed three times as notch as spirits, and if they went back to the original tax on, beer they would greatly relieve the grievances of which Ireland complained.
§ Motion made, and Question put, "That the Clause be Read a Second time."
§ The Committee divided:—Ayes, 89; Noes, 289.—(Division List, No. 253.)