§ 2. "That the duties of Customs payable under Section I. of The Finance Act, 1898, on manufactured tobacco shall, on and after the twentieth day of April, nineteen hundred and four, be increased, in the case of cigars, by sixpence per 1264 pound, and in the case of cigarettes by one shilling per pound, and the duties payable under the same section on unmanufactured tobacco shall, on and after the same date, be increased, in the case of stripped tobacco, by threepence per pound."
§ Resolutions read a second time.
§ First Resolution.
§ * MR. LOUGH,
in moving to reduce the duty to sixpence, said that this immense tea duty marked a stage in the fiscal development of the country which ought to be recognised by every means that the House could devise. The country was more agitated over this feature of the Budget than by anything else it contained, and the Chancellor of the Exchequer would certainly hear a great deal about the tax in the future. The right hon. Member for West Birmingham had alluded sneeringly to his "disinterested" opposition to this tax. He thought that the expression might 1265 have been dispensed with. So far as he knew his interests, they were not opposed to this tax, but were in favour of it. He desired to draw the attention of the Chancellor of the Exchequer to the serious nature of this tax, first of all, from the grower's point of view. In one of his earlier speeches the right hon. Gentleman had made an interesting comparison between the Budget of 1864 and that of the present year, but the one thing he omitted to state was that the tea duty in that year was brought down from 1s. to 6d. As a matter of fact, in the seven years ending 1864, the tea duty was reduced from 1s. 7d. or 1s. 9d. to 6d. What was the condition of things in 1864? The consumption of tea per head of the population was 2½lbs., and the total amount of British grown tea was represented by the 2,000,000 or 3,000,000 1bs. received from India. In Ceylon tea-planting had not started. To-day the British Empire produced 350,000,000 lbs. of tea per annum, and there was at least £30,000,000 of British capital invested in the industry. That was a striking testimony to the wisdom of the action of the Chancellor of the Exchequer in 1864. In few other countries in the world was the duty on tea so high as that now proposed. The right hon. Gentleman was suspected of leanings towards Colonial preference, but what a contrast was afforded by his actions and his theories! The Opposition generally were against giving the Colonies a preference, but they were not against giving them fair play, and that was just what this duty denied them. Instead of giving either preference or fairplay, the right hon. Gentleman was dealing one of the deadliest blows that could be given to a great Colonial and Imperial interest. As a result of the last increase of the duty the consumption of tea had been somewhat checked, and the right hon. Gentle-man's comment on that point was simply that the people of this country were "saturated" with tea.
§ MR. AUSTEN CHAMBERLAIN
I did not say that we could not expect a further increase in the consumption of tea. I said that whether the tax were increased or not you could not expect the rate of consumption to go on as fast as it had done in recent years. When asked "Why," I used 1266 a picturesque phrase suggested to me in saying that the consumption had reached the saturation point. You cannot wash in tea, and there is a limit to the amount of any beverage that a population can consume
§ * MR. LOUGH
said he was delighted with the right hon. Gentlemen's explanation. He thought that these mistaken ideas were clue to the fact that the right hon. Gentleman had not yet set up housekeeping. He could prove by a very simple case that there was still room for great development in the consumption of tea. When a family went away from home, it was usual to allow each servant left behind a ¼ lb. of tea a week. That was 13 lbs. a year; and vet the right hon. Gentleman suggested that the consumption must be checked at 6½ lbs. per head a year. In China the consumption of tea was 15 lbs. per head of the population. The Chancellor of the Exchequer ought not to have argued so lightly that there was no room for further development in the consumption of tea, and at any rate he could not expect growers to adopt that view. When selecting this particular tax the right hon. Gentleman alluded to one or two other articles which he said must be left out. and he mentioned sugar. With regard to sugar the Government had already given that trade a blow, and so they had decided to leave it alone in order that it might recover. Owing to the policy of the Government contained in the Brussels Sugar Convention the Russians had put a tax of l¼d. per lb. on tea from British possessions, and this had also affected the tea industry. He believed the Chancellor of the Exchequer had already heard from the Governor of Ceylon in regard to this tax, and he would also hear from the Government of India. This great and flourishing British industry which had been set up during the last forty years felt itself outraged at the idea of a huge tax of this kind. What they ought to do was, he would not say to give these Colonies or any part of the Empire a preference, but at least give them fairplay, which this tax denied them.
He would now turn to the effect of the tax in this country. The right hon. 1267 Gentleman ought to have a more kindly feeling for the traders engaged in distributing tea. This large class were engaged in collecting his revenue for him. If the right hon. Gentleman chose to get his revenue by indirect taxation, the least he could do was to be polite to these traders. He had hinted that the tea distributors were a very bad lot and that they lived by efforts to cheat the Chancellor of the Exchequer out of his duty when he was going to alter his tax. Of course the way out of that difficulty was not to alter the tax, for how could a trade be conducted when the Chancellor of the Exchequer was altering the tea tax almost every year, Tea was distributed by over 60.000 grocers throughout the kingdom. Through them this huge revenue of £6,000.000 was paid, and they would pay this £8.000.000 which the right hon. Gentleman now hoped to raise by this tax. The new rate of duty meant a complete alteration in prices, and he did not think the business of these people should be unnecessarily disturbed, but the right hon. Gentleman might at any rate speak sympathetically to them. In dealing with a great article of consumption like tea, these constant changes ought not to be made in the price, and some stable system should be observed.
He would, in conclusion, say something on the question from the consumer's standpoint. This tax would be felt in every household at morning and evening. It was possible to raise the country from one end to the other about a shilling tax on corn, but corn did not occupy a different position from tea in the diet of the people. Tea was just as important as bread. This House could always be excited about a shilling tax on corn, but why should they take this tax of 8d. per lb. on tea lying down? To the consumers, this additional tax meant that they would have to pay about 4d. per lb. more for tea than six years ago. The poor consumers generally bought tea at the same price, no matter what the duty was, and they would either obtain worse tea now or consume less than they did before. Therefore the consumers were being extremely badly treated. The hon. and learned Member for Waterford had pointed out that no less than £300,000 would be paid by Ireland 1268 in consequence of this additional 2d. per 1b. on tea. It was estimated by the Treasury that the revenue from tea in that country now reached £900,000 per annum. So this tax would make it £1,200,000, a totally ruinous burden. In Ireland the poorest inhabitants depended upon tea, because it was the cheapest drink, and therefore the Chancellor of the Exchequer by this tax had hit those who were most dependent upon this form of food. In Ireland they consumed 8 lbs. of tea per head of the population, and this tax, with the 2d. imposed in 1900. would place upon the people of Ireland an additional burden of 2s. 8d. per head per annum. In the case of a family of six this meant 16s. per annum upon some of the poorest families in the United Kingdom, and that was a very serious imposition. Therefore he thought the House ought to resent the action of the Government in this matter. His opinion was that the Government, by some economy in the expenditure of the great spending departments, might have avoided this additional tax. He begged to move the Amendment he had placed upon the Taper.
To leave out the words 'Eight pence,' and insert the words 'Six pence'—(Mr. Lough) instead thereof.
§ Question proposed, "That the words 'Eight pence' stand part of the said Resolution."
MR. SWIFT MACNETLL (Donegal, S.)
said if he did not intervene at this time, when such a tax was being placed upon an article which was an important part of the food of the people of Ireland, he should be altogether unworthy of his position. His hon. friend the Member for Islington had told them that about 86 per cent, of the tea consumed in this country came from our Colonies, and only about 14 per cent, from foreign sources. Under these circumstances it was very strange that the Government had decided to strike such a blow at colonial trade. Had he been so disposed in reference to this Budget he could have shown a glaring disregard for the poor and a desire to protect the rich. Every Irish Member except those Gentlemen who were the paid agents of the Government on the Ministerial Bench would vote 1269 for this Amendment as a protest against this tax. It they had an Irish Parliament which resolved by a majority of one that this tax should not be imposed the tax-would cease, but now when united Ireland protested the tax would be laid upon Ireland, and under such circumstances resistance to the laws of this country would not only be the privilege of Irishmen but it would be their duty. Perhaps the House would allow him to quote from a letter in reference to this tea tax which had been sent to him by one whom he might describe as one of the merchant princes in Dublin, who differed from him in all matters of politics. This merchant had told him that an increase of 2d. per lb. upon tea would mean to the poor in Ireland an increase of 4d. per lb. because in Dublin 90 per cent, of the tea sold was retailed at 1s.4d. per 1b. duty paid, which was just 1d. per oz. This extra duty would drive this tea out of the market, and the poor people would now have to pay 1¼ per oz. or 1s. 8d. per lb. When the tax on tea was raised from 4d. to 6d. per lb. it was done with many apologies, and the then Chancellor of the Exchequer promised the tea drinkers that it was only a war tax, and acknowledged that it pressed upon the poor people of Ireland most severely. His hon. friend who opened this debate had stated that the consumption of tea in the United Kingdom was 6½ lbs. per head of the population, but in Ireland it was 8 lbs. per head. In Donegal, which was one of the poorest districts in Ireland, the budget of a well-to-do peasant in the congested districts with a family of five would be about £23 a year, and out of that sum £5 10s. would be spent upon tea. He had seen the details of another budget where the man's income was £12, and out of that £3 went for tea. Many of those people were so poor that they were unable to buy ordinary bread, and they had to live largely upon Indian meal. When the right hon. Gentleman the Member for West Bristol imposed his tax on corn the Irish Members resisted it as far as maize was concerned on the ground that such a proposal would entail a tax on the food of the very poor in Ireland, and the right hon. Gentleman had the grace to take the tax off that article. He had little hope, however, that the Chancellor of the Exchequer would take this extra 2d. off the tea tax.
His hon. friend the Member for Islington had spoken of the effect this tax would 1270 have upon the poor consumers in England. Let them go into any of the abodes of misery in Ireland, and they would always find a teapot there whatever else there might be. Tea was the cheapest drink of the poor, and it cheered them without doing any harm, but now this drink was to be made almost dearer than whisky in order to produce £2,000,000 for the Exchequer. While the effects of adding 2d. to the tax would scarcely be seen in the case of the English people, it would produce ruinous results in the cottagers' homes in Donegal. It was a cruel, heartless, and shameless tax, and at another stage of the Budget the Irish Members would avail themselves of the opportunity of going into the whole question of the financial situation in Ireland, He had intervened in this debate simply for the purpose of protesting against a tax which would produce a state of things in his constituency bordering on starvation. It was a scandalous thing for this Government to take a course which would produce in the poorer parts of Ireland a condition of artificial famine, but the Government were inaccessible to shame or human feeling in these matters. At the beginning of last century Ireland had a Chancellor of the Exchequer of her own, and speaking in the House of Commons against the Union he told Mr. Pitt that the object the English Ministry had in destroying the Irish Parliament was that the power of the purse might be taken out of the hands of the representatives of the Irish people and put into the hands of an alien Parliament. He had expressed his feeling strongly in this matter, but he would be unworthy of his position if he did not protest in this House that money was worth nothing if it was produced from the blood and tears of the poor.
§ * MR. T. W. RUSSELL
said the hon. Member need not be alarmed about his vote on this tax. He had voted for an additional penny on the income-tax. He did not like it, but he thought that those who shouted for war ought to be made to pay for it. It was the only way to bring home to those gentlemen who clamour for expenditure every day the results of their views. But when it came to tea it was a wholly different thing. It was a tax that would go into every poor man's home in Ireland. It would affect the poor woman more than 1271 the poor man, and the poor woman was not represented in that House. He challenged any English Member to deny or contradict the fact that the House was laying a heavy burden of taxation upon the Irish people by means of this tax, and he said unreservedly that if they reverted to the position of things at the beginning of the last century—if they could have a separate Exchequer for Ireland like that which existed between the years 1800 and 1817—the Irish Government could be carried on, on the Scotch basis of expenditure, for £3,000,000a year less than it was. The Local Government Board of Scotland cost £20,000 a year, whereas in Ireland the Local Government Board cost £80,000and the judiciary of Scotland cost half of what it cost in Ireland. It was a burning shame that the House should insist upon putting a load of taxation upon these poor people which was ruinous to England and absolutely destructive of decent life in Ireland.
§ MR. HEMPHILL (Tyrone, N.)
said he protested four or five years ago against the raising of the tea duty from 4d. to 6d., and he wished to protest against this further imposition. He had been brought up in a school of economy whose first article of faith was "a free breakfast table for the poor." That article of faith was based upon the principles of humanity and justice, and it was an extraordinary thing that the Government which had involved the country in enormous debt for the purposes of an unnecessary and fruitless war should find no other means of raising revenue to meet their extravagant expenditure than by adding 2d. to the poor man's tea. He spoke on this question from the point of view of Irishmen, knowing that, from the failure of the potato and the time of the famine, tea had been one of the principal means of sustaining life among the poor of Ireland. It was the cup of tea which enabled them to swallow the yellow meal on which they were obliged to depend for subsistence. It would be perfectly impossible to use the yellow meal were it not for the help of tea. It was the women and children who would suffer most from this addition to the price of tea. The tea tax was increased four or five years ago as a temporary measure. It was a case of 1272 grinding the faces of the poor. The Chancellor of the Exchequer did not like to be reminded of these home truths, and he turned away in order to show indifference. His objection to the tax was not based on statistics, or fiscal or non-fiscal policy. It rested on the principles of humanity. This increase in the tea duty was an intolerable thing which would render the Government more unpopular than it already was throughout the length and breadth of the country. The attempt to raise £2,000,000 a year at the expense of the poorest class of the population would react upon themselves. The result would be that people would drink adulterated and deleterious tea, and he believed that at the end of the year it would be found that the 2d. increase would fail to produce the additional amount on which the right hon. Gentleman seemed confidently to rely.
§ MR. JOSEPH WALTON (Yorkshire, W.R., Barnsley)
said he wished to enter his strongest protest against the increase of the tea duty on the ground that if the Government had earnestly turned their attention to retrenchment in the national expenditure the addition would have been totally unnecessary. Last year, in a time of peace, the normal expenditure of the country was nominally £9,000,000 in excess of that of the previous year, but as the expenditure was under-estimated to the extent of £3,000,000, the expenditure last year was £12,000,000 in excess of that of the previous year. This year the country's whole financial condition was such as to demand every possible retrenchment of expenditure. They were face to face with a Budget which only provided a reduction of £1,500,000 on last year's expenditure. He voted against the 1d. increase on the income-tax because he believed it was unnecessary, and he would vote against the 2d. additional on the tea tax for the same reason. He opposed this additional imposition on another ground. It was a violation of the equitable principle of the fair distribution of taxation. When the 2d. per lb. was added to the tea tax they were told that it was essentially a war tax which would be removed at the earliest possible moment. Last year 1273 the Chancellor of the Exchequer was in a position to remit taxation to the extent of £10,500.000. During the war enormous increases of taxation had been imposed, practically in equal amounts as between the direct and indirect taxpayers. Why was not the remission last year given in the same ratio? Last year four-fifths of the £10,500,000 was remitted in favour of the direct taxpayer, and only one-fifth in favour of the indirect taxpayer, in the remission of the corn tax. Therefore, on this occasion, if additional taxation was necessary, equity required that the injustice inflicted last year should, at least, have been redressed, and that the indirect taxpayer should not have been called upon to pay an additional 2d. in the 1b. for tea. It would press hardly on the masses of the people.
§ * MR. CATHCART WASON (Orkney and Shetland)
associated himself with what had fallen from the hon. Member for Islington as to the injurious effect this tax would have on the tea growers of India and Ceylon. This was the only article on which it was proposed to charge duty in excess of the price of the commodity except of course, strong drink. Tea could be produced for about 6½d. or 7d. per lb. and less. That was a serious matter, both from the point of view of the grower and the consumer. Why was it put on? Was there no reason except that it was for the purpose of obtaining revenue He did not like to suggest reasons, but he was not sure that there were not other reasons. Wherever they found tea drinkers they found a temperate people. He knew this to be the case in Australia and Japan. He hoped that the result of putting on this tax would not be that people would be driven to drinking something else than tea. This was a Scotch question as much as an Irish one, and perhaps more so, because he was certain that in many districts of the Highlands and Islands, especially in parts of the country represented by the Member for Inverness, there were people living under circumstances of as great poverty as in Ireland. The people had the greatest difficulty in drawing a meagre subsistence from the soil, and tea to them was not only a necessary of life, 1274 but it was also their one luxury. They did not drink beer, and they never saw whisky. He thought the Chancellor of the Exchequer had done a cruel wrong and injustice to those poor people in putting on this extra tax. If more money had been wanted, it might have been got in the many ways that could have been suggested by the hon. Member for Islington and others without taxing this prime necessary of life, and also the one luxury of the poor. In the far North of Scotland they did not drink beer, or even whisky, at any rate in his constituency; and he felt that this tax would press very heavily on the poor; nor would the result be satisfactory to the Chancellor of the Exchequer, for the consumption would largely decrease. If the people could get tea as easily as intoxicating drinks there would not be the same amount of crime and drunkenness as at the present moment. He wished to express most emphatically the opinion that this was not at all a purely Irish question. Its general effect upon the poor would be most disastrous.
§ MR. J. A. PEASE (Essex, Saffron Walden)
said that as representing one of the poorest constituencies in the country he desired to associate himself with the protest that had been made against this tax. In his constituency there was no other industry but agriculture, and hon. Members who had any knowledge of agriculture must realise that in the county of Essex farmers had had a very depressed year, so much so that it was almost impossible for both the farmers and the labourers to make ends meet in their weekly budgets. When it was realised that the consumption of tea in the average household had increased during the last forty years from 2½ pounds to 6½ pounds, the severity of the tax on the agricultural labourer with a large family of five to seven children, who paid 2s. or 3s. a week of cottage rent and had no luxuries, would be understood. It meant a good deal if these poor people were to be deprived of a necessary of life. This was a tax which would oppress the poor; it was an intolerable tax, and could not be justified by anyone who thought out the whole subject of our fiscal system. He was opposed personally to indirect taxation. It 1275 was wasteful, and promoted extravagance on the part of the Government. In the North of England the average income of a wage-earner was from 25s. to 30s. a week, and by indirect taxation he paid practically an income-tax of 19d. in the £ to the revenue of the country. Many on his side of the House, and he hoped many on the other side, believed that taxation ought to be imposed on the people in proportion to their ability to pay it. If that principle was to be adopted it was simply preposterous that any individual should be compelled to pay an income tax of 19d. in the £ when rich people only paid one shilling. The millionaire was only taxed to the extent of 1 or 2 per cent, on his income, whereas the wage-earner was taxed to between 5 and 10 per cent, on his income. It was because he believed that this tax was unequal in its effect upon the poor that ho protested against it. There was no justification for an increase in the tax on tea, and it would retard the physical development of the poorer classes of the people.
§ * MR. TOMKINSON (Cheshire, Crewe)
said he also wished earnestly to protest against the proposal to increase the tax on tea. It was in all senses a graduated tax, but it was graduated in the wrong direction. This tax would be wholly unfelt by the rich and little, if at all, felt by the middle classes; it would be seriously felt by the better-to-do working people, and most severely felt by the poorest of the poor, who lived practically on bread and tea. When they had to pay 7d. for tea for which they had formerly to pay 6d., they would have to forego one-seventh of the tea they at present consumed and it must be seen, therefore, how unjust this tax was.
§ * MR. HUGH LAW (Donegal, W.)
said that when his right hon. friend the Member for North Tyrone used the expression "grinding the face of the poor" he heard some expressions of dissent from the other side of the House. He desired to say that the phrase was not at all too strong. It was generally admitted that the larger proportion of this tax would be borne by the poorest families and 1276 that the increased duties on tea imposed on account of war expenditure amounted to 16s. a year per family of six persons. Many hon. Members might say that that was a very trifling sum, but it should be remembered that a burden of 16s. must be heavy on families whose total income was from £12 to £20 per annum. This was a matter in which there need be no jealousy between different parts of the House; but Ireland had a sorrowful pre-eminence, inasmuch as, whilst this tax would fall heavily on all the poor in the United Kingdom, there was in Iceland a greater proportion of poor to the total population than in any other part of the United Kingdom. Apart from that, the Irish Members were in a very curious position in regard to this question of taxation. The English Government always called the tune, and they in Ireland were compelled to dance to it. The English Government pursued a policy against which the Irish Members continually protested; and when the day of reckoning came the Government turned round and said that liabilities had been incurred, and must be paid. The Irish Members had never lent themselves to sanctioning or calling for this expenditure, and they had a good claim to a hearing in this House when they protested against the whole system of this extravagant expenditure. It was a very strange thing that when they protested against the policy which produced this enormous expenditure, they were told sometimes that they were ungrateful, because some months ago they had obtained a loan out of the common Exchequer for a purpose which it was admitted was of Imperial urgency, and that in addition a free grant had been given them. But the liabilities for making good any losses consequent upon the working of the Land Act of last session rested entirely upon Irish funds. On all these grounds he joined in protesting most strongly against this proposal.
§ MR. AUSTEN CHAMBERLAIN
said the hon. and learned Member for Water-ford had given notice of his intention of calling attention to the special case of Ireland with reference to the Budget proposals at a later stage. It was true that that case had special reference to the tea duty, but it would be more 1277 convenient to discuss the financial relations of Ireland with England on the Second Reading of the Finance Bill than to scatter the discussion over each Resolution in turn, and he hoped hon. Members for Ireland would not consider it any lack of courtesy on his part, therefore, if he dealt at present with the question of the tea duty as it affected the whole of the United Kingdom. In dealing with these matters it was impossible to please all his critics whose remarks were often quite irreconcilable. For instance, the hon. Member for Saffron Walden objected to all indirect taxation, while other hon. and right hon. Gentlemen opposite declared not infrequently that indirect taxation was as necessary to any financial equilibrium as direct.
§ MR. J. A. PEASE
said he would like to explain that, while be believed all indirect taxation tended to waste and lack of economy, he admitted that it would be impossible for any Chancellor of the Exchequer to propose a Budget which would not. to a certain extent. tax intoxicating liquors and tobacco.
§ MR. AUSTEN CHAMBERLAIN
thought that neither the hon. Gentleman nor himself would live to see a Chancellor of the Exchequer propose a Budget in which indirect taxation was confined to intoxicating liquors and tobacco. [An HON. MEMBER: Why?] He would not be dogmatic, but if such a thing happened he fancied they would enjoy such long lives that the insurance companies would be almost ruined. There was nothing more difficult than to frame an accurate estimate of the proportion of their income which any class of the community was called upon to pay in taxation. But one thing was perfectly clear, and that was that the hon. Gentleman's calculations on the subject were wrong. The hon. Gentleman had calculated that a millionaire paid only from 1 to 2 per cent, of his income in taxation. Why, the millionaire's income-tax alone was 5 per cent. of his income. It must be remembered that the income-tax payer also paid indirect taxation in proportion to his expenditure. How much of the wine duties were contributed by the classes which did not come within the circle 1278 of the income-tax? At any rate they did not pay as much of these duties as he would wish. If he thought that by raising the wine duties he should get more money, he certainly would have made the proposal in his Budget. As a matter of fact, any further rise in the duties on wines would, by decreasing the consumption, result in a loss of revenue to the Exchequer. It is by no means a pleasant duty to have to impose new taxation. I am not insensible as to what is to be said against an increase in the tea duty. But it is not to the tea duty alone that hon. Members opposite object. Every tax conies under their censure. Earlier in the sitting the beer and spirit duties were described as an irreparable injury to the poor. Thro years ago it was said that the sugar duty was a tax on the poorest of the poor. Two years ago it was complained that the corn duty was even worse than the tax on sugar. To-night we are told that the tax on tea has nothing to recommend it over the tax on corn. The hon. Member for Islington has said, "Tea is just as important to the poor as bread." I remember another Member of this House was taken to task for having suggested that tea might be as important an item in the budget of the poor as bread. There is one observation of the hon. Member for Islington to which I must take strong objection. The hon. Member has said that I. at the instigation of mv right hon. friend the Member for West Bristol, have charged tea dealers with cheating or chiselling the revenue. I never made any suggestion of improper conduct against any gentleman in the tea trade. All I said in reply to the Member for West Bristol was that tea lends itself to forestalment, and that on this occasion I had been fortunate in preventing any forestalment. as I had taken precautions which would make it difficult for the trade to hold back the tea duty by making it end in August instead of the end of the financial year. No imputation could be cast on any one if they, knowing that a tax was to be imposed, withdrew tea from bond. It is a mere business matter, and the process is one which the hon. Member opposite would have pursued if he had obtained the information. But there would have been nothing dishonest in the matter, 1279 and there is no aspersion on the trade. The expression generally used by the trade is that the Chancellor of the Exchequer has caught us napping. One trader said that if he had had the slightest idea that there was going to be an increased duty he would have withdrawn thousands of pounds worth of tea, and the trade could have withdrawn millions of pounds worth in a short time. In desiring to get revenue it is desirable that there should be no great fore-stalment of the duty.
After all, the serious question is. what effect is this tax going to have upon consumption-is is really going to be a check? Many hon. Gentlemen who have spoken to-night have complained at least as bitterly of the increase made by the hon. Member for West Bristol when he was Chancellor of the Exchequer. What has happened? Has the consumption fallen in the past? I will not take a single year, for with regard to a particular year changes might have been anticipated. I will take a series of three years. In 1859–6l the average consumption of tea per head of the population was 2.685 lbs., in 1871–73 the consumption had risen to 4.01 in 1892–94 it was 5.45; in 1898–1900it was 5.95; and in 1901–3, since the new tax was imposed, it was 6.08 lbs. per head of the population. The consumption of tea. therefore, has steadily increased over periods of three years throughout the last forty or fifty years. Now let us look at other countries. The consumption of tea per head of population is 0.2 in Germany, 1.4 in Holland. 0.42 in Belgium. 0´4 in the United States, and 6.08 in the United Kingdom. These figures are in correction of the statements of the hon. Member for Islington, and they are subject to explanation in consequence of the habits of the people in reference to the consumption of coffee and other articles.
§ MR. AUSTEN CHAMBERLAIN
Then we are both agreed that the consumption of tea has progressed here very satisfactorily in spite of additional taxation and I believe it will not be reduced by the addition now proposed. The hon. Member for Islington is more sanguine 1280 than myself as to the capacity of our people to consume tea. I do not venture to calculate upon such a great increase in the consumption of tea in this country as he thinks possible, if his anticipations are realised nobody will be better pleased than myself. I treat this tax as one affecting both rich and poor in the United Kingdom and Ireland. It is not lightly that I ask the Committee to add to a burden which falls upon the poor, but no small part of our expenditure is directly for the benefit of the poor and the rest of it is for the benefit of rich and poor alike. It is with the mass of the people that political power rests, and the consideration of what the taxes ought to be cannot be separated from the question of who has control of expenditure and the purposes for which it is incurred. Taking these considerations into account, it is not unfair to make this addition to indirect taxation having regard to the circumstances of the year, and I do not think I could have made a wiser or fairer proposal than this increase on the tea duty.
§ MR. SYDNEY BUXTON (Tower Hamlets, Poplar)
said he understood that if all the Members on that side of the House had voted against the Government in the last division, the Government would have been defeated. Although he for one believed that the income-tax ought to remain, he thought they could do without it rather than with the present Government. On the question of the tea duty the Opposition were agreed. The Chancellor of the Exchequer had pointed out that there had been no falling off in the consumption of tea owing to the last increase of the duty. He would not estimate whether there would be any falling off in consequence of the present proposal, but if there was not, there would be a considerable addition to the privations of the poorest classes. It would practically deprive them of tea on one day of the week. He agreed that at the present rate of expenditure it was necessary to put large taxes on the indirect taxpayer. The object the Opposition had in view was to revert to the position they were in not many years ago when they were getting near a free breakfast table, and he hoped that before long public opinion regarding expenditure would so advance 1281 as to enable them to do so. The Chancellor of the Exchequer was proposing to add £2.000,000 of taxation to a necessity of life pecially for the poorer classes. During he past three or four years they had added a burden of £9,000,000 by the imposition of the tea, tobacco, and sugar duties, and during the past five years they had taken out of the pockets of the indirect taxpayers £40,000,000 sterling. That ought to give them pause. If the Government thought it necessary to obtain this additional revenue, the Chancellor of the Exchequer, instead of putting an extra tax on tea, should have put an additional penny on the income-tax.
§ * MR. CROOKS (Woolwich)
had listened with considerable interest to the speech of the Chancellor of the Exchequer, for his reply to the criticisms was an apology for not taxing those who could afford to pay. Why did he raise the question of wines? The Chancellor of the Exchequer said that if he thought he was likely to get a little more he would certainly have taxed wine. He did not attempt to do so because he was not likely to get much out of it, for the poor did not drink wine. Rich people drank wine, and wanted quality, and there could be no attempt to manipulate wine. The Chancellor of the Exchequer said the consumption of tea would be the same in the future as in the past, but he said nothing about the quality. Why should the poor always be compelled, if they wanted to drink, to drink muck? Why did he not have some consideration to a man's limited income. The eight-penny tax on tea would mean 4s. a year, taking the consumption at 6 lbs. per head of the population. That was a tall order out of a small income. The fact remained that the tax on tea fell disproportionately on the poor. There was a lot of talk about the amount the rich man had to pay, but he had the money with which to pay. He knew many a working man who looked at the piper to see the speeches of the Chancellor of the Exchequer on the Budget, and then examined his own exchequer to consider whether it was possible for him to invest a halfpenny to see 1282 what went on in Parliament or whether he should keep the halfpenny to buy a cup of coffee to keep himself warm when he went to work in the morning. No doubt it represented a small sum, but it represented all the difference between having and going without. If Members of the House could live the lives of some of these people, they would soon compel the Chancellor of the Exchequer to bring in a revolutionary Budget. A duty of 8d. per lb. on tea sold to the consumer at Is. 4d. per lb. was a serious matter and must have serious effects on the quality. He doubted if the Chancellor of the Exchequer would run the risk of drinking it. but the poorest of the poor had to drink it or go without. When they imposed these heavy duties they took it out of the poor man in quality. It was all very well to say that a little but was being taken off the millionaire at the same time, but he did not think that fact would be any cheering consolation to the working man. The Government had better by far have put a penny extra on the income-tax. The people who paid income-tax could afford it. When money was to be raised it was always the poor who were to be taxed. Why? Because they did not grumble. They were not heard in the House of Commons because they had no votes. If the right hon. Gentleman would substitute an increase of the income-tax for this tea duty, the popularity of Birmirgham would go up at least 50 per cent.
§ MR. O'MALLEY (Galway, Connemara)
said he also desired to enter his protest against this tax. It would press most heavily on his constituency and on the people in the West of Ireland generally. They were all very poor there. Thirty or forty years ago a tax upon tea would have made no difference to the people in the West of Ireland, for in those days tea was a luxury drunk only by the better class of people. But now it had become an absolute necessity; it was practically an article of food, of which they partook morning, afternoon, and evening. He would put it to the Chancellor of the Exchequer—was it fair that these people, struggling for 1283 existence, and always in a chronic state of poverty, should be called upon to pay this additional tax. They had no responsibility for the extravagance which had led to the need for increased taxation: they were not responsible for the additional expenditure on the Army and Navy. On the contrary, they were absolutely opposed to it. and therefore they were entitled to object to this extra duty on what was practically a necessity of life.
§ * MR. HUNT (Shropshire, Ludlow)
said the necessity for imposing the extra duty on tea was entirely the fault of those gentlemen who were so tied down to the rotten system of what they were pleased to call free trade that they had bullied the Government into promising that they would do nothing in the way of taxation, for the present, at any rate, which could possibly help either our own Colonies or our own working men. If it had not been for that the Chancellor of the Exchequer would not have had the slightest difficulty in raising the money without affecting the poor. At the same time, speaking personally, he would much rather have had another penny put on the income-tax than the extra twopence on tea.
§ * MR. WEIR (Ross and Cromarty)
said tea was now becoming a popular institution throughout the whole world. This extra duty of 2d. would be very keenly felt by the poorer working classes who had for years been able to get a very good tea for 1d. per oz. Now they would only be able to get tea of poor quality at that price. Why had not the Chancellor of the Exchequer sought to raise the money in other directions? Why had he not put a tax on the deer forests? 1284 Thus he might have made the millionaires find the necessary money. He might, too, have taxed the salmon fishings and thus have relieved the thousands of suffering poor.
§ And, it being Midnight, the Debate stood adjourned.
§ Debate to be resumed to-morrow.