I beg to move, in Sub-section (1), to leave out the words,

"as respects sugar and molasses made from beet grown in Great Britain or Ireland (in this Section referred to as non-dutiable sugar and molasses)."

4.0 p.m.

We now come to the Clause dealing with the Sugar Duties. There are two Amendments on the Paper in the name of the party for which I speak, and we wish to see that the discussion on such Amendments that you may select does not eliminate the points which we want to raise. The effect of the first Amendment is to abolish the Excise duties on sugar, and the second Amendment is to leave out Clause 6 which raises the question of the special protection given to the growing of sugar in this country. The two questions involved are totally different. The two points we want to raise are, first, the abolition of the Sugar Duties in tato, and, secondly, the refusal to sanction this new special protection for home-grown sugar. I do not know what points the other Amendments raise, but from a hasty glance at them they seem to be protective in character. To the uninitiated this first Amendment would seem to be one which would indeed be lamentable as coming from the Labour party. It is, on the face of it, a case of the grossest protection. If the Customs duty were left in, it would be setting up a system of protection for refineries in this country such as has never yet been asked for even by the proprietors of the refineries themselves. I need hardly say that the Labour party in moving this Amendment have no intention of protecting home refined sugar. We are moving this Amendment, because we are perfectly well aware that, if we can get rid of the Excise, we can get rid of the Customs also, and thereby abolish the whole of these duties upon sugar. That is the intention of the Labour party—to abolish the indirect taxes upon sugar and thereby lighten the burden upon the whole of the consuming population of this country.

Every argument that has been used in favour of the abolition of the Tea Duty can be used in favour of the abolition of the Sugar Duty, and many other arguments. Not only is sugar the food of the people, and particularly of the children, but it is also the raw material of a very large number of industries in this country. Cheap sugar is the basis not only of human life, but also of a considerable amount of human industry in this country. I do not propose to descant on the advisability of abolishing the Sugar Duty, or to refer to the fact that under this wonderful rich man's Budget £61,000,000 comes off the direct taxes and only £5,500,000 off the indirect taxes. There are plenty of hon. Members behind me who will state the arguments in favour of the abolition of the Sugar Duties. All I want to do, in opening this Debate, is to make it clear in the first place that the intention of our Amendment is not protective, but is directed solely towards the abolition of the Sugar Duties. The arguments in favour of that I will leave to my hon. Friends behind me. No doubt when the Chancellor of the Exchequer comes to reply, his argument will be that he has not got the money. After four years' experience of this Government, we have come to the conclusion that the only way to make this Government economical is not to let them have the money in the first instance.

It might be of service to the Committee if you, sir, could indicate the next two or three Amendments that will be selected.

The next two Amendments in the name of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon)—in Sub-section (1), after the word "Ireland" ["beet grown in Great Britain or Ireland], to insert the words "and of a polarisation not exceeding ninety-seven degrees"; and, in Sub-section (2), after the word "paid," to insert the words

"and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in band, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent"—

are in order, and I propose to call them. Then the Amendment on Clause 8 of the hon. and gallant Member who has just spoken (Colonel Wedgwood)—to leave out the words

"having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article"—

will be in order, as will also the first two Amendments on Clause 3—to leave out paragraph (b), and, at the end of the Clause, to add the words

"Provided, however, that the Entertainments Duty within the meaning of Section one of the Finance (New Duties) Act, 1916, as amended by this Clause, shall not be deemed to extend, and shall not apply in the case of any exhibition of a cinematograph film or films generally described as a 'trade show' where such exhibition is mainly or primarily attended by persons to view such film or films for the purpose of trade."—

but not the last Amendment—at the end of the Clause to add the words

"(2) The Entertainments Duty payable under Section one of the Finance (New Duties) Act, 1916, and Section eleven of the Finance Act, 1918, where the payment for admission to any entertainment does not exceed twopence halfpenny, shall cease to be payable as from the fifteenth day of May nineteen hundred and twenty-two."

Are we to understand that the Entertainments Duty will be discussed on these Amendments to Clause 9 or on the new Clause standing in the name of the hon. Member for West Leyton (Mr. Newbould)?

Clause 9 is a purely declaratory Clause, and no Amendment which involves substantive changes in the law will be in order.

It seems to me that the Amendment does not at all raise any discussion upon the general efficacy of the Sugar Duties. The whole point involved is that while the Clause proposes to exempt from Excise Duty sugar which is made from beet grown in this country, the hon. and gallant Member proposes to exempt from the Excise Duty sugar made from beet grown in other countries. The Amendment does not deal in any way with sugar as a whole, but purely with sugar made from beet. Therefore, the Amendment does not seem to me to raise the large question that my hon. and gallant Friend proposes to discuss. Accordingly, I shall deal with it as it stands and with the necessary restrictions which are imposed by the Amendment itself. I can reply to this suggestion almost in one sentence. If you exempt from duty sugar which is made from beet grown in other countries, it is perfectly obvious that you destroy the whole intention of the Clause itself. You would then encourage the importation of beet from other countries in order that sugar may be made from it to compete at an unfair advantage with sugar grown in other parts of the world. I cannot imagine that any seriously-minded Member wishes to bring about that particular result, and, whether the proposal which we make in this Clause be bad or good, at least the proposal which my hon. and gallant Friend makes would be of the greatest possible detriment and injury to the sugar industry in this country. It would also have the effect of destroying a considerable portion of our revenue—not the whole £35,000,000 which he is anxious to get rid of—at present obtained from sugar, and, accordingly, on these two grounds, I would ask the Committee to reject the Amendment.

The Amendment has certainly left some of us who are not so familiar with the procedure of the House in quite a quandary as to whether we can debate the Sugar Duties, or merely the point raised by the Chancellor of the Exchequer as to the subsidies to British-grown beet and the sugar industry. I have no desire to depart from the ordinary course of procedure, but, so far as the Sugar Duties are concerned, I think I can safely say that there were many manufacturers and refiners in this country who were looking forward to a reduction. I remember, when the Budget was about to be introduced, receiving from a firm in this country a wire which I may be permitted to read. It was as follows:

"Rumours here that Sugar Tax will be reduced, to operate on some deferred date. This would be serious mistake for everyone. Am prepared for reduction being effected from to-night. If deferred all the great inconvenience of preparation for reducing stocks, etc., will have to be repeated."

I think I must rule on this Amendment that the discussion will have to be confined to the distinction between Excise Duty on sugar grown at home and Excise Duty on sugar imported in this country and used for the purposes of manufacture in this country.

This Amendment quite clearly goes to the root of the whole of the Sugar Duties as we know them. If we carry this Amendment, the Sugar Duties fall to 'the ground. Are we not therefore entitled, in arguing in favour of this Amendment, to show that the Sugar Duties as a whole are bad, and that therefore those who are voting for this Amendment are voting against the Sugar Duties.

If it be for the general convenience of the Committee to take a general discussion on this Amendment, I am willing to acquiesce, but that discussion must not be repeated. If I allow a general discussion on the Sugar Duties, then, although the matter of the Customs Duty might be divided upon, the discussion could not be repeated. I can only allow a general discussion now on that ground.

We put this Amendment down in this form in order to get the discussion taken when we should be in the House. We have a conference next week at Edinburgh, and we shall be mostly away. We wanted a discussion now, when we can take part, rather than later, when we shall not be able to be here.

Is not the Amendment a direct negative of the Clause? If the Amendment were carried, the Clause would read:

"The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland and (except as regards goods in respect of which the said duties have been paid) the Excise drawbacks and allowance under the said Section shall cease and determine as from the commencement of this Act."

That is exactly what the Clause does. This is a direct negative to the Clause, and should be brought up on the question that the Clause stand part of the Bill.

No, I think not. The immediate effect of the Amendment is to extend the operation of the Clause to all manner of sugar as regards Excise. It is in order if argued on the limited issue. If the Committee are of opinion that it would be convenient to take the general discussion now, I am willing to allow it.

The words at the beginning of the Clause are

"The duties of Excise chargeable under Section nine of the Finance Act, 1918, in respect of sugar and molasses made in Great Britain or Ireland."

Those words are still left in, and under those circumstances the only result of leaving the words out is that the duties in respect to sugar and molasses made in Great Britain and Ireland shall cease and determine, and that is really the effect of the Clause.

I think not. I read it otherwise. If the right hon. Baronet is right the words "as respects sugar and molasses made from beet grown in Great Britain or Ireland" would be meaningless. I do not think they are meaningless, and I think the hon. and gallant Gentleman was fully aware of that when he asked the Committee to disallow any possible taint of Protectionism.

I hope we shall have an opportunity later of discussing the question of the Customs Duty on sugar apart from this particular question of sugar produced from beet grown in this country. It can only be discussed on a new Clause, and if we attempt to discuss it here and now, on the mere question of beet sugar versus sugar produced from any other source, we shall not have a satisfactory discussion. I hope we shall keep this Amendment to the question of beet sugar versus any other kind of sugar.

If objection be taken to having a general discussion now, I am bound to rule rigidly according to the Rules of Order.

Is it not a fact that you have ruled out my Amendment on the Sugar Duty because it was appended to a Clause which dealt with beet sugar and not with other sugar?

No. The ground on which I ruled it out was that this was a Clause which dealt with Excise and not with Customs. I only suggested a general discussion because it might be for the convenience of the Committee, it being somewhat difficult to discuss Excise Duty without the corresponding Customs Duty. As objection has been taken, I feel bound to rule narrowly on the matter that the discussion must be confined to.

In that case I ask leave to withdraw the Amendment.

I beg to move, in Subsection (1), after the word "Ireland" ["beet grown in Great Britain or Ireland"], to insert the words "and of a polarisation not exceeding ninety-seven degrees."

This Amendment is intended to help the Chancellor of the Exchequer to get a little more revenue. Its object is to confine the experimental stations which have been organised in this country for the production of sugar from beet to the manufacture of raw sugar. The sugar refining industry in this country is one of considerable magnitude and highly specialised, and gives a large volume of employment to a great number of people. If the concessions which are contemplated in this Bill are given to these stations engaged in the manufacture of sugar from beet it will tend to deprive the sugar refiners of a considerable proportion of their activity and will inflict considerable injury upon the large number of people engaged in this industry. Up to the present the beet sugar industry has been in receipt of a subsidy of 6s. 2¾d. per cwt. It is now proposed to increase this subsidy to 25s. 7d. per cwt. Of course, the Minister of Agriculture, whose devoted loyalty to the farmer is becoming one of the assets of our public life, says quite cheerfully, "We are going to increase this subsidy from 6s. 2¾d. to 25s. 7d. a cwt," and he paints a beautiful picture of the wonderful achievements in the future of these sugar factories. But the right hon. Gentleman ought to remember, in so cheerfully subsidising these experimental factories at the expense of the British taxpayer, those who are already employed in the sugar refining industry and those enterprising people who have invested large capital in sugar refineries. The deficiency at Kelham in the year ending 31st March, 1922, as shown in their revenue account, was £103,509, and what the Committee is asked to do is to support a concession which reduces substantially the loss incurred in this experimental working. If, as a matter of fact, the Government had given the additional 19s. 5d. a cwt. subsidy which is now proposed in the Finance Bill to this factory, it would have been an actual loss last year of 263,000. Is it reasonable or sane public finance to spend money in that way at the expense of the taxpayer in order to prop up what is at best a purely speculative enterprise? I have been associated most of my life with agricultural experiments. I had a great deal to do at one time with the promotion of sugar beet growing, but I would be no party to the British taxpayer being invited to put his hand in his pocket and pay out to the tune of £60,000 or £70,000 a year in order to maintain experimental stations, of which no one can say they can work on a properly organised commercial basis.

The actual subsidy given under the existing arrangement to Cantley last year was £26,700. The actual amount of subsidy proposed to be given to this industry is considerably in excess of the value of refined sugar without the duty, and all we ask is that these experiments may be continued, but continued by limiting their work to the production of raw sugar. My proposed 97 degrees of polarisation simply indicates that the sugar produced within that limitation shall be what is known as raw sugar. I do not want to discourage these people from making the trial, but I do not want their experiments to be conducted at the expense of another class of the community who are already doing very successful and valuable work, and I suggest that this Amendment ought to be embodied in this Clause, and the operation of these beet sugar experimental factories be limited to the production of raw sugar. Every Member of the Committee is all for the encouragement of agricultural development, but it ought to be encouraged upon lines which would not inflict an unfair burden upon the taxpayer, and do injustice to a considerable section. Then look at the position in which we are placed with regard to our own Colonies. If this subsidy, as contemplated in the Bill, is given to the sugar beet factories, you inevitably place them in unfair competition with our own Colonies, which we are always proclaiming our desire to help. My hon. and gallant Friend who has just come back from the West Indies will appreciate the significance of that observation. I do not think we ought to adopt any method of subsidy which would inevitably put us in conflict with our own people overseas, and I suggest to my right bon. Friend who is so desirous of saving the finances of the country, and so anxious to conduct the public administration at a minimum of expense, that here is an opportunity of preventing waste of public money on an enterprise which, at all events, up to the present has given no evidence of achieving success.

While agreeing with a great deal which has fallen from my hon. Friend, I do not think he has explained very fully why he would select 97 degrees of polarisation. I believe, in regard to Canadian and West Indian sugar, the figure is 98, and this is the first time I have known the figure of 97 given in dealing with this matter. I do not understand what is the precise point of fixing 97 degrees as the test of what is raw sugar and what is manufactured sugar, which I understand the hon. Member wishes to differentiate by this Amendment.. He thinks that, up to a point, we are justified in giving special assistance to the production of raw sugar from beet grown in this country, but that we should not encourage artificially and specially those people who are producing the raw beet sugar by going into a further process quite apart from their original process of producing something which is now produced from raw sugar imported into this country from the West Indies into a manufactured article. With that object I understand this Amendment has been put down. But whether he is right in fixing 97 degrees I very much doubt. I hope the Chancellor of the Exchequer will satisfy us on that point, because I know my friends in the West Indies are a little apprehensive on points of this kind. They have had experience of the introduction of figures of this kind in the working of the Canadian agreement, and they would like it satisfactorily cleared up that this fixing of 97 degrees is not a new departure in the making of a new standard of quality which may necessitate them in their operations changing the whole of their methods of manufacture.

This Amendment has given us an opportunity of discussing the subsidy which is being paid to Kelham and Cantlay. I am not prepared to give an affirmative or a negative answer to the question put by the hon. Member for Stafford (Mr. Ormsby-Gore). I cannot speak from the refiner's point of view. So far as the subsidy to the Kelham and Cantley factories is concerned, there is a consumer's point of view as well as a. taxpayer's point of view. A few days ago several of us bad the privilege of meeting the Chancellor of the Exchequer in his palace, and we attempted to put the position, so far as we thought it advisable, as to the complete dropping of the subsidies to these two factories. Our strong protest as consumers and as taxpayers is based on the fact that the proposed increase of subsidy is from 6s. 2¾d. per cwt. to 25s. 8d. per cwt. That amount is too great. We claim, first and foremost, that there cannot be any argument that can be put forward that would justify the attempt of the Government to sub- sidise this industry, We are living in days when economy is the watchword, and here is an opportunity for the Government to save money. It will not be a hardship upon those involved in the industry, but will give these people an opportunity to use their genius in order to increase their own industry, so that there will not be any claim upon the taxpayers of this country.

As taxpayers we consider that it is essentially wrong to give such an inducement to Kelham and Cantley to continue making this sugar. The deficiency on 31st December, 1922, amounted, roughly, to £104,000, which has to be made up out of the country's revenue. Can my right hon. Friend say that the time is opportune for the spending of such a vast sum of money? He may say that it has a tendency to increase employment and to encourage industry that shall have a British basis. If he is going on these lines of giving subsidies to one particular industry he can no longer justify his action in refusing to give a subsidy to any other industry that asks for it.

I do not propose in dealing with this Amendment to discuss the whole question of policy, because I do not think it arises upon an Amendment which is confined to the refiners' interests. Accordingly, I do not propose to give to my hon. Friend the reply which he would expect that in courtesy I should give to him. I should imagine that he could bring forward his argument upon the Motion that the Clause stand part.

As I understood the speech of the Proposer, he wishes to qualify the reduction of the Excise Duty on the ground that the relief is excessive. I hardly see that I can rule out the argument as irrelevant.

I am desirous of concurring in your ruling, and am anxious to meet the statement made by the Chancellor of the Exchequer. He generally attempts to meet us somewhat fairly, and I try to meet him on reasonable grounds. I thought that this Amendment gave us an opportunity of raising the question of the subsidy. Those who are familiar with the industry at Kelham and Cantley will remember that so far as Cantley is concerned, in one part of its history it only started in 1912, and after three years working it proved a failure and was closed down. It was reopened in 1920, on the ground that a preference was given to it in the form of a subsidy by the Government. At the present time Cantley is barely paying its way, even with the subsidy. If Cantley cannot make a profit and make ends meet, even with the gift of 6s. 2¾d. per cwt. upon its production, it should be closed for a second time. It not good business for the taxpayers to carry the shareholders of Cantley upon their backs. When we have proposed Amendments with the object of promoting social reform and to removing many difficulties with which the working classes have to contend, the first argument of the right hon. Gentleman has been that we cannot afford the money; that it would amount to a subsidy, and that industries must stand upon their own basis. Is my right hon. Friend prepared in this case to let this industry stand upon its own basis, without subsidy? He will probably say that he is prepared to support British enterprise, and British initiative and British capital. Is he aware that many of the shareholders of Cantley are Dutchmen? If we are to enter into the question of giving the subsidy for British enterprise, we ought to say that where British money is taken from the British taxpayers it should go into British avenues, in order to encourage British trade.

What is proposed this year means that Kelham and Cantley will receive in subsidy an amount which is more than double the value of the sugar that either of these factories produces. The subsidy that the British taxpayer will have to find will be a greater amount than the total value of the sugar produced in these factories. That is extremely bad business, to say the least of it, it is bad statesmanship, and I appeal to the right hon. Gentleman to reconsider his position in the matter. I cannot speak for the refiners, but I am informed on good authority that the English refiners to-day are melting what is known as Cuban raws. These raw sugars, which are grown in Cuba, are conveyed to the refineries in the United Kingdom, and they are offered upon the market, after being refined, at the rate of 22s. 6d. at the door of the refinery, and yet you are offering a subsidy to these two factories at the rate of 25s. 8d. per cwt. How can business be conducted in that way?

Is the subsidy 25s. per cwt., or 25s. per ton? One speaker has mentioned one figure and another has mentioned another figure.

It is 25s. 8d. per cwt. The gift on last year's production at Cantley of 4,300 tons of sugar amounted to £80,000, raising the total gift to Cantley, based on last year's production, to the large sum of £114,000. The position at Kelham is slightly different from that at Cantley. At Cantley the private shareholders benefit or suffer according to the trade profits which are made, but at Kelham there is a different situation. The private shareholders, au matter what happens at Kelham, are entirely protected and safeguarded until 1930. Their 5 per cent. interest is entirely safe until that time, and it has to be drawn out of the revenue of this country. All the losses that they are compelled to deal with at that place fall upon the taxpayers. If Cantley has cost the taxpayers £114,000, what have we to hope for if the desire of these people to establish 50 factories is realised? We shall want a new Chancellor of the Exchequer to secure the revenue, or at some future time we shall have a Chancellor of the Exchequer telling us that he will have no Sinking Fund for that year. We cannot go on in this way. It is not sound business. My right hon. Friend may say, "What about the men who will be thrown en the streets? What about the blow to the agricultural industry"? I admit that those are excellent points, but when they are examined and analysed he will find that much more good would be done and more benefit would be yielded to those who are engaged in the industry by setting up an industry that can be more fruitful than the one on which the subsidy is granted. I appeal from the consumers' point of view, and particularly from the taxpayers' point of view, that the right hon. Gentleman should reconsider the position, and that he should allow this industry to stand upon its own legs. If you are to subsidise these industries you must subsidise others. If the right hon. Gentleman wants to end the subsidies, he must end them at the earliest possible moment.

I think that, my hon. Friend is wrong in some of his assumptions respecting the Cantley factory. Neither Cantley nor Kelham has received anything as yet. This proposal cannot be operative until this Bill is passed. I gather from his observations that he was of opinion that the Cantley factory had already received a subsidy from the State. The Amendment before the Committee was obviously put down in the interests of the refiners. They are naturally apprehensive. For my part, this seems to imply a confidence in this new industry, which is not traceable in my hon. Friend's speech, because unless the industry does develop on very large lines the interests of the refiners will not be affected. It is true that if the industry does develop on the lines that are now projected, and if it becomes a big, industry, of necessity the interests of the refiners will be affected adversely. There is no secret about it. This Committee requires to know the facts. Under the new processes which are now in operation at Cantley and Kelham refining is carried on as part of the general operations. It is a continuous process. You make and refine sugar in a modern sugar factory. It is obviously most uneconomic—this is apart from the particular merits of the policy—to convey beet to the factories and restrict the manufacture to raw sugar, and then have to transport the raw sugar to a refinery, refineries in this country, being mainly situated at a port., because obviously they have hitherto dealt exclusively with the imported raw sugar.

My hon. Friends who represent the refiners are entitled to be apprehensive, in the event of this home-grown industry developing, that their interests may be affected. It will be a matter of slow and gradual development. Nevertheless, they are entitled to take the fact into consideration. On the other hand, looking at the matter from a broad point of view of the economic conduct of an industry, the application of the Amendment would be a most undesirable thing. I would simply say to them that the prospects, even if much more hopeful than they are now, are such that they need not cause the present generation of refiners serious alarm. There will still be plenty of raw sugar in the country for the refiners to work on. In fact, I do not see that that part of the business will be materially affected for a number of years.

With respect to the remission of duty in the case of the factories at Cantley and Kelham, of course this does raise a great question of policy. I am appreciative of the way in which it has been introduced and debated in this House. For my part, I have long approved the policy. It is one that has been adopted intentionally by Parliament. I was a member of the Sub-committee of the Reconstruction Committee of the Government, presided over by Lord Selborne, which recommended to the Government that an experiment should be carried out in the growth of sugar beet in this country, and the manufacture of sugar from the beetroot. Ultimately the Government decided to assist a number of private individuals in the carrying out of such an experiment. Now it has been proved so far, as I anticipated is always the case in a new industry, that you must have a number of years' experience before you reach economic production, but we have at least proved this. One of the earliest objections which we used to encounter was that the soil of this country was not suitable to the cultivation of sugar beet. We have proved on the contrary that sugar beet is grown in this country equal to, and I believe better than, that of almost any other country in the world.

Moreover, the growth of sugar beet is a real help to agriculture. You introduce into the. rotation a crop which is profitable to the farmer. I do not profess to be an expert agriculturalist. I have made many speeches on agriculture, and perhaps because of my limitations of knowledge I have preferred to speak with greater authority than others who have more wider and intimate knowledge, but no one aware of the facts will dispute that in the rotation in England there must be either a fallow or a root crop, and that the farmer has had to grow a root crop which was a dead loss to him, and he had in the course of the rotation to make up, in his profits, for the dead loss on the crop which was essential to the cleaning of the land. But sugar beet introduces into the rotation a crop which has the quality of cleaning the soil, and it is also one which gives a profit to the farmer. He has a ready market. He will not produce unless you give him a definite contract to take his beet at a particular period, and this in itself is a real advantage to agriculture. Moreover, it does bring large numbers of persons on to the land. I have friends in my locality who have worked out the figures for me, and in the course of last season's crop there was a general expenditure of at least £8 per acre on actual manual labour on the land. My hon. Friends, in this connection, will recall come of the arguments which they have used. They have told the Government that it is much better to put men in employment, even uneconomically, rather than have them draw the dole without doing anything for it. I recognise the difficulties, but here we have taken some step in that direction, and last year we had employed on the land several thousand men who otherwise would have been in the ranks of the unemployed.

Several thousand is rather many. Could we have the figures?

I want to be as accurate as I can. There were a thousand additional labourers employed on the land. That is in the cultivation of 7,937 acres last year. That is for the two factories, and the average wages were per acre. We have ascertained £63,500 the books of the two factories that £63,500 were paid out on labour in the production of sugar beet for last year's crop.

Are the two factories amalgamated?

No, they are not. It is well known that I am closely connected with one of the enterprises and everyone will relieve me of even the suspicion of trying to make any private profit out of it. So far as profit is concerned, it is the worst venture that I ever made in my life, but my interest is in the development of the land. I believe that it is going to be a real contribution to applied agriculture in this country. While I say that, I assure the Committee that what we are doing is simply done out of considerations of the public policy, and I ask them simply to accept the assurance that I derive no private profit out of it. As soon as it appeared certain that a loss would be incurred, as a result of operating the season's crop, my colleagues met and decided to abolish all payments to directors, and since then we have all been working without any fees and paying all out-of-pocket expenses in visiting the works and farms, so that I hope that my colleagues and myself shall not be charged with looking after private profit. In my opinion it is a good thing for agriculture. Everybody must be aware of this further fact, which I will not elaborate, that our country needs, and in my opinion must have, sound agriculture. World conditions are constantly changing. It is the policy of every country to avoid the lopsided development which has characterised this country for very many years in the development of its agriculture and its industry. Your Dominions are doing it, and rightly doing it. We do not attempt to interfere with the fiscal development of the Dominions, and of the overseas dependencies, and accordingly we expect that they will not interfere with any arrangement which we deem it desirable to make.

The right hon. Gentleman is going away somewhat from the particular subject of home-grown beet sugar.

I will endeavour to keep within the limits, but I thought that the whole policy had been opened up in the course of this Debate. I will certainly obey your suggestion and keep close to the point. As a result of the operation of these factories it was found that they could not, during the experimental stage, continue to pay the heavy duties. As my hon. Friend stated, Cantley started in 1912, and worked for two or three seasons, I am not sure which, but it is not accurate to say that the factory was closed down because it failed to make a profit. It had to close down because the War was on, and the Dutch Government, from whom seed was previously secured, forbade the exportation of sugar beet seed from that country, and Cantley was consequently closed down. Cantley, undoubtedly, has been very efficiently conducted. I can see the point and the danger that, if the remission of the duty was simply to tend to the advantage of foreigners, however good their relationship may be with us, there would be a strong point of criticism.

5.0 P.M.

First of all, I think that we are indebted to the Dutchmen for having introduced the industry into this country. It is recognised that, in order to carry on the industry economically, the two enterprises ought to be amalgamated, and we are now engaged in endeavouring to effect that policy. The Dutchmen will have no hesitation in putting up the necessary capital in order to carry out this policy. We, on the other hand, are concerned that the enterprise shall be carried on by British capital and be a British sugar-beet industry, and be that alone. That is the policy which we are endeavouring to carry on. Much criticism has been advanced respecting the result of the first year's operations at Kelham. Cantley I do not know as well. They are certainly in a better position than Kelham because of several years' working, and because they have at their disposal experts who have been engaged in the growth of beet and the manufacture of sugar. It is very largely that expert assistance which will he placed at our disposal in the event of amalgamation taking place. In respect of Kelham, you must bear in mind that we built under the most adverse circumstances. It is a legitimate point of criticism to say that the enterprise ought not to have been started at that particular moment, but if we carry our minds back, we know that at that time everybody was urged to develop business in order to provide employment and to assist reconstruction. We recognised that we were starting a new industry, and that very few of us had actual knowledge of the working of a complicated sugar factory it would be well to pay a visit to the factory to see the elaborate machinery required for the production of sugar. We decided to go on. Indeed, the plans were in readiness before I joined the enterprise. But I think my colleagues were perfectly right. First of all, they foresaw that there was some danger that the machinery might not be ready, and the works not even completed. Therefore they limited the programme and estimated for about one-half of the crop that could be operated in a factory of that size. Contracts with the farmers have to be made in October and November for the beet of the following September or October. The price has then to be fixed and you have to make the contract on that basis. I admit that we paid too much for the beet, but at the moment none could have foreseen the great cut in prices which was to ensue in the following year.

With regard to the factory, we were very soon hung up with labour disputes. We had then to pay heavy sums in order to persuade the men to get on with it. I have stated in this House that, whereas we were in need of between 50 and 60 bricklayers, we could get only 15 or 16 at a time when we were told that unemployment was rife. Those were some of the difficulties. The result was that we had then again to cut down the programme, so that the factory only operated at one-third of its capacity. Everybody knows that it cannot be an economic proposition on that basis. But we were experimenting, and we felt that everybody would be reasonable enough to recognise that in establishing a complex industry of this character some years must elapse before success could be reached. It is not only a question of public money being granted, if the policy is a good one. I know of men who have ventured large sums and have already lost heavily, with no possibility whatever—with the remission of duty or otherwise—of recouping themselves. Therefore it can never be said that they have benefited by the remission of duty. The Government have recognised the strength of the case. They feel that it is an industry which ought to be established. They realise that this money goes to the development of agriculture and the provision of employment. I have every reason for believing that in the course of a few years, with the aid of this remission—bearing in mind that every country with which we have to compete has built up its sugar industry on aid from its own Government—we will have established in this country, on a sound basis, a sugar beet industry which will develop rapidly. I know that there are already schemes in existence for the creation of new factories, so great is the confidence already inspired, among agriculturalists and others, in the prospects of this industry.

While the Committee has appreciated the arguments and the facts which the last speaker has addressed to them, I wish to refer more specifically to the Amendment under discussion. I share some of the difficulty experienced by the hon. Member for Stafford (Mr. Ormsby-Gore). I understand that if the words of the Amendment are inserted in the, Clause sugar grown in this country, which passes through the refineries in this country, will not pay the Excise Duty. That will have the effect of placing the refining industries at Greenock, London and Cantley on an equality. If the Amendment is carried the Government subsidy will be paid to the farmers for growing sugar and the refineries in different parts of the country will be on an equality; that is to say, they will be treated alike by the Chancellor of the Exchequer. This is not the time for the outpouring of public money to the farmers of the country to encourage them to grow beet sugar or any other commodity. With one aspect of this subject I will deal later when the question before us is that the Clause stand part of the Bill. If the hon. Member who moved the Amendment goes to a Division meanwhile I shall be unable to support him in the Lobby.

I am sure we all appreciate what the right hon. Member for Norwich (Mr. G. Roberts) has told us about Cantley and Kelham. I had an idea that an amalgamation was going through and that if that amalgamation succeeded there was a chance of the Dutchmen subscribing more cash and therefore, possibly, saving the British Government. I do not think the bounty referred to by the hon. Member for Greenock goes to the farmers. It goes to support the factory. One of the great crises in 1914, when War broke out, was our position with regard to sugar. We must be careful it does not recur again. These factories, especially that at Kelham, should be supported, but I am not anxious that they should be supported by further Government money. The great thing to consider is the shortage of sugar at the present time and that that shortage—it is about 50 per cent. down compared with 1914—may put a factory such as that at Kelham and Cantley in a position to make both ends meet. With regard to employment, I have always understood that the factory worked for only three months in the year. Perhaps the hon. Member for Norwich can inform us on that point?

The sugar factory can work only three months of the year. It has to take the beet when it is ready, for beet deteriorates if kept. The factory, once started, works throughout the 24 hours for seven days a week, and, taking the number of hours worked, it is approximately an ordinary working week. Many endeavours have been made to utilise the factory in other parts of the year, but so far without success.

We must realise that the total output of sugar beet in this country is only 1,850 tons, which is very low. We have been told that the factory has worked to only one-third of its capacity. I hope that the output will be increased, so as to reduce the cost, and possibly in that way a certain amount of the Government subsidy could be saved. At the same time I support, as far as I can, a scheme of this sort to get new industries established in this country, but, as I have stated, I am not very anxious that the Government should give financial support.

In the ordinary course I would not have taken part in this Debate. The right hon. Member for Norwich (Mr. G. Roberts) has very frankly stated his position and has put the case in his usual able manner. It is only fair that the British refiners' point of view should be stated. There are one or two points in the speech of the right hon. Gentleman which I must controvert. He has spoken a great deal about the benefits to agriculture and the enormous number of men who have been or will be employed in the agricultural industry. But, surely to goodness, it is possible to employ a great many men in any industry if you are going to bolster up and subsidise that industry! It is not necessary to mention agriculture only. I personally confess to being one who wishes to protect British industry, if it can be done fairly. It is quite easy to give instances of many trades and industries where one could employ a great number of men, in addition to those already employed, if that trade or industry was subsidised. There are all the arguments on the other side, whether you do not lose more in one way than you gain in the other is another matter. I will leave that point. All of us want agriculture to prosper, and, speaking from the point of view of the British sugar refiners, I say we certainly do not want to put any spoke into the wheel of industry. The right hon. Member for Norwich said it was a mistake for hon. Members on this side of the House to think that Kelham and Cantley had already received any money from the Government. What he meant was, no doubt, that they had not received the enormous subsidy which is proposed by the Government to-day. But they have been receiving the preference and benefit of 6·;2¾d. per cwt. They have been receiving the preference which the Colonial is getting, and an additional 2s. 4d., so that altogether these Kelharn and Cantley factories have been in receipt of a benefit of 6s. 2d. per cwt. over their competitors, and in spite of this benefit they have not been able to make things pay. It is very unfortunate, but they have not been able to do it. This Amendment which we have put down limits them as to the quality of the sugar which they should turn out. It limits them to this extent, that they may turn out sugar of a polarisation of 97 only. The hon. Member for Stafford (Mr. Ormsby-Gore) asked why that figure had been selected. We do not put that figure as an absolutely rigid figure, but we want to prevent the British beet-sugar grower from getting a benefit of £25 13s. 4d. a ton over the British sugar refiner, and we had to put down some figure to mark the difference between raw and refined sugar. The hon. Member criticised the figure somewhat, but I have been looking up the figures in our own factories, and I find the polarisation of the raw sugar which we receive is between 95 and 96. I would be quite prepared to alter that figure of 97, but we deliberately put it high because we did not want to exclude any of the sugars which were coming over from the Colonies and from other parts. The right hon. Member for Norwich suggested that it would be a retrograde policy for any beet sugar factory not to go to the full length and produce white sugar. I entirely disagree with him. Previous to the War I do not think there were more than five factories in Germany and Austria which turned out white sugar. I admit that the position is different in France, but still it is not at all necessary to turn out white sugar, and I challenge contradiction on the point.

We do not wish to put any spoke in the wheel of an infant industry. We should like to see the industry prosper, if it can be made to prosper as a commercial undertaking; but we do not think it fair or right to bolster up and to prop up an industry with the undreamed of protection of £25 13s. 4d. per ton. In the past we British sugar refiners had to fight the German bounty system, which gave a direct bounty on every ton of sugar they exported to this country, and we managed to survive it; but we would have been delighted if we had had protection to the extent of 6d. per cwt., and for a protection of 1s. per cwt. we would have thrown our hats into the air. These people have been getting, not 6d. or 1s. per cwt., but a protection of 6s. 2d. per cwt., and they have not been able to make it pay. Now they are not only to get the 6s. 2d. per cwt., but a protection of £25 13s. 2d. per ton, which is 25s. per cwt., something which absolutely flabbergasted everybody who heard it.

No doubt this thing was entered into by the Government without full consideration of what it meant. If I may say so, with great respect, they did not understand the position, or perhaps they thought the Sugar Duty was going to come down, and the remission of the Excise Duty would not, in that case, have been the enormous concession which to-day it appears to be. As the Committee knows, it was announced in a speech by the Minister of Agriculture, who, probably, was not too well informed about it. He said the Government had decided, in view of the exceptional circumstances of the new industry, and of the position of unemployment in the country, that no Excise Duty should be charged to home-grown sugar. That was the first intimation we had of it, on 30th March. I really think he did not realise what he was saying when he was committing the Government to give £25 per ton protection. What is to be the position as to unemployment? Presumably, you are going to employ more people in agriculture and in the sugar-beet factories, which are going to turn out white sugar, but I say that for every man you put into a sugar-beet factory you are going to take away a man from the British sugar refineries. The British sugar refiner has been able, in the face of the sternest competition, to compete with his business rivals, and his is a business which—without wishing to blow one's own trumpet—is fairly efficiently managed. You are going to replace a man in that business by a man placed in a business which is highly speculative and which, even with a benefit of 6s. 2d. per cwt., has not been able to make its way.

Many of us feel that the Government rushed into this question partly because they were pushed by the Minister of Agriculture and partly on unemployment. They did not quite realise what they were doing. Also, there are many of us who feel the Government are taking this action partly because they have already invested certain money in the business, and having done so, and having found it is not a paying business—not business which can stand on its own legs—they are going to throw good money after bad. From the strict point of view of the Amendment, we say that if you are going to protect this industry, if you are going to try and bolster it up, and if you think sugar beet growing can be undertaken in this country, give it protection, but do not do it at the expense of the old established industry of the British sugar refiner. We say it is a monstrous injustice to give them a protection of £25 a ton on white sugar, and we suggest in our Amendment a fairer method. I do not say that the figure 97 is a permanent and definite figure, but it is a good figure, and I should be prepared to defend it. If you are determined to give this enormous protection, we ask you to do it in a way that will not ruin an old business which is already established.

I do not propose to enter into the wider field which has been opened up, but to devote myself entirely to the point which has been raised in the Amendment, and I hope another opportunity will come later on for other matters.

I can only say to the right hon. Gentleman what I have said before, that we cannot have two discussions on the same subject. I could not allow a discussion on the question of Kelhana and Cantley to take place on the Clause after it has already taken place.

I bow to your ruling. I shall say a word or two on the general question; but let me deal first of all with a matter raised by the Amendment. My hon. Friend who proposed the Amendment indicated in a very interesting speech that he was very anxious that nothing should be done to injure an infant industry. He was perfectly clear that, in principle, he had no objection whatever to what was proposed to be done, and the only topic which he raised was the particular interest of the refiners in this country as against the in- terests of the people who are managing this infant industry. His solicitude, I found, very rapidly disappeared, because the comments which he made revealed the fact that what he proposed to do would effectually kill this infant industry—as effectually as if nothing had been done to give it any help whatever. His proposal contained the suggestion that only sugar of a certain polarisation should be produced in these factories. My hon. Friend is very well aware that while the practice in past times may have had the result of producing only raw sugar in certain sugar factories, that modern practice. has gone—as one would have anticipated it would, having regard to the development of every other form of business—in favour of uniting the production of raw sugar with its refining.

I challenge that statement. Of Austrian and German sugar-producing factories before the War, not more than five or six turned out white sugar.

Of course, I bow to the superior knowledge of my hon. Friend in this business, but what he has said really only confirms what I have just stated, because in point of fact the tendency has been towards amalgamating these two processes, which can undoubtedly he carried on side by side. Whether that practice is right or wrong, it is enough for me to say that these two particular factories have been equipped with refining machinery as well as the machinery used for the production of raw sugar. It is impossible in their case to say that you can make it a paying business by confining them to the production of raw sugar. The capital charges which they have incurred by equipping their factories has made it absolutely impossible for them to carry on a profitable business if they produce only the raw sugar and do not proceed to refine it.

Does the right hon. Gentleman know whether either of these two factories has a single particle of charcoal, or any charcoal plant? Are they in any sense equipped as refineries?

I cannot answer my hon. Friend with regard to the details of the particular plant, but that they do produce refined sugar, I suppose, my hon. Friend will not deny, because the whole object of his Amendment is to compel the sugar they produce to be sent to refiners to be refined. The reason he is anxious to get this Amendment passed is that the refiners should get the business which at present is being done by these factories themselves.

Because you are giving them a protection of £25 per ton?

My hon. Friend should confine himself to the point I am at for the moment. The issue between us was whether these factories could produce refined sugar or not. I think I have demonstrated to the House—despite the anxiety of my hon. Friend who now seizes a different argument on which to reply—that they do produce refined sugar and are equipped for that production. It is impossible to say in that case that they can carry on a profitable business, if having put up plant for producing refined sugar, they have to start a process which falls short of that and then have to convey all their sugar to the refinery. The point made by the right hon. Member for Norwich (Mr. G. Roberts) is cogent and irresistible. By doing so they would not only forego the profit they could make on the refining, but they would add to their charges by conveying all the raw sugar to the factories by rail covering great distances.

That has to be done now.

They have to convey the sugar when they are marketing it, but that is a totally different thing from sending the sugar a distance to be refined. I listened to my hon. Friend's speech and I would remind him that one does not advance one's arguments by interruption. What I desire to say is that undoubtedly this would enormously increase the charges to these factories not only by what they would have to forego, but also by the extra cost, which they would incur. The difficulties of their present position have already been made plain. A great part of the speech of my hon. Friend dealt with the fact that to-day they are working at a great, loss. What then is the fear that the refiners have that anything will be taken away from them by what they call the large subsidy at present being granted? In point of fact, it is not a subsidy at all it is only a remission of Excise Duty. There is no question at all as to the effect of this Amendment. If it is passed, then these factories are doomed as surely as if we gave them no aid whatever.

I turned to the larger question which has been opened in the course of the Debate, but only for a moment, because the matter has been very thoroughly threshed out. This suggestion of a remission of Excise duty is by no means new. When the sugar beet industry in this country was first started, the Excise duty was remitted by a Liberal Government, which, as everyone knows, on these matters always gives the pure milk of the true economic word. The Excise duties were only put on in the year 1915, when Mr. McKenna was Chancellor of the Exchequer, because of the fact that under the Sugar Convention we were bound to impose them. Mr. McKenna, in dealing with the matter, stated that but for our obligations under the Convention he would not have thought it worth while to impose these charges. Now we are in a position in which nothing is to be gained by continuing them. If we exact these duties to-day it is as certain as that we are here that neither of these factories can carry on. Accordingly, the Exchequer has nothing to gain by exacting these Excise duties, because there would be nothing to come from these factories. I was approached by a very responsible deputation, representing both employers and workpeople connected with this industry, and it was very strongly urged upon me that unless this was done, and a concession granted to the extent to which the Government is proposing in this Clause, the industry would disappear. The Government had to consider what action they should take. It had been made perfectly plain that, so far as capacity to grow sugar beet is concerned, the soil of this country is in no way inferior to that of any other country. We had to consider whether, in these circumstances, there was any reason why this industry should not be a success in this country.

It was pointed out that the growth of sugar beet has not only been a great cause of profit in connection with the sugar industry in Germany, but that it also had the effect of enormously advancing the farmers' profits. As the right hon. Member for Norwich has explained, having a sugar beet crop as one of the crops in rotation, not only has the effect of giving the farmer a profitable crop, but leaves in the ground elements which greatly enrich the soil and enables the farmer to get a better crop of cereals in the following year. These were considerations worthy of attention. Was there any reason why the manufacturers of sugar here should not be able to compete with the makers of sugar in Germany and Austria? So far as appears, there is no reason, except that in this country it is an infant industry and has not yet acquired the necessary experience to engage effectively in competition. It has the effect of employing a larger number of people on the land and of giving employment to the large number of people who go to these factories. Were we to forego these benefits, especially after we had made a start with the industry, and when it had been acquiring a certain amount of experience and had collected round it a number of men who had become practised in the operations of the industry? I think the Committee will agree with me we came to the right conclusion. I have no doubt that if my hon. and gallant Friend the Member for Leith (Captain W. Bonn) is going to speak after me upon this matter, he will give us some of the ancient shibboleths of the economic doctrine to which he adheres, as to the support and protection of industry. I would remind him that all the economists whom he professes to follow in the doctrine which he so often advances in this House, have made at least one exception in the case even of Protection, and that is with regard to infant industries. I would refer him in particular to a long and eloquent passage in John Stuart Mills' work on Political Economy, in which he sets forth the great advantages to be obtained from Protection by the State of an infant industry which has an opportunity of acquiring natural growth, and in the end standing upon its own feet. If this industry does not justify in the future that test, then undoubtedly it must cease to have the support of the State.

How many years will you give it?

At any rate, under present conditions, this is not the time to give up an industry which at least has made a promising start but has been hit by the extraordinary circumstances which have arisen in connection with the sugar industry in recent times. In particular this is not the time—if this industry has any chance for the future and has already so much capital embarked in it—to deprive people of employment until it is shown to demonstration that the industry is unfit to afford profitable employment in the future. Accordingly I ask the Committee to reject the Amendment.

The right hon. Gentleman anticipated, as he thought, some arguments which I was to bring forward. I shall submit whatever arguments I have, in my own words to be judged by the Committee on their merits rather than on the prejudice which the right hon. Gentleman sought to import in advance. The right hon. Gentleman received a deputation from the employers and the employed in this industry pointing out that it would be a great advantage if they could receive a benefit from the State amounting to £25 per ton.

The deputation which I received was not only from people immediately connected with the industry but was also representative of the whole agricultural industry of the country. It also represented agricultural labour as a whole and not merely to those employed in this particular industry.

I should like to know what industry would not be prepared to get up a deputation to the Chancellor of the Exchequer if they thought they were going to get some remission of taxation. Of course, any industry would do so. Nobody doubts that an individual industry may benefit by some such measure as this, but the point is whether the public benefits in the way that private interests benefit. The right hon. Gentleman says this is an experiment. He says, first of all, that the duty imposed will yield no revenue, and, therefore, there is no harm in its remission. That is not an argument which he applies all round. There are many industries complaining that they cannot afford the taxation imposed upon them. They say they will perish, and some of them actually do perish, because of the taxation. But that makes no appeal to the heart of the Chancellor of the Exchequer. He says, "No, there is the duty; it has to be imposed, and if you cannot meet it you must go out of business." In the second place, he says that we should try this experiment for a certain number of years, and submit it to the test of time. What will his answer be when that test has been applied? We have had experiments of this sort tried before. The Motor Car Duty is a case in point. Immediately it begins to yield revenue the. Chancellor will come forward and say, "I am really not dealing with the general question of Protection, but this yield is a thing I cannot forego, owing to the needs of the Exchequer." Either there is no yield, and it is not worth while raising the question, or else there is a yield and he cannot forego the revenue. It is just another step in the Government's preconceived plan of a stealthy imposition of Protection in this country. [HON. MEMBERS: "Hear, hear."] Exactly. The hon. Member for East Birkenhead (Mr. Bigland) understands that perfectly well, and, of course, the Minister for Agriculture also understands it perfectly well. There is now a majority of Protectionists in the Cabinet, and they are striving in every way to impose a Protectionist system on this country. The only wonder to us is that they continue to receive the support of their so-called Free Trade followers and colleagues.

The proposal to remit this Excise duty has already done a good deal to destroy that feeling of gratitude on which the scheme of Imperial Preference is supposed to be based. We know quite well that protests against the remission of the Excise duty have been received from producers in the Dominions who did not receive anything like the advantage which is about to be offered to small factories in this country. The right hon. Gentleman says we must have regard to the number of persons employed. Can he tell us, are there as many as 1,000 people employed in this industry? The number is said to be only 800 or 900. His argument was immediately devastated by the lion. Member for Stratford (Mr. Lyle), who pointed out that for every man you put into this failing and unsuccessful industry you have put a man out of work in a successful and prosperous industry. That is the story of Protection all round—supporting people who have not got the strength to support themselves and throwing out of work people who are in industries which can bring profit to this country. I should like to ask the Chancellor of the Exchequer some questions. The first is, who are the holders of the shares in the Kelham factory? Of course, it is these shareholders who will benefit. Are they British nationals at all? Are the majority of the shares held by British nationals, or it is true that the majority are still held, as they were a few months ago, by foreigners? Would it be right to say that 133,000 out of 140,000 shares are not in the possession of British subjects at all? Because it does seem rather a pity that, if we are going to give this enormous bounty on the ground of some inscrutable patriotism, the bounty should not come the way of people of this country. Would it be correct to say that part of the shares are actually held by Austrian aliens? Would it be correct to say that part of the £25 per ton is to he given to the Administrator of Austrian property in England? If so, what becomes of this plea that we must give this great bounty to foster an infant industry on which the future life of this country depends?

Is it a fact that it is either this, or that the money, amounting to £325,000, which the Government have sunk in this commercial industry, is going the same way as that on celluloid and dyes, and all the other industries into which they have put the public money of this country? Is it true to say that if they do not get this bounty, the Board of Trade will be compelled to tell us that the 250,000 shares are worthless, that the taxpayer must find the 5 per cent. on the other 250,000 until 1930, and that the 125,000 second debentures which the Government hold are worthless? Is that the alternative? Is this really a sort of hotchpotch of ineffective protection, combined with a shrewd stroke of business on the part of the Government so as to make their experiment with public money appear more successful? If this be done for one industry, why not for other industries? My Noble Friend the Member for Aldershot (Viscount Wolmer), if I recollect, actually appealed for the remission of Excise Duty on home-grown tobacco. Why not? What fairness can there be in allowing yourself to be moved to make a concession with public money to so substantial an amount to one deputation, when I am perfectly certain the Noble Lord could bring just as influential a deputation on behalf of his plea? That brings me to the final argument against this. Either it is a small, weak and futile manœuvre, or else it is the beginning of a system of depending on this country to some large extent for our supply of sugar. If that be so, it seems to us that it is the beginning of the most offensive of all protective taxes, that is, a protective tax on food—in fact, it means that this is another step in the direction indicated by the Leader of the House when he said, referring to the policy of his distinguished father, who advocated food taxes, that the day was come when these taxes would be imposed.

I would like to say a few words on this question of home-grown sugar. I would not have intervened, except that I do think this matter has been coloured, and made a very technical question, when it might be confined to two or three points. One is that it is of great advantage to agriculture. Last February I wrote to the Ministry of Agriculture for constituents of mine on behalf of this very industry. We have heard a great deal about the subsidy, but the Excise Duty on the value of the sugar has not been mentioned. I have the figures which, I believe, are perfectly correct. On one ton of sugar, valued at £27, the Government were receiving an Excise Duty of £19 8s. I do not think any commercial undertaking can possibly exist which has to pay a tax of £19 8s. on a value of £27. From the point of view of agriculture, this industry employs many agriculturists, who would be otherwise thrown out of work, from October to December. It is a particularly good crop for cleaning the land. Further than that, the Government were asked to invest money to re-establish industries, and they have invested Government money in these factories. Surely, then, it is rather bad business for the Government to ruin its own shares. I am not at all interested in any of these undertakings, but I think many Englishmen have invested their money from a patriotic motive, and it would be a mistake to cause them to lose money in that way.

I am afraid that I am not quite so strict a Free Trader as my hon. and gallant Friend who sits beside me, and, therefore, I look at this matter primarily from an agricultural point of view [An HON. MEMBER: "A landlord's!"] I pre- fer to say "from an agricultural point of view," and from that point of view I have come to the conclusion that there is not a single argument to be said in favour of the Government on this matter. I have considered it as it has been laid before the Agricultural Committee and other bodies by deputations, and I have tried to understand it, and to justify this request from an infant industry for exceptional treatment. I think there was some justification for treating it exceptionally when it was in the very infantile stage, but I think that that stage is passing away, and, with the best will in the world, I have not been able to convince myself that it is justifiable for the Government to continue this policy, as they clearly do intend to continue it for some years more. They have said they intend to pursue this policy for five years more. I cannot for the life of me see the justification. Probably before I was able to be present here this afternoon, the facts have been stated as to why the industry claimed this exceptional treatment, and why it was they were not able to make a profit last year, and are therefore asking for bigger rebates this year. The arguments of those interested in the factories, I remember, were, first, that the workers were not yet really accustomed to the machinery, and could not get the best out of the plant; and, secondly, with regard to one of the factories, at any rate, the management had not been satisfactory. They brought over, I believe, a Frenchman or a Belgian, to show them how to do it, and he had not got on well with the workmen, and so on, and, what otherwise might have been a profit, had been converted into a loss. Those two arguments do not go very far with me. If those responsible were so foolish, from a business point of view, as to bring over a manager who did not understand how to get on with the workers, instead of sending an Englishman to learn the business over there so as to be able to handle the work here, it did not presage well for the future management, and I was led to believe that the machinery was of so complicated a nature, that with a full season's experience and more, they were not able to get workers sufficiently accustomed to it.

The arguments, however, which make me come down very violently against the Government's proposal are not the ones I have mentioned. They are these: I do not believe that beet-sugar production will ever pay against cane-sugar production, without special subsidies, unless it be able to depend on a very favourable situation, which it can never have in this country. I do not believe there is an instance of a really successful beet-sugar production unless, for instance, it can depend on exceptionally cheap labour. I do not believe there is a single instance in Europe where beet sugar is being produced to compete with cane sugar on open and fair terms, unless it be in a special position for getting cheap labour. I believe that in the Western part of Europe production depends wholly on cheap labour, which comes forward to do the winter work in connection with the sugar industry, and that in Belgium and other countries there are workers and their families ekeing out an extraordinarily small livelihood from small holdings, who are accustomed to work in sugar factories at wages an Englishman would never look at, and never could be asked to take. Therefore, I do not believe this industry can ever be established on a non-subsidised basis. This Committee knows that it requires great discipline on the part of the farmers to make the industry go properly. This is not an easy crop to get out of the ground when the season is dry, and, therefore, every farmer will wait till the land is in a state of wetness to enable the crop to be raised easily, and the factory will be flooded with products at one period which suits the farmer. It is going to be an entirely difficult thing, with the tendency of English farmers to manage their own industry as best suits themselves, to get that evenness of deliveries throughout the winter season which has been ingrained in foreign farmers as a necessity, but which would be extremely difficult for English farmers to learn. It is not possible for those who support the Government proposal to point to beet sugar being a success anywhere where labour conditions are such as they are bound to be, and we wish to see in this country. Therefore, I am perfectly certain the industry will never be able to act in this country on a non-subsidised basis. If this is to be considered at all by this Committee, let it be considered frankly as a permanent matter of artificial subsidies, and do not let us have any camouflage about it being a temporary thing for three or four years, while the industry is getting on its legs. If it could really be proved that the industry in a few years could get going without help, it would be a different matter, but as I am certain this industry could never get on to a permanent non-subsidised basis, I am going to support the Amendment.

I should like to endorse what the right hon. Gentleman the Member for Camborne (Mr. Aoland) has said. I think every Member of this Committee who served in France or Germany will be able to see the situation, and be able to give evidence in this matter. It is perfectly clear that at certain times of the year the cultivation of beet sugar requires labour conditions such as none of us in this Committee would like to see introduced into this country. It requires child labour on a very large scale, and it involves very long hours of work under very difficult conditions. I cannot, myself, see how, in a country like this, we are ever to compete against the cheap labour in Northern France and Belgium, and particularly that which comes from Poland and Russia into the German beet-sugar districts. In fact, I have had this whole matter out with those interested in this great industry—I am not referring to the hon. and gallant Member for Stratford (Mr. L. Lyle). The gentleman in question is one of the largest persons concerned in this trade, and he told me that the whole trouble in regard to the beet sugar industry in this country is that labour conditions would have to be accepted which no Englishman would accept for any long period. The hon. and gallant Member for Leith did not go quite far enough in what he said. He pointed out—I think quite rightly—that any benefit which was going to accrue, apart from the benefit of wages, from this policy of the Government would accrue to Dutchmen and other foreigners. He also pointed out that this was evidently an attempt to bolster up a really bad investment on the part of the Government. He pointed out—also quite justly—that this was not the first; but what, I think, he failed to point out was the failure of this policy: that in another notorious case, the case of the manufacture of dyes in this country, we had exactly the same typical form of legislation we are getting in this particular Clause. We passed the Dyestuffs (Import Regulations) Act, and when it became perfectly obvious that the taxpayers' money had been lost owing to the reckless gambling of those who put it into British dyes, then, in order to try to "boost" up that investment, and in order that the Chancellor of the Exchequer, who was then President of the Board of Trade, might say that the taxpayers' money had not been lost, and that we should be able to get out of this company with a 50 per cent. instead of a 75 per cent. loss, he came down to this House and introduced legislation just like this Clause in order to bolster up an industry in which he had wasted the taxpayers' money.

Everybody in commercial circles knows perfectly well that it is quite impossible to realise the Government investments in the beet sugar factories, and that it is highly probable, as the hon. and gallant Member for Leith says, that we shall have to fulfil the guarantees which have been recklessly given over a long period. Now he comes, just as in the case of the Dyes Bill, trying to bolster up a company which is really on the rocks already, and to try to prove to the taxpayers that their money has not been squandered. When is this going to end? Are we to have legislation to prevent the farmers in this country from buying their phosphates from anywhere except Nauru? Are we to be told that nobody is to buy artificial silk except from that other magnificent company, the British Cellulose Company? Is a single farthing of the taxpayers' money which has been squandered in these reckless gambles to be returned to them as a result of the taxation of the whole population? The right hon. Gentleman knows perfectly well, and so does every Member of this House who is engaged in commercial concerns, that it is utterly impossible to realise our investments in cellulose, in British dyes, or in British beet sugar at the present time. I do think it would become the right hon. Gentleman if he got up and admitted once for all that he has lost our money for us, and not to attempt by excessive taxation in other directions to "boost up" the shares of industries in which he has lost that money.

The last speaker addressed the House as if this proposal to remit the Excise Duty on sugar-beet had only reference to the two companies in question at the present time. It is a very broad proposal, and one in the highest interests of agriculture, and has as its main object the increasing of the arable land in this country. Did not the increased production of wheat and oats, which was the object of the Agriculture Act, receive the support of three-quarters of the House of Commons? Of course it did. We are quite forgetting what happened in the War and after. Most of us then came to the conclusion that it was in the highest interests of this country to encourage the production of wheat, and to keep land which was under the plough under the plough, and to get more under the plough if we could procure it. We are starting to grow sugar beet, and it will surely have some effect in this country, in the direction I have indicated, if it is as successful, as I believe it will be, as it is in Germany. Germany attributes much of her success in agriculture and in increasing her cereal crops as do the other European countries from growing the sugar beet. That is the main object of this proposal. The right hon. Gentleman talked about labour. It is not only labour in factories. It is labour on the land that will be employed, labour which growing beet occasions, and it will be of the greatest advantage to the small people whom we have set up since the War. They have a, ready market with cash sales for a root crop, and they look forward to better cereal crops afterwards. I only rise to remind the Committee that this has nothing to do with those two particular factories. This is done to fulfil the intention and policy of the Government as expressed also in this House to increase the producttion of wheat throughout the country.

I think somebody at this time, some supporter of the Government., ought to get up and make a protest. Last night I came into the House with the intention of supporting the Government, but a Protectionist speech by the Solicitor-General sent me out of the House. This afternoon I come here and I hear what is advocated by the Chancellor of the Exchequer on the ground of the protection of a small industry. I will not go into details, but it is really an absolute Protectionist proposition. I agree with the right hon. Gentleman the Member for Camborne (Mr. Acland), who stated the agricultural point of view. We have heard other agricultural points of view. I have seen attempts to grow sugar in my neighbourhood in Suffolk, where it was attempted to put down a factory a great many years ago. That factory is now being pulled down. The experiment has been tried over and over again. It is not a nascent industry which is being tried in this country. It has been tried for more than 20 or 30 years, and has always failed. I do not believe it will he any remedy for agriculture. I know cultivation of these crops necessitates cheap labour; not in the factories, but cheap labour on the farms, and that is what we do not want to see. If it is only going to resuscitate underfed and underpaid men in agriculture, it is not the sort of industry this country should support. I am against any sort of contribution from the Government to any industry, because I am still a believer in Free Trade.

I beg to move, in Subsection (2) after the word "paid" ["upon which no duty has been paid"] to insert the words:

"and also, with a view in the case of non-dutiable sugar and molasses entering a refinery working in bond, that no duty shall be paid on delivery on such non-dutiable sugar or its equivalent."

I am moving this Amendment in order to help the Chancellor of the Exchequer.

Perhaps the hon. Member will allow me to point out that the object of this Amendment is already provided for in Sub-section (3) of the Clause.

I have an Amendment to move in the shape of a new Clause to repeal the whole of the Sugar Duty take this opportunity of rising now to intimate that when the new Clauses are taken I wish to state my reasons why the Sugar Duty should be repealed.

After what the Chancellor of the Exchequer has just stated I ask leave to withdraw my Amendment.

I beg to ask the Chancellor of the Exchequer what kind of liquor is referred to in this Clause, and why any change in the law is necessary in this respect?

I also wish to put a. question on this point. Some time ago a gentleman invented a process for the manufacture of a liquor, something like strong beer, from which he extracted the alcohol, selling the remainder as a temperance drink. I think it was a successful experiment, but, for some reason or other, the Excise authorities shut the business down and would not allow the liquor to be brewed in the brewery. Is this Clause intended to be a reversal of that policy?

The object of this Clause is to enable certain categories of liquor manufactured in a brewery to be sold on premises where no excise licence is required. It puts the liquor on exactly the same footing as similar liquor manufactured outside a brewery.

I beg to move to leave out the words

"having regard to the nature of that ingredient or part and to the smallness of its value in comparison with the total value of the article."

This Clause enables the Treasury practically to reverse the Safeguarding of Industries Act. It gives them a power which we, naturally, on this side of the House want to see them exercise, but it only gives them that power in certain specified cases, and the object of my Amendment is to widen the powers of the Treasury and to enable them to reverse the Act of Parliament with greater facility and frequency than is possible at the present time. In moving this Amendment I am torn between the natural instinct of objecting to a Government Bill and a real desire to help the Government out of a hole. The Government, for good or ill, passed this Safeguarding of Industries Act. They have since found it to be in. convenient even in the privacy of their own Cabinet, and they are endeavouring by his Clause to get round some of the difficulties which they have made for themselves. It does not help them much, and I do not see why we should not give them slightly more ample powers than they are now seeking. Under the Clause they may only exempt articles coming into this country, such as dolls having eyes that are valuable. If the eyes are not of much value, then they cannot exempt the dolls. We would like them to be in a position to exempt anything they think fit, whatever the value of the dutiable part of it. Our proposal would facilitate matters enormously, and it would help the staff, which at present, in the small hours of the morning, are sitting with towels around their heads trying to solve the problem whether certain articles shall come in or be stopped. It would also give a help to the President of the Board of Trade. There he is he has to carry out an Act of Parliament which he does not like. He knows it is his duty to carry it out. This Clause would help him to get round some of his difficulties, and therefore I move the Amendment in order to enable him to do so all the more quickly.

It is a matter of very great regret that I am not able to take advantage of the very unusual 'offer of assistance just made by the hon. and gallant Member. I am bound, however, to refuse that help. I would like to point out, moreover, that his offer would not facilitate the operations of the Government Department. It would rather impose upon it a very much larger burden of work than now falls to its lot, because the discretion which the hon. and gallant Member seeks to impose upon it is one of a most wide and far-reaching character. It would enable it, in fact, to tear up the Act of Parliament; it would enable the Treasury upon its mere ipse dixit to say that no compound article at all shall be charged the duty. The Safeguarding of Industries Act has been placed upon the Statute Book, and I am sure that the House of Commons would not be prepared to give such a power to abrogate it to any Government Department. When an Act has been passed, it is the duty of the Government Department to carry out the legislation and not to render nugatory any decisions of the House. I thank my hon. and gallant Friend for his generous offer in this matter, but I cannot ask the Committee to accept it.

I very much regret the decision just announced. I look upon this Amendment as a very serious one. I think it would be an improvement on the Bill as it stands. The Bill gives power to exempt articles where only a small part is subject to the operation of the Safeguarding of Industries Act. Under the Clause as it stands, the Government must be satisfied that the part which is subject to the duty is only a small portion in comparison with the total value of the article. But that is a very vague expression, and I think this Amendment would only add to the doubt of the trader whether or not an article is likely to be taxed. It would add to the complexity of the matter, while it would not give the Government freedom to exempt any compound article, whether by reason of the smallness of the duty or by reason of the condition of the trade, or by reason of the size of the part which is subject to the duty. In none of these cases will they be allowed to exempt it under this Clause. The Clause proceeds on the principle that the wording of the Act has shown that some elasticity must be given unless you are to be landed in the most absurd results, as has happened in the case of dolls' eyes, of which we have heard so much recently.

This seems to prove that some dispensing power must be given to the Government, and that is the reason for this Clause. It would be very foolish to confine that dispensing power to the single case of the smallness of the value of the dutiable part of the article. The immense probability is that this unfortunate piece of legislation, as I look upon it, when it comes to be worked further will disclose still other absurdities, which will make it very desirable to exempt all compound articles from the duty and not only those of which but a small part are subject to the duty. If you are going to give this dispensing power, it is far better to give it in as wide terms as possible, leaving it to the Department to carry out so much of the exemption as may seem desirable to it. This Amendment would make a material improvement in the Bill. There are other reasons which might be advanced for its adoption. The British Government have been represented at an international conference at Genoa. It has been there solemnly repeated, as it was constantly urged at previous economic conferences, that it is of the utmost importance to diminish to the greatest possible extent all barriers to trade between European countries. That has been laid down by every authority one can possibly conceive, strictly technical as well as political authorities. The Government now come down here and have an opportunity of showing, even in a slight degree, that they really do mean what they said at Genoa, and that they desire to diminish artificial barriers to trade between various countries. I venture to hope that this Committee will insist on accepting this Amendment, which seems to me to be a real improvement in the legislation and in some measure a fulfilment of the professions which the Government have made in the name of the House.

Twelve months ago, when the Government introduced the Safeguarding of Industries Bill, they were told repeatedly that its administration was impossible. Despite all the advice tendered to them they persisted in putting it on the Statute Book, and now they have found that their arrangements are incapable of carrying it out. That is the reason why even at this late date, instead of bringing a Bill to amend the Act they have brought forward this proposal -in their Finance Bill to help them out of their difficulty. I have no doubt that one of the factors which led up to this Clause was the famous case of the dolls' eyes. In this Clause the Government take power to exempt dolls' eyes when they come in as part of the dolls, but there are manufacturers in this country who make the dolls but import the eyes, and they have to pay the duty upon them. The Germans, however, can send in dolls with the eyes, and they are exempt. That has been the policy of the Board of Customs for some time, and in order to give it legal authority we are now asked to pass this Clause. I could keep the Committee going for a considerable period with illustrations of the impossibility of administering this Act as it is on the Statute Book at the present moment.

Again, why confine this to the Safeguarding of Industries Act? There are the Import Duties, in the case of which the same problem arises. A question was asked a few weeks back with regard to an electric lighting outfit upon which a trifling amount—something like 1s.—of duty had to be collected, and the apparatus had to be held up for weeks, at a cost of over £1, in order to enable that duty to be collected. There is no provision made in this Clause for such a case as that, because it comes under Import Duties and not under Safeguarding of Industries. If the Chancellor of the Exchequer wants, as I am sure he does, to assist the Customs, I suggest that it would be better to delete the reference to the Safeguarding of Industries Act and let it, apply to all duties. That would be of some use to the Customs, and, I take it, would be appreciated by their officials. Then there is another factor. Let it be realised that when this power is given there will be no control as to how the Customs will interpret or use it. An interesting question was asked some time ago by the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) as to why a toy bagpipe, costing 2s., imported from France, was defined as a musical instrument subject to duty, whereas a mouth-organ imported from Germany, costing the same sum, came in free. The reply of the Financial Secretary to the Treasury was that mouth-organs were expressly exempted from the Customs Duty on musical instruments by a Treasury Order made under Section 5 of the Finance Act, 1915. This Order also covered all other musical instruments the value of which did not exceed 1s. Therefore, a toy bagpipe coming from France, and costing 2s., would not be exempted, but a mouth-organ, costing exactly the same sum, would be exempted. What nonsense it is to proceed with legislation of this kind.

Perhaps I might give one other illustration. A well-known firm of pickle manufacturers imported glass bottles with their name embossed on the glass. The Customs officials said that the name of the country of origin must also be put on the bottles. The manufacturers said that that would not be right, because their pickles were not made in Holland but in Great Britain. That necessitated a meeting of His Majesty's Board of Customs, and, after a good deal of consideration, they decided that in such a case the bottles might come in despite the fact that they had an English name embossed upon them. All this shows the absurdity of this legislation, but., while the Chancellor of the Exchequer and the Government insist on its remaining on the Statute Book with all its foolishness, I do not think we can do better than make it as easy as possible for them to conduct their business. I would point out to the Chancellor of the Exchequer that it is no use his proceeding without taking ample powers, so that, for instance, a doll manufacturer who wants to import the eyes shall not be penalised in favour of the foreign exporter of the complete doll.

I think the Chancellor of the Exchequer has forgotten the Safe-guarding of Industries Act. His argument just now was on the assumption that the articles upon which the duty was to be levied are definitely stated in the Act, but the Board of Trade have, in the exercise of their discretion, introduced from 6,000 to 8,000 articles that were not named in the Act at all. I should much prefer the matter to be left in the hands of my right hon. Friend. He has a scientific staff at his disposal who could decide many of these cases. For instance, there is the question of gas mantles. The whole question whether a duty was to be levied on gas mantles depended upon whether certain fine chemicals, nitrate of cerium and nitrate of thorium, lost their identity when worked up into the mantles, and any duty would be levied upon that part of the mantle which was composed of oxide of cerium and oxide of thorium—it becomes oxide in the process of manufacture. The question that had to be determined was whether these substances, after being combined, lost their identity altogether. I can illustrate what I mean by a political allusion. Did the Coalition Liberals, on the one hand, or the Coalition Unionists, on the other, lose their identity when they became merged in the Coalition? That is a question that has puzzled many people. I should not mind leaving it to the discretion of the scientific Department at the Treasury to decide a question of that sort, and that sort of question, having been before the various officials indirectly for some time, might help them to come to a decision as to whether these substances have lost their identity when they are made part of a gas mantle. My sole point is that the right hon. Gentleman is not taking more discretion than the Board of Trade have already. They have already the discretion to put thousands of articles into the Schedule without getting the direct consent of the House of Commons. Here we are not extending to the Treasury any more discretion in applying taxes than the House has already granted to the Board of Trade, and I would much prefer, and I think the House generally would prefer, that this discretion should be in the hands of the Treasury, which is a Department accustomed to decide questions of that sort, rather than of the Board of Trade. My right hon. Friend is just a little too modest in assuming that he could not do this hit of work better than the Board of Trade. Therefore, I support the Amendment.

It is very hard to resist the temptation to take advantage of the rare opportunities that occur for pursuing the investigation of this fascinating Act of Parliament. This Clause in the Finance Bill, apparently, enlarges the powers which the Government already have to exempt various articles from the incidence of the duties imposed by this Act. I should like to ask the Chancellor of the Exchequer one or two questions with reference to that, and to the effect which the proposed Amendment of the Act—because this is in effect an Amendment of the Safeguarding of Industries Act—will have upon the Act itself and upon its somewhat complicated operations. Under Section I (4) of the Act, where an imported article consists of ingredients one or more of which is dutiable it may be freed from duty if such ingredient or ingredients lose their identity, as my hon. Friend the Member for the Western Isles (Dr. Murray) has rightly stated. Is this power intended to assist the Government? Where the question of loss of identity is difficult to determine, does this give them power to decide the question? It says here that if an ingredient is liable to duty, then for certain reasons, although the articles becomes thereby liable—

This Clause does not deal with cases in which the identity of the ingredient is lost, but only with cases in which it is of very small value as compared with the total value of the article.

Exactly. I think I am right in saying that, if the identity of the ingredient is held to be lost, the article is not dutiable. But here, even if the identity of the ingredient is not lost, the Government may for certain reasons waive the duty. The question I want to ask is, Are the Government intending to use this power for the purpose of assisting them in cases such as have arisen, when the Court could not decide whether the identity of the articles had been lost or not?

I do not follow the hon. and gallant Member.

Let me make clear what I have in my mind. The gas mantle is a case in point.. I understand that there was great difficulty in deciding whether these dutiable ingredients had lost their identity, and I do not know now what is the position with regard to the gas mantle—whether is dutiable or not. In that case, is the Government intending to use the power conferred upon them by this Clause to relieve the gas mantle from the imposition of a duty which would otherwise tall upon it? That, I imagine, is the sort of case which the Government has in mind, and also the very absurd cases which are constantly arising, such as the one we had to-day at Question Time, in which a duty of 11d. was levied on some parcel and the Post Office charged 15s. for opening the parcel in order to ascertain whether it was dutiable or not. That, I imagine, is primarily the kind of case, but would this additional power enable the Government to settle the controversy in regard to gas mantles? That is a question which I should like the Chancellor of the Exchequer to answer.

Then there is another point. If hon. Members will look at the Clause they will find that it is not in the least confined to Part I of the Safeguarding of Industries Act. Part I of the Safeguarding of Industries Act imposes duties according to lists published in pursuance of Section 1 of the Act. Part II allows duties to be imposed by Orders which must he on the Table of the House of Commons. As snowing how fascinating the study of the subject can become, if hon. Members will look at Part II, Section 3, they will find that where an article is partly made in one country and partly in another, or where some of its ingredients are of one origin and some of another, it may escape the imposition of the duty under an Order made by the Board of Trade. Now these Orders are about to be made. Will this Clause enable the Government again to defeat the intention of Parliament when such Orders have received the approval of the House of Commons? That is an interesting inquiry, because, is very difficult really to understand where the trade of the country is under this legislation. Inquiries are held, the results are reported to the Government, long delays take place, and finally Orders are made or promised, and, when they are presented to the House of Commons, and if they receive the approval of the House, apparently, under this Clause, the Government will still, although a Part Order has been made, have the right in certain cases to set aside the decision of the House and of their protectionist followers that the duty shall be imposed. It is obvious from what I have said that it is a subject which, so far from being small or unimportant, deserves the closest study, and I invite the Chancellor of the Exchequer to give answers at least to the two questions which I have ventured to ask him.

The Chancellor of the Exchequer interrupted my hon. and gallant Friend the Member for Leith (Captain W. Benn) to say that he was unable to understand him or to follow his argument. I sympathise with the Chancellor of the Exchequer, and whilst I am talking, and when I sit down, it will be quite competent for him to say that he was unable to understand me. When, however, the right hon. Gentleman has explained to the Committee the purpose of this Clause as it will affect businesses in this country, no one will he able to understand him, and we shall then sympathise with him. As one reads this Clause, one is bound to ask where is the business in it, and where is the sense in it. There is this discretionary power. Just let us imagine, and I would ask the Chancellor of the Exchequer to imagine it. Business men, sufficiently harassed by a thousand business and financial considerations, have to be bothered by not knowing whether or not any particular line of goods will recommend itself to the Treasury after consultation with the Board of Trade. The trade of England was never built up by business manufacturers having to bother themselves as to whether, after a consultation between the Treasury and the Board of Trade, and the exercise of certain discretions, they can go ahead or must hold back. I would ask the Chancellor of the Exchequer, after this consultation has been held and if there is a difference, who is to be the final arbiter and who is ultimately to decide whether or not business men should be hampered or should be free under this Clause?

I should like to ask the right hon. Gentleman another question, to which I attach very great importance. Does he not think it a most unfortunate thing, with reference to business matters, that discretionary powers are left either to the Board of Trade or to the Treasury to say how a business is to be affected by Acts of Parliament? Discretionary powers! A flat tariff everyone can understand. An exaction upon a business, a duty upon a business, a Corporations Profits Tax, any tax upon a business, a flat rate, are understandable; but discretionary powers! Vested in whom? Vested in officials who know nothing of the practical conduct of the business; harassing the heads of businesses, who do riot know how the officials will view a thing in January compared with the way in which they viewed it last October harassing cashiers and the financial Departments as to whether they may have to pay so much money in order to get in a certain quality of goods and whether the discretionary powers are with them or against them. I say, with great respect to the Chancellor of the Exchequer, that anyone who tries to speak about this Clause speaks about it in a fog. When he replies, I say with great respect, he will speak in a fog. No one knows how it is going to affect the practical conduct of businesses, but everyone does know that every business man will resent it. Whilst I have no hopes of any reply the right hon. Gentleman can make, I think this is one of the least workable and least justifiable Clauses included in the Finance Act.

I hope I may be allowed to remind my hon. Friends, after what took place last night, that this Debate has occupied three hours and we have not yet got Clause 8. [HON. MEMBERS: "It is due to your friends!"] I do not think it is fair to this side of the Committee to say that the time has been occupied this afternoon by them. My hon. Friends cannot complain as to the shortness of my speeches or replies. I entirely agree with one remark of my hon. Friend who spoke last, that discretions under an Act of Parliament are not a good thing and lead to uncertainty, and that they are things one would very much rather avoid. The misfortune of this Amendment is that it seeks to increase the discretion and to make the uncertainty still greater than is the case under the Clause at present. I do not think there is a great deal in what the hon. and gallant Member for Leith (Captain W. Benn) apprehends. I believe, while he usually gives very diligent study to these matters, that a little more deliberation on his part would have explained it to him. There is no difficulty about the Act itself in this respect when there is a Schedule of the class of articles which may come under the Act, and there is a provision that the Board of Trade shall issue Schedules of those things which come under the general definition at that time. Therefore, the trader knows where he is in regard to

Will the right hon. Gentleman answer my question, whether this applies to Part II?

There is no difficulty about that. It will apply to any article under Part II brought within the Act. That is to say that if under Part II the Committee appointed under the Act decides that certain articles coming from certain countries are dutiable, then the other question will still arise whether the amount of the dutiable article in a compound is of sufficient importance really to be charged. The whole object of the present Clause is to decide that point.