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New Clause—(Excise Duties On Homegrown Tobacco To Cease)

Volume 155: debated on Wednesday 28 June 1922

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  • (1) The duties of excise chargeable under section seven of The Finance Act, 1918, and sections eight and nine of The Finance Act, 1919, in respect of tobacco grown in Great Britain (in this section referred to as "non-dutiable tobacco") shall (except as regards goods in respect of which the said duties have been paid) cease and determine as from the commencement of this Act.
  • (2) Notwithstanding anything in any Act, the Commissioners of Customs and Excise may, subject to the prescribed conditions, permit a person manufacturing tobacco in bond to receive non-dutiable tobacco at his bonded premises and to deliver therefrom without payment of duty a corresponding quantity of tobacco.
  • (3) In this section the expression "prescribed" means prescribed by regulations made by the Commissioner of Customs and Excise.—[Viscount Wolmer.]
  • Brought up, and read the First time.

    I beg to move, "That the Clause be read a Second time."

    What we are asking for is the protection of the industry of tobacco growing in this country until such time as it shall be able to establish itself. The reasons upon which this is put forward are, briefly, as follows: Tobacco was once grown on a very large scale in this country. It was once grown in no fewer than 31 different counties. In the year 1660 it was prohibited by Act of Parliament. In 1910 a Liberal Government made the growing again permissible, but the Government not only did that, but on 1st January, 1911, they granted a protective rebate of 30 per cent. to English-grown tobacco in order to establish the tobacco-growing industry, thereby following out the well-known maxims of Adam Smith and Cobden that an infant industry can be protected consistently with Free Trade principles. In 1913 the contribution was altered by a grant of 820,000 from the Development Commission for English-grown tobacco. That was not nearly so successful. The acreage under tobacco, which had reached 140 acres, declined in two years to about 40 acres, and the great bulk of the money of the Development Commission was spent on administrative expenses and unprofitable expenditure. But what has really put the English tobacco industry in such a ruinous condition—and this is the point I wish to bring before the Chancellor of the Exchequer—was not only the events of the War when all acreage was devoted to growing food that could possibly be devoted to it, but the policy of the Government themselves in regard to Imperial Preference. In 1919, the Lord Privy Seal, then Chancellor of the Exchequer, granted a preference to Empire-grown tobacco of one-sixth of the duty, and that preference was extended to English-grown tobacco as well. For all practical purposes English-grown tobacco and Empire-grown tobacco was put on an absolute equality, whereas under the Liberal Government English-grown tobacco had been given a rebate of 30 per cent. over Empire-grown tobacco. The vast bulk, more than 90 per cent. of the tobacco imported into this country, comes from America, and the utmost that either the English or any other growers who are trying to get the English market can hope to achieve is to get a very small share which can be blended with the American tobacco.

    Tobaccos coming from warmer countries, and chiefly because they belong to a longer established industry, are able to compete successfully at present with English-grown tobacco on level terms. The point is that if you want to establish an English tobacco growing industry you have to protect it in its initial stages, not only against American but also against Colonial tobacco. I would like to point out that that is perfectly consistent with the policy of Imperial Preference. That is what the Colonies have done themselves. They have given a preference to British goods over the foreigner, and a preference to their own goods over British goods. I, therefore, move that English-grown tobacco should be treated as the Government are treating English-grown sugar and exempt it- from Excise Duty, and give it a preference over Colonial imported tobacco. Unless the Government do that, it is impossible to establish the English tobacco growing industry. It is worth while establishing.

    It is an industry which was destroyed by Act of Parliament. It is an industry which gives a-n enormous amount of employment in countries in Europe. In France at this moment there are over 32,000 acres under tobacco, and they are all farmed by very small men. Indeed there are over 40,000 growers. [An HON. MEMBER "Divide!"] If the hon. Member does not wish to listen, he can go home. In Germany at the present moment there are over 25,000 acres under tobacco: in Hungary over 50,000 acres, and tobacco is even grown in countries like Norway and Sweden. It is a complete fallacy to think that tobacco-cannot be successfully grown in this country. At the present moment it is grown in my constituency. I have cigarettes here which were grown in my constituency, which I shall be delighted to offer to any hon. Member. The tobacco is very much like Rhodesian tobacco of a light sort.

    Yes, though personally I am a pipe smoker. There are other reasons why the tobacco-growing industry should he encouraged. Tobacco is grown on the very lightest soils. It is grown on the sands round Aldershot, which will not bear an ordinary crop. For that reason it is grown in parts of Berkshire and Norfolk. Therefore, if you encourage tobacco growing, you can bring a great acreage of soil under cultivation which you cannot do with any other crop, and that soil, subjected to high manurial treatment, becomes capable of growing oats, barley, and potatoes, and can, therefore, be made a potential food reserve in time of war. It is worth while establishing this industry, which was once flourishing and was destroyed by the action of the State. It gives employment to thousands of people in France, Germany, and other European countries. You cannot establish it unless you are to give it efficient protection, not only against American tobacco but against Colonial. That was recognised by a Liberal Government, and I ask that this Government should grant a remission of Excise Duty. If the Chancellor of the Exchequer feels that he cannot go the whole way in granting us what we ask, I would ask him to receive a deputation of growers, who will be able to show him that this is absolutely necessary if the industry is to be saved. This protection is necessary for at least. 10 years before you can ascertain the exact type of tobacco which will grow beat—there are over 30 different types of tobacco—until you have generated the necessary skill for the growing process and until you have found out exactly which type of manure and which treatment produces the best results. Until the industry has passed out of the experimental stage you have got to give protection, and efficient protection, and that can he done by the most wholehearted Free Trader.

    I admire the enthusiasm with which the Noble Lord defended a certain portion of his constituency. I fear that it is not altogether sufficient to make me accept this Clause. He has compared tobacco-growing with sugar-growing, but as far as I can see there is no real comparison between the two crops. Nor can it be suggested that there are the same hopes that the manufacture of tobacco can be carried out in the same way and with the same benefit as the manufacture of sugar. Tobacco has had a much longer opportunity than the sugar industry has had, and, unfortunately, the results up to now have not been very hopeful; so much so that the Noble Lord is constrained to say that he cannot see until 10 years elapse whether in point of fact the encouragement of this industry is going to have any fruitful results or not. In these circumstances I do not think it is fair to ask the Committee that the Excise Duty should he remitted. The Noble Lord has also asked me whether I shall be content to receive a deputation upon this matter. I am always glad to see representatives of any body of people in the interest of the country if I can find time, and I will readily agree to receive the deputation which he desires.

    If the right hon. Gentleman will consider the matter further, I propose, with the consent of the Committee, to withdraw the Clause.

    Before the Clause is withdrawn I think some attention ought to be drawn to the position of the Government. There is not a single argument which the Noble Lord has brought forward to-night for the protection of tobacco which was not brought forward with success by the promoters of homegrown sugar. I listened with great interest to the Chancellor of the Exchequer's speech at that time. What were the reasons he urged for extending protection to the industry? He said, first of all, that there was nothing to be gained by imposing the duty. Does he allege that the excess duty imposed on tobacco is something that he is looking after? Then he went, on to say that he received a deputation from this interest and have no doubt that the tobacco industry will also send a deputation. He also said that sugar was suitable for growing in this country. That point was also made by the Noble Lord. Then the Chancellor went on to say that the sugar industry was an infant industry, and employed a large number of people, and he quoted us these words:

    "In the present circumstances this is not the time to give up an industry which has made a promising start and that has been helped by the extraordinary circumstances of the times, and this industry has not much chance for the future unless it is assisted, otherwise it would deprive people of employment."
    What single argument is there which is not a good argument for the protection of tobacco or any other industry which can bring sufficient pressure to bear upon the Government? The Government have entirely given away their position about. Protection. Bit by bit they are carrying out a Protectionist policy. There is no logical reason why, having given the remission of the excise to the home-grown sugar, they should not. give it to homegrown tobacco or anything else. The only thing that surprises me is that the Postmaster-General, who is a Free Trader, should continue to support a policy of this kind, and that others who also call themselves Free Traders should continue to support a Government which is a Protectionist. Government.

    I just want to correct the Chancellor of the Exchequer on one point, and that is when he said that this industry has not been a success in this country. He has not been in the House as long as I have, and I remember when the late Mr. William Redmond made a most powerful appeal some years ago with regard to tobacco-growing in Ireland. At that date the industry had nothing like the rate of preference asked for in this Clause, but Mr. Redmond assured-us that he could procure quality and quantity of tobacco which would surprise us all. I do hope that the Chancellor will not only receive the deputation suggested, but give the whole matter his very careful consideration.

    Does the Chancellor of the Exchequer mean that at the present moment his mind is definitely fixed that this year at least he is not going to make any remission? The principle could be applied to many products which we receive from various parts of the world. We could grow cocoanuts and bananas and all the cotton we receive in this country under glass, and there is no limit on the demands which can be made on the Exchequer. I merely wish to ask the Chancellor whether we properly understood him to mean that his decision was final for the present.

    Motion and Clause, by leave, withdrawn.