I beg to give notice that, on this day four weeks, I will call attention to certain aspects of Empire trade, and move a Resolution.

I beg to give notice that, on this day four weeks, I will call attention to the condition of Agriculture, and move a Resolution.

I beg to give notice that, on this day four weeks, I will call attention to the Condemned Housing, and move a Resolution.

I beg to give notice that, on this day four weeks, I will call attention to the failure of the Government to keep their Pledges, and move a Resolution.

I beg to move, in line 8, to leave out "8s. 10d.," and to insert instead thereof "8s. 4d."

In regard to the Chancellor of the Exchequer's proposals for an increase of the Tobacco Duty, some of us, in listening to the right hon. Gentleman's Budget speech, perhaps had a vain hope that the additional three million pounds or more which he hopes to obtain would have come out of the large monopoly profits of the tobacco trusts. We may have entertained that hope, particularly in view of the statement which the Chancellor of the Exchequer made in his speech in regard to this increase. He said:

"I have no reason to believe that the whole increase of this tax will be passed on to the consumer."—[OFFICIAL REPORT, 11th April, 1927; col. 93, Vol. 205.]

That remark was greeted by some of my friends behind me with cries of "Rubbish," which it would appear, in the light of later events, were completely justified. [HON. MEMBERS: "No!" and "Yes!"]. I will give reasons in a moment which I hope will convince hon. Members on the other side of the House that those cries were justified. I do not know whether the Chancellor of the Exchequer was in communication with the tobacco trade before introducing this increase in the Tobacco Duty. I hope he will be able, when replying to this Amendment, to tell us about the undertakings, if any, which had been given to him at an earlier stage that the tobacco manufacturers would bear the greater part of this increase, and not pass it on to the public.

With regard to pipe tobacco, it would appear that the inrceased duty has in practically every case been passed on to the consumer to the extent of one halfpenny per ounce. I know that the pipe tobacco which I smoke has gone up in price, and I have yet to learn of any pipe tobacco which has not gone up in price. With regard to cigarettes, I am told—I do not smoke them myself—by those who smoke them that they are having to pay more than before for their supplies. The only exception which I am able to discover from the passing on of the increased duty to the consumer, is the case of Havana cigars. I read that Havana cigars are to remain at the same price as before. It seems to me that the Chancellor of the Exchequer has been able to make a specially advantageous bargain for the consumer of Havana cigars. I wish he had been able to extend it, as he held out a promise of doing in his Budget speech, to other classes of consumers of less expensive smoking materials.

I do not propose to go into details with regard to the enormous profits made by the tobacco trusts, but it would be fair to remark that their profits are such that they could perfectly well have afforded to pay the whole of the increase of £3,400,000 which is to be raised by the increased duty upon tobacco. The tobacco trusts are one of the few groups of producers which are still charging wartime prices, or above, for the goods which they sell. Even before this increased duty, there had been no reduction in the price of tobacco from the maximum height reached in war time, and it does raise the presumption that tobacco companies are very well able to bear some increased burden. Our complaint, as I have already said, is that the Chancellor of the Exchequer has not succeeded in making arrangements whereby the burden of this increased charge falls upon them as distinct from the consumer.

If I may go back for a moment to the past history of this duty to show the enormous increases that have taken place in the War and post-War duty, I would like to remind the House that the main Tobacco Duty, which is to-day 8s. 2d. in the lb., was, before the War, only 3s. 8d., and went up in 1917 to 6s. 5d., and in 1918 to 8s. 2d., when Preference was introduced, and was extended in July, 1925, to a quarter of the duty, at which it still remains. Under this proposal of the Chancellor, the main duty will be 8s. 10d., and the preferential rate 6s. 7½d. This is another example of the continual increase of duty even compared with the War period. Even the Chancellor of the Exchequer in the War period did not think it possible to increase the Tobacco Duty to anything like the height to which the right hon. Gentleman now proposes to raise it, and the preferential rate of 6s. 7½d. is higher than the main rate on foreign tobacco in 1917. It is well known that, in regard to tobacco, the proportion of the price paid by the consumer which goes in taxation is abnormally high. Even in the case of a cheap tobacco it is more than 50 per cent. The Colwyn Committee, who made their investigation before this proposed increase, offered this comment, which, I think, is worth quoting:

"The tobacco duty is a considerable tax on the average or normal consumer of small means. Per head of population (including children and other non-smokers), it is now about 24s. per annum."

It is, of course, very much more per consumer;

"The duty borne by the normal consumer with an income of £150 to £200 ranges between, perhaps, £3 10s. and £5."

Working that out in terms of Income Tax, it means that the Tobacco Duty on such an income is equivalent to an Income Tax of 6d. in the £ on incomes of £150 to £200 a year, and the proposed increase is going to add an equivalent of a further Income Tax of in the £ on such incomes. This Tobacco Duty, like all other indirect taxes, falls most heavily on those who are least able to pay it, while upon the people with the greatest capacity to pay taxation, the burden is exceedingly small. The Colwyn Committee have made available both with regard to this tax and other indirect taxes a great deal of new and interesting information. On page 94 they give a very interesting table showing the Tobacco Duty paid at the old rates by people with varying grades of income, taking the average of heavy and light smokers together so as to get a typical case. It is shown by this table that the Tobacco Duty payable on an income of £100 a year, in an average case, is £2 15s.; on an income of £200, £4 15s.; on an income of £500, £5, and so on, rising, in the case of an income of £50,000, to only £10 4s. a year. In other words, the person with an income of £50,000 a year pays only twice as much in Tobacco Duty as the person with £500 a year. That is a quotation from the Colwyn Committee's own Report. Putting it in terms of Income Tax, we see that a person with £100 a year, or £2 a week, would pay the equivalent of 6½d. in the £ Income Tax for Tobacco Duty; £500 a year, 2½d.; £2,000 a year, 1d.; £5,000 a year, ½d.; and £50,000 a year, 1/20d.

It is perfectly evident from those figures that the burden of the Tobacco Duty falls in the most unjust manner upon one section of the community as compared with another. If you had still in operation those direct taxes which the Chancellor has reduced in previous Budgets—the Super-tax and Income Tax—on the higher level, there might be some slight and plausible case, for raising a million or two by a tax on an article so widely consumed as tobacco; but when we take the reduction in the Super-tax and Income Tax, which fall more or less according to the ability to pay, in conjunction with the proposal to increase this tax, which falls exactly in inverse proportion to ability to pay, we find that the trend of taxation under the present Chancellor of the Exchequer is to put the heaviest burden on the weakest backs and the lightest burden on the broadest backs. If we desire to get one more illustration of the lesson which is being continually driven home from the benches behind me and upon platforms outside, we have not got to go further than this particular proposal.

As the Chancellor of the Exchequer was not here at the very beginning of my remarks may I venture to repeat what I then said, that I hope he will give the House some justification for this statement he made in his Budget speech:

"I may add that I have no reason to believe the whole increase of this tax will be passed on to the consumer."—[OFFICIAL REPORT, 11th April, 1927; cot 93, Vol. 205.]

I wish to know, in the first place, whether he thinks that statement can be justified in the light of the increases which have taken place; and, secondly, whether he had negotiations with the tobacco trade before the Budget, and whether they gave any undertaking that they would not pass on the duty to the extent it has been passed on? Further, has he considered at all the possibility of so arranging this taxation that it might fall upon them, and not upon the general body of consumers?

I beg to second the Amendment.

In supplementing the statement already made, I would refer to the partial promise that the Chancellor of the Exchequer gave when making his Budget statement, that there was no reason to doubt that the tobacco companies, who were making such fabulous profits, would at least bear a portion of the increased taxation that be proposed. It is evident already all over the country that not only are retailers compelling consumers to pay the full 8d. of extra taxation, but in many eases we have evidence that where consumers purchase their tobacco in very small quantities, such as half an ounce at a time, they are actually being called upon to pay even more than 8d. a pound extra. So that, notwithstanding the promise that the tobacco companies had pre viously made, the large tobacco firms are apparently bearing no portion of this increased taxation, and the retailers are going to demand certain extra profit for the money that they are compelled to hand over to the Treasury. On examination of the figures between 1913 and 1927 and; the tremendous increases in taxation that tobacco smokers have been called upon to pay, I think even the Chancellor of the Exchequer would feel disposed to say that we have reached a point when the smoker has already paid far more than his normal proportion of taxation to meet any extraordinary period of financial depression.

In 1913–14 the normal taxation was 3s. 8d. per pound. By 1917–18 it had grown to 6s. 5d. per pound, or an increase of 2d. per ounce for all kinds of tobacco. By 1918–19 the duty had reached 8s. 2d. per pound, or an increase of 3½d. per ounce of tobacco. The proposals in the present Budget carry the sum to 8s. 10d. or a taxation of 4d. per ounce upon that kind of tobacco which before the War was purchased at 3d. per ounce or 3½d. per ounce maximum. Therefore, from the point of view of the consumer of the poorest quality of tobacco, the increase in the proportion of taxation has been well over 100 per cent. since 1913–14. But the total figures, rising as they have done from £18,283,000 in 1913–14 to £53,500,000 in 1926–27, indicate the colossal increase in the taxation of tobacco, which taxation after all is largely borne by the people whose only enjoyment is to smoke occasionally. In dealing with this Tobacco Duty perhaps the Chancellor of the Exchequer himself has overlooked the fact that not only must the consumer considered when increases in taxation are imposed but that there are 440,000 people who have purchased licences to retail tobacco and who are hound to be affected in a certain small measure by this taxation while wages are so low. The 440,000 retailers will find that the relative sums received for tobacco will decrease, and unless they do on a universal scale what has been done in a few instances already, that is, charge more than the 8d. per pound now imposed by the Chancellor of the Exchequer, so that they shall obtain some extra sum for the collection of this increased taxation, their normal profits are bound to be reduced.

I have a letter here from one of my constituents, stating that a meeting has already been held and a protest carried against the price that retailers are now charging for tobacco. The letter also states that the retailers have intimated to the local consumers of tobacco that they cannot be expected to handle pounds per week extra unless, they are to receive some remuneration for the collection of the taxation that the Chancellor of the Exchequer is imposing. I suggest to the Chancellor of the Exchequer that the proportion of taxation upon the poorer qualities of tobacco as compared with the proportion of taxation on the better qualities is one further instance of the incidence of taxation falling heaviest on the shoulders of those who are least able to bear it. Something was said yesterday by the hon. Member for Ilford (Sir F. Wise) of the proportions of direct and indirect taxation to-day compared with the proportions in 1913–14. I would remind the House that, while the proportions have changed very considerably, other changes have taken place which tend to cancel out the adverse effect that they may have had upon the direct Income Tax payers. While the proportion of direct and indirect taxation has certainly changed, the amount of money paid by the nation in interest on the National Debt service has also changed considerably. While in 1913–14 we were called upon to pay only £19,000,000 interest for National Debt services, in 1926–27 we were called upon to pay well over £300,000,000 for the same purpose. People who are called upon to pay direct taxation are very largely the people who are the recipients of that increased interest.

One must come down to the man with £2 per week to know the real evil of any increase in indirect taxation. While it may not be the most desirable thing to cultivate the habit of smoking, the habit has been cultivated; it is here and it undoubtedly does form the only luxury that a very large proportion of the lower paid workers of this country enjoy. It seems to me that the Chancellor of the Exchequer is imposing further upon the poorer section of the community and limiting their few privileges, and to that extent one is fully justified in opposing this new imposition. I would also remind the Chancellor of the Exchequer that his proposal may have some disastrous con sequences in some of our Poor Law institutions. I was once a member of a board of guardians who used to provide the aged inmates with an ounce of tobacco per week. When the guardians were in a very pleasant frame of mind a few years ago they sympathised still more with the aged people who had spent 50, 60 or more years of their lives in arduous toil, and they agreed to increase the allowance of tobacco by allocating to each inmate who was a smoker two ounces a week. This increased taxation is going to be a further addition to the charges of Poor Law guardians, who are already too heavily burdened as a result of the actions of this Government. It seems to me that the consequences, or some of them, are not realised by the Chancellor of the Exchequer. I would like to supplement the question put by my hon. Friend who so ably moved the Amendment, by asking the Chancellor to justify, if he can, this further imposition on the poorest section of the community. From every conceivable point of view, notwithstanding the present financial position of the country, I cannot see any sort of justification at all for this increase in the tobacco duty over and above the point at which it has stood since 1918, when the yield was increased from £18,000,000 to £53,000,000, and now the Chancellor of the Exchequer is budgeting for £56,500,000 from that source. The Chancellor of the Exchequer said yesterday that he had no desire or intention to impose any further burdens upon the community, but obviously this is a burden upon the community and it will be felt by the poorest section of the people. For these reasons I support this Amendment.

It will not be in order during the remainder of this Debate to have a discussion on the relative merits of direct and indirect taxation which by custom is confined to the first Resolution dealing with tea.

; The hon. Member who has just concluded his speech and the hon. Member who moved this Amendment have asked for some explanation and justification of certain words which were used by the Chancellor of the Exchequer in his financial statement upon the introduction of the Budget. I must say that I am rather surprised that the hon. Mem ber for Peckham (Mr. Dalton) should have blundered as he did on the question of prices, because I understand the hon. Member is regarded by the members of the Labour party as an authority on economic questions, and one would have expected that he, at all events, would have been very cautious in regard to his facts, and that he would have been more accurate in his statement regarding existing conditions. The words used by my right hon. Friend on the occasion referred to were very cautious words, and he said:

"I have no reason to believe that the whole increase of this tax will be passed on to the consumer."—[OFFICIAL REPORT, 11th April, 1927; col. 93, Vol. 205.]

He said he had been told that.

Even supposing that the whole of the duty were being passed on to the consumer, is there anything in that upon which to reproach the Chancellor of the Exchequer or the Government? Has anybody ever suggested that in the case of indirect taxation the tax is not supposed to be passed on to the consumer? I always understood that that was the case. [HON. MEMBERS: "Hear, hear!"] Naturally, hon. Members opposite cheer that sentiment. I know perfectly well that they are opposed to all forms of indirect taxation, and that is quite a consistent doctrine for them to adopt. The proposal the Government is now making in this connection is made upon a perfectly well-recognised system of indirect taxation. I know that Members opposite are opposed to indirect taxation in every shape and form, but, even if it were true that the whole of this duty was being passed on to the consumer, there would be nothing in that of which we on these benches need feel in the least ashamed or disappointed about.

Reference has been made to the large profits which have been earned by a number of big tobacco companies, and that is quite true; but I should like to point out that those profits are already being taxed through other methods by direct taxation. On the really important point with reference to this duty the hon. Member for Peckham in his speech has gone hopelessly astray, and I will give the evidence. The hon. Member challenged my right hon. Friend to offer any justification of the words he had used which he said had been contradicted by the facts, but that is not so. They are absolutely being supported by the facts, and as the hon. Member for Peckham has made that statement, perhaps the House will allow me to give some details of the movement of tobacco prices, as indicated by the chief companies. First of all, I would like to say that if an excuse is to be found for the blunder which has been made by the hon. Member opposite it may be owing to the fact that he himself has told us he is not a consumer of cigarettes. I do not know whether the particular brand which the hon. Member smokes is the higher grade Havana cigars or pipe tobacco, but, at all events, he is not a cigarette smoker, and no doubt that accounts for the mistake he has made. As a matter of fact, cigarette smoking accounts for between 70 and 80 per cent. of the consumption of tobacco, and if the prices of cigarettes rise or fall, as the case may be, that is the best indication of the effect upon the price of popularly smoked tobacco.

I will deal first of all with the case of the Imperial Tobacco Company. They have issued a statement to the effect that they are making no change in the price or quality of their cigarettes. [An Hon. MEMBER: "They can make them smaller!"] I anticipated that interruption, but I am sure those who have that apprehension will be very much relieved and reassured when I say that since that first declaration was made the Imperial Tobacco Company have made a further statement under the influence of competition that their cigarettes not only will be unaltered in price and quality but will remain unaltered in every respect. That is the very satisfactory result of competition which was naturally anticipated. Before the second declaration was made by that company, another rival concern, Messrs. Carreras, who naturally wanted to take first place in this respect, announced that the price of their brands of cigarettes would not be changed, and they guaranteed that there would be no change in size, weight, or quality. There you have the two largest producers and manufacturers of the most popularly smoked tobacco in this country absolutely turning down the speech which has been made this afternoon by the hon. Member for Peckham. Therefore, without going any further, and I could give other instances, those two companies fully justified the cautious hopes expressed by the Chancellor of the Exchequer when he said that he hoped the whole of the duty would not be passed on to the consumer.

In point of fact, what the hon. Member opposite has suggested would be the right course to take with regard to these duties is the course that the Government are taking, namely, that the greater part of the duty, as far as popularly smoked tobacco is concerned, will be paid out of the profits of these two great companies. Let me go a little further. It is not only these two great companies, but I find that Messrs. Godfrey Phillips, Limited, the Abdulla Company, Limited, Messrs. Cavanders, Limited, Messrs. Milhoff and Company, Limited, and associated companies, have all announced that there would be no increase in the retail prices of their cigarettes, and no deviation from the present high standard of quality. I will not weary the House by going into them all, but I have a number of others, all of whom make practically the same announcement, that they are not going to make any addition to their prices, and that the quality and quantity of the goods they sell will be the same as they have been before. I submit to the House that that is a complete answer to the suggestions that have been made, and a complete justification of what was said by my right hon. Friend.

The hon. Member for Peckham was guilty of another inaccuracy, though not, perhaps, quite so serious, and of less consequence. He was speaking about the preferential rate on the basic grade of tobacco under the proposals of this Budget. I admit he was not basing any great argument upon it, but he mentioned the preferential rate, and his figure was 2d. wrong. Instead of the preferential rate of 6s. 9½d., he said it was 6s. 7½d. I only mention that to show that, although we all have a great admiration for the hon. Member, we certainly cannot trust his accuracy.

When are you going to say anything about pipe tobacco?

I could say a good deal about pipe tobacco. I have already shown that there is no change either in the price or in the quality of tobacco in that form in which it is smoked to the extent of 70 per cent. of the consumption and over 60 per cent. of the revenue derived. What is the reason why we have to resist this Amendment? It is a very simple one. The real reason is the same which might be given for every one of the Resolutions which have been or will be before the House—that certain revenue has got to be found during this present year, and the revenue to be derived from an increased duty upon tobacco is one which we cannot possibly surrender. The Amendment would have this effect, that it would deprive the Revenue during the coming year of two millions of money, because, if the hon. Member's proposal were carried—other Members want to keep it at the old level, while the hon. Member and his friends are willing to give us an addition of 2d. on the duty hitherto in force—it would involve a loss to the Revenue of £2,000,000, and I do not think the Hens, if it has grasped the general financial situation, will consider it possible to accept any Amendment which would involve so much loss of revenue as that.

I am relieved from the necessity of following the hon. Member into his disquisition on indirect and direct taxation, by the information from the Chair that that would be out of order; and I am glad that that is so, because I think we have had that particular form of Debate almost ad nauseam, and I de not think it would really assist us at all in coming to a conclusion on these specific proposals one by one to have the general policy of taxation argued at great length. In these circumstances, I think the House will regard the proposal we are making in this particular Resolution as a reasonable one for raising a considerable revenue; and, although I have no doubt that much will be said, in the Debate which will follow, from different points of view on all sides of the House, I confidently hope and believe that the large majority of the House will see the reasonableness of what we are doing, and will support the Government by carrying this Resolution.

The right hon. Gentleman concluded by saying that no doubt, in the Debate which would follow his speech, expressions of opinion upon the proposed increase in the Tobacco Duty would be given from all quarters of the House. When he sat down, however, I saw no disposition on the part of hon. Members behind him to rise in defence of this proposal. [HON. MEMBERS: "You were called!"] I should have been delighted to wait and see that enthusiasm in favour of this proposal which was suggested by the right hon. Gentleman. At any rate, we had no exhibition, in the Debates yesterday upon many of the Resolutions that we discussed, of an anxiety on the part of the usual supporters of the Government to give their support to those proposals.

I can quite understand why the Chancellor of the Exchequer left to the Financial Secretary the difficult task of defending this proposal. It might be noted that, on the two occasions when the Resolutions discussed have been of a more important character, the Chancellor of the Exchequer has delegated the duty of defending them to the Financial Secretary to the Treasury. I do not know whether it is the intention of the right hon. Gentleman to intervene later in the Debate, but if so, I hope he will attempt to do what the Financial Secretary has utterly failed to do, and that is to offer a single reason in support of this proposed addition to taxation. I have the highest admiration for the ability and the debating skill of the Financial Secretary to the Treasury, but I say quite sincerely that I have never known him fail so miserably to bring forward even a plausible defence as he has done to-day, and I am quite sure he must be feeling exceptionally uncomfortable.

What, indeed, was the case put forward by my hon. Friends against this increase? They pointed out that this proposed increase was an addition to an already very heavy duty upon an article which may not be a necessary, but which has become, shall I say, a necessity—perhaps that is the more correct word—to a very large number of the people of this country, and not merely, as the Chancellor of the Exchequer pointed out in his Budget speech, to men but in an increasing degree to women. I incline to think that one reason that has influenced him to put an additional duty upon tobacco is the fact he mentioned in his Budget speech, that women are consuming tobacco to a greater extent than they did formerly. It seems to me an obsession with the Chancellor of the Exche quer to find ways and means of putting additional taxation upon women. I am really surprised at it. I know he was not a defender of women's rights and a supported of women's suffrage in the past but he has altered his views. In those days he believed in opposition to women's enfranchisement just as he believed in the multiplication table. Now he is a great supporter of the extension of the franchise to women and is a member of a Government which is going to enfranchise all women over 21 years of age. Has it never occurred to him what political and electoral implications there may be in this proposal to increase the taxation upon cigarettes that these women who are shortly to be enfranchised will have to pay? It may, as a matter of fact, be a determining factor with them.

What is the case put forward by my hon. Friends against this increase of the Tobacco Duty? In the first place, they pointed out that tobacco being, as I think they very properly described it, a poor man's comfort, already bears a very heavy duty indeed. I am not quite sure, but I believe, with the possible exception of the Spirit Duty, tobacco is far more heavily taxed than any other commodity. I did not quite follow some of the figures that were given by my hon. Friend who moved the Amendment in regard to the proportion of the duty to the retail price of the article. I find it, difficult from the figures of the duty upon tobacco, to calculate what is the exact proportion of the duty to the retail price of the article. My hon. Friend said that, according to the Colwyn Committee, it was something like 60 per cent. It says here that the duty on manufactured tobacco is to be 11s. 2½d. a lb. That is something just over 8d. an ounce. I do not smoke pipe tobacco, but I understand that tobacco will be retailed at from 10d. to 1s. an ounce. If you take it at 10d., I make it out that something like 17/20ths of the retail price of tobacco is duty. That is to say, when these new duties become operative, out of every 20 puffs of tobacco the working man blows, three are for his own enjoyment and 17 for the Chancellor of the Exchequer. How can a heavy duty like that be justified? Then the Financial Secretary conveniently ignored what was the main burden of the argument of both my hon. Friends, namely, that the opera tion of the Tobacco Duty weighs far more heavily upon those who cannot afford to smoke expensive tobaccos and have to confine themselves to cheap tobacco. It is a sort of ad valorem tax. The poorer the man the heavier the burden. I know the Chancellor will say this is an optional tax and the smoker need not pay it unless he wishes, but there can be no such thing as, a justification of an optional tax, because revenue is supposed to pay for national expenditure, and everyone is supposed to benefit from national expenditure, and therefore contribution to national expenditure ought not to be optional. It should be compulsory, and its incidence should be so arranged that everyone will contribute in proportion to his means and as far as possible in proportion to the benefit he receives from the expenditure of the State. Therefore, this Tobacco Duty does not conform to that very fundamental condition of sound taxation.

I wish the right hon. Gentleman would elaborate that most interesting doctrine a little more. How does he apply it, for instance, to the Beer and Spirits Duties?

I have always said the duties upon beer and spirits stand in a special category. [Laughter.] Hon. Members laugh, and by laughing they simply, along with the Chancellor of the Exchequer, show how incapable they are of understanding a difficult and delicate point. The original purpose of the taxation of liquor was not so much for revenue purposes, but because it was a monopoly licensed by the State, and I look upon the taxation upon liquor as being very largely a payment to the State of the price of the monopoly that is enjoyed by the trade.

To get back to tobacco. I was dealing with the contention of my hon. Friend that the poor man pays a far larger proportion of the Tobacco Duty than those who can afford the more expensive tobaccos. Another argument is that a tax of this sort penalises a man according to his taste. Because one man happens to have a particular taste, or happens to spend some part of his means in a particular way, he is taxed, when a man who has not got that taste and chooses to spend the same amount of money on some other article which is not taxed escapes taxation altogether. That is utterly indefensible and I should like to hear the Financial Secretary or the Chancellor make an attempt to reply to that argument.

rose—

Really, I have taken a quarter-of-an hour already, and I have not yet got to what there was of substance in the right hon. Gentleman's speech. The right hon. Gentleman devoted a great part of his speech to the charge that had been made against the Chancellor of the Exchequer, that he believed that not the whole of this duty would be passed to the consumer, and there was a strange inconsistency in what he said. He began by saying that the purpose of such taxation was that the consumer should pay, and then he devoted the greater part of the rest of his speech to trying to prove that the consumer was not paying at all. I suppose that it is his contention—and I shall show in a moment that it is not correct or true—that the great bulk of this increased duty on tobacco is not being passed on to the consumer. Who is paying it? Somebody is paying it. Well, the right hon. Gentleman says that the tobacco trade is paying it. Is it the purpose, in imposing indirect taxation that it shall fall, not upon the people who are supposed to be deriving some benefit from the expenditure, but upon a small number of people who happen to be in the trade, and therefore cannot possibly escape the payment of the duty? That, I am quite sure, he would not attempt to defend for a single moment. The fact of the matter is that the right hon. Gentleman is trying to make the best of both worlds, and that he cannot have.

I now come to the other part of his speech, in which he attempted to prove that this duty was not being paid by the consumer. I wonder if I should be in order in relating an incident that happened this morning. A friend of mine went into a tobacco shop for three ounces of St. Bruno. He threw down the usual half-crown. The tobacconist said, "Here, I want three halfpence more." What is that for?" asked my friend. "For Winston Churchill," replied the tobacconist. Then my friend said, "Damn Winston Churchill." I should like the right hon. Gentleman to use his argumentative gifts upon my friend who had that experience this morning and to try to convince him whether it is the consumer or the tobacco trade that is paying.

I would not speak to a man who used such language.

My right hon. Friend might overlook my friend's language and deal with the fact. He spent the whole of his time, when dealing with this point, in trying to prove, in the case of cigarettes, that the increased duty had not been passed on to the consumer, but, while he read certain advertisements, he did not read other advertisements, half-page advertisements, which appeared in the Press the morning following the introduction of the Budget, and which told a different story. I would like to remind the House that this promise on the part of people of proprietary brands of cigarettes, well-known brands of cigarettes, applied only to packet cigarettes, namely, cigarettes in 6d. and 1s. packets, and the reason they have not increased the price of those small packets is perfectly clear. It was too small to permit them to put on the 6d. packet and 1d. on the is packet. But we had these large advertisements in the newspapers following the introduction of the Budget announcing that an increase of 2d. per 100 had been made in the price of cigarettes when bought in larger quantities. I smoke cigarettes, I am shamed to say, and I am paying 1s. 8d. per 1,000 more now than I did before the introduction of the Budget, or 2d. per 100 more. May I give the House of Commons a practical example? There has been no change in form, the right hon. Gentleman says. Here we have two cigarettes (exhibited), and that is the change that has taken place. There is one-eighth of an inch taken off the cigarette. That is how they can put it on the price. You can depend upon it that they will find ways and means of recouping themselves at the expense of the consumer. I would like to ask the right hon. Gentleman one more question. Although the price of cigarettes may not have been increased to the consumer, has the price been increased to the wholesale dealers? The right hon. Gentleman does not know. He had better make some inquiry into that question.

Now let us come to pipe tobacco. The right hon. Gentleman said that he could say a great deal about pipe tobacco, but he did not find it agreeable to say that great deal. About the increase in the price of pipe tobacco there can be no doubt whatever.

I need not add to the arguments which have been advanced by my hon. Friends in support of this Amendment. They have not been met; indeed, they were ignored by the right hon. Gentleman. There has so far been no defence whatever of this proposed duty. May I say this, in reply to the right hon. Gentleman's argument about there having been no increase in the price of cigarettes? He referred to the Chairman of Godfrey Phillips. Did he see the speech of the Chairman of Godfrey Phillips made the day after the introduction of the Budget? [Interruption.] He did. Then he remembers that, speaking to the shareholders, the Chairman said: "You can make up your minds that we shall pass on the duty to the consumer wherever we possibly can. [Interruption.] Certainly I am not objecting, but, as I said before, you cannot have it both ways, and that is what the Treasury Bench are trying to do. I need not at this stage say more. I shall be interested to hear the defence of this impost made by hon. Members opposite. I can imagine Members for agricultural constituencies going down and addressing public meetings of farm labourers, who are earning 30s. and 32s. per week, and dilating to these men upon the blessings that are being showered upon them by this Tory Government, chief among which is this increase of ½d. per ounce upon what practically is the only comfort that these working-men have. I wish them joy in doing that. We shall, of course, carry this Amendment to a division. I hardly expect that we shall defeat the Government, but, although we shall not defeat the Government, this action on their part will be one addition to the indictment which they are piling up against themselves, and sentence will be passed upon them when the electors of the country next get an opportunity.

I would like to say just one word regarding that humorous story which the right hon. Member for Colne Valley (Mr. Snowden) told of a friend of his who went to buy three ounces of St. Bruno tobacco. I think the proper comment, when his friend was charged this extra 1½d. and he asked what it was for, would have been, not that "It is for Winston Churchill," but "It is for Mr. Cook." He is the cause of this demand on the poorer classes. I would like just to make one further comment on the ex-Chancellor's speech. I should have hoped that a right hon. Gentleman who had been in charge of the country's finances would have taken a somewhat broader view of this question of the increase in the Tobacco Duty than he did. It would have been enlightening, not only to the House but also to the country, if he had reminded us that out of that £38,000,000 deficit—all due to the general strike and the upheaval in the coal trade, or, let us say, in simpler words, due to Mr. Cook—the Chancellor of the Exchequer is raising under £6,000,000 by taxation altogether, and out of that £6,000,000, £3,000,000 comes from this one duty on tobacco, and of that £3,000,000 a very much larger part than the Chancellor of the Exchequer dared to anticipate when making his Budget statement is not being borne by the consumer at all. The right hon. Gentleman the Member for Colne Valley said that the Chancellor of the Exchequer always seemed to be so anxious to put a further tax on women. In spite of what the right hon. Gentleman said, there is not a question in anybody's mind after the statement of the Financial Secretary, in which he quoted the largest firms in the country dealing in cigarettes, who have all pledged themselves to the public that there is to be no alteration in shape, form, or quality of the cigarettes that they supply, or in price, and, as women are practically exclusively smokers of cigarettes, it is abundantly clear that the Chancellor of the Exchequer in this case is not putting any additional tax upon his lady friends at all. There is one question in relation to cigarette and pipe tobacco which has not been wholly or satisfactorily dealt with in this Debate. The Financial Secretary told us that from 70 per cent. to 80 per cent. of the tobacco smoked in this country was in the form of cigarettes. It is no part of the duty of the Chancellor of the Exchequer to try to reform public taste, but I do think that it is unfortunate that that great part of the smoking which is done by the people of this country of both sexes escapes practically without any increase at all, while, as the hon. Member for Don Valley (Mr. T. Williams) said —my information agrees with his—the very cheapest form of pipe tobacco will not only pay the whole duty but that which is sold in the smallest quantities will pay more than the whole duty. That is a very unfortunate development. I am quite sure that it would be beyond human wisdom in putting a tax on an article of consumption of this sort to foresee exactly how it will be borne, and in what proportion, by the people.

I would like to call the Chancellor of the Exchequer's attention to the facts as they are put before me by members of the retail trade. They are these. What was known before the War as 3d. shag—or similar quality—now cost 8d. an ounce. In order to meet popular demand a still cheaper form of pipe tobacco, presumably inferior to what was known as 3d. shag, is sold at 7d. per ounce. The poorest people who want to economise their smoking can now obtain half an ounce of this 7d. tobacco at 3½d., but the trade has not yet devised means of selling them half an ounce of 7½d. tobacco at 3¾d., because the farthing is not generally current. Therefore, unless they devise means of working down the price, not yet hit upon, in regard to half ounces of their cheap tobacco, the poor man will have to pay 4d., which is double the increase in the duty. That is very unfortunate. I feel bound to draw my right hon. Friend's attention to it—I did not know that attention was going to be called to it by hon. Members opposite—and I hope that his advisers will be able to devise some means of dealing with this unexpected incidence of the tax upon the very cheapest kind of tobacco bought by the poor.

I would like to say just one thing further, and it is, that after all, it is not to be expected that the Chancellor of the Exchequer, though he has got the country out of an extraordinarily difficult situation during the last financial year, will be able to raise the necessary revenue without causing the slightest hardship to anybody. I have found among my working class friends quite a different spirit from that which the ex-Chancellor of the Exchequer seems to anticipate. As we seem to be telling familiar stories this afternoon, I must admit that I was at one end of a cross-cut saw and my friend at the other only two days ago. He commented on the effect of the increase in the duty on tobacco, and his comment was "While we must not grumble, I shall have to take a pull," meaning that he was not going to smoke quite as much as before. I am sorry he should have been deprived of even a puff of his pipe tobacco, but he fully realises—as I believe, the great majority of his class realise—whom he has really got to thank for the present trouble, and why he has got to pay more for his tobacco, when he looks a little further than the right hon. Gentleman's friend who went to buy three ounces of St. Bruno tobacco. The country as a whole, I think, has got off extremely lightly in face of the difficulties imposed upon the Chancellor of the Exchequer and upon the country by the incidents engineered by the extreme Labour agitators last year.

I rise to support the Amendment to the proposal to increase the Tobacco Duty. I want, first of all, to congratulate the Chancellor of the Exchequer upon what, apparently at first sight, was very excellent information given to him when he was framing the Budget when he told the House that he had reason to believe that a great deal of the taxation would not be passed on to the consumer. At first sight that appears to be correct, but I am convinced in my own mind that it will not be very long before the manufacturers will take steps to pass a great deal, if not all, of that extra tax on to the consumer. If the consumer does not pay in that way, the manufacturer will make so much less profit and pay so much less Income Tax that someone else will have to make up the deficiency. If we are to have indirect taxation, I think that tobacco, as a means of raising revenue, is a good subject. We have heard it talked about in days gone by as a luxury; then it became a necessity to some people. Let us look at it, if you like, from the point of view of a comfort to working men. I am in a very invidious position to-day, for while I am a very heavy consumer of pipe tobacco, I am not, under this proposal, going to pay any increased taxation. The firm from whom I purchase my tobacco are not imposing any extra charge on me, and the consequence is that while this Budget is not going to cost me any more, I still oppose this tax because it inflicts an additional burden upon the poorer people of the country, especially upon pipe smokers.

You will find that this halfpenny an ounce, except in the one form mentioned, will be passed on to the consumer. In many cases more than a halfpenny is being passed on, and in consequence a larger percentage of the tax is being paid by the poorer section of the community, which is absolutely wrong. This happens in every part of our taxation which is based on poundage. The lower the value of the article, the higher the percentage of tax. In this case the cheaper the tobacco, the higher the tax to be paid by the consumer, which is absolutely wrong. It is certainly wrong that I, smoking a fairly good tobacco, am going to escape taxation, while the poor man is to pay. I am told that, apart from the difference in size of certain cigarettes, as pointed out by the ex-Chancellor of the Exchequer, a particular brand of cigarette is being charged to the wholesaler at an additional rate of 2s. per thousand owing to the tax, with a provision that he is not to charge more to the consumer. The consumer is not going to pay in that case, but the retailer is. Although the retailer may have made big profits before or he may not, it, at any rate, seems to me that it is not fair for tobacco manufacturers who have made huge profits to pass the tax on to the man who has to retail tobacco across the counter. I do not know whether it is correct or not, but I am told that the additional price charged varies from is. 6d. to 2s. per thousand. If that be so, it is infinitely worse that the tax should be juggled with in this manner than that it should be placed upon the consumer, when everyone would have to pay and know what he would have to pay in consequence of this extra imposition. As an income Tax payer, if this amount of money has to be raised, I say it ought not to be placed upon the comfort of the working man, but that it should be placed upon Income Tax payers, so that non-smokers should not avoid their just proportion. I must protest, and I shall vote against this Resolution, because I believe it is absolutely unfair to the poorer section of the community.

I must say that I do not like the suggestion which the ex-Chancellor of the Exchequer makes against these big tobacco manufacturers when he manipulates two cigarettes and shows the different length of them. He has not told us whether they are quite the same cigarettes, or the same brand, or what they are, or whether he bought them. I should like to have them in my own hands. It is quite possible that when he takes such a cock-eyed view of things in general he may think that the cigarettes may not be perfectly genuine. The working man knows perfectly well who is causing these disturbances. He knows that he has to thank Mr. Cook, the Trade Union Congress, and the present state of the law—which, happily, is now going to be altered—which allows these preposterous goings on in the country. I am exceedingly sorry to see the Tobacco Duty raised, and still wore indignant to see that the Whisky Duty eras not been lowered. I shall claim the support of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) when I come to move a reduction in the Whisky Duty for the purpose of raising additional revenue, because it has already reached an uneconomic stage. This Tobacco Duty is undoubtedly the fruits of the labour disturbances that we have had. The Chancellor of the Exchequer, seeing the enormous development in the use of tobacco—the use of this commodity is always going on and on—realises that there is some money to be got out of it, and that is what the Chancellor of the Exchequer looks for. What I object to is that other luxuries and comforts of the working classes and of all classes—because I submit that the consumption of liquors are the comforts of all classes of the normally constituted masses of mankind—are being taxed to such an extent that they are becoming uneconomic. You cannot say the Tobacco Duty is uneconomic, because its consumption is going up by leaps and bounds, and both sexes are making use of it.

It has occurred to me that the explanation in respect of no increase in the price of cigarettes is this. There is a con siderable concession made in respect of the tobacco produced from our own Dependencies. In the great Colony of Rhodesia, with which I am intimately acquainted, there is produced the finest tobacco that is grown throughout the world; and this is more and more being used and gets the benefit of Imperial preference. I am satisfied that these big companies, by their enormous organisations and the gigantic nature of their output, are able to supply tobacco at cheaper prices than they would be if its production was more distributed. I am not in favour of combines in any shape or description, but I think that if they are centred more and more in Rhodesia, Nyasaland and other places where they grow magnificent tobacco, they will be able to manufacture tobacco at a very moderate price. That is how they are going to meet the difficulty. The result of this increase in the duty will be automatically to drive the cigarette-producing companies more and more to our fellow-countrymen abroad for their supplies.

Tobacco has always been used for developing our Empire. In the old Virginia days, before we had the split with America over another commodity, which occupied a great deal of yesterday's Debate, namely, tea, tobacco was used for the purpose of devoloping our Colonies, and now it will be more and more used, and I prophesy that in the course of a comparatively short time the main source of tobacco supply for the citizens of this country, and for many other parts of the world where manufactured tobacco is sent, will be our own Colonies. This will enormously strengthen the industries of this country, because it is well known and admitted by all but the most pig-headed Free Traders, who are now, happily, becoming relics of the past, that our own Colonies are our best customers and producers of commodities. The ultimate result of this duty, therefore, will be to strengthen the position of the working classes and really to assist them, because it will lead to the development of the Colonial system.

We have heard a new argument for Preference from the hon. and learned Member for Argyllshire (Mr. Macquisten). I did not expect to find this form of argument trotted out by him on this occasion. He also referred to his intention of moving a reduction in the Whisky Duty. Will he tell us how that will help the Empire? Is he going to hang that on to Imperial Preference and the Tory Imperialism of the present day?

There is no other whisky than Scotch whisky, and the hon. and gallant Member in travelling round the world ought to have found out that it is one of the greatest exports of this country.

The hon. and learned Member has never been to Canada, or he would have sampled what is known as rye whisky. Perhaps, with one eye on his constituents, he would not call that whisky, but the Canadians call it whisky, I am told. However, those who excuse themselves accuse themselves, and the continual harping by hon. Members opposite on Mr. Cook and the Trade Union Congress and the unhappy events of last year, as an excuse for the increase of taxation this year, is really the self accusation by the present Government of their incompetence to govern. It is no use the hon. Member for Barnstaple (Sir B. Peto) following the usual practice of these days and going out directly after making his speech. The hon. and learned Member for Argyllshire made the same excuse, and we had the same yesterday from the Chancellor of the Exchequer. The excuse that it is all due to the troubles of last year will not go down with anyone with any sense at all. The Government are responsible for what happens in the country. When trade increases, they say, "Look what wonderful people we are," but when trade falls off and our revenue declines, they say, "Blame the Opposition!" They cannot have the best of both worlds.

Is not the hon. and gallant Member aware that the government of this country is carried on by His Majesty's Government and by the Opposition—that it is a joint affair?

These high constitutional questions are not relevant to tobacco.

I, in opposition, gave certain advice to the Government last year, which they did not take. Hence the trouble. However, I wish to say a few words to reinforce what was said by the hon. Member for Oldham (Mr. Wiggins), who pointed out that the expensive tobaccos are escaping the increased duty and that the poor man's shag is paying the increased duty and a, bit over. I only rose to point out another anomaly, and that is the case of the cigar smoker. Some of the cigars come from the Empire, so this will interest the hon. and learned Member for Argyllshire. Cigars are falling off in consumption, and they are now really only smoked by wealthy people and a few poor people, like myself, with very refined tastes. I cannot smoke the cheaper cigarettes. I can only smoke a very limited range of tobaccos and cigars. I am happy, personally, with the hon. Member for Oldham, that the chairman of the Association of Cigar Importers has issued the usual pronouncement in the newspapers to the effect that cigars are not going up in price. Therefore, the very limited range of poor but fastidious smokers, like myself, will escape this impost, which will be paid by the producers, or importers, or retailers, as the case may be—no doubt, the retailers. I am not going to pay it, and similarly the wealthy man who smokes cigars after and before breakfast, and all day long, and half the night will be paying no extra tax at all, but the poor wretch earning 30s. or 28s. a week as a stonebreaker, hedger, ditcher, or agricultural labourer will have to pay an extra farthing for his half ounce of shag every time he buys it. I am told he is actually paying a halfpenny, but it ought to be a farthing. That is grossly unfair. It is the unfairest thing I have ever seen in a Budget, and I think this is the eighth Budget at which I have assisted in Parliament. How can the right hon. Gentleman defend it? Your cigar smoker who was paying 2s., 2s. 6d., or 3s. for his cigars before the Budget is paving no more now, while your poor wretch on 30s. a week is paying an extra halfpenny on his half-ounce of shag, the little screw of shag he buys at the village inn. It almost reduces me to speechlessness with indignation.

Now I am going to take up the cudgels for the pipe smoker as against the cigarette smoker. I am going out against the cigarette smoker. I regret that the incidence of this tax is going to fall in such a way that the pipe smoker is to be penalised and the cigarette smoker is, in many cases, though not in all, to escape. I base myself on medical evidence. The doctors inform us that people who must smoke, those who smoke heavily and injure their health, as is sometimes the case, should smoke, if possible, pipes or cigars, and there is a general consensus of medical opinion against excessive cigarette smoking, yet in this Budget and its results a very large group of cigarette smokers will pay no extra tax, and a very large group of pipe smokers will pay an extra tax. That is bad statesmanship on the part of the Exchequer.

As for the increase of smoking among women, I do not object to that in the least. I object to cigarette smoking in excess by both sexes and by the whole country, and I am not afraid to say so, and I do not care whom I offend by saying so. The statesmanship or lack of it, that imposes an extra tax on the healthier form of smoke indulged in by the pipe smoker, and that apparently lets off the cigarette smoker, is questionable and foolish. If we looked at the health of the community—and I am only basing myself on medical evidence and not on prejudice at all, for I do not mind a bit who smokes cigarettes or other kinds of tobacco in other forms—we should have put the extra impost on the cigarette smokers and not have had any extra impost on the pipe smokers. One further result is going to be that the men who buy tobacco and roll their own cigarettes will, I suppose, be driven to the proprietary brands of cigarettes instead, and I do not think that is a very good thing either, from the point of view of health; and I have medical evidence to support that. I have attempted to put some new arguments before the House and not to go over the ground covered by other speakers, and, needless to say, I shall have no hesitation in supporting the Amendment.

I wish to put a question to my right hon. Friend the Financial Secretary to the Treasury. I take it, of course, that the 8s. 10d. is the new full duty on tobacco which governs the whole scale. Previously, as the right hon. Gentleman knows, the preferential rate for Imperial tobacco was three-quarters of the full rate, but this year that is changed, and the extra 8d. which brings the standard rate from 8s. 2d. to 8s. 10d. has been added en bloc to the preferential rate. Therefore, the new preferential rate for Imperial tobacco will not be three-quarters of the new standard full rate, but it will be the old preferential rate plus 8d., and, as a matter of fact, while I am no very great mathematician myself, I have worked out one or two of these figures, and I find, for example, that while the duty on a tobacco under the old full rate of 8s. 2d. was 6s. 1½d. on the preferential rate, this year it will be 6s. 9½d., whereas, if it was three-quarters of the standard rate as before, it should be 6s. 7½d. That is to say, that the duty on Imperial tobacco would be 2d. less than it is now proposed to be.

Perhaps my right hon. Friend could, in the course of the Debate, or at some other time, elucidate why, if there is a fixed proportion existing between Imperial tobacco and other tobacco, the duty is now increased as a, flat rate. In the higher items in the Memorandum it is not even at the 8d. rate, because the increase on snuff, for example, is from 11s. 10½d. previously to 12s. 10d. now, which means an increase, not of 8d., but of 11½d. on the full rate. Taking snuff again—I am afraid it is technical, but I hope my right lion Friend will see what I am driving at—to keep the original proportion between Empire and foreign tobacco at the three-quarters rate instead of the flat rate increase of 8d. on the original standard rate, the new preferential duty would be 9s. 7½d. instead of 9s. 10⅜d. I raise this, because, as a matter of fact, everyone in this House, probably, is aware of the tremendous increase which is taking place very rapidly throughout the country in the consumption of Imperial tobacco. Only last week-end a tobacconist in my constituency told me that in the last three years the change in demand had been quite out of all recognition, and that now—and this is one of the things that appeals to people with comparatively small means—three out of every four customers demand Empire tobacco. Therefore, anything which might retard progress in growing tobacco in our Dominions would be very unfortunate if it were due to an oversight and not to some particular item of policy with which I, at any rate, am not acquainted.

I hope the House will permit me to reply to the question put by my hon. and gallant Friend the Member for Gainsborough (Captain Crook-shank) at once. If my hon. and gallant Friend will look at what was said last year when the Finance Bill was under discussion, and at the Finance Act itself, he will find that the stabilisation of Imperial Preference was put upon this footing, that in the case of specific duties the Preference should be stabilised at the actual amounts of the difference then between the preferential and the full rates. It is only in the case of ad valorem duties that the Preference was stabilised at the existing proportions, and if my hon. and gallant Friend will look at the figures of the present proposals, he will see that the exact amounts by which the Preference was below the figures of last year are preserved throughout. The basic rate of the Preference is 2s. 0½d. on unmanufactured tobacco, which was exactly the same, though the figures are different, last year. It is the exact amount of Preference on the same grade as last year, and in the same way he will find that carried all through. It is a specific duty, not an ad valorem duty.

I must confess to some surprise to learn that the Government of this country have to rely on a newspaper advertisement as an answer to the arguments put forward from this side of the House. We have not had one single word of assurance from the Financial Secretary to the Treasury, or from any of the companies concerned in the tobacco industry, yet the right hon. Gentleman asks the House of Commons and the country to believe that an advertisement written by some capable advertiser will lead the people to believe that they are purchasing something better than the articles they really receive; and we are to accept that as an assurance that the tobacco companies will not pass on the duty to the cigarette smokers. The Financial Secretary has a much greater regard for the two great tobacco companies than I have. Having had to deal with them in connection with their employés, and knowing how difficult it is to secure adequate wages for the people employed in the tobacco industry, I am not prepared to accept the assurance of a newspaper advertisement that this duty is not to be passed on. We have been told more than once that all the burdens we have to bear at the moment are due to the dispute of last year. It is a wonderful shelter for the Government, who had every opportunity of straightening matters out, but, owing to their incapacity, or some other fault, were unable to cope with the situation. We have never had any explanation from any Member of the Government as to how the burden that has to be met now is due to the dispute last year. All the Government have done is to try and make the people of this country believe that the reason they are being asked to pay extra for their tobacco is because the coal owners locked out their workmen last year—

That may be relevant on Second Reading but it cannot be relevant on the Tobacco Duty.

I was dealing with the reasons, which have been given more than once during the discussion, for the extra duty now being imposed.

The hon. Member is perfectly in order, if the Financial Secretary to the Treasury has said that this duty is due to the coal strike of last year, to controvert that view, but he cannot go beyond that.

If the Financial Secretary has not said it the Chancellor of the Exchequer has stated it more than once during this and other stages of the Budget.

The Chancellor of the Exchequer has not spoken on the Tobacco Resolution.

I accept, of course, your ruling, but I may say that the hon. Member for Barnstaple (Sir B. Peto) and the hon. and learned Member for Argyllshire (Mr. Macquisten) had nothing else to say upon the Tobacco Duty except to refer to Mr. Cook, who is held responsible for all the difficulties we have to face at the moment. I suggest that this duty on tobacco is just another example of the methods adopted by the present Government. In each of the last three Budgets they have imposed burdens upon the poorest members of the community. They have done it this year. They knew full well that this duty would be passed on, and that it would have to be paid by people who are already very heavily burdened by tobacco duties which have been previously imposed. They knew full well that it would have to be paid by people whose wages are so low that they are unable to maintain anything like an adequate standard of life. Yet even with this knowledge in their possession, with the knowledge that many of the poorest cannot pay the present prices, the Government are imposing this new duty. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) told us of an incident which took place in a tobacco shop this morning. I was in the North of England last week-end and I heard some shop assistants expressing the wish that the Chancellor of the Exchequer and the Financial Secretary had been working with them in their shops during the week when they had to impose an additional ½d. per ounce on tobacco. I wish there could be that change of occupation for a period.

This duty is being passed on. We are asked to depend on the philanthropy, and everything else, of the Imperial Tobacco Company and the American Tobacco Company. I shall be prepared to accept their word when they are prepared to pay adequate wages to the people in their employ. Those who do not pay adequate wages to their workpeople are the people who can be depended upon to impose every burden they can on other members of the community. One of these companies last year had a profit of £8,000,000, and the other company had a profit of £6,000,000, yet they refused an advance in wages to the people in their employ which would have cost at the most only £750,000. They would not find this sum out of all their millions for their work-people, and the Financial Secretary asks us to accept a newspaper advertisement; not a promise made to him or to the Government, but a statement made by some smart advertising agent who puts up the kind of thing he expects the people to believe.

The Tea Duty was described yesterday as the meanest duty of all, but I think this Tobacco Duty can be ranked with it. It is very evident that the people of the country cannot look to this Government for any easement of their burdens. They can only expect the im position of every possible burden which can be placed upon them. And the Government are imposing this new duty on the people from whom last year they took away unemployment benefit and the funds which they had collected in their insurance societies. The Government dare not impose this new duty on their friends. The hon. Member for Oldham (Mr. Wiggins) suggested that it might have been imposed on the Income Tax payer. The Government dare not look in that direction. They hope to make that section of the community believe that they are their friends, but as far as the vast bulk of the working people of the country are concerned they intend to make them pay every penny they can. That is the policy behind this new duty on tobacco.

I do not propose to examine the question as to whether tobacco is a luxury or a necessity. Provided a man can have a certain minimum of food and water, and shelter and clothing, everything over and above that may be regarded as a luxury, but to the ordinary man in the street, although tobacco may be a luxury, it is one of those luxuries which it is very difficult for the ordinary man or woman to do without and, therefore, a duty on this, particular article is undoubtedly one the incidence of which mainly falls on the working masses of the people of the country who at the present time are very hard hit in various directions. The Chancellor of the Exchequer distinctly stated during the Budget Debate last year, when he was considering the possibility of an industrial disturbance, that if it did occur it would have to be paid for by taxation which would fall on the direct and indirect taxpayer, yet we find that in his proposals this year the greater part of it is to be found by taxes upon the indirect taxpayer. I should like to protest against the gross injustice done to the Chancellor of the Exchequer by the Financial Secretary, and I was surprised that no hon. Member on the other side of the House protested against it. The Chancellor of the Exchequer in his Budget Statement—and the Financial Secretary quoted him—said:

"I have no reason to believe that the whole increase of this tax will be passed on to the consumer."—[OFFICIAL REPORT, 11th April, 1927; col. 93, Vol. 205.]

We remember the circumstances in which the Chancellor of the Exchequer made that statement. He was calculating how he could get the money necessary to balance his Budget this year. He proposed various methods, various ingenious methods, one after another in a long category; and then he came to tobacco. Immediately like the practised speaker he is he felt a shiver going down the spines of the serried ranks behind him and in answer to that feeling he turned round to the Committee and said:

"I have no reason to believe that the whole increase of this tax will be passed on to the consumer."

5.0 p.m.

Now the Financial Secretary in those circumstances asks us to believe that if the whole of the duty is passed on to the consumer we should have no cause of complaint against the Chancellor of the Exchequer! If that happens we shall have the greatest cause of complaint against the Chancellor of the Exchequer that he grossly misled the Committee. I do not believe that the Chancellor of the Exchequer spoke in an empty way think the Chancellor of the Exchequer honestly intended us to believe that he had solid reasons to suppose that this duty would not be passed on and that he meant us to give full weight to the words he spoke on that occasion. I think we are entitled now to ask him to make his words good. The right hon. Gentleman made out that these tobacco companies were not raising their prices. First of all he tried to rule out cigarettes, and the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) has dealt with that argument, showing that the size of cigarettes is now being reduced. He produced cigarettes for us to see, and, further, Messrs. Godfrey Phillips, Limited, have informed the country that they do propose to increase their charges in the autumn. Therefore, even as regards cigarettes, the case which the right hon. Gentleman tried to make out is shown to be falsified and his facts are shown to be wrong. The advice which has been given by the Treasury officials is fallacious, and I hope the right hon. Gentleman, having heard the facts from so many Members, having been shown the cigarettes—so there can be no mistake about that—and having heard the quotation from the proceedings of the annual meeting of a great tobacco company, will perhaps consent to the adjournment of the Debate while he is making further inquiries. At any rate, I hope that between now and the Debate on the Finance Bill he will make further inquiries in the light of the facts which have been brought out in this Debate. Before I pass from the right hon. Gentleman's remarks, I would say how much we welcome the expression he gave to the view that the whole of the duty is always passed on to the consumer.

I did not say that.

I understood the right hon. Gentleman to say so.

What I said was that it was the theory on which it was supposed to be based; but the hon. Baronet must also remember that the wholesalers are included in this question of consumers. Whether the increase all reaches the ultimate consumer is a matter which varies with the circumstances. But that is the theory of indirect taxation.

It will not be put on to the consumer if the wholesaler is patriotic enough and philanthropic enough to bear the burden, and the Government hope it will not be passed on to the consumer. So much of this argument as dealt with cigarettes has been shown by various speakers to be completely fallacious, and the data upon which the right hon. Gentleman depended has been shown to be wrong. The remaining 30 per cent. of the tobacco is pipe tobacco. As to that, the right hon. Gentleman agrees that smokers of pipe tobacco will have to pay the increase; there can be no possible shadow of doubt about that. I am surprised, I must say, to hear that only 30 per cent. of tobacco is pipe tobacco. This question affects very directly those of us who represent rural constituencies. There, at any rate, the great bulk of the tobacco smoked is pipe tobacco, and it is in the rural districts—where there is so much hardship at the present time, with agriculture depressed, and where, we understood, the Government were going to do something to help rural life: as they claim, though I do not say that on this side of the House we had much expectation that they would give help—that one of the principal little luxuries which country people enjoy, pipe tobacco, will be increased in price. The Chan cellor of the Exchequer's argument applied only to cigarettes, but there can be no question about a rise in the price of the pipe tobacco.

I am not impressed by all the extracts read out by the right hon. Gentleman from the reports of the tobacco companies announcing what their intentions are in regard to the price of tobacco. During the 1924 Budget, when we had discussions on the McKenna Duties, the motor car companies all brought out manifestos about what they were going to do and the amount of unemployment which was going to be caused. In some cases they actually threw men out of work, although two or three weeks later they were bringing those men back into the factories, even getting more men, because they could not deal with the orders flowing in. That is how propaganda to influence public opinion is organised by the great interests which expect taxation to be put on on their behalf. It is easy for them to give these assurances, and then, as one company has frankly stated it will do, to put up prices in the autumn. I have very little doubt, and I do not believe there are many Members who have any doubt, that in the autumn, when public attention is shifted from this issue, the great bulk of the companies will raise prices of all kinds of tobacco. This increase will fall most heavily on just those kinds of tobacco used by the poorer sections of the population, especially in the countryside. It will not fall only on tobacco that is smoked; some is chewed; and it is on the smoking and chewing tobaccos of the heavier and coarser kinds that this tax will fall most heavily. For this reason I hope all those Members who, as I do, represent rural constituencies will vote against this duty.

There seems to be a great difference of opinion between the Chancellor of the Exchequer and the Financial Secretary to the Treasury as to who is going to pay this sum of £3,000,000. I heard the Financial Secretary say that 70 per cent. of it would be paid by the tobacco companies—he said they would pay it in effect by not increasing prices. I have been a cigarette smoker a few years, and I remember a number of increases in the duty on tobacco, and I have never yet known a single case where the tobacco duty was not passed on to the consumer. In many cases even more than the increased duty was passed on, because the duty was increased by such an amount that the actual sum could not be added to the price; they have had to place twice the amount of the increased duty on the price of the tobacco. Those of us who have memories remember those things. It is not as though this was the first occasion on which the price of tobacco was raised. Before the War the tobacco of the average working man was 3d. an ounce; if he smoked fourpenny tobacco he was supposed to be one of the "nuts." Now the cost of those tobaccos is approximately 9d. and 1s. an ounce; and yet the Chancellor of the Exchequer is now going to take another £3,000,000 from the tobacco smokers of this country. It may be said that a halfpenny an ounce is not much. It does not amount to much to the Chancellor of the Exchequer. I do not know whether he smokes tobacco or cigars. I would be delighted if some of those who think that a halfpenny an ounce is an infinitesimal sum, and not worth considering, would come down for a month to living on £2 a week, as so many hundreds of thousands of people in this country do. When they had to pay the increased price for their tobacco they would start wondering where the extra 2d. was to come from. I wish some of the hon. Members opposite had had to consider ways and means to know where all these little increases of expenditure are to come from.

In working-class families on a Friday night now it is not a case of reckoning up what they are going to get, but of reckoning up what they are going to do without, and it is a generally accepted fact amongst workmen—I have passed my whole life amongst them—that practically the only luxury of scores and hundreds of thousands of men is their chewing tobacco or their smoking tobacco, and that is going to cost them 2d. a week more. The extra £3,000,000 going to the Chancellor of the Exchequer will be received mainly from the working classes. I wish to enter my protest against it. I think it is about time some of the more expensive forms of luxury were taxed instead of the working man's tobacco having an extra ½d. an ounce put on it. I wonder what it is going to mean on the price of a cigar. [HoN. MEMBERS: "Nothing!"] Nothing on a cigar, but a halfpenny an ounce on twist. It is not fair and I shall tell people in my own constituency and in other constituencies that I think it is not fair. Why should this increase be put on the tobacco of the poor, which was 3d. an ounce in pre-War days and is now 9d., or was 4d. an ounce and has now been increased to 1s.? Because I think this is unfair and is going to mean an extra burden of 2d. or 3d. a week to men with 35s. and £2 a week, I enter my protest against it here, as I shall do in the country.

I am afraid the Financial Secretary has not made out a very good case in connection with this duty. I am wondering whether he had the conduct of the negotiations with the people in the tobacco trade and misled the Chancellor of the Exchequer in connection with this duty, because it was perfectly evident when the Chancellor made his statement in Committee that he suggested that this duty was practically not going to fall on the consumer at all, but that the profits of the tobacco companies were going to be responsible.

indicated dissent.

The Chancellor of the Exchequer shakes his head and states that was not his intention.

I never said it was not my intention. I said it was not what I said. The hon. Gentleman really ought to see the actual words which were used, to which I adhere, and not place on them a construction which they cannot possibly bear.

The Chancellor of the Exchequer's exact words have been read out twice to-day. It has been said that words are used to conceal thoughts. I do not know whether those words of the Chancellor of the Exchequer were used for that purpose or not, but the impression in the Committee and the impression throughout the country was that the great tobacco combine, out of its profits, was going to have to provide this duty, and that it was not going to be a burden on the people. When some time previously the Chancellor of the Exchequer restricted the withdrawal of tobacco from bond it was pointed out in the Press that any increase of duty was not going to be an additional burden on the people, and statements were made with regard to the wonderful profits made in the industry, and how the Chancellor of the Exchequer was simply turning to this wealthy combine, to this combine that was adding wealth to wealth, to get them to bear a share of the burdens of the day. That is the general impression there was throughout the country, and if the Chancellor of the Exchequer will go across the street into one of the tobacco shops there and buy some of this tobacco and ask the man, "Why is there this increase in price? "—[Interruption]—I should expect him to disguise himself a little, or he might send his Parliamentary Secretary; he could depend on his word. If he went into the shop, the shopkeeper would say—[Interruption]. I hope I am not offending the Financial Secretary to the Treasury; at any rate, I do not think he has any book near at hand. If the Parliamentary Secretary to the Chancellor will go into a shop and make inquiries, the man behind the counter will tell him that anything the Chancellor has said on this matter is all nonsense, and that the tax is to be passed on to the public. I speak from experience because that is what the man behind the counter said to me when I asked him if they were increasing the price. He said, "Of course the price will be increased," and it is no use the Chancellor of the Exchequer shaking his head or the Financial Secretary looking at me in that heart-broken manner. The Chancellor of the Exchequer has to bear his responsibility for the impression which was created throughout the country.

indicated dissent.

Then all the rest of the country is wrong and the Chancellor is right; but we will have to examine his words more carefully in the future to see exactly what he means. The Financial Secretary to the Treasury indicated that he could say a lot regarding pipe tobacco, but he would not say it. The right hon. Gentleman reminded me of a character of Dickens, Mr. Winkle, who was always going to skate but never did it, and when, at last, he was forced to do it, he cut an ignominious figure. The Financial Secretary, having told us that he could say a lot on this subject, never got any further, and possibly it is just as well.

There was an extraordinary amount of simplicity in the right hon. Gentleman's attitude when he expressed the view that the hon. Member who spoke from the front Opposition Bench was not as expert at economics as some people in the House seemed to suppose. The Financial Secretary said that the theory was that a tax was always passed on to the consumer and that nobody would suggest anything else. Hon. Members must have short memories. I can recall the Tariff Reformers going on quite the other tack, and suggesting that the foreigners would pay the taxes which were to be imposed under their proposals. I am sorry if I interrupt the conversation which is going on on the Front Bench opposite. I was only pointing out that the Financial Secretary "got away with it" in his statement that the people of the country were not led to expect that the tax would not be passed on to them.

He then proceeded to create the impression that it would not be passed on to them in so far as cigarettes are concerned. He read some advertisements as a proof that the tax was not going to be passed on in connection with cigarettes. I did not believe that even the Financial Secretary was simple enough to believe everything he read in the advertisement pages of newspapers or magazines. I am glad to notice that the right hon. Gentleman seems to agree with me, but evidently in this case he does believe the newspaper advertisements. It was not sufficient for him to have placed before him the two cigarettes taken from the case of the ex-Chancellor of the Exchequer in order to demonstrate that one was about an eighth of an inch shorter than the other. Evidently the right hon. Gentleman was not prepared to believe his own eyes, but preferred to believe the newspaper advertisements. He cannot have it both ways. He says any general tax will go to the consumer. Then he tries to tell us that this tax is not going to the consumer. He knows it is going to the consumer, and the probability is that not only will there be a large tax on the consumer but the Imperial Tobacco Co. will take advantage of the shortening of the cigarette just to take a little bit of commission on the tax. That seems to be the way in which it is going to work out, and I join in protesting against the burden which is being placed on the working class. When the Chancellor was unfolding his statement in Committee, and when he came to the critical point he said all his difficulties would be settled by putting 6d. on the Income Tax. It was interesting then to look round the faces of his supporters. Some turned white, and some green.

The House is now discussing the duty on tobacco.

I was going to suggest that too much tobacco smoking might have been responsible for the change in the coloration of hon. Members opposite on that occasion. However, the Chancellor could not contemplate doing anything like that, and so he is putting a halfpenny an ounce on to the tobacco which is consumed by the working men. If you take a workman smoking two ounces a week, that is 1d. a week, which is being placed as an additional burden on the working men.

Would he save it?

He may save it. There are people who have all sorts of schemes for other people, including the restriction of the population and matters like that, but I am dealing here with the Tobacco Duty, and not with birth control or anything like that. That comes to 4s. 4d. in the year. The Budget on which the Chancellor is congratulating himself puts upon the ordinary working man an additional burden of 4s. 4d. for which there is no sound reason. The condition of the working class is hard enough without any additional burdens, and I should like to hear what justification can be offered for this increase in the taxation of the workers by those who shudder at the prospect of an increase in the Income Tax. I am glad to see that the Prime Minister has arrived. Perhaps I am unduly suspicious but I was developing a theory that there was a split in the Cabinet over this matter. The Prime Minister is notorious as a pipe smoker, and the Chancellor of the Exchequer is notorious for the large cigars he smokes. Some of us thought he possibly got them in order to advertise some firm, and that consequently he was not so much concerned about this matter. But one did think that the Prime Minister would use his influence to protect the working men of the country who follow his good example in using a pipe instead of cigarettes or cigars. Evidently the Prime Minister has very little power over the Chancellor of the Exchequer. The ex-Chancellor of the Exchequer suggested to the Financial Secretary that arguments ought to be produced that would satisfy the man who bought St. Bruno tobacco, and the Financial Secretary was shocked at the suggestion that he should argue with a man who used the words "damn the Chancellor." The right hon. Gentleman ought to remember his own history. It would be better to talk with a man, than to throw a book at him, and I am reminded that no less a person than the Home Secretary has used the word "damn."

We are not discussing the Home Secretary.

The Financial Secretary to-day interrupted the Debate and said he could not possibly argue with a man who used such language with regard to the Chancellor of the Exchequer. I suggest that one of his own colleagues used similar language on a certain occasion. The working man who is having this burden imposed on him has some justification for using strong language, and so I would like the Financial Secretary to reconsider his refusal to give arguments in this matter to men who use words of that kind. I hope we are going to get same reasons from the other side in support of this duty. We have had no reasons so far. We have had pious expressions of opinion from the Financial Secretary, and a touching tribute to his faith in the truthfulness of advertisement, but that is all. I hope we are going to hear some defence of this proposal, and I hope some little consideration will be shown for the people who are least able to bear taxation.

I am glad that the Prime Minister is in his place, because I want to point out that the Chancellor of the Exchequer has taken upon himself to repudiate the statement of the Financial Secretary to the Treasury on the question of whether this duty is to be passed on to the consumer or not. There seems to be a disposition on the part of the Financial Secretary to run away from the position he took up a short time ago. We have been challenged to produce the exact words that were used by the Financial Secretary. I want to remind him of what he said on the second day of the Budget discussion, and I would like him to pay attention to the words. After making reference to the small addition put upon the Tobacco Duty, he said:

"I am very happy to be able to inform the Committee, if they have not already seen it announced in the Press, that we now know that that addition to the Tobacco Duty would not have any effect upon the price of the popularly consumed tobacco, as two of the largest organisations of producers of tobacco have already announced that they will make no difference in price, and therefore it is quite clear, as we anticipated, that the competition amongst themselves"—

I hope the House will note this, because this was the alternative to an increased price to the consumer:

"will compel the various producers of tobacco to go on supplying the public at the old price, notwithstanding this small addition to the duty."—[OFFICIAL REPORT, 12th April, 1927; col. 287, Vol. 205.]

I would like to direct the attention of the Prime Minister to this point, because the quarrel between the Financial Secretary and the Chancellor of the Exchequer must be settled if the interests of the Conservative party are to be served. Just before the Prime Minister entered the House, the Chancellor of the Exchequer when challenged with this statement having been made, very definitely shook his head. He entirely repudiated any share of responsibility for the making of that statement. I want to remind the Financial Secretary to the Treasury that there was no dubiety about the statement, because a remark which I made on the same occasion was never challenged. After the speech made by the Financial Secretary on that occasion, I said:

"I am sure that the public will be gratified, when reading the speech of the Financial Secretary to the Treasury this evening, to know that so far as the duty on tobacco is concerned it will not, on this occasion, be Passed on to the consumer."—[OFFICIAL REPORT, 12th April, 1927; col. 297, Vol. 205.)

Perhaps the Financial Secretary will remember that statement having been made in his hearing without its being challenged in any shape or form. Therefore, when we have from him, as we have had this afternoon, a totally different attitude—

indicated dissent.

The right hon. Gentleman shakes his head. Only a few minutes ago he specifically stated that this indirect taxation was imposed with the deliberate intention that the consumer would be expected to pay it, and that the usual procedure of passing it on to the consumer would ensue. He cannot say one day that the manufacturer of the article is going to meet the duty out of his profits, and come along now and tell us that this additional duty is to be paid by the consumer, and then expect us to pay very much attention to any statement which he may make in any shape or form on any subject whatsoever. We, on these benches, are placed in a very difficult position. We are trying to be just and fair to the Conservative Government when we are attacking them, as we are bound to do, in the country for this and other reasons, but it is difficult when we do not know what they mean. We are entitled to know exactly upon what basis they have applied this duty, and we are entitled to know from them who they expect will pay the duty.

There is another aspect of the question which is very serious. In the development of this duty there has been an attempt to apply the principle of equity in previous Budgets; but if ever there was a charge of a tax being iniquitous, it certainly applies to the application and the incidence of this particular tax. According to the figures which have been supplied to me, the size of the Tobacco Duty since 1914 has been increased 2¼ times. That, coupled with the statement already made that the bulk of the proposed new increase is to be shared by 30 per cent. of tobacco smokers, forces us to a further analysis. We have been informed that cigar smokers are absolved from the effect of this duty, and that the smokers of expensive tobacco are absolved. The attention of the Government has been directed to the fact that the 30 per cent. of tobacco smokers by whom the bulk of the increased duty will be borne are the least able to bear it. They are the people who smoke coarse tobacco. That means that not only has the Tobacco Duty been increased generally 2¼ times since 1914, but with the proposed increased duty the effect upon the man who smokes coarse tobacco is that he pays something like 10 times as much as he was compelled to pay in 1914.

It would hardly be fair to criticise the Government in the application of this duty, inasmuch as revenue has to be raised, if one did not endeavour to suggest some kind of alternative. I am glad that the Chancellor of the Exchequer has returned to the House. I would like to inform him that while he has been absent the statement of the Financial Secretary, which he repudiated, has been proved by the definite words having been read out in the presence of the Financial Secretary, and they have not been challenged, namely, that this duty would not be passed on to the consumer and that it was the intention that it should be met by the manufacturers of tobacco. The Chancellor of the Exchequer has indicated that he does not share that point of view which was enunciated by the Financial Secretary on the second day of the Budget Debate. The alternative which I suggest is reasonable. The Chancellor of the Exchequer wants certain roosts to rob. He managed it very successfully last year in certain directions, and he has repeated it this year as far as the Road Fund is concerned. Without touching the consumer, if he were to intercept the profits that are being made by certain tobacco firms he would find very easily that he could obtain the money which he seeks to obtain by the increase of one halfpenny per ounce on the tobacco of those who are least able to bear it. I have particulars of the British American Tobacco Company. I do not know whether the Chancellor of the Exchequer can get at them or not.

indicated dissent.

The right hon. Gentleman shakes his head. It is conceivable then that he can get at the Imperial Tobacco Company. He does not shake his head now. Since 1914, while the increased duties have been applied and the man who smokes coarse tobacco has had to pay—he always has to carry the heavy burden—the profits of this particular tobacco company have increased over and over again every year. The Chancellor of the Exchequer does not deny that it is possible to consult with this company. Perhaps he might be able to make some amicable arrangement. With his persuasive ability, I have no doubt that he would be able to reconcile any difficulties as between himself and the firm. Here is a nice little nest egg for him. In 1914 this company had a profit of £3,268,000. In 1919 the profits had increased to £4,500,000, in 1922 to £7,000,000—these are all clear profits to the shareholders, in 1925 to £8,800,000, and in 1926 to £8,968,000. In the meantime the dividends had increased progressively. The dividends increased from 15 per cent. until last year they were 24 per cent., free of tax. Is there anything fair in allowing these accumulations of huge profits and dividends to that extent, with 24 per cent. dividends, free of tax, on the invested capital, while, on the other hand, the Chancellor of the Exchequer suggests that he is entitled to tax the man with 30s. or 35s. a week to the extent of one halfpenny every time he buys an ounce of shag tobacco?

It has been pointed out that those who smoke cigars—they are the 24 per cent. dividend receivers—and those who smoke the expensive pipe tobaccos are absolved from payment of this increased tax, whilst the increased revenue is to be found by those who are the least able to bear the expense. While that happens, the people who are able to afford it avoid the tax. We know the difficulties of the average worker, particularly the lower-paid worker, in making his weekly budget balance. There is a difficulty every Friday night or Saturday in deciding what the family have to do without and what they must have. It is the people with very small incomes who are affected. We claim that they are taxed to the fullest possible extent which they are able to bear, and we ask that the Chancellor of the Exchequer will consider the alternative which has been suggested, namely, that he should endeavour to obtain the increase which attaches to this additional duty, if possible, from other sources, and, if need be, obtain it by the application of a tax upon the present tax-free dividends which are paid, and in that way be able to overcome the grievance of which we complain.

I do not wish to detain the House more than a few minutes, but there are one or two points to which I would like to draw attention. We have listened to-day to an exposure of the inconsistency of the Chancellor of the Exchequer in the speech which he delivered to the Committee and his speech this afternoon. One effect of the position into which the Chancellor of the Exchequer has drifted has been to strike his own supporters dumb. Not a single Member of his own party has the courage now to rise in his place and defend the policy of the Chancellor of the Exchequer. My hon. Friend who has just sat down quoted the remarks of the Chancellor that two of the largest fims had promised him that this tax would not be passed on to the consumer. We have had ample evidence to-day that the Chancellor has been misled. I understand the Financial Secretary, and not the Chancellor, is to blame, but, whoever it is, the Department is really at fault, and it is due to the House that one or other of the right hon. Gentlemen should rise in his place now and give us an assurance that, if those two great firms have misled the Treasury, the Treasury has some means of dealing with them. I submit that it is a serious thing for large combines, large powerful corporations like these, to use their power and influence to mislead the right hon. Gentleman who is responsible for the financial affairs of this country. Indeed, I submit that more damage might well be done in that way than is done by certain members of the working class who, for sedition, are clapped into prison. I do hope the Chancellor will feel that it is his duty to tell us what steps he proposes to take in the event of promises made to him, and on the strength of which he framed his Budget, being departed from by these rich corporations.

There is soother point to which I would like to draw the right hon. Gentlemen's attention. In the case of direct taxation, the collectors are under the direct supervision of the State. They can be dealt with, their remuneration can be fixed and their duties can be controlled. When it comes to indirect taxation, you are on quite a different footing. The collectors of these taxes are completely independent of State control. We have no guarantee, unless the Chancellor be prepared to give it to us now, that the increase in prices which has already taken place will be the last increase in the price of these commodities during the next 12 months. We have every reason to believe that when the atmosphere has cleared, when people have ceased to think about the present action of the Chancellor of the Exchequer, these combines may return to the charge, and impose even greater burdens on the people. They will do so on the ground that the cost of pruduction has been raised, and that it is necessary, in order to maintain the fabulous fortunes they have been making out of national necessities, to put up the price further. I suggest that if the Chancellor imposes indirect taxation such as we are dealing with here, and leaves that taxation to be collected by the manufaturers, he is in duty bound to see that these manufacturers do not collect from the people more than they pay to him. I think that is very seldom done, and that an examination of indirect taxation would show that not merely is the tax passed on to the consumer, but that the usual overhead charges of running a concern are added to the tax, and collected by the manufacturer or whoever controls the commodity. I hope the right hon. Gentleman will see that the combines which have misled him will not go further and make a profit out of the tax he is proposing to-day.

The right hon. Gentleman tried to make the House believe that there was a great necessity for imposing this burden. It is demonstrated beyond a shadow of doubt that the burden will fall mainly on the working classes. The Chancellor knows that in imposing this tax immediately following upon his conduct of last year, he is really robbing the poor with both hands. He first of all robs them through their incomes. There was the attack on the miners, regarding which he adds insult to injury by blaming the miners for the necessity of imposing the tax. There was first an attack on the incomes of the miners, and now, having diminished the incomes of the miners, he proceeds to impose this additional burden on them it is all very well for some hon. Members to sneer and say that it is only 4s. 2d. or 8s. 4d., according to the tobacco consumed, but to a person with a low wage 4s. 2d. or 8s. 4d. is a substantial sum, however little it may be to people who pay Super-tax. I submit that there was no need at all to go to these impoverished people for this £3,000,000.

The Chancellor, yesterday, in reply to the right hon. Member for Colne Valley (Mr. Snowden), said that we on this side had by our Amendments abandoned most of the sources of revenue; but may I remind him that there is one source of revenue which we have not proposed to abolish, and that is the revenue from Super-tax? There is, as I pointed out in the discussion on the Budget, £364,000,000 going to some 97,000 people of this country in excess of £2,000 a year each. Surely if the Chancellor had been at all anxious to find the £3,000,000 without putting his hand in the pockets of the poor, he could have taken that sum out of the £364,000,000 a year which is now going to that small number of people? They would not have missed a meal. They would not have lost a smoke; they would not have diminished the consumption of high-priced cigars or high-priced wines by a single shilling. They would never have felt the burden, and no one could rise in this House without

rose in his place, and claimed to move, "That the Question be now put."