Most decidedly, and far more an essential article of diet for poor people all over the country. Comparatively few women drink beer but nearly all drink tea, and most men who drink beer also drink tea. You can avoid the consumption of beer if you think fit and drink something else, but to the vast majority of the people of this country tea is an absolutely essential article of diet.
I regret, also, that the Chancellor of the Exchequer, while claiming to throw his net widely and calling for sacrifice from all sections of the community, should have deliberately differentiated against one industry and have called upon road transport to bear so large a share of the burden. The Committee will remember the history of this tax. A tax on petrol was imposed before the war and shortly afterwards repealed. In 1929 the right hon. Member for Epping, then Chancellor of the Exchequer, wanted some revenue to finance his de-rating scheme and he turned to the road transport industry and imposed a petrol duty on light hydrocarbons of 4d. a gallon. In the financial crisis of 1931, the Chancellor of the Exchequer, looking round for something to tax, again fastened on this unfortunate road industry and in two successive Budgets of that year imposed additions of 2d. per gallon, making an additional 4d., and bringing the full duty up to 8d. a gallon. Subsequently, heavy oil became important because of the development of Diesel engines for road transport, and heavy oil was taxed, first one penny and then finally 8d. The Chancellor of the Exchequer yesterday again turned to this unfortunate road transport industry and called upon it to provide one penny more per gallon on light oils, and one penny a gallon more on heavy oils used for motor transport. Heavy oil in Diesel engines is to pay another penny; but not if it is used to propel a train; only if it is used to propel a road lorry. That, surely, is differentiation against a particular industry, and against that differentiation the Committee ought to protest.
The increase in the Income Tax is certainly preferable to the Prime Minister's disastrous experiment in National Defence Contribution, which started the unfortunate trend in our affairs which the Chancellor of the Exchequer noted yesterday. The increase in Income Tax is less alarming and more productive than National Defence Contribution. Moreover, we applaud the measures the right hon. Gentleman has taken to avoid hardship to Income Tax payers in the lower ranges of income, and to alleviate the burdens upon productive industry by increasing the allowance for wear and tear. We on these benches have' long advocated this increased allowance for wear and tear. The very proposal which the Chancellor of the Exchequer made in his Budget statement yesterday for increasing this allowance was the subject of an Amendment to the Finance Bill last year in the names of my hon. Friend the Member for Dundee (Mr. Foot) and my hon. Friend the. Member for Bradford. South (Mr. Holdsworth). I hope the Chancellor of the Exchequer may be persuaded to go a step further and to permit the allowance for obsolescence to be claimed annually, as is provided for in the fiscal arrangements of more than one British Dominion and several foreign countries, instead of only allowing it to be claimed on replacement. By adopting that proposal he would encourage manufacturers to run the risk of installing experimental machinery which if unsuccessful may never be replaced, but if successful may lead to striking and fruitful industrial developments.
It would, however, have been better if the Chancellor of the Exchequer had said that instead of increasing the Income Tax he proposed to employ six other methods of fortifying the revenue. Time forbids my entering in any discussion of them—or dealing with the question of tax avoidance, which I shall look for the opportunity of doing on some other occasion—but let me conclude by enumerating the six other methods to which I have referred. They are (1), an increase in the Surtax; (2), an increase in the Death Duties; (3), economy and elimination of waste, bureaucratic extravagance and profiteering in armarnents; (4), the taxation of land values, of which the Chancellor of the Exchequer was until recently so eloquent an advocate, and towards which even the Prime Minister has shown on two occasions some disposition; (5), the revival of overseas trade by the reduction of tariffs, the abolition of the quota restrictions and the adoption of the recommendations of M. van Zeeland's report; and, lastly, a constructive policy of peace, making it clear that it is not in national armaments, as the Chancellor of the Exchequer seemed to indicate yesterday, that we can find safety, but that war can only be averted, on the one hand, by confronting those nations which are still employing war as an instrument of national policy, with the collective resistance of all nations which are willing to abide by the rule of law, while on the other hand, making it clear, in specific and positive terms, that on the basis of disarmament and the acceptance of the rule of law there is no grievance or cause of dispute, financial, economic or Colonial, which we shall be unwilling to submit to the arbitrament of third party judgment, and no price which we shall be unwilling to pay for the friendship of all peaceful and law-abiding nations.