Tobacco (Customs Duty).

Part of Orders of the Day — Customs and Excise – in the House of Commons at on 25 April 1939.

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Photo of Mr Thomas Magnay Mr Thomas Magnay , Gateshead

I have sat here for seven-and-a-half hours all but ten minutes, and have heard the whole of this Debate, and I would like to say that in my opinion, for what it is worth, it has not only been an interesting Debate, but has been worth while and has justified all those who wished such a Debate to take place. I would like, first of all, to congratulate the Chancellor of the Exchequer on what I deem to be a fair and reasonable Budget. I am certain that the whole of the North-country, for which I speak, at any rate on this side of the Committee, would agree with that opinion. If you want to know what the North-country thinks, always listen to me. I am a typical North-countryman, and the people in the North-country know that what I say goes. I should like to congratulate not only the Chancellor but the nation on the fact that, notwithstanding the huge outgoings, the social services are being maintained unabated and intact. I rejoice at that for the working people I represent.

It is true that there is borrowing as well as taxation, but what about that? I am quite prepared to take up the challenge which has been thrown down. Hon. Members opposite have spoken as though there was something indecent about borrowing. Many of them have said it is the rich people who do all the lending. Have they ever heard of the Prudential and other big insurance companies? How on earth do they pay the huge benefits they give to their subscribers, except by lending their money to great advantage? One of the ways they secure these profits is by lending on the safe security of the Government.

The right hon. Member for Caithness and Sutherland (Sir A. Sinclair) asked what will happen when this has to be repaid. I can tell him that when it has to be repaid the lenders will be very glad to lend again on the same security. How do hon. Members think the banks keep going? They do so on the interest on the overdrafts, and it is the interest on well-secured funds such as these which keeps these huge societies in being. There is £24,000,000 to be raised by taxation. I am quite certain, being an accountant and knowing something about industry in the North, that industry will be very glad that there is no increase in the Income Tax to cripple it in these very strenuous times in the North-country.

It is amazing how very little has been said about the Budget in the speeches to-night. There are two or three items about which I wish to speak. The first is the horse-power duty on private motorcars. It seems to me that this is a very easily got and easily assessed Income Tax on those who show proof that they have something to spare over the needs of living. If armaments are to have a prior claim it is quite obvious that they must get the skilled workers in the motor-car industry. The right hon. Gentleman the Leader of the Liberal Opposition said he would take it upon himself to stop the motor trade, if necessary, altogether. I would not think of doing that. Income Tax has to be raised, and one cannot pay Income Tax until one makes income or profits. How to keep the finances of the country going if there is no income and no profit is a mystery to me. I can call "spirits from the vasty deep," but will they come? [Interruption.] If hon. Members opposite will listen to me, it will be to their advantage. Subsidised foreign makes of cars will not be bought so easily and readily. This tax may make all the difference in the choice of a foreign or a home-made car.

I understand that the additional taxation of tobacco means an increase of three halfpence an ounce. If a man is a moderate smoker, he ought to pay on not more than two ounces a week. When the doctor asked me how much tobacco I smoked per week, I said, "Two ounces," and he replied that I should smoke one ounce. I believe that if I had said that I smoked four ounces a week, he would have said that I ought not to smoke more than two ounces. Two ounces may be regarded as a moderate consumption, and I believe that most men will be able to afford the extra 3d. per week in taxation. I am sure that, as far as my constituents are concerned, they will not grumble, nor will the housewife in having to pay a farthing a pound, or an extra penny on every four pounds of sugar. I think that she will be rather proud of the fact that she is contributing a little towards the huge expense of the nation in order to make this country safe for her kith and kin.

I regret that no mention was made of any increase in old age pensions. In the Budget Debates last year and the year before, I made a plea on behalf of these old people, and I suggest to my right hon. Friend the Chancellor of the Exchequer that he should give this matter his most earnest consideration. Thousands of old people, who receive only the pittance of the old age pension, have to go on public relief, and are therefore receiving money from public funds. Why cannot the Government pay them in one payment instead of in two payments. [An Hon. Member: "How would they get it?"] They would get it by means of a block grant, as is the case now. I am old enough in politics to know that £4,000.000 saved by Mr. Asquith when Chancellor of the Exchequer was dispensed by his successor the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). It was said in this House that the payment of old age pensions would sap the moral fibre of our people. As a matter of fact, it is common knowledge that it irrigated channels of trade in that this £4,000,000 was circulated, making trade better, not because of sentimental reasons at all but because it increased the purchasing power of our people. The fact ought to be considered that we are paying old age pensioners public relief through public sources, and it would be more dignified for the old people to be paid in one payment direct from the Exchequer.

The Leader of the Opposition said there was no background to this Budget. I think he has made a mistake, and I regret that he is not present to hear what I have to say. The dogs and the stones in the street are eloquent about it. He was answered by the right hon. Member for Caithness and Sutherland who said that rearmament was the cardinal issue. That is the background of the Budget. For once I agree with the right hon. Member for Caithness and Sutherland.

The right hon. Member who opened the Debate for the Opposition also said that it was a policy of borrowing and inflation. I would like to know what is his alternative to borrowing. I think everyone else would be interested. Inflation—what a blessed word it is for some folks. What a bogy it is. I am terrified of deflation, but I am not at all afraid of inflation. There are terrific checks against inflation, but very few checks against deflation. Of all men the hon. Member for Chislehurst (Sir W. Smithers) agreed with the right hon. Member who opened the Debate for the Opposition that inflation was a dreadful thing to contemplate. There is nothing static in the national income. The old idea that there is a reservoir with a fixed quantity and that once it is tapped there is nothing else to replace it, has gone. The national total capacity is now X; it is an unknown quantity, in fact, there is no limit to it. We can produce to any extent we like, and these Rip Van Winkles simply amaze me. It would never do for them to come up to the North country and stand as candidates, because the people are politically educated there. Hundreds of millions are saved each year by the community, but the trouble is that it is not invested in industry, but put into gilt-edged securities and thousands of other things for safety, instead of the community taking the risk of investing it in industry. The consequence is that we have unemployment, and other things which we mourn so much.

The right hon. Member for Caithness said that this was a pedestrian's Budget. I thought he gave it the best recommendation that it was possible to give it. It is a pedestrian's Budget; both feet are on the ground. The right hon. Gentleman also talked about borrowing and asked how we were going to repay. I repeat that it depends on circumstances. Nobody can argue with a prophet; you must either believe him or disbelieve him. When we come to the bridge we shall cross it, not before. I was very sorry to hear him of all men say that appeasement had failed— and he was not sorry about it. I should expect a Liberal of all men to mourn the fact that appeasement by negotiation had failed.