A number of questions were on the Order Paper to-day relating to sugar supplies and sugar prices, and I informed the Deputies who asked those questions that I proposed to reply to them by means of a general statement. I am very glad to have the opportunity of making a general statement concerning them, and to give the House all the information that it is possible to give it concerning sugar, the reason for the increase in the price of sugar, the circumstances that affected the distribution of sugar in the past, and that we think will affect the distribution of sugar in the future.
On the 1st November the Irish Sugar Company announced an increase in its price for sugar, equivalent to an advance of 1½d. per lb. in the retail price. That increase in the retail price of sugar here brought it up to, and only up to, the prevailing retail price in N. Ireland and in Great Britain. In fact, the retail price of sugar in Northern Ireland and in Great Britain has been fixed at 4½d. per lb. since the 27th September.
It is, perhaps, desirable to divide the explanation of the reason for that increase in price into two parts. One part of that explanation was given to the House to-day by the Minister for Finance in his statement. The increase in the duty upon sugar, both the customs duty and the excise duty, represents ¾d. of the 1½d. increase in the price of sugar. It is true that, since 1st November to date, the Irish Sugar Company has been receiving 1½d. more for the sugar sold by it during that period than it had been receiving previously. From this date forward it will be receiving only ¾d. more. The reason for that arrangement I will explain later.
I do not know if Deputies require me to give them the reasons which, in the opinion of the Government, justify a higher tax on sugar as distinct from some other tax. It is, of course, always easy, as was in fact demonstrated here to-day, to make a case against any particular tax. No matter what particular taxes the Government proposed to deal with the present Exchequer situation, it would be possible for Deputies to make, in relation to each separate proposal, a case which might or might not be convincing. It is much easier to oppose the imposition of new taxes, or additions to existing taxes, than to formulate counter proposals. In fact, the only justification for an increase on sugar, tobacco, beer, tea or any other commodity, is the necessity for supplementing the revenue of the State.
Everybody recognises that a higher tax upon sugar, or any other commodity, is going to cause an increase in its price, and, consequently, a certain amount of hardship. These proposals are not made lightly. They are not made without due consideration of their possible consequences. They are made only because of the absolute necessities of the situation. When the Government was faced with the fact that the war had so interfered with the normal revenues upon which it was depending to meet the cost of Government services this year that a deficiency of a substantial size at the end of the year was to be anticipated, it had one or two possible courses to take, or perhaps a combination of both courses. It could, for instance, endeavour to offset that diminishing revenue by cutting down expenditure. From many points of view that would be a preferable course, but clearly there were difficulties to be encountered.
I am sure all Parties in this House will agree that, in present circumstances, with prices rising, as everybody must have expected them to rise, any serious cutting down of the social services would be an undesirable step to take. Such reductions in expenditure, therefore, as we might seek, such economies as we might effect to offset diminishing revenues, would have to be on the limited range of services which are not combined under that general heading, social services. We had, therefore, to face the difficulty that many of these services were expanding, and the very circumstances of the war were necessitating additional expenditures in one direction or another, and, whatever economies were being sought or made, they were likely to be offset by higher charges arising out of other services, and, consequently, there was, in fact, no alternative to supplementing the diminishing revenue from existing taxes other than by the imposition of new taxes.
Once that decision was made, it was merely a question of picking the tax that would give the best return with the least difficulty. We decided on a tax on sugar. That tax will bring in, during the course of next year and in the present year, a substantial additional revenue to the State. If the circumstances change, if the war ends, if the diminution in the national revenues, which the war causes, ceases, then a new condition of affairs will be created; but, in the circumstances that we are likely to be faced with, I am sure all Deputies will at least subscribe to the theory that the State must continue to pay its way; that we must endeavour to balance our Budget and see that the services properly chargeable against income are met by income.
All Deputies give lip-service to that, even though they vote against the particular proposals brought in here from time to time to implement it. This is one of the proposals. I am sure there is no Deputy on the opposite benches who will attempt to deny the soundness of that principle, who will attempt to contest my contention that the diminishing revenues of the State resulting from war conditions must be supplemented by new revenues, secured on new taxes. As is the normal function of Opposition Parties, all those Deputies will, of course, vote against every proposal brought in here. It is their privilege.
The tax on sugar accounts for only half of the increase in the price of sugar. I am sure every Deputy who gave any consideration to the matter expected there would be an increase in the price of sugar before the war ended, just as they must have realised that other commodities would also increase in price. It is inevitable that over a great range of commodities war conditions are going to mean higher costs and, therefore, higher prices. We can control, and are controlling, the element of profit in these prices. We can ensure that at no stage in the process of manufacture or importation or distribution or sale are excess profits secured, but we cannot prevent an increase in costs. Where imported commodities are concerned the reasons for these increased costs, or at least some of the reasons, are obvious—higher transport costs, higher insurance costs, as well as the conditions which would lead those selling the commodities to seek a higher price in any event. We may be able in some cases to check these higher costs. I mean we may be able to keep down prices, apart altogether from the limitation of profits, by the regulation of the methods of manufacture or importation or distribution, and we will try to do so. But, we must face the fact that in this war, as in the last war, prices will tend to rise.
Deputy Norton spoke strongly here to-day about the reference in the Minister for Finance's statement relating to salaries and wages. It is, of course, possible to contemplate that everybody whose livelihood depends on his profits or upon his salary or his wages will endeavour to offset the rising cost of commodities by getting higher profits, higher salary, or higher wages. That happened before, and, as a result of that upward movement of salaries, wages and profits after prices, prices moved still higher. A general inflationary effect was produced, and prices spired until we got, in the last war, a price for sugar, not 4½d. per lb., but a price which persisted up to the middle of 1920, of 112/- per cwt., or 1/- per lb. In the middle of 1920 that price came down to 56/- per cwt., or 6d. per lb.
Deputy Dillon spoke here to-day about the fact that maize-meal is costing, I think, 12/- a cwt.
