PROVISIONS APPLICABLE TO RETAILERS' LICENCES.—(GENERAL.)

§ Mr. DILLON

I entirely disagree with the hon. Member's view of that matter. I have Amendments raising different questions, and they ought to be discussed separately. The questions of the brewer's licence and of the distiller's licence are quite distinct.

§ Mr. HERBERT SAMUEL

May I ask whether there is room for a general discussion of this character on the Schedule, seeing that we had a general discussion on the Clause both with respect to manufacturer's duty and with respect to retail duty?

§ The CHAIRMAN

Clearly if objection is taken to the discussion of the scale as a whole it cannot be taken as a whole, and under these circumstances I need not reply to the question of the Chancellor of the Duchy. We must take the items separately.

§ Mr. A. J. BALFOUR

As it turns on whether objection is taken or not, I understand that by general agreement the Bill is to be finished on Wednesday, and in these circumstances I should have thought it was for the general convenience of the House not to trammel the freedom of Debate. But I agree that it does not rest with me.

§ Mr. T. M. HEALY

As the Secretary of the Treasury announced that the Chancellor of the Exchequer intended to accept no more Amendments beyond what are now on the Paper, will the Government 1678 not put the Closure on the whole Schedule?

§ Mr. DILLON

The right hon. Gentleman seemed to make an appeal to me, but I think he misunderstood my point. I do not want to interfere with the liberty of the Opposition to discuss the Schedule as a whole. All I want is to safeguard ourselves against disposing of questions of vital importance in detail on the first Amendment and then being told we cannot raise them later on.

§ Mr. JOHN REDMOND

The right hon. Gentleman states that so far as he and his Friends are concerned they have come to an arrangement that the Schedules shall be concluded by Wednesday. That is not an agreement on which he could speak for anyone except his Friends above the Gangway, but it is an agreement which the two Front Benches may force in opposition to others. If that is so, and a general discussion takes place which occupies the whole of to-day and perhaps a portion of to-morrow, then by the operation of this voluntary guillotine on Wednesday we may be prevented from discussing, as fully as we desire, matters of detail which arise on the Schedules.

§ Mr. YOUNGER

I was wholly misunderstood. I merely proposed to take the questions of the brewer and the distiller together, and not to have a general discussion on the Schedule.

§ Mr. HERBERT SAMUEL

I have no objection to their being taken together.

§ Mr. JOHN REDMOND

I certainly object to their being taken together. They raise, so far as Ireland is concerned, very distinct points which have to be discussed separately.

§ Mr. BALFOUR

After listening to this conversation it appears to me that nothing will be passed by a general discussion, and that the matters must be taken separately and seriatim.

§ Mr. YOUNGER

The distiller's Licence Duty is not being nearly so heavily increased as the other. I submit that in view of the enormous addition which is being made to the Spirit Duty, and of the extraordinary depression which that has created in the distilling industry, it is little less than an atrocity to add to that an additional burden. The Licence Duty that the distiller pays now is a registration duty, and no monopoly whatever is granted in return for the registra- 1679 tion. He produces a dutiable article, and that being the case he must necessarily be registered in order that the Inland Revenue authority shall have the ordinary power of collecting the duty. But, to put upon him a duty in proportion to the whisky which he produces, which is really a second Income Tax, is not in any way admissible unless we are to have a series of taxes, where no monopolies are granted, over the whole system of manufactures in the United Kingdom. It is ridiculous and unfair, and it is not in any way a proposition which hon. Gentlemen opposite can support, to single out two classes of manufacture for penalising duties of this kind, while leaving everyone else alone. Duties are all very well when a monopoly is granted in return for the duty. They are not defensible when that is not so. The Prime Minister, two years ago, distinctly stated that there was no excuse whatever for a tax of this kind, either on the brewer or on the distiller, and upon that I rest, and I move my Amendment.

§ Mr. T. M. HEALY

It appears to me that if this Amendment is not accepted, the logical situation must be that you must grant the British and Irish manufacturers a drawback. We are competing in this matter especially with Germany, and Germany is sending in German spirits here at an enormous rate at 10d. a gallon, and sometimes as low as 9d. These Germans are under no restriction whatever in their manufacture. They have not to conform to any law of Excise in respect to the shape, the contents, or the class of the machinery by which they manufacture their product. Now, for the first time, a Free Trade Government proposes to lay upon native manufacture, and in respect of one kind of goods, a heavy duty, although the Germans, who make goods of the same class, are allowed to make them with absolute freedom. Take the case of the export duty. We are allowed 3d. as a drawback. That is because the article is sent outside of this country. We are allowed it because of the restrictions imposed on native manufacturers by the Excise, and actually so vehement and hitter is the feeling in temperance circles in this House that when the American tariff was passed the other day by which America imposed a special duty an hon. Baronet opposite got up and said that the drawback of 3d. granted in this country was not a drawback at all, but 1680 a bounty which ought to be abolished. That is Free Trade run mad, I thought. What have we here? You single out particular manufactures in which Britain and Ireland are in the keenest competition with Germany. When this matter was inquired into by a Royal Commission and by a Committee upstairs you refused to allow the native product to be specially marked to indicate that it was native product. And yet in all Customs places you allow vats to be established where foreign stuff made for 10d. per gallon is allowed to be blended with the native product, which costs 3s. per gallon. Remember this affects the Colonies, and especially Jamaica and the rum which it exports. In regard to Jamaica rum that sort of sophistication was allowed to go on until something was done to check it. Then, when that fraud has been committed, there comes on the top of it the proposal of a Free Trade Government to impose on this special article in addition an extraordinary duty of something like 14s. per gallon. You propose that the manufacturer should pay this enormous amount. I can understand destroying the distilleries altogether. Perhaps the Chancellor of the Exchequer would prefer the word "disestablish," which appears to be very popular in Wales. He proposes by this Schedule to put British and Irish manufacturers under a disability which they have never suffered under before. Under what circumstances is the proposal made? If ever conviction could be brought home to the mind of a Minister it ought to be brought home to the Chancellor of the Exchequer by his own figures. He budgetted for £1,700,000, and about four o'clock the other morning he said that the income, instead of being that amount, would be something like £1,300,000. That may be very good for those who rejoice at anything in the nature of temperance, but the logical course would be to abolish the distilleries altogether. Either this is a revenue Budget or a revenge Budget. Now, I ask, are you after revenue or are you after revenge? If you are after revenue it has been demonstrated by your own figures that you have practically ruined the distillers. It is ruin to a man to have his product falling off to the extent of millions of money. I think I am justified in using the word "ruined," but if it is objected to I will say seriously injured. I say, "If this be so, grant us at least a countervailing duty against Germany." That we are fully entitled to in connection with this proposal. You have given a countervailing duty of 3d. as re- 1681 gards exports against the competition of Germany. What will happen under this Duty? You have to pay £10 for every 50,000 gallons of whisky, and then for every further 25,000, or fraction of 25,000, another £10. I do not know whether I am correct in that. I think I am, but I speak subject to correction. After you have manufactured the first 50,000 gallons you must pay £20, even if you only manufacture one gallon in addition to the 50,000. In the name of Providence, I ask how can you carry on manufacturing under these conditions? The best Irish whisky costs from 3s. to 4s. With patent stills you can manufacture whisky for 1s. or 1s. 6d. These articles are made from honest native products as a rule. The German article costs 9d. or 10d., and, as we know, it is made from inferior materials for that purpose. How can any manufacturer contend against these conditions? You propose to put on the product itself an extra duty of 3s. 9d. You have admitted that there is an enormous falling-off in the quantity. That being so, how can you fairly ask the manufacturers of this substance to pay such an enormous extra duty? I cannot conceive, if the Budget is only for revenue, and if the intention of the Government is to allow the manufacture to be continued under any reasonable system, how such a duty can be proposed. Why do you not put it on poisons? There is a large manufacture of noxious substances. Let us take chemicals. There are important Members of the Liberal party engaged in the manufacture of articles which at least smell unpleasantly. I do not say they taste bad, but admittedly they must be noxious substances. To select one particular article, as the Government propose, is simply to dig the grave of the manufacturer, unless you give a countervailing duty. This question of a countervailing duty is so important that I do trust it will be dealt with in a reasonable spirit by the Chancellor of the Duchy of Lancaster. I must say it augurs ill for any concession when we have the Financial Secretary to the Treasury getting up and officiously stating that the Government do not intend to accept a single Amendment beyond those which have been put on the Notice Paper. In other words, the House of Commons is entering on this discussion practically garrotted. There are two kinds of closure. There is the fiscal closure that is put from the Chair, and there is the intellectual closure which is imposed when you know that you are beating the air, and when the Government say that, de- 1682 spite the force of any arguments that may be submitted to them, they are obliged to state that they cannot accept any suggestion. From what was said by the Financial Secretary to the Treasury we know in advance that the Chancellor of the Duchy comes in handcuffed or tonguetied. We know that he is barred from accepting any Amendment. But I do maintain that the question of a countervailing duty on German imported commodities is one well worthy of the consideration of the Government.

§ Mr. HERBERT SAMUEL

I would have great pleasure in accepting this Amendment, and indeed all the other Amendments on the Paper, which would lower or even abolish the existing imposts, but that, unhappily, the revenue must be raised, and the deficit has to be met, and we are obliged to ask the Committee to sanction the new taxes proposed. The Committee at an earlier stage after discussion sanctioned the principle of the new duties which were to be imposed not only on retailers of intoxicating liquors, but also on manufacturers. What we have now to consider is whether the scale proposed on manufacturers is equitable or not. At present the duty on the distiller is 10 guineas. The hon. Member who moved this Amendment wishes so far from increasing it slightly to reduce it, by shillings it is true, but other Amendments which come later show that hon. Members opposite desire to reduce in several particulars the duties on retailers and manufacturers of intoxicating liquor. I think the duty proposed by the scale which the Committee is asked to sanction is exceedingly low. It amounts on the average to 1–10th of a penny per gallon. This is the duty which the hon. and learned Member who has just spoken has described as an enormous amount, and as a heavy duty which will destroy the distilleries. We have already at the present time a duty of 11s. per gallon on spirits, and we are proposing by another provision to increase the duty by 3s. 9d.; and now when we ask the distillers to bear the Licence Duty amounting to 1–10th of a penny per gallon we are told it is an enormous and crushing burden that will ruin the Irish distiller and leave him a prey for the German invader. Language like that of the hon. Member, when we consider the infinitesimal amount of the duty, is deprived of all authority. If it is true, as he says, that logically it might be necessary to give an 1683 equivalent drawback on account of the danger of foreign competition, and that foreign distilleries should be entitled to be taxed to the extent of one-tenth of a penny per gallon, yet the amount is so small that the cost of collecting a Customs Duty of 1–10th of a penny per gallon, in fact, even the account keeping would almost swallow up the amount of the duty. In addition, the sur-tax on foreign spirits at present is admittedly too high, and is a protection for English distillers against foreign distillers. Because when the Corn Tax was imposed there was a sur-tax of a penny imposed in 1902 to counterbalance the increased charge that would fall upon the English distiller on account of the higher price of corn which the Government of that day anticipated would follow on the imposition of the low Corn Duty. When the Corn Duty was abolished in 1903 that penny was not abolished, and consequently at the present time the sur-tax is higher probably than it ought to be. Taking that into account, and also taking into account the small extent of this new imposition, the Government have thought it would be both unreasonable and unnecessary to impose the corresponding drawback in respect of this infinitesimally small amount.

§ Mr. AUSTEN CHAMBERLAIN

I cannot help thinking that the Committee must have been struck by the very remarkable defect in the argument of the right hon. Gentleman (Mr. Samuel). He says that before we dealt with the Spirit Duties there was already an enormous tax of 11s. a gallon on spirits—enormous that is in comparison with the cost of its production or with the ordinary units on which we levy Customs Duty. But he says, "That is not all. Not only was it taxed to 11s. a gallon, but we by another provision in this Bill are imposing an additional 3s. 9d. per gallon on it. How can you under those circumstances complain when we put on another burden not in the form of Customs or Excise under the name of Licence Duty?" Does not the right hon. Gentleman see that the fact that the duty is already so high and that by another provision of the Bill the Government are making it higher is not an argument in favour of the present proposal, but is an argument against it? It is, in the first place, a fact that the existing duty is so high that, in the opinion of many of those most competent to predict and in the opinion of those who judge by the experi- 1684 ence of the tax, and by the admissions of the Government, the tax is already so high that fiscally, on purely revenue grounds, it is a mistake to put further burdens on those subjects of taxation. But, in spite of that, the Government have put on the 3s. 9d., and then it is said that this duty after all is so small in amount, and in this Budget we have got so many burdens to bear, that this at least need not weigh with us. But each new burden that is added by the Government is an added injury to the trade, and to all the demands on them they reply that the duty is infinitesimal, and that it is a very small matter. On the best forms of spirit it would perhaps be a small matter, but on the cheap forms of spirits it becomes of more importance, and with regard to them I venture to say that it is not infinitesimal at all. The right hon. Gentleman defends himself for imposing this duty on homemade spirits without any corresponding Customs on foreign spirits, on the ground of the infinitesimal amount, and also because he says home spirits already have some protection. There is, I think, in every case, or nearly every case, where we have a Customs Duty, or anything which affords some minute protection, a view that it should be done away with. One of my hon. Friends (Mr. Rowland Hunt) the other day called attention to the case of cocoa, and proposed to withdraw the protection in that case. I was not able to be here. Had I been here I would have appealed to him not to press that Amendment. If there is any small protection I do not mind saying I am very glad it is there. I think it would be better if the scale were turned in our favour in other directions, but admit, if you like, for the sake of argument, that previous Chancellors of the Exchequer, either beginning in the Free Trade school or themselves pioneers of the Free Trade school, have left some slight trace of favouritism in our administration in the case of cocoa, tobacco and spirits, is that any reason for undoing their work, disturbing the balance they created and proposing a new duty on the home-made article without any counterbalancing customs?

On the more expensive articles it may be a small matter, but take the average measure of the duty as taken by the Chancellor of the Duchy to be one-tenth of a penny per gallon. What is that on the cheapest forms of spirit, such as are used for methylation? It is 1 per cent. What would the right hon. Gentleman have said if the last Government had proposed for 1685 home manufacturers a 1 per cent. preference? Would the skies have re-echoed? Would the clamours of the then Opposition against the Government, who was protecting their own country, have resounded through the House? For it is fatal in the eyes of the present Government to give protection to their own country. They are perfectly ready to give protection to the foreigner. That they are doing by the provision we are now discussing. They are imposing a duty on the home-made article without any countervailing custom. The tax was a fixed Licence Duty and they are turning it into a tax on the manufacturer proportionate to the amount of capital invested; proportionate to the energies shown and the goodwill obtained by any particular business. They are penalising industry and enterprise. They are taxing the processes of manufacture instead of taxing the excisable article itself, and they combine with all that this preference to the foreigner, which they proclaim loudly on all occasions and which they will never accord to their own country.

§ Mr. JOHN REDMOND

The House will realise that this is an Irish and a Scotch question. It does not affect England at all. I do not know whether there is a single distillery in England. [An HON. MEMBER: "Lots of them."] Certainly I never heard of anybody asking for English whisky. If there be a distillery anywhere in England, I am afraid it must be calling its product either Irish or Scotch whisky. I am right, therefore, in saying that this is in the main, if not almost entirely, an Irish and a Scotch question. So far as it is a Scotch question, the Scotch Members may be allowed to deal with it themselves. So far as it is an Irish question, I desire to say a few words, although indeed they must be more or less in the nature of repetition of what I said the night that the Budget was first disclosed to us by the Chancellor of the Exchequer, or of what I said on the discussion of the Resolutions, and, subsequently, of what I said on the second reading of the Bill. The Chancellor of the Duchy, if he will allow me to say so without any offence, seemed to me in his speech to make a perfectly ridiculous defence. He pointed out that this particular item of tax would only amount to one-tenth of a penny on spirits, and, therefore, he said, "It is so small, why need you bother about it?" If that was the sole increased tax levied on the industry, although people might 1686 object, I do not suppose that any very vehement or strenuous opposition would be made. But it is impossible to discuss this addition to the tax without taking into account the whole of the burden which is being put on the whisky industry. This is only a small item of the entire tax. The taxation that has been put on the industry, so far as Ireland is concerned, will, most undoubtedly, severely hit, if it does not destroy in many cases, the distilling industry. That is one of the few industries left in Ireland. Three-fourths of the amount of whisky distilled in Ireland is not consumed in the country at all. It is sent out of the country for consumption, and this, one of our only remaining industries, is going to be destroyed undoubtedly by this taxation. It is an industry which gives large employment in the country. It is an industry which promotes other trades and industries, and through this industry being injured you will be hitting directly other industries, and especially agriculture. Therefore it is that the Irish Members take such a serious view of the matter, and, therefore, we oppose by every means in our power this additional tax which the Government are putting on the industry. I do not desire to repeat arguments which I have used again and again on this matter. We take the view that anything more unjust than this tax cannot be conceived. You put this tax on Ireland and Scotland, and you do not put an equivalent tax upon England, and I ask again, as I asked before in discussing this matter, why is it you did not put a tax upon the British industry of beer when you put a tax on the Irish industry of whisky? We regard this as an unjust differentiation against Ireland, and that at a time when you ought to be engaged in reducing Irish taxation instead of increasing it. I trust this tax will be vehemently opposed by Irish Members in all quarters of the House. So far as we are concerned we regard with the utmost resentment this addition to the burdens of our country.

§ Mr. H. BELLOC

I merely wish to make one or two observations with regard to this proposed tax. There are many of us who think that a special tax of this particular type is in general unjust, though we will, nevertheless, vote for the particular Schedule under discussion at this moment. The argument brought forward by the hon. and learned Member for Waterford (Mr. John Redmond) is an argument which I myself, and many who think 1687 with me, take to be an argument from the Irish point of view—the point of view of men representing a country which has been ruined, and deliberately ruined, by English rule. Men in that position have the right to protest against any increase whatever, however small; they have a moral right, and a political right, to protest against increasing the burdens upon a particular trade, and a trade which is peculiarly their own. Against that I say nothing. So far as the tax, taken as a whole is concerned, it is impossible for one who feels as I do not to support the Government in this very small increase. I could wish that the rest of the taxation on trade had been of the same nature, but this is not the moment in which to discuss that. Precisely because later in these Debates it will be my duty to protest against a different type of imposition which will fall on the ordinary consumer, and which we regard as unjust, I wish to explain my reasons for voting in favour of this particular Schedule. No one can pretend, seeing what the position of Scotch distillers is at this moment, seeing what an enormous increase in the consumption of whisky there has been in the last generation, that an impost which amounts to one-tenth of a penny per gallon—it is a little less than one-tenth—is a serious burden upon the trade. This is precisely one of those very small imposts, falling upon a trade, a wealthy, well-organised trade well able to support it, which are right, which are traditional in our finance, and which have been imposed in the past when necessary to meet an extraordinary demand for revenue.

§ Mr. JOHN GRETTON

I want to dispel one illusion put before the Committee, that there are no distillers in England. It is an English question, though, I admit, not nearly so largely as it is a Scotch or an Irish question. There are distilleries in England, some of which distil various descriptions of gin, including Plymouth gin; so that it is not entirely, as will be seen, an Irish or a Scotch question. I have great reason for objecting to this tax, which, added to the other taxation which is to be imposed, will interfere with the industry. My chief reason for objecting to the present proposal is that it is put before the Committee under an absolutely false guise. The Government put the tax as upon the manufacturer, whereas it is not that at all; it is a tax on the article which the manufacturer produces, and the scale in the 1688 Schedule fixes that tax. I think the impost is absolutely falsely described; it is a misnomer to call it a tax on the manufacturer, and it is coming before the Committee and the country under false pretences. If the Government wish to bring this additional taxation forward, they should do so in a straightforward manner, by imposing it on the article, and not calling it a tax on the manufacturer. In view of the fact that this additional burden, though small, will be seriously felt, in combination with the other additional taxes on the trade, I shall certainly vote against it.

§ Mr. CHARLES ROBERTS

I wish to disabuse the minds of Irish Members opposite of this deep-seated fallacy which apparently they entertain, namely, that we do not both distil and drink spirits in England. The right hon. Gentleman the Leader of the Opposition has also frequently fallen into that mistake.

§ Mr. BALFOUR

What mistake?

§ Mr. CHARLES ROBERTS

The mistake that we do not both distil and drink spirits in England. As a matter of fact, it is a tax which falls more heavily upon England than upon Ireland. It is simply a question of looking up the particulars in the Returns of the Inland Revenue, and I find that in England we distil 12,900,000 gallons of spirits, and in Ireland they distil 12,192,000 gallons. [An HON. MEMBER: "What about the population?"] It is not a question of population in this case, it is a question of the burden upon the manufacturer, and of the respective burdens on the two countries. I think hon. Members opposite will realise that there is more fairness in this tax than they are at present inclined to believe, and that they will realise that in this particular case the tax falls more upon England than upon Ireland.

§ Mr. J. F. REMNANT

I do not think hon. Members of this House will agree with the hon. Gentleman who has just sat down when he says that spirits are not drunk in England. If he were to go into the smoke-room of this House his delusion would soon be dispelled. What I wish to call attention to is not the question of potable spirits, which has been so ably referred to by my hon. and learned Friend the Member for Louth (Mr. T. M. Healy). With all that he said I heartily agree, and I do not believe the Government have any very reasonable or businesslike answer to make to the hon. and learned Gentleman. In all this discussion I am 1689 rather afraid that the distilling of industrial spirit is likely to be overlooked. I would like to call the attention of the Prime Minister, to whom everyone in this House looks for an impartial attitude on these and other matters, to the question of industrial spirit, which is made in London and England to a very large extent. I have the details of the distilling in London for which I can vouch. They have been given to me by one of the manufacturers. He says, talking about this one-tenth of a penny tax, which is contemptuously referred to by the Chancellor of the Duchy and the Chancellor of the Exchequer:— It is true that the Licence Duty amounts to about one-tenth of a penny per gallon; but I would merely add this, that we often work on a fraction of a penny per gallon profit, and it is more serious than it looks. Besides, we find in our business that if we can sell an eighth of a penny per gallon cheaper than the foreigner, we do the business, whereas, if we do not do it at that small fraction cheaper, so great is the competition of the day, that we lose the business and it goes to the foreigner. That is the opinion of a man of experience manufacturing industrial spirit in London to the extent of a million and a half gallons per year. He has asked me to call the attention of the House to this very serious matter. When the Chancellor of the Duchy commences his speech by saying that he and all Members of the Government would have the very greatest pleasure, if they could, to accept all the Amendments on the Paper, I ask why they should not do so in this instance. I suppose they have made up their minds to accept nothing, but I would point out that industrial spirit here is heavily taxed in favour of the foreigner, and I think the Government might at least see their way to exempt this kind of spirit, which, after all, only means a paltry £2,600 of revenue, which they would not feel at all. I do ask

§ Mr. SAMUEL YOUNG

Though this tax is a small one, it is very irritating to manufacturers. You have already placed a tax of 3s. 9d. per gallon on whisky, but for the purpose of raising revenue this small tax of one-tenth of a penny will produce a mere trifle. In view of its irritating consequences, surely it is scarcely worth the Government's while to insist upon this impost. Apparently any stick is good enough to beat any person in the trade. Is this tax intended for revenue? I do not think it is. I think the whole meaning of these taxes is simply revenge. I cannot see how it can be intended for revenue, because the consumption is falling off and the revenue diminishing. Probably it is thought that this legislation will reform the morals of the people. If it would do so I, for one, should not object, but I certainly believe it will not. I am one of those who do not believe that legislation will reform the morals of the country. If you impose this tax on the manufacturer I think you will find that, instead of the morals of the country being improved, the whole result of these proposals will be to cause the people to resort to other stimulants which would be far more injurious to them. I say to the Chancellor of the Exchequer, therefore, that he makes a great mistake in imposing this duty, which will produce a very small return, and will not assist him in any material degree.

§ Mr. HERBERT SAMUEL

The cases are not precisely similar. This is not a scale based on the amount of spirits treated by the rectifiers, but the present duty of £10 it is proposed to raise to a uniform sum of £15 15s. I hope the hon. Member will not press his objection.

§ Mr. WATSON RUTHERFORD

How many rectifiers are there altogether, and how much will they pay altogether?

§ Mr. HERBERT SAMUEL

It will bring in a revenue of £1,600.

§ Mr. WATSON RUTHERFORD

Is that all. How much will it bring in this present year?

§ Mr. HERBERT SAMUEL

The revenue is about £3,000.

§ Mr. WATSON RUTHERFORD

Is it considered worth while to upset the trade for £1,600?

§ Mr. T. M. HEALY

May I ask whether it is worth while to impose this, and why are you abolishing the revenue in the case of cider? I cannot understand why the five- 1693 guinea tax in the case of cider is abolished. Immediately some representation is made as in the case of football grounds, and that it is likely to catch votes, the Government put down an Amendment according as their supporters bring pressure to bear on them. If this revenue is so very small why can you not afford to abolish it, and how can you afford to abolish that on cider? I know it is very wrong to ask a question in this House, but I will be much obliged if the right hon. Gentleman will tell us what is the amount of revenue estimated for in each of these cases. It will be a great convenience for us to know.

§ Mr. BALFOUR

I do not think the hon. and learned Gentleman (Mr. T. M. Healy) has yet appreciated the principles of the Budget. He asks a perfectly innocent question why the Government appear so obstinate in a duty which is bringing in £1,600, and why they hasten to abandon a duty which brings in a very great deal more, as I understand it, from cider. The answer is perfectly simple, and I am really amazed that the hon. and learned Gentleman thought it worth while to ask. A tax on cider affects a very large number of persons in the West of England, and there are only 300 persons engaged in the rectification of spirits. That is the answer. For the hon. and learned Gentleman at this time of day to appeal to the Government to relieve 300 persons who could not have more than 300 votes passes the understanding of an old Parliamentary hand like myself, and shows a degree of innocence which I could not have imagined possible.

§ Mr. HERBERT SAMUEL

The right hon. Gentleman (Mr. Balfour) has made a very amusing speech which would have more influence with the Committee if he were really acquainted with the comparative statistics. The number of rectifiers of spirits who hold licences is 252. The number of manufacturers of cider who would have to take out licences under the Bill, with the exemptions allowed in the case of farmers who make cider from their own apples, is 10.

§ Mr. BALFOUR

You are leaving out the farmers who do make cider.

§ Mr. HERBERT SAMUEL

The number of manufacturers of cider affected by the duty in the Bill which we propose drop- 1694 ping is 10. The number of rectifiers in England and Wales is 252, and there are a score or so in Scotland and Ireland. Our revenue from the rectifiers of spirits, the increased revenue, is £1,559, and the revenue from the manufacturers of cider would he £52.

§ Mr. T. M. HEALY

That is that there are only ten persons making cider. I think there are that number in Ireland. Why was it put in the Budget at all? In Lord Macaulay's history he speaks of Worcester as the great cider country, and Lord Macaulay thinks it worth his while in dealing with great political questions to bring in the effect on the cider industry. And yet we are now told by the Government that there are so few either in Worcestershire or Herefordshire that really there are only ten altogether. Where do the figures come from? When I was a boy in county Waterford there were ten makers of cider in that county alone, and to be told now that in all England, Wales, Scotland, and Ireland there are only ten makers of cider simply capsizes me. I venture to say that we get circulars from 50 makers of cider in twelve months. I am really amazed at the action of the Government. I must acknowledge that the Leader of the Opposition has given me a great store of information that I did not previously possess. I thought the ground of the Government's treatment of cider makers was different—that pressure had been put upon them by Liberal Members from Worcestershire and Herefordshire, and not in the least that it was due to any paucity in the amount of revenue. Now that the Government tell us that there are only 10 persons affected, I cannot see that they would turn any electoral scale; I can only believe that there are many more than 10 persons concerned, and that it has been found convenient on the eve of a General Election to wipe out the tax altogether.

§ Mr. REMNANT

Can the right hon. Gentleman tell us where he gets the figures from as to the number of cider manufacturers?

§ The CHAIRMAN

I think we had better leave that until we get to the Cider Duty.

§ Mr. JOHN REDMOND

Before the Prime Minister speaks, I should like to say a word. In any answer the right hon. Gentleman is going to make, I would remind him and the Committee that I raised this question when the Clauses were under discussion, and gave him facts about the small Irish breweries. The right hon. Gentleman informed me that those facts were new to him, and that he had not had an opportunity of considering them, and he promised he would give his consideration to the matter. That raised hopes in our minds, especially when, later in the Debate, a Member of the Opposition twitted the Government with having given a promise of special consideration to Ireland in this matter. The Chancellor of the Duchy of Lancaster said, "That is not so," but that any concession that might be made would extend to England as well as to Ireland. That led us to believe that the arguments we had used had made some lodgment in the minds of the hon. Gentlemen on the Treasury Bench. I trust that is so. I only desire to deal with the Irish part of this case. It is like all matters connected with this Budget. The case of Ireland is entirely different from what it is in this country. In Ireland there are only 29 breweries altogether. One of them is the great firm of Guinness, who manufacture something between 2,000,000 and 3,000,000 barrels of beer yearly. The other 28 breweries are all small. Probably the whole of them put together brew only 700,000 or 800,000 barrels per year, against Guinness's 3,000,000. These little breweries are small industries scattered here and there over the country. They are centres of employment. They promote the growing of barley, and it would be a cruel thing—I am sure it cannot be the intention of the Government—to wipe out these small industries for no other object in the world than to enlarge and enhance the monopoly of Guinness.

Let me give the figures again. Fourteen of the breweries in Ireland manufacture less than 10,000 barrels per year; five breweries each manufacture less than 20,000 barrels; five less than 100,000; two less than 150,000. Guinness's jump up to nearly 3,000,000. Well, now, I do earnestly press upon the Government and upon the Committee this view: What is the object of putting a crushing tax upon these small breweries? It is not with the object of 1700 revenue, because the revenue to be raised from these small breweries by this additional impost is necessarily very small. It cannot be in the interests of temperance, because if you destroy these small breweries you only enhance the power of that great monopoly—Guinness. You do not diminish the consumption of porter in the country by a single gallon. You do not help your revenue; you do not help temperance. What is the object of putting the tax on these small breweries? I defy anybody to give a single solid reason why these small breweries should be crippled or destroyed. I find on working it out that the total amount to be raised by these under the Bill is £12,474, a ridiculously small sum from the point of view of revenue, but from the point of view of the existence of these institutions a very large sum. I find in these small breweries where they manufacture less than 10,000 barrels yearly, each one of them, under the Bill, will have to pay £119 16s. additional duty. Those who manufacture less than 20,000 would have to pay £239 16s. each. Those who manufactured under 100,000 would have to pay £1,199 additional duty. Those who manufactured under 150,000 would have to pay £1,799 additional duty each. Now, it would be no use for the Government to point to the smallness of these figures and to say that they will not destroy all these industries. We who speak from these benches know the commercial position of these breweries. We know that at the present moment most of them are not paying a dividend; that they are barely struggling along, and we are assured by those who are connected with them—we know of our own knowledge—that this additional impost will absolutely destroy, at any rate, all the smaller of them. I do put it to the House no sufficient object, public or private, financial or political, or any other, can be gained by carrying out this operation. I have an Amendment upon the Paper later in which I propose to substitute another scale for the one that is on the Paper. When we come to that Amendment I will deal in detail with the matter. I do not desire to deal just now in detail with the subject, but to reserve my right to deal fully with the matter when my Amendment is reached. What I desire now is to raise the broad question as to whether you will impose this tax at all. I have confined myself entirely to the Irish aspect of the matter, and in view of the sympathetic way in which the Prime Minister and the Chancellor of the Duchy 1701 of Lancaster answered me when I spoke upon this before I am not without hope that they may make some concession to the demand I have made.

§ The PRIME MINISTER

The hon. Gentleman opposite the Member for the Ayr Burghs (Mr. Younger) has raised again all the relations raised when we discussed the clause which authorises this scale. I do not think it would be a reasonable way to spend the time of the Committee at this stage of the proceedings if I were to go back to the question as to whether or not it is desirable that an additional Licence Duty should be imposed upon the brewers. I think the Committee have decided that in the affirmative. I imagine the only practical question before us is as to whether or not the scale proposed in the Schedule is a just scale and meets the requirements of the case. I do not think the hon. Gentleman means or anyone on that side of the House would seriously contend that if we impose a duty of this kind at all that a firm such as that as has been referred to by the hon. Member opposite—that is Guinness', who brew nearly 3,000,000 barrels yearly—should escape with a payment of £1. I think, therefore, so far as it is a question of the substitution of some scale for the existing fixed charge of £1 the matter really and in effect has been decided. With reference to what has been said by the hon. Member for Waterford (Mr. John Redmond) I promised when this matter came up a few weeks ago to take it into serious consideration. That promise was repeated by the Chancellor of the Duchy with the proviso—a very proper proviso—that in a matter of this kind one cannot deal with Ireland on a different footing to the other parts of the United Kingdom. This is not at all an analogous question to the question that arose on the valuation of public-houses, or the application of a minimum scale of retailers' duty. In this respect all the brewers of the United Kingdom are practically upon a level footing. While I assure the hon. Gentleman I have given careful and sympathetic consideration to the points he put before us then, and which he has repeated to-day, I have felt compelled myself to come to the conclusion—at any rate as at present advised—that I do not see my way to make the concession which he suggests. The matter, of course, will come up more fitly when he proposes his own alternative scale. Let me point out generally what the state of the case is. There are in the 1702 United Kingdom brewing under 1,000 barrels yearly 3,300 persons; under 10,000–770; under 20,000–208; under 30,000–110; under 50,000–97; under 100,000–81; and 100,000 and over, 46. So that it appears from that enumeration that not merely in Ireland, but, what is more striking, in regard to other parts of the United Kingdom, that the vast bulk of the brewers are those who brew under 1,000 barrels yearly. The enormous majority brew under 10,000 barrels yearly. If you are called to exempt altogether by some preferential scale the persons in that category from the operations of this Bill obviously we should be introducing a most extraordinary and anomalous state of things. You would only have to sub-divide the scale of your operations in order to escape, or largely to escape, the payment of the duty. This is not like a duty upon the monopoly duty of licences. This is a duty which must inevitably tend, sooner or later, and in one form or another, to fall upon the consumer of the commodity.

§ Mr. YOUNGER

So will the licence.

§ The PRIME MINISTER

I will not discuss that question with regard to the licensed dealer who has a monopoly. Here we admit there is no question of monopoly at all. Either in the form of enhanced price or, as the hon. Member suggested, in the form of a more highly watered commodity, the consumer will pay the duty in the long run, and it will not fall upon the brewer himself. We have recognised this by introducing, as the hon. Member for Waterford knows, into the body of our Bill a clause, already passed, which imposes a corresponding Customs duty, showing that we treat here this very imposition, not as an imposition upon the trade, not as an imposition which is ultimately to be borne by the brewer, but by the consumer. On the whole consideration of the question I think it will be found that there are almost insuperable difficulties, in the shape of discrimination, between a different tax on manufacturers in proportion to the different amount which from time to time they make. And while I have no desire to see a great business swallowing up small ones—

§ Mr. JOHN REDMOND

That will be the result.

§ The PRIME MINISTER

Either in Ireland or anywhere else, I do not at the present see my way to establishing discrimination such as the hon. Member suggests; 1703 and perhaps, at any rate, we may reserve further consideration until we come to his own Amendments, to see what valuable arguments not yet used there are that would justify discrimination which at present seem to be impracticable.

§ Mr. BALFOUR

I do not propose to urge upon the Government the imposition of discrimination in favour of one class of manufacturers of beer against another class. I think the anomalies of the new principle introducing strange changes already made in our system of finance are quite sufficient as they are without introducing further that a man is to be taxed on a higher scale, according as he turns out a larger amount of goods. However much you tax a manufacturer on a large scale I suppose there are many industries in which a manufacturer on a large scale is undoubtedly beneficial to the consumer, and is the only way of dealing with foreign competition. At any rate, to discriminate against large producers in the manner suggested would be an extremely perilous experiment, and I should not care to be responsible for it until I hear the question argued much more elaborately than it has been argued so far.

Then we come to the question: If there is to be no discrimination against the large producer, is there to be a discrimination in favour of the small producer in one part of the United Kingdom? Again, I do not think that that is a practicable policy. But it is a policy which, I understand, the Government are going to accept in another part of the Schedule to which we have not yet come. I will not anticipate the discussion, but I certainly think the Government did introduce in deference to requests from hon. Members below the Gangway, and in consequence of arrangements come to, a provision intending to discriminate, and having the effect of discriminating, in favour of one part of the United Kingdom as compared with another. I do not know that this is a principle I can accept from the Government. Indeed, I must say one of the objections I have with regard to this Budget is that I think it discriminates in other respects, both with regard to Ireland and Scotland, and is most unfair to other parts of the United Kingdom. If the Government insist upon carrying out this principle of fiscal legislation, we may surely find ourselves in the sort of difficulty with which the Government are in vain endeavouring to cope. The right 1704 hon. Gentleman, not for the first time, has given the go-by to the arguments by my hon. Friend who proposed this Amendment. He accused my hon. Friend of having repeated the arguments he used in the Committee stage, and he absolved himself from the necessity of replying to them on the ground that he had replied to them earlier in our Debates. I do not think the right hon. Gentleman has replied to them.

These arguments were put by my hon. Friend before the Committee in a speech which was remarkable for its compression and gravity, and I should have thought at all events the right hon. Gentleman on a similar scale should have given us his reasons against the Amendment, and I should have thought so the more because nobody has committed himself more specifically against this tax than the right hon. Gentleman. The right hon. Gentleman was appealed to last year or the year before by the hon. Member for North Paddington to impose a tax ad valorem upon general lines which the Government have now adopted, and the right hon. Gentleman was not content in saying he did not think it would find a fitting place in the Budget he was then introducing; he went much further, and said he thought that kind of ad valorem tax was objectionable in principle. I should think that if the late Chancellor of the Exchequer of the present Government and the present Prime Minister of the present Government told us a particular tax was objectionable in principle, when his own Government brought forward that tax the least tribute he could pay to his own arguments in the past is to offer some refutation of them.