HC Deb 30 March 1832 vol 11 cc1095-112
Mr. Spring Rice

then moved the Order of the Day for the House to go into a Committee on the Malt Drawback Bill.

Mr. Horatio Ross

I am very unwilling either to occupy the time or intrude myself upon the attention of the House, but, however disagreeable it may be to myself, yet, as a Representative of Scotland, I consider it my duty to offer every opposition in my power to this Bill, which, if permitted to pass, will inflict the most serious injury upon the morals of the people of Scotland, as well as its general interests. I shall confine myself to a I plain statement of facts. In the first place, I would call the attention of the House to the state of the lower orders in Scotland prior to the allowance of this drawback, which it is now proposed to reduce. At the period to which I allude, illicit distillation was carried on from one end of Scotland to another, not merely in the Highlands, but in the Lowlands also. In the Highlands, I may say, it was the chief occupation of nine out of ten of the peasantry. To give the House some idea of the extent to which smuggling was carried on, I may mention that, in the course of one day's shooting, I discovered forty-seven illicit stills. These stills were in a wild glen, where once, and once only, the Excise-officers ventured to show their faces, and they were then defeated by the smugglers. I am sure I need not point out to the House that such a state of things could not continue without producing the most injurious effects upon the inhabitants of that part of the country. The population were trained up in habits of drunkenness, and a total disregard of the laws; and not only were those immediately concerned in the manufacture of this illicit spirit injured by this system, but a great many others were also tempted to speculate in this illegal trade. The Highlander manufactured the spirits in some remote glen; he had his confederates in the Lowlands. To convey the whiskey from the mountain was, of course, a service of considerable difficulty and danger. Those who undertook it, were frequently caught by the Excise-officers; and, in the constant scuffles which took place between the Excisemen and the smugglers lives were frequently lost, and the jails were constantly crowded by these misguided people. If the smuggler succeeded in eluding the watchful eyes of the Excise, and landed his load of whiskey in the Lowlands, his success held out a temptation to a continued breach of the laws. He disposed of his spirits to the confederates, and then returned to the mountains to procure more, while they, not having any permit, were obliged to resort to every shift and scheme to dispose of it, and, by this means, the evil spread far and wide. Customers were contaminated, as well as the dealers themselves. I have no hesitation in saying, if this system had been permitted to go on for some years longer, the lower orders of Scotland would have been reduced to the lowest stage of moral degradation. This was the state of Scotland many years ago. At last, the attention of Government being called to it, the Commissioners of Revenue Inquiry were instructed to examine into the causes of the wide-spreading evil, and they discovered, what all Scotchmen knew before, that all classes preferred spirits distilled from malt to such as are made from raw grain, the former being both more palatable and wholesome than the latter; and that, in spite of all Excise regulations, malt whiskey could be procured and drunk. But owing to the existing laws, this malt spirit was entirely supplied by the smuggler, because, in addition to the spirit duty, the distiller of malt whiskey had to pay a duty of 2s. 7d. on every bushel of malt, which necessarily raised malt spirits to such a price, that the smuggler could carry on a profitable trade. The Commissioners of Revenue Inquiry accordingly recommended that a drawback of 1s. 2d. per gallon should be allowed upon all spirits distilled from malt only. Although this is called a drawback, it is in truth a tax upon the smuggler of 1s. 2d. per gallon, and should not be viewed in the same light as other drawbacks. In point of fact, the object of it was, to remove the inequality between the raw-grain distillers and the malt-spirit distillers—the latter of whom were subject to the malt duty in addition to the spirit duty. That recommendation was carried into effect, and in a short time, the most decided change for the better took place in the habits of the people of Scotland—the attention of small capitalists was directed to this branch of trade. Distilleries were erected upon the faith of this drawback in every part of the country, but, especially in the Highlands, which, were formerly the head-quarters of smuggling. There are now 334 malt distilleries in Scotland; and so well has this system worked, that such a thing as an illicit still is hardly known—the people have forsaken their lawless mode of life—the farmers, instead of being obliged to encourage an illegal trade, and sell their grain to smugglers, find a regular market for it at the licensed distilleries; and, though last, not the least, important benefit resulting from the measure is, that the revenue has increased nearly a million sterling. And why is the system, which has been found to work so well, to be interfered with? Why, because the great Irish and Lowland Scotch distillers, who use only raw grain, finding that the monopoly they enjoyed was interfered with by the great increase of the number of legal distillers from malt, have thought proper to make the most unjust, unfounded clamour against the Scotch malt distillers. They have been supported by the united body of the Irish Members; and the Government yielding to the clamour granted a Committee to inquire into the effects produced by allowing this drawback. I was one of that Committee, and what was the result of our inquiry? Why, that not one case of the alleged frauds could be proved against the Scotch distillers; and it also was proved, in the most satisfactory manner, that the destruction of smuggling in Scotland was to be attributed entirely to the drawback allowed on malt spirits. The Commissioners of the Board of Excise also expressed their opinion in the most decided terms upon this subject. I beg to refer hon. Members to their Report. The Commissioners of Excise ought certainly to understand this subject, and they have expressed in the most positive manner, that "it would be impolitic and dangerous to interfere with this drawback, both with regard to the revenue and the chance of again opening the door to smuggling." Yet, in the very teeth of all this—with the recollection of the former state of Scotland still fresh in their memories—in defiance of the Reports both of the Select Committee, and of the Board of Excise, with the certainty that smuggling will again commence—the Government is about to break down that protection which has conferred so many benefits upon the country. I have scarce temper to speak of the conduct of Government with regard to this Bill. I have hitherto been one of their steady supporters; but I must confess, my confidence in them is very much shaken. It appears to me, they are wantonly about to ruin a great many individuals; it appears to me they have neither justice nor good policy on their side, and I must frankly assert, that the chief cause of their having brought in this Bill, has been with a view to conciliate the Irish Members. Of this, however, I am certain, that if it is permitted to pass, the immediate consequences will be the re-introduction of smuggling, and the total ruin of those unfortunate persons who have invested their capital in malt distilleries, upon the faith of this drawback being continued. At present, it is so nicely balanced between the legal distiller and the smuggler, that it is all the former can do to drive the latter out of the market; but when 6d. per gallon is taken from him, as it is proposed to do by the measure now under discussion, it will be quite impossible for him to compete with the illicit distiller. I do most earnestly supplicate the Members of this House to pause before they permit such an injury to be inflicted upon Scotland. I know that there are many Members on this side of the House, who will at present support Ministers under all circumstances, but, I also know, there are many independent Members on both sides—to them I appeal. I entreat them also to bear in mind the former state of the lower orders in Scotland; the improvement that has taken place under the present system—that they will pay some attention to the Reports of the Select Committee of the Board of Excise; and, that they will also bear in mind the certainty of a recurrence of the present state of things, if this Bill is permitted to pass. I am certain that, if they will take all these circumstances into consideration, I shall not appeal in vain to the Members for England, and that they will not sacrifice the welfare and interests of Scotland to the bad policy of Ministers or the clamour of the Irish. I shall, therefore, move that this Bill be committed this day six months.

Mr. Sinclair

rose to second the Motion, and to enter his protest against the measure before the House, because its adoption would militate against the moral welfare of the district which he had the honour to represent, as well as against the interests of Scotland in general. The system this Bill was about to subvert had been attended with the most salutary effects; he could confirm his hon. friend's statement that it had put down illicit distillation, and thereby improved the revenue. He firmly believed, that, if this measure should pass into a law, it would be necessary to enlarge all the gaols in Scotland for the reception of smugglers.

An Hon. Member

thought the Bill, which ought to be entituled "A Bill for encouraging Smuggling in Scotland," went the length of accusing the Scotch distillers of frauds which had not yet been proved against them.

Mr. Dawson

meant to give his support to the Government on this subject, and he hoped, notwithstanding the opposition of the Scotch Members, that Ministers would persevere in passing this Bill. The effect of the Report was merely to call the attention of the House to the evidence, so that hon. Members might form their own opinion. Whoever would undertake to wade through it, must perceive that the allowance of a drawback opened the door to the greatest fraud on the revenue. The hon. Gentleman said, that no fraud had been proved to have been committed, and he would allow, that no case of distinct fraud had been made out; but, not a single person was examined before the Committee—not even the distillers themselves—who did not state that the law was such as to permit fraud. It appeared, that the malt and the raw grain were deposited, in many cases, in a loft above the building, where the distillation was carried on, and there were no means of preventing the distiller from mixing the raw grain with the malt. If the facility of mixing the two was so great, that even the Excise officer with all his dilligence, could not detect it, it was manifest that there was no provision against fraud. If there was a law to prevent the two ingredients being kept in the same building, there might be some check upon the distiller; but there was no such law. The hon. Member might talk about no fraud having been detected; but, as long as spirits could be made more cheaply from raw grain than from malt, fraud must take place, more especially when it happened that the most experienced person could no more distinguish the one whiskey from the other, than he could two sorts of spring water drawn from different springs. The hon. Member had stated, that 334 small distilleries had been established in Scotland in consequence of the drawback: he did not doubt it; for the fact was, that this system had been supplying capital out of the public purse to these very distillers, who were entitled to the drawback in ten days after the spirits were made, and who did not pay the malt duty for six weeks. It was said, that the Irish distillers were entitled to the drawback also, but he begged to tell the House, that the Irish distillers had dealt more fairly and honestly with the Government than the Scotch, for the Irish had openly told the Government that the present system afforded an opportunity of committing fraud, of which all distillers might avail themselves: and, indeed, so anxious were they to put down everything that should interfere with the legal trade, that they had entered into a contract amongst themselves to submit to a large pecuniary penalty, if ever detected in mixing raw grain with the malt. The fact was, that the Scotch distiller having no such scruple, was able to transport his whiskey into Ireland, and undersell the Irish distiller in his own market, which had naturally given rise to much dissatisfaction, and had caused strong representations to be made to the Government. The consequence had been, that a Committee was appointed, before which both sides were fully heard; and there was but one opinion among all impartial persons as to the necessity of altering the law. Under these circumstances, he felt that he could not do otherwise than support the present Bill. The only thing of which he complained was, that the change was not more extensive, but he hoped that this measure was the forerunner of the abolition of the system of drawback altogether.

Mr. Gillon

observed, that, though he had already expressed his opinion on this subject, he could not avoid again endeavouring to avert the threatened injustice to Scotland. The evidence adduced before the Committee had shown to what an extent smuggling had prevailed in Scotland previous to 1821, and that it had now entirely ceased. In one county alone, where only 5,000 gallons had been previously brought to charge, now there were 100,000—and in the island of Isling, where there had been 300 convictions, there had last year been but three. At the former period, out of a population of 17,000, every one was, more or less, concerned in smuggling. That this change, so beneficial at once to the revenue and the morals of the people, was attributable as much to the drawback as to the reduction of spirit duty, a reference to the duties would fully illustrate. The worst consequences were to be apprehended for the agriculture of Scotland in the Highlands, by the uncertain demand of the smuggler being substituted instead of the steady market now afforded by the licensed distiller; and in the Lowlands, by the diminished consumption of barley, which had hitherto been the grain that had afforded to the farmer the most profitable return. A number of hands now employed in making malt, and cutting and drying turf, must be thrown idle—a consequence seriously to be deprecated in the present state of distress prevailing in every part of the country. He deprecated the proposed change as highly unjust to a most useful and respectable body of men, who had been induced to embark their capital in the process of malting and of malt distillation, on the faith of the permanence of the present law. Above all, he utterly denied the existence of fraud in Scotland, and which rested on no proof whatever, and was supported only by gross calumny and interested clamour. A reference to the Excise, the only impartial judge in this matter, had utterly disproved the allegation. Having now considered the Bill before the House, he declared that, did fraud exist, it in no way diminished the probability of its occurrence; that it was utterly inadequate to accomplish the end in view, and would have no effect but that of giving a bonus of sixpence for the manufacture of an impure spirit, while it would materially assist the over-grown distillers, at the expense of the small capitalist. If the principle of the drawback was a bad one, it was as bad with a drawback of eight pence as with one of fourteen pence. The only mode of preventing the possibility of fraud had been suggested by the malt distillers of Scotland, who were as much interested as any class of men in repressing smuggling, and who were anxious to refute those vile calumnies thrown out against them. The mode was to oblige raw grain distillers and brewers to store their malt, and receive it under permit for consumption, in the same manner as malt distillers now received it. If he was told this would create an expensive machinery, he asked what was the use of a machinery that did not meet the end in view? He could not imagine what the Excise had got to do: various taxes, such as the beer, and the leather tax, had been repealed, and their time must be but little occupied in consequence. He was convinced the revenue, instead of improving, would fall off—not, probably, for the first six months, or even a year, but such would ultimately be the case by the revival of illicit distillation. There was another species of smuggling well known and extensively carried on in Ireland—he meant smuggling from the worm mouth: this had been but little practised in Scotland, but the temptation to it would now be much increased; and there was no proper check against that species of fraud now proposed to be established. On all grounds, therefore, both generally as to any change from the necessarily injurious effects of that change on Scotland, and as applicable to the Bill under their consideration, he should oppose the measure in every stage.

Colonel Lindsay

said, the Irish distillers having complained that great fraud had been committed under the existing system, Government had directed their allegations to be inquired into; but the investigation which the Commissioners of Excise had caused to be instituted proved that the statement was incorrect. Notwithstanding this, however, Ministers were, by this measure, about to place an additional duty of 6d. on malt, for the reduction of the drawback from 1s. 2d. to 8d. was tantamount to that—and the question was, whether the revenue would gain or lose by it. The revenue derived at present from this source, was four times greater than it was before the existing system commenced, and they ran the risk, by altering it, of losing that important benefit. This measure, he looked upon, as most dangerous, and he thought it required further consideration before it was adopted.

Mr. Spring Rice

observed, that the system of drawbacks was never intended to be permament. It was adopted as an ex- periment for the purpose of putting down illicit distillation, and had frequently been dealt with before. Ministers had come to the conclusion, founded on the best information, that the measure now proposed would neither raise the price of spirits, nor encourage illicit distillation. It was said, that, in this instance, Ministers had yielded to the clamour of the Irish Members, and party considerations, but they had not adopted the measure in consequence of the clamour of any party. They were actuated by a desire to do justice, as well as they could, to all the interests concerned. It had been asserted, that no fraud had been committed under the present law. He thought that he could point out a case of very great fraud. That, however, did not weigh with him. It was, however, certain that the system afforded great liability to fraud, and, therefore, it was necessary to correct it.

Mr. Goulburn

agreed with his right hon. friend that the question ought to be divested of all party considerations, and he agreed with the right hon. Gentleman that the drawback was not intended to be permanent. The drawback had been, as it was said, introduced for the purpose of putting down illicit distillation, and, although that object was achieved, he thought it should not be withdrawn hastily, or without due consideration. He feared much, indeed, that the withholding the drawback would renew those unfortunate scenes which were attendant on the practice of illicit distillation in Ireland, and he should, therefore, certainly vote for the hon. Member's Amendment, if he pressed it to a division.

Mr. Robertson

observed, that the amount of duty on malt had increased to a great extent since the adoption of the drawback system, and he was afraid that the change would be disadvantageous to the revenue. In Argyleshire, the amount paid for duty on malt had been only 5,000l. a-year, and now it was upwards of 100,000l. In Elginshire, no duty had been paid formerly, and now it amounted to 80,000l. a-year, while the number of distilleries in Scotland had increased from thirty-seven to 225 last year, and they were at present, he believed, nearly double that number. The capital embarked in them would be most materially affected by the proposed alteration, while encouragement would be given to illicit distillation. There could be no regulation more danger- ous than that which went to teach a whole population that it was their interest to defeat the law.

Mr. Cumming Bruce

said, notwithstanding the assurance of the right hon. Gentleman, the Secretary to the Treasury, that this question was not taken up by the Government in deference to the wishes of the Irish Members, he was yet aware that it must, in a great degree, be considered as a question between the interests of Ireland and Scotland. He, therefore, regretted, that there was not a considerable number of English Members present, to arbitrate between the two. The right hon. Gentleman, the member for Harwich, wished that the question might be decided on the evidence given before the Committee: he heartily concurred in that wish. He was sure that the result would be favourable to Scotland, because every word of that evidence, if fairly considered, was at variance with the Resolutions proposed by the Committee. He felt it his duty to oppose those Resolutions to the utmost of his power, as fraught with injustice to Scotland generally, and to the Highland districts particularly. It would injure the revenue, and deteriorate the morals of the Highlanders. On the faith of the law, and the presumption that the present duties would continue, many persons of small capitals had been induced to embark their all in this trade, and they would now be exposed to entire ruin. The majority of the distillers in the north and centre of Scotland were of this description. Persons who made up by frugality and industry for the want of large returns, for the profits of the trade at present were as low as they could be not to be ruinous. The duties in 1823, with the view of inducing the legal distiller to compete with the smuggler, were reduced to 2s. per gallon. Such had been the uncertainty and constant state of fluctuation, as regarded the excise laws, previous to the judicious alterations then introduced, that even that comparatively low rate of duty failed at first to induce the small capitalists of the Highlands to embark in this trade; but as the Government took great pains to satisfy them that the law should be permanent, they did, in 1824, embark extensively in this trade, and the smuggler was forced to give way. Since then, the duties had been successively raised from 2s. to 3s. 4d.; and this constant disposition of the Exchequer to run them to the very verge of profit, had had this effect—that all had been disgusted—some had been driven altogether to retire. The term "drawback" might mislead some Gentlemen who objected to the principle of bounties. In this case, however, there was no bounty whatever, but merely a lower rate of duty levied on spirits produced in a particular way, for the purpose of protecting the revenue on malt in general. If there was a bounty, it was a bounty to the revenue for malt, and not to the malt distiller. One argument used in favour of this measure was, that the actual system offered facilities for fraud. To that, he must reply, that, under a vigilant superintendence, no case of fraud had ever been detected or proved. It was surely monstrous injustice to punish the Highland distiller from malt on a mere allegation that facilities for fraud existed. But, then, the defective system was left in full operation; and while a class of persons were punished because the law was defective, the bad law was left to hold out the same facilities and an increased temptation to fraud, because persons would naturally seek to compensate themselves for the diminution of profit occasioned by the increased duties. The common-sense course would be, to alter the law, which could be done by abolishing the drawback altogether, and reducing the duties on malt spirits in proportion. This would be satisfactory to the northern distillers. But he objected to any reduction of the drawback, without such an arrangement, because it would be attended with serious loss to the revenue. The state of the Exchequer was certainly not such as to make it wise or prudent to try experiments of doubtful utility, without a strong probability that they might be successful. Suppose this diminution of the drawback should drive the legal distiller from malt out of the market, what was the state of this branch of revenue from Scotland, when the market was in the hands of the free-traders in the Highlands. His hon. friend, the member for Fife, had stated the result generally; he wished to allude to a few facts in more detail. It was in evidence, that, prior to 1823, the revenue paid from the county of Argyle was about 5,000l. per annum, it was now upwards of 100,000l. In the county of Elgin—with which he was more immediately connected, and from which two petitions against this measure were recently presented to the House—formerly it amounted to absolutely nothing; it was now, about 80,000l. It was in evidence, that there were only thirty-seven licensed distillers in Scotland in the year 1815; and thirty-six in 1817; 112 in 1818: but there were, in 1824, 171; and in 1828, 255; and, since that period, they had materially increased. There would be a double operation of loss to the revenue by driving out the small distillers, for their habits of life being formed that way, they would, in general, become smugglers, and compete with the legal distillers who remained. But that brought him to a consideration infinitely more important than the interests of the revenue—he alluded to the effect which would be produced on the morals of the Highlands, if the system of smuggling, so successfully put down, were again to be brought into activity. This was an important consideration. Previous to 1823, the whole hill country (he spoke this from his own knowledge) was overrun with smugglers. There was scarcely a family which was not in some way connected with them. The smaller tenants, were not, indeed, generally smugglers; but the operations of the still were carried on by the cotters, who, in case of detection, had nothing to lose, and they became the best, indeed almost the only purchasers of the inferior sort of barley and bigg grown among the hills. The tenant looked to them for the means of paying his rent, and the landlord was thus included in the chain of those interested to evade or to violate the law. He did not say, that all these persons became demoralized, but a whole population was taught to draw a distinction between the duties of legal, and the duties of moral, obligation—a distinction most prejudicial to the strength of the principle on which obedience was most surely founded. Accordingly, the disposition to violate the law, in the mind of the smuggler, was very soon not confined to the Excise laws. He could cite various instances to prove this, but the general knowledge of the illicit traders habits must make the fact notorious to every hon. Member. If, therefore, the fair trader was driven out of the market, the farmer and landlord would have a common interest with the smuggler, because, in the remote districts of the Highlands they had no other vent for their barley and bigg than to sell it to the distiller. There was no law more impolitic than that which made it a common interest for all classes to evade it, Besides, their pecu- niary interests, so far as the landlords were concerned, their feelings of humanity, and the consideration of kindliness and protection to the interests of their tenants, would be ranged against the law. In the days of smuggling had been most anxious to stay the demoralization resulting from it, and, with that view, had entered a clause in all his leases, making it a forfeiture on the part of the tenant of his lease, if detected in illicit distillation. Other proprietors did the same, but motives of humanity frequently compelled them to desist when they found that ruin must ensue to the tenant; for, to enforce the forfeiture, they must have informed against them, and proved the fact, and the latter office was, besides, so odious, that no gentleman could undertake it, and the tenant generally escaped with impunity. He could assure the House, that he knew whole parishes whose rental had been doubled, and the condition of the occupiers much improved, under the existing law. He did, therefore, hope, on the grounds he had stated, that the amendment of his hon. friend would be carried.

Mr. Callaghan

could not suffer the House to go to a division on the question without offering a few observations; for, however, convenient it might be to hon. Gentlemen near him that they should do so at that moment, when their friends were present, and those who supported the Bill, expecting a longer debate on it, were not in attendance, he did not think it for the interest of the country that the question should be thus disposed of. Having been an attentive Member of the Select Committee who inquired into the subject, he thought it right to state, that the recommendation to abolish the Drawback was given by them, if not unanimously, certainly with only one exception; and, however disappointed those persons were who imagined that the repeal of the whole duty would necessarily have resulted from it, and that now not half of it was to be abolished, yet as the Committee, recommended that in repealing it, care should be taken that illicit distillation in the Highlands should not be encouraged or revived, although he could not implicitly agree in the mode being the best which the Chancellor of the Exchequer had adopted for this end, namely the gradual taking off only 6d. Now he was not inclined to strongly challenge the correctness of that decision, and would look forward with confidence to its total repeal next year. The hon. Gentleman from Scotland, who spoke on this subject, seemed to feel that, because this Malt Drawback was necessary for the Highlands, that, therefore, it was good for the country. Now, he contended, that it was because it was not a good system for any other part of these countries that it ought to be abolished. It was not in operation in Ireland, and where it had been put there into operation, it was found to give such great facilities for the evasion of malt-duty, that it became evident to the fair trader, that it was not a system which should be continued. Hon. Gentlemen seemed to think that there was an unjust aspersion cast on the body of Scotch distillers by Irish Members; he thought it right to state that this was not the case; they did not charge the small Highland Distiller with any habitual evasion of duty, or improper receipt of drawback, but he was confident, and it was the opinion of many of the most respectable Scotch distillers, that the manufacturers in the Lowlands of Scotland did make improper use of the drawback.—Many circumstances were given in evidence before the Committee which made him of this opinion, and the notoriety of the case did not even require such evidence. Hon. Gentlemen asserted, that, because no very exact proof of it was given by the Excise, that, therefore, it could not be. Why, the Excise could not have offered proof of it, because, had they known it, or acknowledged it, they must have been guilty of connivance or negligence. Distillers who were examined by the Committee would not have acknowledged it and condemned themselves, therefore they were not questioned on the subject. But it was remarkable that, although the Committee had continued sitting for a fortnight after they might have decided, merely to give time for Scotch distillers to come forward to support, by their evidence, the statements set forth by them to Parliament, and the Treasury, they did not come forward. He was not presuming too much, therefore, in saying, that they shrunk from the investigation, and did not choose to be probed upon that point. The Irish interest had no objections whatever, to favour the Highlands, and would not object to any fair mode of giving them relief in their duties; but they did object to the Lowland distillers of Scotland having an un- due advantage over them, and it was evident they must have had this to a great extent when they were taking the corn of Ireland to Scotland to be there distilled and brought back to Ireland in spirit, and sold at much less prices than the Irish distiller, with equal skill, could afford to sell them at. His hon. friend, the member for Argyleshire, was quite content with the system which gave this advantage to his own property, and abused the Irish for interfering with it; but he was quite indignant with them when they offered to leave the advantage with him, if he would only allow that so long as it continued, the Scotch should not send their spirits to Ireland. In fact, while it continued, a non-intercourse became just, though perhaps the House, or even he himself, would not approve of such a measure. His hon. friend the member for Argyleshire, who fought the battle of the Scotch in that House on the question, relied on some documents lately placed on the Table of the House, that allegations of fraud in Scotland could not be just. He argued with him in private thereon, and thought that, because the malt duty in Scotland was now greater in amount than when the drawback system commenced, that therefore, there could not have been any great fraudulent abstraction. Now, from these documents it appeared that in 1824, the whole malt duty of Scotland was 120,000l. per annum—and that, since then, the average was 160,000l. which was the net revenue last year; but he did not perceive that, in 1824, the revenue of 120,000l. was received from the malt used in making only 2,000,000 gallons of spirits, and now that the make there was by the same returns, shewn to be 7,000,000 gallons, this ought to have given a much larger increase than there appears. He challenged his hon. friend to deny any part of this statement, and if he could not, he was sure other hon. Members who had spoken, and not examined these returns, would admit that they were in error. He repeated that he did not object to Scotland being favoured, but he objected to any system of drawback. He would, if necessary, give them their malt without any duty; but he would not approve of a system of receiving duty with one hand, and paving it away with the other. The hon. Gentleman then proceeded to some detail, which showed that distillers in Scotland, with two distilleries, made malt at the raw grain distillery for the work in their malt distilleries, and made malt for the raw grain in their malt premises for the evident purpose of fraud. He also alleged, that the Excise Board were, in consequence of the Report of persons sent down lately to Scotland, convinced of the practicability of committing fraud there, and of its having been to an extent they had not believed, and that none but the most clumsy workmen could have been detected.

Mr. Francis Baring

begged to refer those hon. Members who said, that the Resolutions agreed to by the Committee were not warranted by the evidence produced, to the testimony of the two superior revenue officers, who were sent to Scotland for the purpose of examining the state of the distilleries. They affirmed that every stage of the process was open to fraud, and they noticed a discovery they made in one distillery, which left no doubt that fraud had been committed. It had been admitted that the malt drawback was only tried as an experiment, and for four years it produced but very little effect, the presumption was, that it had not succeeded. It was the great reduction of duty afterwards that occasioned the stoppage of illicit distillation, which effect was not confined to Scotland, but also extended to Ireland.

Sir George Murray

said, the House was told the present system must be amended, because there was something in it which created a suspicion of fraud, but it was only suspicion, and no particular case of fraud had been proved. The quantity of malt found in the distillery to which the hon. Member who spoke last alluded, which it was supposed had not paid duty, was so small, compared with the immense consumption in that distillery, that it was impossible to attach any great weight to the presumption of the revenue officers. The question before the House was not a mere dispute between Ireland and Scotland, but was one of much importance to the country generally. The great evil of the distillery laws up to 1823, was then continued fluctuation, this led to an inquiry by Parliamentary Commissioners, who, in their Report, laid down principles in which expectations of considerable improvement were founded. The plan of malt drawbacks was then adopted certainly as an experiment with a view, if successful, to continue it permanently. In considering whether it had been successful, they must reflect upon the evils which existed when the Commissioners made their Report. The Commissioners said, that the enforcement of the collection of the spirit duty was attended with the most injurious consequences to the people of Scotland and Ireland. They stated, that the evil was chiefly confined in Scotland to the more remote and mountainous districts, where the peasantry were rapidly approaching to the lawless and disorganized state which they exhibited in some parts of Ireland. That evil had been remedied by the system which it was now proposed to abandon. The Commissioners' Report was chiefly founded on the opinions of the landed proprietors of the country, and it would be well to pay some attention to their authority. The right hon. Gentleman who moved the Resolution should consider the distressing situation in which they would be placed by the alteration, for their duty as Magistrates would be wholly at variance with their interests and feelings as landed proprietors. The result to be anticipated was, that the people would do that illegally which they did at present according to law. It had been said, that the reduction of duty was the chief, if not the sole cause of putting down illicit distillation, and that the granting of a malt drawback had very little to do with it; but in reply to this it might be observed that, before the diminution of duty, the malt drawback had not fair play. But since that time it had had fair play, and all the beneficial effects which had been expected were realized. To bear him out in this statement, he begged to refer to the paper he held in his hand, by which he found that, previous to the year 1824, the convictions in Perthshire under the Excise Laws, varied from 200 to 400 a-year, but since that time, they had gradually decreased till 1830, when they amounted to only eighteen. So far as he had been able to examine the evidence in any point of view, it offered no solid foundation for this proposition. Indeed, the evidence of the Irish distillers proved too much, for it went to the extent that every distiller in Scotland committed frauds on the revenue, and that the Excise officers were negligent in the discharge of their duty; but, in Ireland the case was quite reversed, there the distillers were all honest, and the officers all vigilant. There was no doubt that frauds were occasionally committed in every branch of the distillery trade, but he denied that the mere suspicion of fraud justified such an alteration as that proposed. The evidenee failed also in proving that the revenue would be increased by the alteration, for it would sustain the loss of all that now received in the Highlands on legally distilled spirits. Illegal distillation would be revived in full force, and the demoralization of the people which was a far more important consequence than the loss of revenue, would inevitably follow.

Mr. Alderman Wood

did not know how the right hon. and gallant Officer could have arrived at such a conclusion. Had he consulted the returns which had been made, he would have found that the drawback which had been allowed amounted to more than the duty on the whole of the malt made or imported into Scotland. In his opinion, the whole of the malt drawback ought to be taken off. No smuggling would in his opinion be produced by adopting such a course, for the smuggling was produced by the high duty; but the consequence would be a saving to the country of 300,000l. annually.

Lord George Bentinck

denied that the sum allowed for drawback amounted to more than the duty levied. He held a Report from the Excise in his hand, giving the returns from 1822 to 1830, and from them he found the total sum received as duty in that period was, 1,916,378l., while the amount of drawback was 1,878,771l. showing a considerable balance in favour of the revenue. He was of opinion, as the drawback had given rise to many of the best consequences, it ought not now to be abolished, or even its amount diminished. To discontinue the drawback on malt amounted, in point of fact, to the infliction of a new tax upon Scotland, to the extent of five and a-half per cent upon the whole amount of its revenue.

Mr. Alderman Wood

asserted that the evidence bore out his statement.

The House divided on the Amendment: Ayes 36; Noes 74—Majority 38.

The House in Committee.

The Clauses agreed to, with verbal Amendments; and the House resumed.