HC Deb 29 February 1832 vol 10 cc977-84

On the question, that the Order of the Day for the second reading of the Malt Duties Drawbacks Bill be read,

Mr. Dixon

regretted the noble Lord had not postponed his Bill until next Session. The only foundations for it were the unsupported allegations of the Irish distillers, who had thought proper to put forth the most calumnious assertions against the Scotch distillers, which, if the opportunity were afforded, the latter would refute in the most satisfactory manner. The assertion of the Irish distillers was, that as the Scotch were able to undersell them, therefore their spirits must be fraudulently manufactured. Instead of exerting themselves to compete with their neighbours, they say, there is a possibility of so managing, as to evade the Excise regulations, and, they asserted, that the Scotch did it. The consequences of the measure proposed by the noble Lord would be, the revival of illicit distillation all over Scotland. It had been suggested to him, that a better course than that proposed would be, to take off the whole of the Malt duty, and place an extra duty of 3s. a gallon on spirits, which would yield a larger revenue than was now obtained from the double duty. Distillation from malt would then become general, and would be highly advantageous, from the increased number of persons it would employ. As he knew other Gentlemen were anxious to address the House, he would content himself by moving, that this Bill be read a second time this day six months.

Mr. Horatio Ross

seconded the Amendment proposed by his hon. friend, the member for Glasgow, being well convinced of the bad policy of the measure now under discussion. He had been a member of the Malt Drawback Committee, and heard all the evidence given before it. That Committee was appointed in consequence of the complaints which the Irish distillers made against the Scotch: they boldly accused the Scotch of committing frauds to such an extent, that it was impossible for the fair Irish distiller to carry on his business. But what was the result of that inquiry? Why, that although the Irish distillers were most ably supported in the Committee by the hon. member for Kerry, and several other able men, who, if it was possible, by questioning and cross-questioning the witnesses, would have detected fraud, if any existed, yet they were unable to prove one single case of fraud on the part of the Scotch distillers. All that could be proved was, that Scotch whiskey was sold in Ireland cheaper than the great monopolists of that country found convenient, but this was no proof of fraud on the part of the Scotch. Persons acquainted with the two countries knew very well that Scotland had natural advantages, which enabled her to produce spirits cheaper than the distillers of Ireland could; and, he believed, that one of the chief causes of Scotch whiskey having been sold so cheap in Ireland for some years past had been owing to the great competition, and that the Scotch distillers had been selling at a decided loss: and several of the greatest distillers in that country had become bankrupts within the last two or three months. Although it did not appear in evidence that the Scotch had been trading to a disadvantage, yet, he had no doubt it was the case. He believed, that the great Scotch distillers had been running a race against the Irish, and that they had suffered severe losses in consequence. He earnestly hoped, that before the House came to a final decision on this important question, Members would read the Report of the Commissioners of the Board of Excise, in reply to the complaints of the Irish distillers. These Gentlemen ought certainly to understand the subject. The concluding paragraph of their Report was this:— In conclusion, we beg to submit to your Lordships, that when the benefits which have been achieved by the present system, and the increasing probabilities that a perseverance in it for some time longer will eventually eradicate illicit distillation, are compared with the evils which have resulted from that practice, and from attempts to collect any high rate of duty, the question is not to be decided as the memorialists imply, by considerations which are merely of a fiscal nature; but, when it has, as we apprehend, been clearly shewn, that exclusive of the large additional profit derived from the increased quantity of spirits brought to charge, the revenue has derived an absolute increase from the operation of the present law, and that the effect of repealing it would be either to place the licensed distillers, especially those of a small capital and inferior skill, under great disadvantages, in his competition with the smuggler, if not altogether to suspend his operations—we are induced to suggest to your Lordships the policy, particularly with reference to the late augmentation of duty on spirits, of suspending any diminution of the present rate of allowance, until further experience shall have shewn how far it may be prudent to modify a system involving so many interests, and from which the revenue, and, it might be added, the community of those districts in which it prevails, are, at this time, deriving so many important advantages. This was the recorded opinion of these Gentlemen — and they concluded, after mature consideration, that a reduction of the drawback would be attended by the most injurious consequences, both to the revenue and to the country; yet, in the teeth of this Report, his Majesty's Ministers, yielding to the clamour of the Irish distillers, backed by the Irish Members, were about to alter that law which, after an experience of several years, had been found so efficient, both in crushing smuggling, and in benefitting the revenue; he had lived the greater part of his life in Scotland; he had seen the bad effects of the former system, and the fatal consequences of smuggling upon both the morals and habits of the people; he had witnessed with pleasure the change that had taken place in those habits, in consequence of the temptation to smuggle whiskey being done away, by allowing a drawback to the fair distiller of malt whiskey; and he felt convinced, that if this Bill was carried, it would immediately cause a recurrence of those disgraceful, demoralizing scenes. He also considered it a gross breach of faith on the part of Ministers with those gentlemen, who, upon the strength of this drawback, had invested their capitals in the erection of distilleries. This vacillating system perpetually changing and interfering with the laws, on which the fortunes of many respectable persons depended, would have the effect of checking enterprise and speculation, for every man would feel that trading was not safe. Upon the faith of certain existing laws, a man invested his fortune in a particular branch of business, and no sooner was he fairly established, than the regulations on which he relied were changed, and he found himself ruined. That would be the case with many distillers in Scotland, he was afraid, if this Bill was carried, and he therefore was determined to oppose it at every stage.

Mr. Leader

felt himself bound, in consequence of what had fallen from the two hon. Gentlemen who had asserted, that the Scotch distillers had been forcing a trade at a loss, and that their success against the Irish was owing to their superiority of skill, to say a few words to the House. In reply to these assertions, he would produce the evidence that was adduced before the Committee, by which it appeared, that the malt drawback admitted of frauds in every stage. This was apparent from the testimony of a gentleman of the name of Falls, who stated, that he had been for many years a distiller at Duncannon, that he himself possessed peculiar resources, and could purchase the materials for his business on unusually low terms—that he was acquainted with the Scotch method of distillation, and had the best machinery, and yet, that he found himself undersold at his own door, by spirits manufactured in Scotland from corn purchased in Ireland. He could not account for this, except by supposing, that the Scotch distillers must have some improper facilities under the system which this Bill was to do away with; and he was satisfied that was the case, when, on a visit to Scotland, for the purpose of inquiring into the subject, he saw that no steps whatever were taken to prevent spirit being manufactured as the distillers pleased. The result of the freedom they enjoyed, and the use they made of it was such, that the best appointed Irish distillery could not compete with them on account of the effects of this unfair drawback. He was satisfied, therefore, that the Act in favour of the drawback ought to be repealed, and all the distillers in the United Kingdom should start fair upon equal terms.

Sir George Murray

regretted, that any difference should exist on any subject between Ireland and the country to which he belonged; but he felt, that the fraud ought to be proved before any alteration should take place, particularly when such an alteration would deeply affect Scotland. The only ground of imputation against the Scotch distillers was, that the Irish distillers could not account for their being undersold in their own market, except by means of fraud. There had already been inquiries into this subject before parliamentary Commissioners, and it was apparent that great benefits had been derived from the existing system; and he thought, that some evidence should be given that a change which would so materially affect the morals of the people, by encouraging illicit distillation was necessary before it was made. With respect to the testimony of Mr. Falls, on which the hon. Gentleman had so much relied, he believed it had been confuted by that of another gentleman, of the name of Smith. Under these circumstances, he called upon the Government to pause before they re-introduced smuggling into Scotland, which would be the consequence of such a measure as that now before the House. He should, therefore, support the Amendment

Mr. Francis Baring

said, that the case did not rest exclusively upon the evidence of Mr. Falls, or of Mr. Smith, but was supported by that of gentlemen from Scotland, connected with distillation. There was one case in which the raw grain had actually been found in the copper; and another, where the circumstances were equally strong; and yet the law was so bad, that in neither of these cases was the Excise able to obtain a conviction for fraud. The right hon. Gentleman would, no doubt, be ready to coincide in regulations that would put an end to fraud; but the best way of getting rid of the fraud was, by getting rid of the temptation; for, as long as there was a temptation to commit fraud, dishonest persons would effect it. The right hon. Gentleman relied on the regulation for the drawback having been introduced by a Commission, whose labours deserved the greatest praise. That was true; but the hon. Member for Radnorshire, who was a Member of that Commission, was also a Member of the Committee, in obedience to the Report of which this Bill was brought in, so that an equal weight might be said to attach to both.

Mr. Walter Campbell

said, that supervisors, sent down by the Government to examine into the Scotch distilleries, had invariably reported, that they found no instances of fraud whatever; and, indeed, the Irish distillers themselves allowed, that no case of fraud had ever been proved against the Highland distillers. The unfortunate Highlander had a strong claim upon the sympathy of the House. If distress occurred in Ireland, England poured in her wealth to alleviate its severity; but, when Scotland was in a state of starvation, no one came forward to assist her. For some time past, the Highlanders had been labouring under the most serious privations, which they had always borne with the most laudable fortitude: but now this resource was to be taken from them. He trusted, that, under these circumstances, a short delay would be allowed, in order that the Bill might be seen by the Scotch distillers, so that they might have an opportunity of giving their opinion upon it. He understood that the greater part of the Irish whiskey was made from oats, instead of barley; and that, out of 1,000,000 of gallons only 230,000 of them were made from malt; so that the Scotch drawback was not calculated to do Ireland any great mischief.

Lord Althorp

did not think that any further delay was necessary. Notice had been given of the intention of Government to introduce such a measure before Christmas. That proper information had reached Scotland was, he thought, evident from the fact, that all those who were interested, spoke on the subject as if they understood it extremely well. Even the Highland Society bad made communications to Government in relation to it. The Bill was calculated to remove those facilities to the commission of fraud, which had too long existed. That was its sole object, and he hoped it would be found effectual.

Mr. Gillon

said, that, as so full a discussion had taken place in the Committee on this subject, he would not now trespass at any length on their attention. He was aware, that it was of no use appealing to facts, or even to the statements of their adversaries, which refuted themselves. Argument was to be borne down by clamour, and his countrymen were to be the sufferers. He had before alluded to the injustice which would thus be done to a most respectable body of men—the maltdistillers of Scotland, who had been betrayed, as it now appeared, by false inducements held out to them, to invest their capital in this trade. Every day convinced him only the more of the im-policy of the change proposed, and of the evils resulting to commerce from that unsteadiness and mutability of purpose observable in our Excise regulations. The House seemed to forget, that "confidence was the soul of commerce," and that they were now wantonly sporting with the rights and property of their fellow countrymen. He had shown that the low price of spirits in Scotland arose from the competition, and that the distillers of raw-grain whiskey, which was the species complained of, had been selling off under prime cost, but this was an evil that would soon cure itself. But, if the representations of the distillers be deemed interested and ex-parte, he begged to call the attention of the House to the Reports of the Highland Society of Scotland; he believed he might say, the most extended, the most intelligent, and the most influential association in the kingdom; they deprecated the change proposed, and suggested other means, which he had before suggested to the Committee, for preventing fraud, as far as was possible, under the present Excise system. He was sure, if time was given, that petitions would be sent in from every county in Scotland against this change. He should be happy to concur in a change of the Excise regulations, the whole of which, by their absurd complication, held out the strongest temptation to smuggling. He believed the revenue might be much more effectually guarded at half the expense; he should be happy to concur in a change of that sort, but not in one which was to sacrifice the fair trader and the man of small capital to the smuggler and the monopolist. He had heard, with the greatest alarm, that it was not altogether out of the intention of the Government to carry this change still further. With what confidence were the malt-distillers to go on, with this further change hanging over their heads? His constituents did not hesitate to say, that they must be driven from a country where there was no security, in consequence of this continual vacillation in the Legislature, for the investment of their capital. He was convinced this experiment would fail; but, if it was to be tried, he begged to suggest, that the change should take place from the 5th of July next; as, by that time, the process of malting for the season would be brought to a close, and less injury would result to those interested in this trade, and it would less interfere with existing agreements, than if forced on in the beginning of April, and the middle of the season.

The House divided:—Ayes 41; Noes 17 —Majority 24. Bill read a second time.

List of the NOES.:—
Arbuthnot, General M'Leod, R.
Brydges, Sir J. Morison, J.
Best, W. S. Pelham, C.
Campbell, W. Townshend, Hon. Col.
Campbell, J. Wetherell, Sir C.
Galley, T. Wyndham, W.
Gillon, W. D. Weyland, J.
James, W. Tellers.
Lowther, Hon. Col. Ross, H.
Murray, Sir G. Dixon, J.