SPIRIT DUTIES (IRELAND). (Hansard, 24 July 1843)

Sir R. Ferguson
said, it became his duty to move that this resolution be recommitted. He had been anxious if possible to direct the attention of the Government to the state of the Irish spirit duties, and to the condition to which the country had 1311 been reduced by the attempts to collect a higher duty than it was proved to be possible with safety to do. The Government, in proposing, as it now did, to reduce the duty at present levied, seemed to him to have acknowledged the justice of the arguments which he, and those who thought with him, urged in favour of a still further reduction, but at the same time they did not propose to make a reduction sufficiently great wholly to put a stop to, arid get rid of, illicit distillation. At the outset he wished it to be understood, that the opinion which he had always held upon the subject of the Irish spirit duties was, that there should be no limit to the revenue to be drawn from that source, either in this country or in Ireland, except that limit at which the illicit distiller came in, was enabled to undersell the legal distiller, and thus prevent the levying of the duties. It was necessary to lay this down in the first place, because he wished to get rid of the idea of being understood to advocate a reduction of duty exclusively in favour of Ireland, or indeed a reduction at all except upon the ground, that a too great amount of duty raised up illicit distillation, and prevented the levying of the duties altogether. The right hon. Gentleman opposite in making his statement last Session, in which the increase of duty was proposed, said that the extent of illicit distillation depended more upon the relative prices of oats than upon the amount of the duty. This was a statement, however, which he believed to be without foundation, for if they would look back to the returns, they would find that high duties invariably involved increase of illicit distillation. In estimating the duty, all the commissioners appointed to inquire into the subject had laid it down as a principle that the duty should be as high as they could levy; but they had also laid it down as a fact that from 2s. 6d. to 3s. was the highest duty which it was possible to levy. He believed that these amounts would be found to be the highest which could be levied, for it was necessary to remark that a duty of 3s. 8d. was upwards of 200 per cent. upon the value of the article. It would be remembered, that the capital required for embarking in illicit distillation was very small. The expenditure which must be incurred in order to set up an illicit still was not more than from 50s. to 3l. This was all that was required for setting up a trade which would produce a profit of 200 per cent. The papers before the House gave information 1312 only since the year 1834; but previous to that period, in 1830, the duties were raised, and so much illicit distillation then took place, that Lord Althorp was obliged to reduce the duty, in order to get rid of some of this increase. It would be necessary here to remark, that the prices of oats in Dublin market, did not always correspond with the price of oats in the mountains. The prices varied there in the same manner as they did in the Dublin Gazette, and what he wished to show was, that let the variation in the price of oats be what they might, higher or lower, still from the moment that the duty was reduced there was a great reduction in the number of smugglers, until they came to the time when the small addition made by the late Chancellor of the Exchequer, brought the duties and the profits of smuggling so nearly to a balance, that the slightest rise in the former would immediately produce the latter. In the year ending April 5, 1834, the duty was 3s. 4d. per imperial gallon. The price of oats was 8d. per stone. The number of detections was 8,324; of prosecutions, 2,569; of convictions, 2,155; and of persons remaining in gaol on the 5th of April, 483. In 1835 the duty was from 3s. 4d. to 2s. 4d., the price of oats 10d., the number of detections was 7,050; of prosecutions, 2,470; of convictions, 2,070; and persons remaining in gaol, 332. In 1836 the duty was 2s. 4d., the price of oats 9¾d., the number of detections, 4,545; of prosecutions, 1,631; of convictions, 1,125; of persons in gaol, 292. In 1837 there was a rise in the price of oats, and the detections, prosecutions, and prisoners in gaol were reduced by one-third. In 1838 there was a reduction in the price of oats, and there was a small increase in the number of detections, but none in the prosecutions or convictions; and the evidence of a witness before a select committee of the House, showed that the increase in the number, of detections was owing to the increase in vigilance and numbers of the revenue police. The increase, therefore, did not prove any necessary increase in illicit distillation. In 1839 a great reduction took place in the number of offenders. In that year the number of detections was 2,369. The number of prosecutions and convictions diminished by one-half, and the number of prisoners remaining in gaol reduced from 222 to 116. In 1840 the duty still remained the same, 2s. 4d., the number of detections and prosecutions was lessened by one-half, and the 1313 number of persons in gaol fell from 116 to 61. In 1840 the right hon. Gentleman the Member for Portsmouth was obliged to increase the excise and customs duties, and he determined, most unfortunately, he thought, to add to the amount of Irish spirit duties 4d. per gallon. In the first year the difference thus made did not produce any apparent increase of illicit distillation, but it did not procure the same regular diminution which had been for some years going on; in the year before, the number of detections, &c., had diminished nearly one-half, but between 1840 and 1841 the reduction in the number of prosecutions was only from 289 to 278, and the number of convictions continued the same; the number of prisoners in gaol had fallen from 61 to 48. In the year ending 1842 they found an increase in the amount of illicit distillation over that of the preceding year. The number of detections had increased from 871 to 942; of prosecutions from 278 to 331; of convictions from 204 to 244; and ' of prisoners remaining in gaol on the 5th of April, 1842, from 48 to S4. It was then that the right hon. Baronet at the head of the Government, in proposing his budget, thought that the increase in the consumption of spirits was such that they could venture to lay on an additional 1s. of duty upon Irish spirits, and it was to the change in the state of affairs so produced, that he wished to call the attention of the House. It was when the duty was raised to 2s. 8d. that the increase in illicit distillation commenced, and the practice had slowly but surely increased; but it was after the imposition of the 1s. of additional duty, that they found the most alarming degree of increase. For the year ending April, 1842, they found an increase over the preceding year of—detections, from 942 to 2,805; of prosecutions, from 331 to 1,239; of convictions, from 244 to 803; and of persons in gaol, from 84 to 368. He wished particularly to draw their attention to this alarming increase of illicit distillation. There was now existing in Ireland a greater extent of illicit distillation than there had been in any year since 1836. In that year the duty had been reduced, and it took five years of exertion in putting down illicit distillation before the right hon. Gentleman the Member for Portsmouth, could venture upon raising the duty even by the small amount of 4d. It was now proposed to reduce the duty from 3s. 8d. back to the previous amount of 2s. 8d., and the right hon. Gentleman, 1314 the Chancellor of the Exchequer, thought that by that reduction, and by using great exertions, they would be able to get rid of the late alarming increase in illicit distillation. Now he contended that this mode of proceeding would produce the greatest evils. The proposed reduction would not be sufficient to get rid of illicit distillation, even with great exertions upon the part of the police and the excise; and he trusted that Government would reconsider the matter, and reduce the duty at once to 2s. 4d" thus taking a step which would free them from illicit distillation. He had no object in wishing to reduce the duty one farthing lower than to such a sum as would enable them to get rid of illicit distillation. In 1830 the spirit duties were increased from 2s. 10d. to 3s. 4d., and the high duties continued in force until 1834; they were then reduced. This reduction was then opposed by the right hon. Gentleman opposite, upon the ground that they had not sufficient knowledge or proof of the extent to which illicit distillation was carried. Lord Althorp, in reply, stated that it had been urged that an increase of duty would increase the revenue, but it had been proved by experience that the only thing it would increase was illicit distillation. That was the argument which they had used against Government last year. There was at present no reason to suppose that the consumption of spirits in Ireland was diminishing; on the contrary, it appeared from the returns of the inspector-general, that the number of committals for drunkenness was stationary. In 1838, the number of such committals, was 16,461; in 1839, 38,678; in 1840, 23,277; in 1841, 20,783; in 1842, 19,003. Throughout the greater part of the country there had only been a nominal decrease of committals. He had also a return from the inspector of gaols in Donegal of the number of prisoners in the gaols on a particular day, upwards of 60; and that inspector mentioned that the number of persons who informed him that they were temperance men was one-fourth of the whole. This showed that there was nothing more likely to interfere with the temperance pledge than illicit distillation. He would wish the Government to consider the sentiment of Lord Althorp as to the evils of illicit distillation. It was impossible; considering the present state of Ireland, to get rid of this evil by the means which they proposed to adopt. The right hon. Gentleman opposite said it was the price of corn that the extent of illicit dis- 1315 tillation depended upon. He thought that the returns which he had quoted disproved this, and proved that the effect of any rise in the duty had been to increase illicit distillation. But he might be told that the extent of smuggling had been greater in former years than it was at present, and he certainly did not think that it had grown to such an extent as in former years; but he was greatly afraid that after a short time there might be a great deal of outrage and violence, as a consequence of the high duty, unless there should be a reduction greater than was now proposed. He had seen statements in the newspapers of an alarming character as to the seizures made of illicit stills. On one occasion 20 gallons of spirits, and 500 gallons of wash had been captured; and in another '200 gallons of wash, and 250 gallons of pot ale. The extent of these seizures showed that illicit distillation was now carried on in a manner, and with a vigour, with which it had never been prosecuted before, and they taught the House that nothing but a reduction of duties could put a stop to such dangerous proceedings. The House was aware that some years ago a great alteration was made in the malt drawback in Scotland, and also in Ireland. It was reduced from 14d. to 8d., at which rate it was still levied in Scotland; but it had since been done away with, as respected Ireland. The right hon. Gentleman's measure for this purpose was supported, and its propriety borne out by the statements of the Irish distillers; but the grounds on which the information which they afforded was founded, were quite incorrect. He would now call the right hon. Gentleman's attention to the diminution in the quantity of spirits brought to charge during the last year. That diminution in the whole duty on grain spirits was no less than one-fourth; whereas, on the quantity of malt-spirits it was one-third. It appeared, that in 1842 the quantity of grain spirits brought to charge was 6,002,955 gallons. In 1843 the quantity was 4,450,786 gallons. He maintained the increase of crime in the north and north-west of Ireland was entirely owing to illicit distillation. He found, on looking at a return laid before the House of Lords, that the number of prisoners in the gaols of Roscommon, Sligo, Lifford, and Londonderry, had increased in 1843, as compared with 1842. On looking too, at the proceedings of the committee of last year, he found it first maintained by the witnesses, that there 1316 was not likely to be any reduction in the quantity of malt spirits. How stood the fact? He found that in 1842 there were 77,000 gallons, whereas in 1843, there were but 50,000. Again, it was said before the committee, that the withdrawal of the drawback would have no effect in increasing illicit distillation. Their prophecy was, however, best rebutted by the facts which he had stated. He could not blame the Government for acting on the information which they received; but he did blame them for keeping the duty to the last moment, and not make such a reduction as would be sufficient of itself to get rid of this illicit distillation. He should not give any opposition to the right hon. Gentleman's motion further than moving the re-committal of the report on two grounds—first, that the reduction from 3s. 8d. to 2s. 8d. was not sufficient to get rid of illicit distillation; and secondly, that there should be a restoration of the malt drawback, or some alteration in the malt duty, so as to get rid of illicit distillation.

§ The Chancellor of the Exchequer
had already stated the grounds why he proposed the additional duty last year. Every one agreed that spirits was an article on which the highest practicable amount of duty should be imposed; and from the information supplied him by persons resident in Ireland, and well qualified to form an opinion, he did entertain a belief that this duty could be made available; but as soon as the fact was established, that it gave rise to offences, he at once resolved to reduce its amount. The hon. Gentleman argued, that no higher duty should be imposed than 2s, 4d., but he founded his arguments on the state of things in 1825, when the condition of Ireland was very different from its condition now; when the organization of a police force for the purpose of preventing illicit distillation was not so perfect as now; and, above all, when there was no such improvement as that which was now apparent in the moral tone and character of the people. The hon. Gentleman endeavoured to show from the tables which he adduced that the offences had increased under the imposition of the 4d. duty; but if he had looked narrowly at the papers, it would be found that they did not bear out altogether the statements which he had made. The hon. Gentleman said, that the number of convictions in 1841, a short time after the imposition of the 4d. 1317 duty, the number of offences was forty-eight, but when it was in operation a twelvemonth, this number was increased to eighty-four, which the hon. Gentleman endeavoured to show proved an increase in the amount of illicit distillation. He must demur to such a test applied to illicit distillation. He took the detections as showing more fairly the state of crime, and saw that in 1840, previous to the imposition of the 4d. duty, they were 1,359; in the following year, during part of which it was imposed, 1,004; and in 1842, when it was in full operation, they diminished to 888. But the hon. Gentleman said, "To be sure there was some decrease in crime in the last year as compared with the preceding, but it did not bear the proportion that might be expected from a comparison with the last before that." It was perfectly true that when means were first applied for the repression of crime, the decrease immediately following such an application was greater than in subsequent years. As to the alteration in the malt drawback, it had been brought before the House in the course of last Session, and a committee having sat on it, they were of opinion, with a few exceptions, that the repeal of the drawback would not be injurious to distillation. It was thought fair that each country should have the kind of spirit most agreeable to the inhabitants. In Scotland five-sixths of the whiskey was distilled from malt, whereas in Ireland, of 6,000,000 of gallons, the quantity distilled last year, there were but 77,000 made from malt—a proportion so small, as clearly to show that the general taste was not in favour of malt spirit. Besides, of ninety-two or ninety-three distillers, there were but three who availed themselves of the malt drawback, and one of these had since abandoned the trade. The return before the House showed that the diminished amount of malt spirit imported from Scotland had answered the anticipation which was made last year. He thought the hon. Gentleman had not made out his case, nor could he concur with him that it would be for the advantage of Ireland, or the general interest of the revenue, to allow again that drawback on malt, which was abolished last year.

§ Captain Jones
thought, unless they reduced the duty below 1s., they could not put an end to illicit distillation. Though there might be a falling-off in the quantity of spirits brought to the charge, 1318 this did not show that a smaller quantity of spirits was consumed. He was of opinion that the hon. Gentleman (Sir Robert Ferguson) had made out his case, and he should support his amendment.

§ Mr. F. Baring
could not, after the best consideration, concur in the view taken by the hon. Gentleman, or in that of a noble Friend of his (Lord Monteagle), whose opinion on any subject he sincerely respected. The question was, whether spirits would bear a duty of 2s. 8d. the gallon. He apprehended it would be generally admitted that this was an article which should be taxed to the utmost extent short of promoting of illicit distillation. They had the benefit of experience that three was a diminution under the additional 4d. duty of offences from 1,359 in 1840, to 888 in 1842. He found, however, that his lion. Friend's return was made out in a different way—indeed, he could guess at the author of that mode of proceeding. His hon. Friend showed, that in the quarter ending April, 1842, there was an increasing number of detections, but his hon. Friend did not mention that there was an increase of 25,000l. on the amount of duty. His hon. Friend then would have them believe that the addition of the 4d. duty increased the smuggling when, the increase of duty was so large as that he had just stated. If the taste for spirits should revive amongst the people, an increased consumption, both of legally distilled and illicitly distilled whiskey would follow. There was another fact mentioned in the report of the commissioners of inquiry, to which he would take the liberty of directing the attention of the House. The question now at issue was, whether Irish spirits would bear a duty of 2s. 8d. The report of the commissioners referred to the alteration of the duty from 2s. 4d. to 2s. 10d.; and what was the result in that case? The average duty paid under the 2s. 4d. duty was 846,597l., and under the 2s. 10d. duty it increased to 1,294,000l. This proved distinctly, that so far from it being true, that spirits could not bear a 2s. 8d. duty, it was evident that they could bear a 2s. 10d. duty. It was remarkable also, that the quantity of spirits consumed under the 2s. 10d. duty was greater than that consumed under the 2s. 4d. duty, even in 1825, which everybody knew was a year of great excitement, and, consequently, of increased consumption. Under these circumstances, he thought, 1319 that the hon. Member for Londonderry had not made out such a case as could induce him to vote against the proposition of the Chancellor of the Exchequer. As far as he was able to judge from his own experience, from the returns before the House, and from the history of past transactions, he was of opinion that the additional fourpence would not increase illicit distillation. Nay, more, he would say, that if he were desirous of trying experiments with respect to the reduction of duties, Irish spirits was not the article he would select for that purpose. Taking the financial condition of the country into consideration, he would rather risk eighty or a hundred thousand pounds on the reduction of some other tax than the duty on Irish spirits.

Sir R. Ferguson
would not give the House the trouble of dividing.