MALT DUTIES. (Hansard, 12 July 1853)

§ The CHANCELLOR OF THE EXCHEQUER

[who had suddenly entered the House] said, he never had been so fortunate as to find that the business began for half-an hour or three-quarters of an hour after the meeting of the House, owing to interpellations and other preliminary matter:—he had not, therefore, expected that this question would have been brought on so soon. The hon. Gentleman had made a Motion on a subject of great importance, without stating any argument in its favour: it would not, therefore, be necessary for him (the Chancellor of the Exchequer) to state at length the objections of the Government to it. He rose mainly for the purpose of saying, that he hoped that if he abstained from taking that course, the hon. Gentleman would not interpret it into any mark of insensibility on the part of the Government. The hon. Gentleman would probably agree with him in thinking that it would be futile if an attempt were made to lead the House into considerations which might, after all, be wholly beside the mark as respected the Motion. Had the hon. Gentleman stated the argument he was no doubt prepared to state in support of his Motion, he (the Chancellor of the Exchequer) should have been prepared to follow that argument, and to show that there were serious, he believed conclusive, considerations to prevent the House and the Government from acceding to the Motion. When he saw the Motion on the Votes, he was not clear, nor was he clear at the present moment, upon the question whether the hon. Gentleman intended to claim a special privilege for the farmers as consumers, or whether he intended only to claim that the farmers should be allowed to make use of malt, duty free, for farming pur- 127 poses. The language of the hon. Gentleman would lead to the first conclusion; but the reason of the thing—and he was bound to believe that the hon. Gentleman proceeded with reason—led to the latter conclusion. The arguments against granting power to farmers to use malt duty free, for the purpose of breeding stock, were conclusive; but the proposition was one in favour of which a great deal was to be said; and, seeing that a large mass of the community thought themselves interested in such a concession, he could not possibly hesitate to admit that it would have been his duty to enter fully on the consideration of such a matter if the hon. Gentleman had given him occasion. That, however, looking to the terms of the Motion, would not appear to be its meaning. The Motion said nothing of the use of malt for the purpose of rearing stock. It spoke of such a quantity of malt as the farmer might require for his own use; but it did not say for the feeding of stock. "For his own use" might be for his own use in brewing, or in distillation, or for any purpose he pleased. When he (the Chancellor of the Exchequer), on entering, heard his hon. Friend the Member for Westminster express his approval of the Motion, he was sure his hon. Friend did not mean approval of it in that sense, or holding that there was to be one class who were to consume malt free of duty: first, because that would be a piece of exceptional legislation; and, secondly, because it would be a piece of exceptional legislation without reason. Why should farmers be allowed to make beer and drink spirits free of duty, when all others paid? What would be the result of such a privilege? That such an amount of temptation will be supplied that unless every farmer were supposed to be a man of the highest principles, a system of fraud so abominable would be established, as would demoralise the people, and a system of plunder so extensive would be introduced, as absolutely to impoverish the Exchequer. The house were dealing with 5,000,000l. of revenue. He would not suppose that they would interfere with that revenue—one tenth of the whole revenue of the country—he would not say in surprise, but in haste, Any attempt that broke down such a revenue, was an attempt that broke down what the House had recently endeavoured to effect. He had not had the good fortune to hear what construction the hon. Gentleman put on the Motion, but he had two constructions be- 128 fore him. With respect to the more limited concession to the farmers to make use of malt for the purpose of rearing stock, the first question that arose was, whether it was or was not true that malt could be extensively used in the rearing of cattle with greater profit than could be obtained by the employment of other descriptions of food? His hon. Friend the Member for Northamptonshire (Mr. O'Brien Stafford), introduced, in 1845, a Bill for the purpose of permitting farmers to steep and to dry malt, for the purpose of rearing stock with it, free of duty. The Government of the day had the question in a marked manner pressed upon their attention. Inquiries were instituted in Glasgow and its neighbourhood under the superintendence of Dr. Lyon Playfair, Dr. Thomson, and another eminent chemist. Two cows and two bullocks were selected, and were put under circumstances precisely identical, except as respected the food they used, The food of one cow and one bullock was malt exclusively, and the food of the other was barley exclusively; and the result put it beyond doubt that the feeding with barley was far better, cheaper, and more profitable, than the feeding with malt. So much for the experiment; but, not satisfied with that, these gentlemen proceeded with their inquiries, till they satisfied themselves, and proved to others, that what experiment showed them had happened, research and analysis showed them would happen. Malt had indeed, as compared with barley, one recommendation—easy digestibility. A Committee appointed in 1846 to make inquiry with respect to the burdens on land, showed very clearly, in regard to what were the constant qualities of barley and of malt, that a considerable quantity of the substances which entered into the composition of barley, and which entered into the formation of milk and flesh, disappeared from the barley in the course of its being converted into malt. Whether malt was to be used in the same manner as salt, or as pepper, or in the same manner as we used bread, beef, or mutton, was an important question. If a total revolution in the food of cattle were shown to be expedient, a battery would be brought against the malt duty; but if malt were to be used duty free, in order that a handful might be mixed, say, with a bushel of barley, the primâ facie argument of those who supported the Motion fell to the ground. The remark had been made that it was not possible for the House to raise the revenue 129 necessary for the public service, if every little trifling objection which might be brought against a particular law imposing a duty, was to be held valid for the purpose of insisting on a remission of that duty. There was no branch of revenue which was not open to objection. The House had been investigating two sources of revenue for some months, and there had been a plentiful crop of objections. Indirect taxes were favourite subjects of assault; but the House were chary of giving their votes when great branches of the revenue were at stake, and were never disposed to admit the doctrine that on account of small or minor objections great branches of the revenue ought either to be abandoned or undermined. The first question was, whether the objection in regard to the present tax was a trivial or a great objection? If the argument of the hon. Gentleman were that malt afforded the most profitable means of rearing cattle, when used (he should not enter now into the question as to its being used exclusively or not) as the main article of their subsistence, then the objection would "be considered; but, as he had shown, the evidence was on the other side—evidence taken before a Committee composed of noblemen who had proved themselves to have an interest in the land by the general tenor of their report, which well deserved the attention it had obtained. The hon. Gentleman was, no doubt, from his practical acquaintance with agricultural affairs, a high authority on such subjects; but there were high scientific authorities who had expressed opinions, not merely theoretical ones, but derived from actual experiment, opposed to the hypothesis that malt was more adapted than barley for the rearing of cattle. In a report to the Crown in 1845 upon this subject, Dr. Graham, Dr. Thompson, and Dr. Lyon Playfair expressed their opinions on the matter, and those distinguished scientific authorities were decidedly of opinion that malt was not as well adapted as barley for the fattening of cattle. Dr. Lyon Playfair was clearly of opinion that barley was better adapted to feed cattle than malt. If, then, it was clearly established that if facilities were given to the farmers for feeding cattle with malt, it would not be attended with any advantages, surely it would not be advisable to endanger a large amount of revenue by giving a boon of such a questionable character. The opinion of Dr. Playfair was given, however, before any actual experiment had been made, and ul- 130 timatety experiments were made which added considerably to the knowledge which had been possessed on this subject. Dr. Thompson, after making various experiments, expressed his opinion on one which he had made, that, although it had been interfered with by a malady among the bullocks, still it left no doubt in his mind that barley was superior to malt for fattening cattle. It appeared, then, to him, that from the knowledge possessed at present upon the subject, and derived from sources to which he had referred, and that when it was only considered that barley was superior to malt for the sustenance of cattle, it was only reasonable to conclude that, for all practical purposes, it would be more economical and more profitable to the farmer to employ barley in rearing his stock. He would repeat that the conclusion which he had drawn rested not only upon the opinions of practical men, but that those opinions were founded upon the results of actual experiments made with the greatest care, and the results of which had never been, to his knowledge, contradicted by results obtained in any other experiments. If that were so, he submitted that he had established his poposition, inasmuch as the question of actual benefit to the farmer would be of a very minute and contracted nature, for it then became a question, not as to whether the farmer should have the power of introducing a new means of feeding cattle, but as to whether increased facility should be afforded him for applying to the use of stock what might be properly called a condiment—not subsistence, but only a qualification of other articles. As far, then, as the benefit to the farmer was concerned, the question became very insignificant; but he would now inquire what appearance it presented as far as concerned the mischief which might arise from adopting the proposition of the hon. Member for Cambridgeshire. He had already stated that the House of Commons had always evinced the utmost hesitation and caution in interfering with any of the sources from which the larger branches of the revenue were derived. Now, he had no doubt that the hon. Member for Cambridgeshire would assure him that he had no intention of persuading the House to abandon the revenue derived from the malt duty; but all that he required was, that the imposition of the duty should be altered in such a manner as to enable the farmer to feed his stock at a less cost. He gave the hon. Gentleman every credit for the 131 sincerity of his intention, but he must express his decided conviction that in point of fact the tendency of the Motion now before the House would be to undermine and impair a most important branch of the revenue of the country. He was not alone in that conviction, for he felt bound to say that there had never been any doubt in the minds of those persons who had been responsible for the collection of the revenue that such would be the effect. At different periods various Governments had entertained this question, with a view of, if it could possibly be done withou detriment to the revenue, facilitating the use of malt by the farmer, to enable him to rear his stock at a lower cost than he could upon barley. He considered that, as far as Chancellors of the Exchequer, with a due regard to revenue, could go, they had gone, and in 1836 a circular had been issued by the Commissioners of Inland Revenue, at that time called Commissioners of Excise, giving permission for barley to be steeped by the farmers for the purpose of cattle feeding, and requiring that returns of all particulars should be furnished to them. From this it appeared that up to that time the steeping of barley had been prohibited, and when it was then permitted it became necessary to institute a species of general supervision. He would put it to the hon. Member for Cambridgeshire, if he supposed that in the event of not only steeping barley being permitted, but if also it were permitted to pass it through the remainder of the process and convert into malt, in such a case the same kind of supervision as was exercised now would be found to be sufficient? If the farmer were allowed to steep his barley, and then convert it into malt, it would be absolutely necessary, for the protection of the revenue, to carry into every farm in the country the presence of officers of Excise; the whole quantity of malt would have to be made known to them, and all the malt manufactured left untouched until the revenue officers had examined its quantity and noted it down. Now, he must say that he felt these annoyances and vexations—which would be absolutely necessary, unless the whole of the revenue derived from the malt tax were to be abandoned—would prove to the farmer inconveniences which he would not be able to maintain. There were several other evil consequences which might be expected to ensue if the Motion of the hon. Member for Cambridgeshire were agreed to, and among them he might mention that it 132 would be utterly impossible to prevent the use of malt for other purposes than for cattle feeding, to prevent its being surreptitiously removed, and employed for brewing beer, or for the distillation of spirits. He had no doubt that the hon. Member for Cambridgeshire did not in any way contemplate any such results as those to which he had referred; but he would ask him to take it for granted that such would occur on the opinion of persons of practical experience in such matters—he meant those persons employed in the collection of the revenue. He was well aware that just as farmers were practical men in rearing stock, so the officers of Excise were practical in raising revenue; and he must tell the hon. Gentleman that in that department of the public service there was not a single man who doubted that to take off the duty upon malt which was employed in rearing cattle, would be seriously to impede the levying of a duty from which the Exchequer derived a revenue of from 4,000,000 to 5,000,000 of money. He did not wish to convey the impression that the proposal of the hon. Gentleman was one, in totidem verbis, to abandon the whole of the revenue derived from the tax upon malt. or that even he had the wish to do so; but he must repeat that that proposal did, in his opinion, tend to undermine that portion of our fiscal policy. Even if it could be presumed that there was no farmer who would not, if permitted to grow malt to feed his cattle, use it for any illicit purpose, it was utterly impossible to believe that every servant of every farmer, would be proof against the enormous temptations to fraud which such a proposal would throw in his way. It was upon grounds such as he had mentioned, and not from any indisposition to grant any practical relief to a class of men who, he would willingly admit, were subject to a very sharp competition, that the Government felt it to be their duty to set their face against the proposal of the hon. Gentleman; and he trusted that the House of Commons would adhere to that course which they had taken in former years, and would not accede to a proposal which would, he believed, prove ruinous to the collection of a large branch of the public revenue. He would not say that he believed that the malt tax would last for ever; but he did believe that Parliament would continue to levy a tax upon beer during the lifetime of most of its present Members. There was a great question which had been con- 133 sidered for now upwards of a quarter of a century, and that was, whether it was most expedient that the tax should be levied upon the beer itself, or upon the malt: that was an open question, If a regulation could be made without regard to private breweries, by some arrangement, which, if it did not establish exact justice, would at all events make a close approximation to it, he was not prepared to say that it would not confer a great public benefit, and prove of advantage to all persons engaged in agricultural pursuits, and all connected with the preparation of malt. He should be greatly obliged to the hon. Gentleman, if he would bring forward a proposal by means of which the duty now levied upon malt could be levied upon beer, without an inconvenience; but he feared that he was not prepared to do so. The great difficulty in the way of introducing such a measure, was the difficulty of levying the tax as far as private breweries were concerned, for it would be a remarkable anomaly that persons should be able to brew their own beer, or that even noblemen, whose cellars were a spectacle in the county in which they lived, should also be able to do so free of duty, while persons brewing beer for sale would not be allowed to do so. It was the difficulty attending that part of the question, which had compelled the Government of 1830 to abandon the plan of a beer duty, and to retain the duty upon malt. The question was one which had been mooted ever since, and which had attracted a considerable amount of attention, but, as yet, had received no satisfactory solution; and in his opinion the point upon which the whole affair turned was, whether or not it was possible to continue to lay something like a fair tax upon private breweries, without subjecting the owners of them to the vexation and annoyance of any excise restriction. Until a plan of that description could be proposed, there seemed to him to be insuperable objections to entertaining proposals such as that of the hon. Member for Cambridgeshire; and he did not believe that any gentlemen who had been in the habit of turning their attention to the condition of the fiscal laws of this country, could better employ their time, than in the consideration of this important question; and he should feel indebted to any hon. Gentleman who could assist him in the solution of that great financial problem. There was a great deal, no doubt, to be said on the subject of the malt tax; but it was clear that it would be impossible to do away with 134 it, until some substitute could be devised. He felt himself bound to set his face not only against any direct proposal to do away with the malt duty, and abandon the whole of the revenue which we derived from it, but also to oppose most strenuously proposals like the present, which, not professing to have for their object the repeal of the whole of the malt tax, would, he felt persuaded, have the effect of leaving the annual revenue derived from that tax, minus some millions, and of introducing a system which would tend to encourage wholesale fraud and demoralisation; and he believed that the proposal of the hon. Gentleman, considered in an extended sense, would infallibly lead to evils more serious than mere loss to the revenue.