WAYS AND MEANS—SPIRIT AND SUGAR DUTIES. (Hansard, 26 May 1854)

§ MR. J. WILSON
said, it would be remembered that upon a former occasion his right hon. Friend the Chancellor of the Exchequer had moved an addition to the duty on Scotch spirits; and in rising to move the Resolution, it was necessary that he should enter into a short explanation. There had been for many years complaints from the distillers of Scotland regarding the difference of the duty as it affected the distillers of malt whisky and the distillers of whisky from grain. It was alleged that the drawback hitherto allowed on malt whisky had not been in proportion to the amount of the duty paid on the malt; and that, therefore, in reality, the malt distiller had to pay not only the ordinary spirit duty, but also an additional duty on malt; and it was understood between the different spirit manufacturers, that the disadvantage under which the malt distiller laboured, prior to the recent alteration in the malt duty, was equivalent to about 6¼d. a gallon. The old duty on spirits in Scotland was 4s. 8d. a gallon upon spirits of all descriptions. The proportion of malt in the manufacture of grain spirit was equivalent to 1½d. per gallon, and, therefore, the gross duty, including the duty, the malt duty, and the spirit duty, was 4s. 9½d. so far as regarded 1024 grain spirit. As regarded malt spirit, the. same duty of 4s. 8d. was charged, but the proportion of malt in a gallon represented a duty of 1s. 4¼d., making a total of 6s. 0¼d. The rule was that one-half of the malt duty, or 8¼d., should be returned in the way of drawback in respect of malt duty, leaving 5s. 3¼d. net duty, or 6¾d. more than was paid for the grain spirit. Now, whether that was right or wrong—right as maintained by the grain distiller, and wrong as maintained by the malt instiller—yet for a great number of years it had prevailed, until it had become almost sanctioned as the relative proportion between those two descriptions of manufacturers. The recent alterations of the malt duties, however, would materially aggravate the disadvantages under which the malt distiller laboured. The new duty on spirits was 5s. 8d. a gallon, and the new duty on the proportion of malt in grain spirits was 2d., making the duty on grain spirit 5s. 10d.; but the new duty on malt spirit was 5s. 8d., and the new duty on the malt 2s., making 7s. 8d., instead of 6s, 0¼d. as formerly, and if the drawback were calculated on the old principle—that was, if one-half of the new malt duty, or 1s. 0½d., were returned as a drawback—it would leave 6s. 7½d. as the gross amount of the duty, or a difference of 9½d. between the two kinds of spirits, instead of 6¼d. as formerly. It therefore became the duty of the Government to listen to the representations made by the Scotch distiller, who complained of this increase of the distinction. As the increase of the malt duty was for a special and temporary purpose, it was thought fair that no one particular interest should be specially prejudiced. It was therefore arranged by the Government, in conjunction with a deputation from the distillers of Scotland, that the drawback on the malt spirit should be fixed at such a sum as to leave the distillers of malt spirit exactly in the same relative position with regard to grain and malt spirit that they held before; that was, that the duty should be adjusted so as to leave a difference of 6¼d. gallon as formerly. It was also represented by the Scotch distiller that he should have a drawback on exportation to England. At present there was a difference of 1s. 2d. a gallon, but by the recent increase of the malt duty the difference would be increased to 1s. 10d., and it was arranged that the drawback on spirits corning from Scotland to England should be 1025 increased 8d. a gallon. A similar arrangement had been made with regard to Ireland. In carrying out these two objects, a considerable loss of revenue would be caused, amounting, according to the estimate of the Excise, to no less than 106,000l. In order to make up that loss it was proposed to increase the duty on spirits in Scotland 4d. a gallon, in addition to the 1s. previously added. This was in strict accordance with the feeling of the Scotch distillers and of Scotch Members, and would be in perfect conformity with the principles of the adjustment now proposed. The loss, he had stated, would be 106,000l., and the additional duty would yield 108,000l. When the Excise Duty Bill was in Committee, some returns were referred to for the purpose of showing the difficulty of obtaining an increased revenue from home-made spirits, on the ground that the increased duty would occasion smuggling and illicit distillation. He did not think that there were any sufficient grounds for this assertion. It appeared by returns he had received, that from the 5th of April, 1852, to the 5th of April, 1853, the consumption of spirits in Ireland and Scotland had been respectively 9,820,000 gallons and 7,172,000 gallons, as compared with 10,350,000 gallons, and 6,534,000 gallons in 1853–54. The total consumption of the two countries, therefore, had been 16,992,000 gallons in 1852–53, under the low duties as against 16,934,000 gallons in 1853–54 under the increased duty. When it was considered what efforts had been made during the past year to instil into the people habits of greater sobriety, he should not think, judging from those figures, that there had been any great increase of smuggling in consequence of the augmented duty. He should have some other Resolutions to move, all consequent upon this. There would he an increase of the rum duty in Scotland to equalise the duty on spirits. He should also have to move another Resolution with regard to another subject. He had already moved Resolutions increasing the duty on sugar, and it would be necessary to move increased rates of duty on beet-root sugar manufactured in the United Kingdom. The manufactories in this country were exceedingly small, but there were some. The hon. Gentleman concluded by moving the Resolutions.

COLONEL DUNNE
thought it very unwise further to raise the amount of the duty upon spirits. It had been three times 1026 attempted already, and had signally failed, and he did not believe that it would add so much to the Exchequer as was anticipated.

MR. HUME
said, that the only question which the Government had to consider was, whether the increased duty would lead to illicit distillation. He did not think that it would; and, so far from being an improper step, he thought that the Government should raise the duty upon spirits to the highest possible point that might be safe without leading to smuggling and illicit distillation.

§ MR. CUMMING BRUCE
concurred with the hon. Member in his views with respect to the increase of the duty, and his general approval of the measure now proposed. It would very much tend to prevent illicit distillation, if landlords would insert a clause in their leases, the effect of which would be a forfeiture of them on the part of the tenant whenever he was discovered working an illicit still.