HC Deb 10 April 1862 vol 166 cc775-87
MR. BASS

said, he had given notice of his intention to move in Committee the following Amendment on the proposed additions to brewers' licences:— That, in the event of the Committee adopting the Chancellor of the Exchequer's proposition, all other manufacturers, ironmasters, and coal-owners shall, on the 1st day of next October, be subject to the payment of an annual licence, to be calculated, as nearly as practicable, on the same principle, or similar principles, to that on which the brewers' licences are to be imposed. As, however, he had found the Resolution would be irregular in that form, and as his object was to invite discussion and give the House and the country an opportunity of understanding the subject, he should conclude with moving that the Committee be deferred till the next day. The taxation on individuals or on individual firms in the manner proposed by the Chancellor of the Exchequer was entirely new to their system of finance, and he wished the House to express its opinion upon the fairness of imposing an impost of £5,000 upon a single individual or a single firm before they were licensed to proceed with their business. If the principle were one upon which it was expedient to act, he thought they had a right to ask the Chancellor of the Exchequer for some reason why it should not be extended to others as well as to brewers. He believed that the course which the right hon. Gentleman proposed to take in that respect was totally opposed to all precedent. When, for example, the duty was takes off cotton, it was not proposed to reimburse the revenue by imposing upon the cotton-spinner a licence duty; nor when the duty was taken off printed calicoes—a business under the regulation of the excise—did the Chancellor of the Exchequer require the printers to pay compensation in the shape of a personal tax. He had no objection to such an impost, provided it was a general one—he thought even that it might be made a very productive source of revenue; but be could not conceive why, because a certain class of tradesmen paid very heavy duties already, and who were, therefore, really the best friends of the Chancellor of the Exchequer, they should be selected for this new form of taxation. That was not the first addition to the malt tax that the right hon. Gentleman had proposed. Last year he deprived the maltsters of their credit for throe months, which was equal to a charge of 3d. a quarter upon malt; and that, coupled with what was now proposed to be charged, would be equal to an addition of 1s. 6d. a quarter to the duty. Some hon. Gentlemen on the other side of the House were particularly anxious for some reduction in the malt tax. But that was going in a precisely opposite direction. The right hon. Gentleman had complained that the right. hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli), who was Chancellor of the Exchequer in 1852, unwisely, in the scheme of finance that he then submitted to the House, proposed by a reduction of the malt tax to throw away some £2,000,000, or £3,000,000 of revenue. He believed the right hon. Gentleman was labouring under some mistake when he made that complaint; for he was satisfied that if they reduced the malt tax to one-half, not one quarter of the revenue would be sacrificed, and he was inclined to think that in the course of a very few years the revenue would regain the whole. He thought he should be able to show that on the present occasion the right. hon. Gentleman was creating a very dangerous precedent. The proposed change would not only inflict a most onerous tax on individual brewers, but would do it in a manner most prejudicial to the best customers of the Chancellor of the Exchequer. He calculated that four barrels of beer were produced from every quarter of malt, and had fixed his charge accordingly. Now, he (Mr. Bass) had brewed since the 1st of October last, from 100,000 quarters of malt, but had only produced 300,000 barrels of beer. He would thus be charged with 400,000 barrels, though he produced only 300,000, and would pay £108,000 for his 300,000 barrels, whereas those who brewed four barrels from a quarter would pay for the same quantity only £82,000. Did that inequitable mode of charging a tax furnish any reason why the Chancellor of the Exchequer should make him pay £5,000 in addition? He was afraid that it was his misfortune to belong to a class of persons who did not meet with much sympathy from the House of Commons. Everybody said "put it on the brewers;" and if, instead of making him pay £5,000 a year, it was proposed to mulct him in £20,000, and in addition give him a fortnight on the treadmill, the House would probably offer very little objection. He hoped that for once the right hon. Gentleman would treat the brewers upon a principle of justice. Although he had already paid the tax, had used the hops, and paid the duty, the right hon. Gentleman proposed to make him pay it over again on the 1st of October, on the plea that all these taxes were imposed before a man was allowed to carry on his business. But the right hon. Gentleman would surely not apply to a tax of £5,000 a year the same principle which was applied in the case of a tax of £10 or £20. A tax so enormous ought not to be imposed until some business had been done commensurate with it. He should leave the matter in the hands of the House, and move with a view of eliciting discussion that the Committee be deferred till to-morrow.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "this House will, To-morrow, resolve itself into the said Committee, —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

MR. LOCKE

said, he rose for the purpose of seconding the Motion, though he did not take the same view of the question as his hon. Friend. The brewers, although an ill-used body, had, upon the whole, been able to take pretty good care of themselves. He should second the Motion, in the interest of a class of men who had hitherto met with no consideration at all from the Chancellor of the Exchequer—the hop factors, hop merchants, and holders of hops in this country. Nothing whatever had been said about them. When the paper duty was repealed, a drawback was granted on the stocks of paper on which the duty had been paid. On every principle of justice the same boon should be granted to the holders of hops. The mere mention of the word "drawback" caused an unpleasant sensation to every Chancellor of the Exchequer; but it was perfectly clear, if the duty on hops were repealed and no drawback granted, or granted in such a way as to do an injury to the holders of that property, a great injustice would be done, which he was sure the House would not willingly sanction. In 1857 the hon. Member for Derby (Mr. Bass) was very anxious to support the hon. Member for East Sussex (Mr. Dodson) in attempting to get rid of the hop duty. A Committee to inquire into the hop duties was appointed, on which he (Mr. Locke) had the honour of sitting; and it was somewhat worthy of remark, that the Chancellor of the Exchequer should have selected from the evidence given before the Committee only the statement of the hon. Member for Derby, that if the hop duty were repealed, the consumers would derive the benefit of that repeal. [Mr. BASS: In the long run.] In a very long run indeed. If the Chancellor of the Exchequer would look through the evidence again, he would find that the answer of almost every other witness was, that the consumer would derive no benefit whatever from the repeal. It was proved by the evidence given before that Committee, that if the duty were taken off, a man who drank a pot of porter every day throughout the year would only be the gainer of 11d. by its removal. With such testimony as this, the evidence of the hon. Member for Derby ought not to have been conclusive. It was not a consumers' question—it was a brewers question; and the brewers, not the consumers, would get the benefit of the repeal. But it was in reference to the position of the holders of hops that he called the attention of the House to the subject. In 1857, he believed, there was a differential duty of 27s. per cwt. on foreign hops; that was reduced, in the first place, to a duty of 20s. on foreign, and 14s. on English hops. That duty was to last for one year, at the end of which the duty was to be, as it was at present, 14s. on English, and 15s. on foreign hops. A complaint was then made, and very justly, that the foreign grower was more considered than the English producer, because the English grower was compelled to pay the duty in the early part of the year after that in which the hops were grown; whereas the foreigner could bond his hops, and not pay the duty till they were taken out of the warehouse and sold. The consequence was, that the amount of the duty of 14s. per cwt. had at once to be found by the English grower, or by somebody for him. The Government now proposed to take off all duty on the 15th of September. What, therefore, was the position of the English growers who had already paid the duty? The 14s. per cwt. they had already paid was most unfairly taken from them, while it was put into the pocket of the foreigner. All they asked for was the same consideration that had been shown to the papermakers, the cotton manufacturers, and the wine trade; and the case of the holders of British hops was stronger than any of these. Wine, when imported, could be bonded, and the duty was not paid till the wine was sold; but the hop growers and hop factors were not allowed the advantage of bonding. They had submitted to all this, and yet their cup of bitterness was not completely full. They were told by the Chancellor of the Exchequer that he was carrying out the great principle of free trade, and though it might affect them in an unpleasant manner, they must sacrifice themselves, like all good and patriotic men, on the altar of their country; it was a good thing for the country that taxes should be taken off, and they ought to submit with a cheerful countenance. Now, that he could not get his constituents to do; they would not be cheerful under the circumstances. They had requested him to put their case before the House; and if it was made out that great injustice would be done them, he hoped the Chancellor of the Exchequer would give way. If the drawback were not given, all these hops must be exported; for when exported, the holders had a right to claim the drawback. But to export them, say to Jersey, and bring them back again, involved an additional charge, in freight and expenses, of 6s. per cwt. If there was, nothing to prevent the hops coming back again, why not allow the drawback at once? He hoped the Chancellor of the Exchequer would take the subject into his consideration, and would treat the persons interested in the hop trade with the justice which had been extended to other trades under similar circumstances.

SIR JOHN SHELLEY

said, it seemed to him that his hon. and learned Friend (Mr. Locke) had taken for granted what was certainly not the general impression, namely, that the hop factor was the person who paid the duty. He held that the hop grower paid the duty before the stock went into the hands of the hop factor. In point of fact the hop factor had never paid the duty. He maintained it was so, and he believed the proposition of the Government would prove most beneficial to the growe. No doubt, a considerable quantity of hops held by factors were unsaleable, and they would be glad to get the drawback on them.

SIR JOHN TROLLOPE

said, he objected strongly to the proposal to bring farmers, tradesmen, and country gentlemen, and others who brewed their own beer, under the cognizance of the Excise. The Chancellor of the Exchequer told the House the other night that all that such persons would have to do would be to take out a licence, just like taking out a licence to shoot; but of course there would be provisions for recovering penalties for evasion of the duty, and that could never be carried out except by establishing a system of espionage over every private family who brewed their own beer, which was a complete novelty in this country. The hon. Member, for Derby (Mr. Bass) had not gone into the question contained in the Amendment which he had put on the paper; but certainly if one class of persons were to pay for licence to carry on a trade, there was no reason why all classes should not pay in the same way. Why should cotton manufacturers or coalowners or the learned professions be exempt? The Chancellor of the Exchequer would find that he had opened a very large question in proposing to tax people for permission to carry on their own affairs. Speaking on behalf of a constituency that were highly sensitive upon this subject, he should support the Motion for adjournment made by the hon. Member for Derby.

LORD HARRY VANE

said, he hoped the House would not assent to the Motion of the hon. Member for Derby (Mr. Bass), for he thought his hon. Friend would gain nothing by his proposal. With regard to the question of the justice of drawbacks, he would not say one word; but he wished to take that opportunity of thanking the Chancellor of the Exchequer for having boldly met this question, and relieved the hop-growing interest from an impost which had long pressed heavily on them. He had always maintained that the hop growers would derive benefit from such a measure, but he also believed that in the long run the consumer would likewise derive benefit from the removal of the tax. He would, however, throw out the suggestion that, to do away with the visits of the exciseman, it might be advisable in all cases where it was possible to make the licence duty payable with the assessed taxes.

MR. BUXTON

said, that since he had last addressed the House on the subject of the Government proposal with respect to brewers' licences, he had ascertained the feeling of six leading firms with respect to it, and had found that, while they agreed, with him in thinking it would on the whole be, perhaps, better they should have been allowed to remain as they were, they, on the other hand, thought they had not much reason to complain of the manner in which they had been dealt with by the Chancellor of the Exchequer. The effect of the removal of the duty on hops would be to induce a very much larger growth, and hops becoming thereby more plentiful, would, of course, become cheaper, which alone would be a source of considerable benefit to the brewing interest. At the same time he was opinion that there was some injustice in the mode in which the proposal was to be carried into effect, inasmuch as it was hardly fair that the brewers should be called upon to pay in the same year the tax on hops and also the new licence duty. If the right hon. Gentleman wished that duty to be paid in the present year, he ought to allow a drawback on hops, or, not choosing the latter course, ought to defer the payment of the licence tax.

MR. PULLER

said, that as the interests of the hop-growers, hop-factors, brewers, and other private interests had been brought before the House with a view to their protection, he wished to say a word on behalf of the farmers. Hitherto they had had a grievance in regard to the malt tax, but their complaint on that head had always been met, and not without some justice, by the argument that no exception could be made in their case, because exceptional legislation was an evil. But now the Chancellor of the Exchequer proposed to put a special tax upon the farmers, and it was not sufficient to say that it was of small amount, and would not press so heavily as the malt tax. Farmers brewed generally three classes of beer. With regard to two out of those three—namely, that consumed by the farmer's family and that consumed by his dependants—it would be reasonable he should pay the same licence as other private brewers. But there was a third quality of beer—the harvest beer—which generally formed the greater part of the beer he brewed. It was an expense occasioned by the harvest, and it was an expense without which the farmer could not get that extra amount of labour performed which was necessary to get in the harvest. The House would recollect that steam was every day being more and more applied to the aid of agricultural operations, and they already had steam machines of all descriptions in use upon farms. Well, supposing the right hon. Gentleman the Chancellor of the Exchequer had included in his budget a proposition to lay a tax upon the coals by which such machines were worked, would not the House have considered such a proposition perfectly unjustified by any principle of political economy? And yet that was just what the right hon. Gentleman was doing; in imposing a tax, for such would be the effect of his Resolution upon the harvest beer. The harvest beer was the same as the coals—it kept the machines going, and in brewing it the farmer was simply giving practical effect to the injunction frequently heard as to the necessity of "getting up the steam." He hoped the right hon. Gentleman would consider whether some modification of that portion of his scheme could not be adopted.

MR. HODGKINSON

observed, that when the Chancellor of the Exchequer had propounded his financial scheme, he had stated that the existing scale of brewers' licences was in favour of the large brewers; but he found that while, in accordance with the new scale, the licence duty to be paid by a person who did not brew more than 1,000 barrels of beer was at the rate of 15s. for every fifty barrels, the hon. Member for Derby and the leviathans of the trade were to be let off on payment of a duty of 12s. 6d. per fifty barrels—a distinction which, after what had previously fallen from the right hon. Gentleman, he was at a loss to understand. He might add that the Resolution with respect to private brewing seemed to him to require further consideration. In that part of the kingdom in which he resided, private brewing was carried on to a greater extent, he believed, than in almost any other quarter, and he should like to know how the Chancellor of the Exchequer proposed to meet the case of a gentleman who, having a house in London and one in the country, supplied the former with beer brewed at the latter. The Resolution did not, he thought, meet that case. There was another case also—that in which a gentleman, supplying his own malt and hops, hired somebody to brew for him—an old servant, perhaps, who had been in the habit of brewing for him—paying him a fixed sum. How, he would ask, was the Resolution to operate in that instance? But, even if the right hon. Gentleman were to improve his Resolution in these respects, he (Mr. Hodgkinson) thought it would still work unevenly; and he thought it would be better if the Chancellor of the Exchequer removed the private brewing altogether from the supervision of the exciseman, and placed the duty payable for it upon the same footing as the assessed taxes.

THE CHANCELLOR OF THE EXCHEQUER

Sir, I think we have anticipated in this discussion many points which might with greater convenience have been dealt with in Committee; but, since they have been raised, I may be permitted to dispose of them as briefly as I can, noticing only what appears to me material. Let me allude, first of all, to what has been said with respect to private brewing. The proposal of the Government with regard to a licence in respect of private brewing was not announced to the House as one of great financial importance. What I said to the House was, we are going to require from brewers for sale a payment in hard cash for every pound of hops they are estimated to use, and we cannot fairly make that demand upon them if we give to persons who choose to brew in private a positive premium by telling them that they shall have their hops free of duty without any payment at all. It may be true that Brewers for sale brew more cheaply than private brewers. With that we have nothing to do. Our business is simply not to interfere. We ought not, without grave reasons, to give a premium to private brewers; but we should, as far as we can, leave both parties in the position in which we find them, asking them to bear the same burden of taxation. My hon. Friend who spoke last has raised a question which may be more properly discussed when we come to the Bill. The practice in the preliminary stage on Resolutions is to impose the charge, but limitations, exceptions, and qualifications, such as are necessary in a variety of cases, are reserved for the clauses of a Bill. My hon. Friend, or example, asks how we are going to deal with the case of a man who has several houses or farms? I have already stated that a person who receives a licence will receive it for all his houses or all his farms, as the case may be. We do not inquire whether he has one house or more than one. We assume that he will brew to supply the wants of his own family; but, of course, he will be liable to pay upon the highest rating or rental of his houses or farms, whatever their number may be. The case of hired brewers is a proper one for consideration. I am not sure that I understand all the bearings of it; but it is not a matter to be dealt with in preliminary Resolutions. Something has been said about espionage. It is a mistake to suppose that our proposed system of licensing involves any espionage whatever. If, indeed, taking the advice of the hon. Gentleman who spoke last, I were to require every one to make a return of how many barrels of beer he had brewed in the course of a given year, there would then be something like a system of espionage; but my proposal is one of a very different character. A brewing licence is analogous to a game certificate, but the case is much less embarrassing, because the test is of the simplest possible description. There can be no espionage in ascertaining the rating or rental of a house or a farm. I have been asked what is to happen if a man takes out a licence on a rental lower than the actual rental of his house. We will not allow him to do so. We have got a sure external test in the value of a farm, or a house. Of course, if a man deliberately chooses to take out too low a licence, he will be liable to penalties, in the same way as a man who shoots without a certificate; but the standard is of the simplest character, and there is no necessity for any espionage whatever. I will now refer to the two main questions—the question of licence and the question of drawback, and I trust that the House will not entertain the Amendment proposed and seconded by my two hon. Friends. The hon. and learned Seconder of the Amendment said he did not agree with the Proposer's speech; but I differ with both of them; I differ both with the speeches in which they differ, and with the proposition in which they agree. My hon. Friend the Member for Derby (Mr. Bass) says that he uses more malt in his beer than certain other people.

MR. BASS

Than you have estimated.

THE CHANCELLOR OF THE EXCHEQUER

He uses more malt than the ratio of two bushels to the barrel, on which we founded our Estimate, but my hon. Friend is too acute not to perceive that the malt is used as a criterion of the consumption of bops. It is not the malt which he uses that is to determine the duty which he has to pay, but the hops which he consumes. We are not giving up the malt duty. If we could sacrifice it upon the altar of agriculture, the argument of my hon. Friend would, no doubt, be a fair one to urge; but unless he can show that he uses a smaller proportion of hops, he has no case whatever. I should be sorry if anything could be said by me or others to induce my hon. Friend in the slightest degree to alter the component parts of his beer, a beverage from which we all derive the greatest satisfaction; but so the matter stands. My hon. Friend has pointed out that there would be some hardship in calling upon brewers to pay in advance in respect to the hop duty. I do not admit that we shall call upon them so to pay in advance. A brewer supplies himself with his hops usually within a short period after the hops are in a condition to be sold. The great bulk of the crop passes almost immediately from the hands of the growers to those of the brewers. Now, my proposal is that the first portion of the licence duty shall be paid on the 1st of October, and the second on the 1st of March; and with reference to the crop of the year, I do not think it can be alleged that in that way the money will be paid materially earlier than it would be paid in the ordinary course of the brewing trade.

The other question—that of drawback —is one of considerable importance. We cannot, in fairness to the various interests of a very susceptible trade, postpone for some weeks the settlement of this matter. At the time I made my financial statement I did not say dogmatically that under all circumstances we should go on on the following Thursday, but the period which has since elapsed has convinced me that on the part of those who are to pay the licence there is a general disposition to admit that the system is in substance and intention a fair one, and a general desire that there should not be any uncertainty. It is, therefore, my duty with respect to the interests concerned, and the prevailing state of opinion, not to accede to the delay which has been asked for; but, at the same time, I do not wish to preclude from the further consideration of the House or the Government any proposal which may be urged on the question of drawback. We intend to insert a clause in the Bill by which the re-importation of British hops without payment of duty will be prevented for a certain time after the 15th of September. I admit, however, that the holders of hops are entitled to export them, and are at liberty to turn that right to whatever account they please. The hon. and learned Member for Southwark (Mr. Locke) has pointed out that there would be a great waste in thus turning that right to account. I admit that the holders of hops are entitled to draw from the British Government 14s per cwt. upon hops exported to a foreign market, but I do not admit that they should be at liberty for a certain time after the 15th of September to bring those same hops back again free of duty, to compete with the new hops. But the Government are ready to listen to whatever may be said on that subject. I will only say one or two words upon the subject of drawbacks. I am convinced that generally the money given in drawback is so much pure gift to those who receive it at the charge of the State, and without any benefit to the consumer. I do not say that this should preclude the consideration of anything which can be urged in this case; but I do say that that is the general result. Nor can I admit that a product like that of hops, which is annually produced, and the bulk of the crop of which is consumed within the year, stands in fair comparison with products like those of paper and soap, which have no relation whatever to the seasons. Upon that ground I confess that I view with jealousy the question of drawback; and if in ordinary cases that is so, it is incumbent on us to act with great caution at the present moment, for two reasons. In the first place, we have just had a severe lesson in the article of paper. The officers of the Government, doing their best to ascertain what stock of paper there was upon which drawback would be claimed, framed a computation, and that computation was somewhat less than one-half the real quantity on which drawback was claimed. The same thing may happen in the case of hops. Another reason is, that we do not present more than a balance of, income and expenditure, because from the £150,000 surplus must be deducted£40,000 for the mere transition of licenees. In certain cases a settlement may be made by, a sort of composition, by which the ends of justice may be attained, and it is open to the Government to entertain a proposition of that sort. At the same time the position of the public revenue is such that we ought not to incur any great risk in such a manner. The hon. and learned Member for Southwark said he would have lost the power if he permitted this stage to pass. I think: the hon. and learned Gentleman is in error. If I rightly understand it, the opinion of the House is that the question of the hop duty ought to be settled in the main upon the terms of the Government proposal; but, at the same time, the hon. and learned Gentleman may either confer with the Government, or, if dissatisfied, may bring before, the House any claims to which he thinks he is fairly entitled on a future occasion, without obstructing a plan which has been favourably received by the House. My hon. Friend behind me, with respect to the farmer, suggests that we may deal with him upon the value of his house; but the simple answer is that there are no means of ascertaining the value of farmhouses separate from the land, and therefore, it would be eminently inconvenient to the farmer to introduce a new system of charge, entailing a great deal of trouble, for a very insignificant purpose. With these explanations, I trust the House will go into Committee.

Amendment, by leave, withdrawn.

Main Question put, and agreed to.

Ways and Means considered in Committee.