HC Deb 04 May 1865 vol 178 cc1471-512

WAYS AND MEANS—Considered in Committee.

(In the Committee.)

Question again proposed. That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now charged on Tea the following Duties of Customs shall, on and after the 6th day of May 1865 until the 1st day of August 1866, be charged thereon on importation into Great Britain and Ireland: viz.£ s. d.

£ s. d.
Tea the lb. 0 0 6:"

said, that he had been selected by the great and important branch of commerce which was affected by the alteration in the tea duty, to bring its grievance under the notice of the House, partly because he had for the last twenty- five years been largely and intimately connected with the trade, and partly because he had now no personal interest in the question. He was, however, sensible of the injustice which would accrue to those engaged in the trade from the very sudden and abrupt notice given by the right hon. Gentleman the Chancellor of the Exchequer. The dealers in tea alleged that it was necessary for them to keep large stocks of duty-paid tea for the supply of their customers. Upon the faith of a distinct promise from the Chancellor of the Exchequer the dealers now held a large stock of tea, upon which they had paid a duty of 1s. per lb.; and now they were suddenly called upon to dispose of it as having paid only 6d. The dealers alleged that they had been acting upon the right hon. Gentleman's own assurance on the 16th of April, 1863, when the Budget was settled, and he said— The Committee will understand that if the proposal to reduce the duty on tea to 1s. per lb. is adopted, it will be a final measure, so far as we can presume to look forward to the future. Acting upon the faith of that assurance, duty had been paid during the last month upon 7,900,0001b., and the bulk of that stock was now in the hands of the dealers. They cheerfully acquiesced in the policy of the reduction; but while they admitted the right of the Chancellor of the Exchequer to make any remissions of taxation, they contended that he had no right to remit the tax already paid upon goods which had not yet been distributed to the public. The grievance of these dealers was that a heavy loss would be sustained by them, for which no compensation was made, and that they had incurred that loss mainly in consequence of the pledge that had been given by the Chancellor of the Exchequer. They also stated that their case was without precedent, that it had always been the custom to give due notice of any alteration to be made in the duty on tea. These gentlemen sought an interview with the Chancellor of the Exchequer, who, with his usual courtesy and kindness, consented to receive them. There were upon that deputation representatives from seventy or eighty towns, but, in reply to their remonstrances, the right hon. Gentleman said he could not consent to any delay, which would be contrary to precedent, and would produce a paralysis of trade. The right hon. Gentleman did not say what probably he would say that evening, that delay would de- range his financial arrangements, but he did say that there was a want of unanimity among the trade. Upon this latter point he (Mr. Moffatt), speaking from an intimate personal knowledge, could only say that although there were perhaps twenty or thirty dealers in tea who would be glad to have the reduced duty come at once into operation, yet there were 165,368 dealers in the United Kingdom whose wishes were of a different character. It was rather hard, when all these gentlemen were voters, that on the eve of an election the Liberal candidates should be asked to support the right hon. Gentleman's dictum against all opposition. The Chancellor of the Exchequer also said something about the cost of allowing a drawback upon tea being equivalent to a penny in the income tax. The dealers, however, did not ask for any drawback, but simply that the reduction of duty might be postponed for a brief period to give them an opportunity of disposing of the stocks upon which they had paid the 1s. duty. It was not difficult to ascertain what the effect of a postponement would be, for a nearly similar slate of things occurred in 1863. At that time it was generally very well understood that the duty on tea was to be altered, and in the twenty-five days preceding the Financial Statement of 1863 duty was paid in the port of London upon 1,159,0001b., and in the twenty five days after duty was paid upon 8,146,0001b., making up in the clearances fifty days nearly ten millions of pounds of tea. The only practical result of the delay asked for would be that the Chancellor of the Exchequer would get rather more of the duty at 1s., and that at 6d. would not be in operation quite so soon. The most serious objection of the Chancellor of the Exchequer was that the request of the dealers was opposed to all precedent, and that it was the usual practice to give effect to all alterations of duty as speedily as possible. He was sorry to differ from the right hon. Gentleman upon that point. There had been of late years three great alterations of the duty upon tea. The first was in 1853, when the Chancellor of the Exchequer gave notice on the 16th of April to 'reduce the duty on tea from 2s. 2d. to 1s. 9d., to become law on the 1st of June. The next alteration was in 1856 when Sir George Lewis proposed on the 6th of March that the duty should be reduced from 1s. 9d. to 1s. 3d. on April 6. The only other altera- tion until now was made on the 16th of April, 1863, and he appealed to every one whether it was not perfectly well understood by the public that an alteration in the tea duties would take place. No formal notice was necessary, therefore, as to that. That was clearly proved by what he had already stated as to the clearances at that period. He thought the House would perceive from what he had stated that the course which he now proposed was in accordance with precedent. That was the case of the teadealers. On their behalf he would only call one further witness, but that was a high authority—no less a person than Mr. Gladstone. In 1857 the right hon. Gentleman was not Chancellor of the Exchequer, but he then made a Motion of his own accord, and proposed that the duty on tea should be reduced from Is. 9d. to 1s. 3d. per lb., and he specially proposed on March 6 that the reduction should take place from April 5. The right hon. Gentleman then complained of the unfairness to the trade in not making them aware of the intended alteration in the duty. In the same speech the right hon. Gentleman said— What is the consequence of the course that has been taken with respect to the tea duty? Why, in the first place, a distinct promise was given to the parties engaged in the trade, and I confess that think it a most serious evil that that promise should be broken. It is all very well to come down to the House and say that, whether you grant a remission of the duty on tea or not, no loss will fall on the dealer. I think nothing could be more harsh—I will not say dishonest—than such a statement."—[3Hansard, clxiv. 1983.] Those are hard words, but they are not mine. They are the words of the right hon. Gentleman when he was making a friendly criticism upon the Budget of Sir George Lewis. The right hon. Gentleman, on that occasion, went on to say— It is most unjust and impolitic to break faith with the dealer, and to defend the non-performance of your promise to him by the allegation that the loss will fall on the consumer and not on him. And subsequently the right hon. Gentleman expressed the hope— That the House will not be led by any such narrow policy, to exult in the gains that are to be got out of the dealers by a disappointment of the expectations they have been led to entertain. It was impossible to adduce higher testimony in favour of the Motion which he was about to submit; but he might refer to another high authority, Sir George Lewis, who, on the 12th of August, 1857, said— It is expedient to give as long a notice in regard to these duties as is possible, because a short notice is always embarrassing and disadvantageous to merchants and dealers. That was especially applicable to these duties on tea. That was the case he had to submit. He had not much hope of convincing the Chancellor of the Exchequer, and those who had intrusted their interests to his care had also little hope; but they did confide in the justice of the House, to which they appealed against the unwarrantable and unjust decision of the Chancellor of the Exchequer. He therefore begged to move to amend the [Resolution by substituting the date of the 1st of June for that of the 6th of May.


, in seconding the Amend-mend, did not go quite so far as the hon. Member for Honiton. He thought that as a general rule all trades must be liable to the chances of a change of duties. When duties were suddenly raised those who possessed large stocks in bond complained, and when they were lowered the complaint came from those who had large stocks duty paid. When the tea duty was last lowered, in 1863, the same number of days only elapsed before the law took effect as on this occasion, and he thought the Chancellor's answer to the hon. Baronet the Member for Stamford on that occasion was conclusive. He had, therefore, declined accompanying the deputation the other day; but on looking more carefully into the question, in consequence of the Motion of the hon. Member for Honiton, he had been surprised to see how much ground had been given to the objectors by the Chancellor himself, and it was upon this ground alone that he supported the Amendment. The hon. Member had gone fully into the question; but he would take the liberty of reading again the exact words of the Chancellor in the debate on the Budget on the 16th of April, 1863— The Committee need not apprehend that the proposal thus to fix the duty upon tea only for a limited period (that was for a year only) will have any disturbing or unsettling effect, for it is thoroughly understood by the trade and by the country that when the tea duty shall be reduced to 1s. per pound the reduction will be, so far as we may presume to look forward into the future, a final measure."—[3 Hansard, clxx. 229.] Then, again, on the 23rd, when the Resolution was in Committee, the right hon. Gentleman said, in answer to the Member for Devizes— The 1s. duty was proposed as a defined settlement, so to speak, of the question. Those words might have some meaning which was not apparent on the surface, but he (Mr. Cave) asked the House what interpretation the trade was likely to place upon them other than that the right hon. Gentleman, at least, was not going to deal with those duties again. Again, in the following year, on the reduction of the licence to sell tea in country districts, the right hon. Gentleman used these words— I think it would be good policy, even if we are to put it on no other ground than the furtherance of the great change adopted last year, to make a reduction upon that (namely, the licence) duty. These words might surely have been expected to strengthen the previous impression, and, having led the trade, at any rate, to believe that the reduction of 1863 was, as far as the Chancellor was concerned, a final one, the dealers told us that they had been induced by them to hold larger stocks of duty-paid goods than they otherwise should have done, and wanted time to reduce them. He confessed he doubted the great advantage to themselves of the concession they asked. He thought the result would be, in places where there was little competition, that people would leave off buying tea till the duty was lowered, and in those places in which there were many competitors they would soon have some one giving notice that he allowed the whole reduction of duty to immediate purchasers, which would, of course, compel the rest to follow. Still, the extension asked for by the hon. Member was a very moderate one, and only placed tea in length of interval on the same footing as that on which sugar was placed last year; and as he thought the trade might be supposed to know their own business, and certainly had a just and reasonable ground for their demand, he should support the Amendment of the hon. Member for Honiton.

Amendment proposed, to leave out the words "6th day of May," and insert the words "1st day of June."—(Mr. Moffatt.)

Question proposed, "That the words '6th day of May' stand part of the proposed Resolution."


I have nothing to complain of in the speech of my hon. Friend (Mr. Moffatt) except to say that the extracts which he has quoted from my speech in 1856 are entirely irrelevant to the matter in hand. The words are perhaps stronger than I could wish now that I had used, but I do not at all recede from the substance of them. I simply say now that they have no reference to any point raised in this debate. That speech had reference to an interference with arrangements definitely fixed by Parliament, and the object was not at all to take care of the interests of retail dealers, but to encourage merchants to make arrangements in China, which necessarily from the distance require a long time for their execution. My hon. Friend (Mr. Moffatt) takes the ground that on all occasions in which a trade is dealt with time should be given to those who vend the articles on which the duty is reduced to get rid of their stocks. But he does not attempt to draw a distinction between the tea trade and other trades in this respect, for how is it possible to allow this right to the tea trade and to deny it to others? No distinction can be drawn, and no distinction ever has been drawn. As far as my own experience and that of the Departments go, there is no case during the last twenty years in which, in regard to any article not about to undergo a process of manufacture, hot simply to be distributed to the consumers, time has been given to get rid of the stocks of the retailers. It was not given in 1863; and, with his means of knowledge, my hon. Friend must be aware that it was not given in 1853. The Resolution in Committee was brought forward at the very first moment possible, and the moment the Resolution was passed and reported the new duty took effect. [Mr. MOFFATT: When was it announced?] On the 18th of April; but when the Budget was proposed there was a gap in the revenue which had to be filled up by the authority of Parliament from the lapse of the income tax, and until Parliament had given its assent to the renewal of the income tax we had not the funds to make the reduction. I said myself then that we had been prevented bringing the tea duties forward sooner by the debates on the income tax. The precedents, therefore, on which my hon. Friend has founded himself have really no relation to the case. What my hon. Friend's proposal amounts to is this: that hereafter Parliament is never to reduce any Customs duties without giving notice to the dealers. To such a proposal I must decline to be a party. I have even less occasion to complain of the speech of the hon. and learned Member opposite (Mr. Cave). There is very little in his speech from which I differ. The hon. and learned Gentleman quite agrees with me in what I regard as the main point at issue, and the grounds taken by him is totally different from that taken by my hon. Friend behind me. The hon. and learned Gentleman has narrowed the nature of the case so much that I shall refrain from arguing the larger and more general question raised in the speech of my hon. Friend behind me, and will look in the first instance only at the narrow question raised by the hon. and learned Gentleman. He says that in a former year he was opposed to a demand of this sort, but he thinks that words were used by me in 1863 which had the effect of placing the tea duties pro hâc vice on a special ground. I certainly cannot agree with the hon. and learned Gentleman as to the effect of these words. I cannot agree that whoever subsequently proposed the reduction of the tea duty would be bound to have due regard to the effect of those words. I have been frequently told in this House that I have a disposition to deny to it any share in the Government of the country; but I admit without hesitation that this being a matter of taxation, the House may do what it pleases, and my duty and the duty of Her Majesty's Government is to place the House in full possession of all the facts, and the view which is entertained by the Executive upon them. In 1863 I used the words which have been quoted, and I am not now going to argue the question against these allowances in general. If this question can he settled on the narrow ground of a special claim on the part of the tea trade, it will be as well not to enter on the broad ground of general policy. But I may observe that on this latter ground nothing can be more mischievous to the dealer, to the consumer, and to the revenue, than that any particular interest should be allowed to interfere with the arrangements of Parliament, in respect of the time at which reductions of duty are to take effect. By a proposition such as that of my hon. Friend very little is acquired for the retailer, and that little is obtained at a tenfold inconvenience to the public. Looking at my hon. Friend as a man in the foremost rank of the commerce of this country, I am sorry to see him advocating such a proposition. He, however, brings the question forward as a breach of good faith. I am glad it is brought forward on that ground. I have not the slightest intention or desire to blink that question. I am of opinion that there is no breach of faith in the arrangement proposed by the Government, but if it be the opinion of the House that there is, as far as I am concerned, the case is not one in which I feel it necessary to offer any determined opposition. Before 1863 the subject of the tea duty was one on which there had been continual battle in this House, and consequently very considerable uncertainty continued to prevail. Accordingly, in 1863, when we proposed to settle the duty by reducing it to 1s., our object was to get rid of that uncertainty and bring tea again into precisely the same position as that of the rest of the articles on which Customs' duties were levied. It was not our intention to give to tea any special privilege not granted to wine, or spirits, or any other commodity, but to place it as near as we could in the condition of other articles; and we did wish to give the trade clearly to understand that no special cause of agitation would thenceforward exist in respect of tea. Now, that would be a very simple matter if it stood alone, but neither my hon. Friend nor the hon. and learned Member opposite (Mr. Cave) has explained the circumstances under which I used the words which have been quoted this evening. We proposed to make the tea duty the subject of an annual Act; and, primâ facie, by such a proposal, we seemed to be putting tea in a position of less security than that of other articles liable to duty. Therefore, it was the duty of the Government to make the trade understand that the article of tea was not to stand in greater uncertainty than any other customable article. My words grew out, not of reducing the duty to a shilling a pound, but of making that duty the subject of an annual Act, and their intention and meaning was that we did not intend thereby to make them a subject of annual agitation and debate. Now, however, my hon. Friend ingeniously, I will not say artfully, makes use of them as conveying another kind of promise, and so founding a special claim. We are of opinion that no special claim exists. I admit that the expressions I used on the occasion were not the most happy that could have been chosen having regard to a change occurring in 1865. The hon. and learned Gentleman opposite thinks that they give to those parties something in the shape of a moral claim. I must confess that his conduct on former occasions, in setting himself against those claims on general grounds, gives his opi- nion on this matter considerable authority and weight, and makes me entertain a confident hope that on future occasions we shall be found together doing battle, and doing it resolutely, against what I believe to be a vicious principle. With respect to the magnitude of the question there is no doubt about it. When my hon. Friend (Mr. Moffatt) marshalled that army of his in Downing Street, it was utterly impossible for me to meet it with an effectual resistance. Some of the teadealers stated to me in his presence that the moment this Resolution was reported and the officers in the Custom House were directed to act upon it every dealer in the country would reduce his tea 6d. a pound. This assertion was made with very considerable boldness. I confess that my objection to my hon. Friend's proposal would be very much mitigated if it operated as an inducement to the 165,000 gentlemen who are flourishing the lash over the heads of their recalcitrant Members to sign a document saying, "I, A B, C D, and E F, hereby declare that I will reduce the price 6d. a pound on my tea the day the duty takes effect." The hon. Member says the tea-dealers are unanimous, and I agree with him that they are usually found to act as one man; there may be a few outsiders, but they, as my hon. Friend says, may safely be disregarded. But my hon. Friend's doctrine is contrary to all experience. [Mr. MOFFATT: It was not mine.] Not my hon. Friend's, but the doctrine of the friends whom he has led on, marshalled, encouraged, sustained, and countenanced. Their doctrine that there would be an immediate reduction of sixpence a pound in price when the duty came in force was all moonshine, contrary to experience. The business of these gentlemen is to get the best price for their tea, and allow me to pay them the compliment of saying that they perfectly well understand the way to do it. Now, while I do not admit that the words which I used in 1863 bear the interpretation which is sought to be put upon them, yet if the House be of a different opinion a sum of £100,000—which perhaps is about the sum involved in this question—though it is not convenient to part with it at present, is not a thing to stand at any time between this House and what it considers to be an act of justice. To a general recognition of a right on the part of retail dealers to interpose between Parliament and a reduction of a Customs' duty on a particular day I am entirely opposed. I do not deny that in those cases some of them may suffer inconvenience in respect of stocks on hand; but every one of these reductions tends immensely to their benefit, and the amount which they may have to pay at any time in respect of stocks on hand is perfectly insignificant as compared with the advantage which they derive from those changes. I do not by any means call the reduction of the tea duty class legislation; yet, undoubtedly, a special benefit does accrue from it to the parties engaged in distributing tea to the consumers throughout the country after it has left the bonded warehouse. I thought it right to avail myself of the opportunity my hon. Friend opposite gave me of drawing broadly the distinction between the attack upon a principle founded on the practice of twenty years, of denying the intervention of time before Customs' duties are reduced to enable dealers to get rid of their retail stocks and the favourable construction—unfavourable to the Exchequer, but favour able to the trade—which the Committee may be disposed to put upon the words I used in 1863. The words I used] were— It will be most convenient to renew the tea duty only until August, 186i. The Committee need not apprehend that the proposal thus to fix the duty upon tea only for a limited period will have any disturbing or unsettling effect; for it is thoroughly understood by the trade and by the country that when the tea duty shall be reduced to 1s. per lb. the reduction will be, so far as we may presume to look forward into the future, a final measure."—[3 Hansard, clxx. 229.] The appeal made on the present occasion stands on special grounds, leaving intact the general principle that the time at which a reduction of a duty shall come into operation shall be regulated by large considerations of public policy, and not by I the convenience of retail dealers, or the pressure which particular constituencies may bring to bear upon the Members who represent them in Parliament. If it be the opinion of the Committee that out of these words arose a claim special to the present occasion, leaving intact the general principle, it is a matter on which I should not feel justified in placing myself and the Government in conflict with what I may be the general wish of Members. I would suggest to my hon. Friend that the most convenient proceeding would be this—that we should strike out all date from the Resolution as it stands, as has often been done before, and then that he should propose another Resolution, which should record the ground upon which the House thinks fit to grant the delay asked for, so as not to interfere with the general principle. The Resolution I would suggest would run in these terms— In consideration of the expectation specially founded upon the declaration of Her Majesty's Government in 1863, in respect of the tea duty, the said reduction shall be postponed till the 1st day of June, 1865. If I have shown tenacity in resisting what I call a broad and dangerous proposition, I shall have no fear of ulterior consequences if the Resolution is passed in these terms.


said, that he had to express his thanks to the right hon. Gentleman for having given way upon that point. He could state that certain dealers not far from St. Paul's Churchyard had expended large sums in erecting warehouses and laying in considerable stocks of tea, and if the duty had been at once reduced they would probably have lost not less than £1,000. He thanked the right hon. Gentleman for the course he had taken, and complimented him upon the very ingenious manner in which he had escaped defeat.


said, that the rigid rules of action adopted in the case of the French Treaty had inflicted the severest loss upon both his constituents and those of the hon Member for Coventry. He expressed his thanks to the Chancellor of the Exchequer for not having opposed the House in the expression of its opinion, and for adopting a plan which would relieve a very large class of dealers from severe loss. The money they would have been deprived of would merely have been put into the pockets of the large holders of tea in bond. He was glad to see that the House had resumed its proper place in this matter, as, without its sanction, the Chancellor of the Exchequer could not have done that which he believed to be an act of justice.


said, the question in reference to the tea duty was now happily settled, although upon somewhat peculiar grounds. He agreed with the general principle which the Chancellor of the Exchequer had laid down as to the inconvenience of and want of precedent for postponing the reduction of the duty, but the House could hardly have taken a different course, considering the special grounds laid before it. He seized the opportunity, which might not occur again, to notice some very curious statements made by the right hon. Gentleman the other night in his financial statement. He was the more disposed to call attention to the matter because, as the right hon. Gentleman had agreed to violate a general principle in deference to the statements he made upon another occasion, he (Mr. Henley) might consider himself entitled to take the converse of the proposition if the statements made by the right hon. Gentleman the other night were to be persisted in. On the occasion of making his financial statement the Chancellor of the Exchequer endeavoured to exhaust, or, if he might so term it, discount the possibility of dealing with the malt duties, and he ventured to ask the right hon. Gentleman whether he was correctly understood when he was reported in the newspapers to have said— If the right hon. Gentleman the President of the Board of Trade was just in stating the malt duty to be 12½ per cent upon beer for the purpose of comparison, for the sake of argument,"—a very curious distinction—"he would take it at 20 per cent upon the barrel less probably 1 or 2 per cent for the licences, and that to reduce beer, 'that was porter,' one farthing per pot, it would be necessary to reduce the duty on malt to 1s. 2d. He did not know whether he was correct in thus stating the figures, or whether the Chancellor of the Exchequer was misreported.


I said it would be necessary to reduce the duty on malt to 1s. 2d. to reduce the price of beer one farthing a pot.


That was to say of the duty of 2sd. now placed on malt. 1s.d. must be taken off. Now, those figures did not appear to him to he accurate, and he was sure the right hon. Gentleman would, if wrong, be glad of an opportunity of setting himself right upon the point. Let them, for "the sake of argument," take two bushels of malt for each barrel of beer, which was the quantity which it had been assumed throughout the discussion would be required. Taking 20 per cent, as assumed by the Chancellor of the Exchequer, to be the duty upon a barrel of beer, that would be exactly one-fifth of its total value which, as sold by the brewers, was 36s. The one-fifth of 36s. was about 7s. 2d. as the duty on the barrel arrived at—thus, five into thirty-six went seven times and one over. But the barrel of beer contained 144 pots or quarts, and 144 farthings would make but 3s. It did not take much arithmetic to arrive at that. And if the duty at one-fifth on 36s. came to 7s. 2d., he could not conceive how a farthing a pot could amount to that sum. He had tried it and turned it about in every conceivable way, but he could not make it come to anything different than the figures he had given. He therefore thought the Chancellor of the Exchequer must have fallen into some error when he said it would be necessary to reduce the duty more than one-half in order to reduce the price of a pot of porter one farthing a pot. Of course, if the price of beer as sold by the pot were taken the error would be still greater. He had been casting about in order to find how the mistake arose, and he found that if 1s. 2d. were taken off the duty, in place of reducing the duty to 1s, 2d., the figures of the right hon. Gentleman would come out right. There must have been some modification in the figures of the right hon. Gentleman, and he thought it his duty to call the attention of the House to the subject. He protested against the statement. The figures appeared to have been twisted round. The right hon. Gentleman dissented, and he should be very glad if he could set the matter right.


said, he could not help taking that opportunity of expressing his cordial thanks to the Chancellor of the Exchequer for the concession he had made on behalf of the people. He felt it would be most gratefully received by the tea dealers throughout the country.


said, that he begged to be allowed to make a very few observations in addition to the statement of the right hon. Gentleman (Mr. Henley) to which he must call the serious attention of the Chancellor of the Exchequer. He had not felt the other night at liberty to controvert the statements of the right hon. Gentleman himself, or question the authority of the Department of Inland Revenue—at least, without further information on the subject. It seemed now that "finality" must no longer be attributed to the right hon. Gentleman's proposals, and he must say he heard that admission with great satisfaction, when he remembered that on the occasion to which he referred the right hon. Gentleman, in clear and explicit terms, declared that the extinction of the malt duty would be the death warrant of indirect taxation. He understood that declaration to import neither more nor less than an avowed determination that the extinction of the malt tax could never be the act of the present Government; but after what had occurred to-night they must not always take it for granted that the right hon. Gentleman meant literally what he said. The right hon. Gentleman had not hesitated, in explicit terms, to contradict the statement he (Sir FitzRoy Kelly) had made, to the effect that of the price paid for beer by the consumers throughout the United Kingdom, taking it in the aggregate to be £60,000,000 per annum, one-third of that amount must be attributed to the malt tax. He now repeated that statement, and if the right hon. Gentleman would give him a Select Committee he would pledge himself to substantiate it in every particular and to the fullest extent. Whether the amount paid by the consumers of beer was £40,000,000, as stated by the Chancellor of the Exchequer, (perhaps limiting his computation to England), or £50,000,000 or £60,000,000, he undertook to satisfy the Committee that one-third of that sum was to be attributed entirely to the tax on malt, of which only £6,000,000, deducting charges, passed into the Exchequer, the difference being entirely lost by the public, the consumers of beer. The President of the Board of Trade had stated that 12½ per cent was the amount of the duty paid on malt. [Mr. MILNER GIBSON: On beer.] The right hon. Gentleman, when it suited his argument, used the term "beer," and at another time "malt." It is necessary to distinguish between the tax on the raw material and the tax on the manufactured article. He did not think the Chancellor of the Exchequer would hesitate to agree that 70 per cent was the duty on malt. If we allowed 28s. for the price of barley and 4s. for the process of malting, then we had 32s. Upon that 23s. duty, or, perhaps, a little less was paid. That was 72 per cent. He did not wish to put the increase in the process of malt at too high a figure, but supposing they put the duty at 22s. 6d., that would not be too high, and the percentage would vary from 66 to 74. He thought he had fairly stated the point when he said the duty payable by the maltster, when the malt was prepared as a saleable article, was 70 per cent; and this became 33 per cent upon beer to the consumer. And when they came to compare the two articles they would find that there was more duty payable upon malt and upon beer than upon tea. He was not about to complain of the duty upon tea. It would be an invidious task to set one commodity against another, or endeavour by any Amendment to intercept the liberality of the Government in taking a certain amount of duty off that article; but if Members of the Government chose to compare one commodity with another, and say to those who had advocated a reduction of the malt tax that their complaints and statements had been unfounded, and that the tea duty had greater claims than the duty upon malt, it became him at all events to call their attention to the particular subjects with which they were dealing. If the House looked for a moment at both duties as they stood at present, they would find that the tax upon malt was the higher. The right hon. Gentlemen the Chancellor of the Exchequer and the President of the Board of Trade had very openly and explicitly addressed the House upon this subject, but the difference between the tax upon malt and that upon tea was this—that the tax upon malt being imposed upon the article in its raw or original state, or in the very first stage of its manufacture, it became increased and multiplied as it passed through the various stages to the consumer. The maltster had his profits from the brewer, the brewer from the publican or innkeeper, and the publican from the consumer, and before the beer reached the consumer the tax upon malt was trebled or quadrupled. That which would be nominally 12½ per cent, as compared with the ultimate price of beer when sold, had become, at least, 33 per cent, by the accumulation of profit upon profit on the original amount of duty. The right hon. Gentleman the Chancellor of the Exchequer had passed rapidly from 12½ to 20 per cent, which he seemed to allow was the proportion charged upon beer when sold in the barrel. If the duty were only 20 per cent when sold in the barrel, he would undertake to prove to demonstration that it became 33 per cent or more at the time it was sold in the public-house by the quart, pint, and glass to the retail purchaser. If the right hon. Gentleman had examined the terms of his own argument, it must have struck him as fallacious when he stated that a large proportion of the whole of the beer sold in this kingdom was by the barrel. Three- fourths of it was sold by the pot and pint in the public-house. This matter must rest very much upon statements, because he could not call brewers before that House to give evidence. There had, however, been letters in the newspapers written by brewers who did not make the same statements in that House, and he only wished that he had had an opportunity of cross-examining them in a witness-box, upon the statements put forth, and he would have shown that the great portion of the beer consumed was sold in quarts and small quantities in the public-houses. He offered once more to prove before any Committee that the 70 per cent duty paid upon malt became, at least, 33 per cent, or one-third, paid upon beer by the consumer. The right hon. Gentleman had also said that in 1722, when the duty upon malt was only 4s., or thereabouts, the consumption was as great as in 1864. When he (Sir FitzRoy Kelly) had the opportunity of addressing the House previously, he quoted from actual Returns to show that during some forty or fifty years in the last century, when the duty upon malt was about 4s. per quarter, the consumption was as much as two or three bushels for each person; and he also showed that within the last twenty years, when the duty per quarter upon malt was 21s.d., the amount consumed by each individual according to the population was not in some years one-half that quantity, and for five or ten years it was not more than two thirds that quantity. He would, therefore, be glad to see the Returns from which the right hon. Gentleman took upon himself to inform the House that the consumption of beer was proportionately what he had stated, taking an average of ten or fifteen years. There was another point, with regard to the duty upon wine, to which he wished to speak on behalf of those who complained of the malt tax. It was an injustice to important interests in this country and a reproach to the Government that while they had taken duty to an immense amount off foreign wine during the last forty or fifty years; while they had relieved the rich and well-to-do in the world from a considerable portion of the taxation which fell upon their luxuries, one of which was foreign wines, yet, from 1815 up to the present time, the malt tax remained untouched and undiminished. This was a grievous wrong, especially to the labouring classes of the community throughout Great Britain. Foreign wine to the benefit of foreign traders had been reduced 200 per cent within our own recollection. The right hon. Gentleman had said that the duty on malt was 20 per cent. The duty upon foreign wine was said to be still 27 per cent, but, in fact, it is but 7 per cent. How, then, was that 27 per cent made out? He cared not whether they took an account of the duty on wine at 1s. or 2s. per gallon or according to the value of the wine; he could not accept the figures given by the right hon. Gentleman the Chancellor of the Exchequer. They ought to look upon the question in a reasonable and common-sense point of view. They ought, in comparing wine with beer, to take that quality of the former article which was generally consumed. What was the amount of duty upon wine costing between 3s. and 6s. a bottle? As he stated on a former occasion, a duty of 1s. a gallon, containing six bottles, would produce a duty of 2d. a bottle, and even if 2s. per gallon it would be but 4d. a bottle. Taking the average of 3s. to 4s. a bottle, and the duty from 2d. to 4d. a bottle, it makes the duty to the consumer of wine about 7 per cent. He would also now take the opportunity of asking the right hon. Gentleman when it was likely that he would bring forward his measure for allowing the duty upon malt to be determined by weight instead of measure. If they were to understand in its literal as well as its substantial interpretation the declaration of the right hon. Gentleman that the repeal of the malt tax would be the death-warrant of indirect taxation, and that Her Majesty's Government (in which he concurred) were opposed to the total extinction of indirect taxation, they must also understand it as an express declaration that the malt tax must continue unmitigated and unalleviated in any way as long as the present Government remained in power. He trusted that the right hon. Gentleman would express himself clearly upon the subject, so that they might know what they were to hope and of what they were to despair.


said, he did not share in the astonishment which some Members had expressed that the agricultural body should have been ignored completely in the present Budget. The reception which the Chancellor of the Exchequer gave to the deputation of agriculturists a short time ago showed him that they had no chance of redress. Last year a deputa- tion of farmers waited upon the Chancellor of the Exchequer, who cast it in their teeth that there was no agitation on the subject, and he also fired a shell into their ranks which was intended to explode to the detriment of their representatives. He (Colonel North) then told the right hon. Gentleman that the absence of agitation on the part of the farmers of this country did not show that they were not suffering a grievous injustice, though they were quiet, orderly men entirely free from agitation; but when they found that some taxes, like the paper duty, were entirely repealed, and others, such as wine, were partially repealed, they thought it was high time to move in their own matter. The consequence was that early this year, a meeting of agriculturists from all parts of the country, numbering between 2,000 and 3,000 gentlemen, was held in London, and a deputation was appointed to wait upon the Chancellor of the Exchequer. He (Colonel North) must say that, although he had attended many deputations, he never saw one more ungraciously received. The right hon. Gentleman did not even vouchsafe a reply, but merely told them that they had representatives who would be able to fight their battle in the House. The right hon. Gentleman knew that the representatives of the agriculturists would not flinch from their duty; but he also knew that, from their numbers, they had no chance of success. However, as an election was approaching he would find that the agriculturists would appeal from the free trade Ministry now in power to the honest feelings of the constituencies of the country, and, in all probability, they would appeal with success. The right hon. Gentleman, however, might be certain that for the future he would not be able to complain of the absence of agitation. They would continue to agitate until this grievance was fully redressed.


would refer to the remarks of the right hon. Gentleman the Member for Oxfordshire (Mr. Henley) and the hon. and learned Gentleman the Member for Suffolk (Sir FitzRoy Kelly), which were of a practical character, rather than to the vague and somewhat harsh imputation of the gallant Colonel who had just sat down. The hon. and learned Gentleman had quoted from his speech his statement that as he understood the proposal for the reduction of the malt duty that reduction would be the death-warrant to indirect taxation. His hon. and learned Friend, in proposing the immediate reduction of that duty with a view to its ultimate repeal, accompanied that proposal by no suggestion as to any other manner in which beer could be taxed. He was bound to repeat that the repeal so understood would be the death-warrant of indirect taxation. Time would decide whether his words possessed any weight or not. His hon. and learned Friend had uged that it was the intention of the Government at no time to do anything with the malt duty, but he had most carefully limited his remarks upon the subject to the present year. What he had said as to the future was that beer would have to take its chance when put into competition with tea, sugar, and coffee on the one side; and with wine and spirits on the other. He deprecated, therefore, any attempt to advocate the repeal of the malt tax upon some exceptional grounds, or the establishment of any claim on the part of the agriculturists to an exclusive enjoyment in the reduction of taxes. He did not at all pledge himself, nor ask the House to assent to the proposition, that any alteration or reduction of the malt tax would necessarily be class legislation. What he said was—let the malt tax take its chance in competition with other taxes. With regard to the future, he had endeavoured to point out that the difficulty of operating with regard to indirect taxation was in a great degree to be measured by our obligations in regard to the income tax, and the policy which the House might think fit to adopt with reference to that impost. For three years it had been his good fortune to propose certain remissions of taxation, and he was not aware that anything had occurred to prevent the agriculturists from participating in the benefits which these remissions had conferred upon the public generally. The matter, however, depended upon the House. The malt duty might undoubtedly be reduced if they retained the income tax at 6d.; and, as the Resolutions with reference to the latter duty had not yet passed the House, his hon. and learned Friend and the hon. Gentlemen who supported him might, if they were in earnest, propose the reduction of the malt duty instead of the income tax. If they were unanimous upon that (the Opposition) side of the House, then, joined probably with a minority of those who sat on this (the Ministerial) side, they would be able to beat the Government. It was the income tax that stood in sharp competition with the malt tax. He was sanguine enough to believe that if Providence saw fit to grant us fair harvests, together with the inestimable blessings of peace and tranquillity, a more suitable time for the proposal of the hon. and learned Gentleman might arrive, but until the reduction of the income tax was effected the two duties were placed in competition with one another. The hon. and learned Gentleman had referred to words which he (the Chancellor of the Exchequer) had quoted of certain gentlemen who considered that the malt tax occasioned a loss of £20,000,000. He had been unable to gather distinctly from the hon. and learned Gentleman whether he adopted that sum of £20,000,000, but certainly it had been put forward out of doors. There was, however, a great fallacy underlying the statement. The hon. and learned Gentleman complained that the duty on beer on account of the tax had been spoken of by himself as 20 per cent, and by the President of the Board of Trade as 12½ per cent, and insisted that it should be stated at 70 per cent. But there were two entirely different modes of stating the doctrine of percentage, and his hon. Friend's figures, upon his own showing, should be 40 per cent instead of 70 per cent, which of itself he believed to be an excessive amount. The hon. and learned Gentleman also asked whether, in speaking of the consumption of beer in 1720 he had quoted from a Parliamentary Return. He could not now speak positively upon that point, but, at all events, he believed that the statements he then made were perfectly accurate. He did not gather from his hon. and learned Friend's statement whether he believed the consumption of beer in the last century was represented by two bushels or three bushels per head annually. He believed himself that two bushels would be the proper amount, and that for England about represented the consumption at present. The hon. and learned Gentleman also complained of the mode of comparison between the duties on malt and wine, but the calculation adopted was the only just and true mode of calculation. He had proceeded upon the percentages taken by the Customs Department, which, of course, were not taken for the purposes of a malt tax debate. The statistical department of the Customs was extremely well conducted by gentlemen of experience and ability, and he found from the figures returned from that Department that the duty upon wine of all kinds taken together was about 37⅓ upon £100 value, or about 25 or 26 per cent if calculated on the same basis as led to the statement of 20 per cent as the duty on beer. But if a comparison was to be made between wine and beer, it was not proper to include those higher kinds of wine which could not come into competition with beer as an article of consumption. Therefore, in stating the duty upon wine at 25 per cent, against the duty of 20 per cent on beer, he was representing the case with a grievous injustice to his own argument, for on further investigation he had found that the duty upon the sale of those wines consumed by the classes who drank beer was 50 per cent. He admitted that wine ought to be taxed more highly than beer because of its greater alcoholic qualities, but he thought that no injustice was done to the consumers of beer. He could not concur with the hon. and learned Gentleman's admiration of the old system when, under the pretence of taxing the rich man's luxury, a duty of 5s. 2d. a gallon was imposed, which had the effect of excluding all wines which could possibly come within the reach of the poor man. The hon. and learned Gentleman had asked about the Malt Bill. He could assure the House that there was no need for hurry in that matter, and ample opportunity would be given for all Gentlemen interested in the subject to make themselves acquainted with the details, which were most important in any decision upon the relative merits of levying the tax by measure or by weight. The right hon. Gentleman the Member for Oxfordshire (Mr. Henley) had referred to some figures quoted in the Financial Statement. The right hon. Gentleman said that if 1s. 2d. were taken off the malt duty it would give a reduction of a farthing in the price of a quart.


said, that that was the only way in which he could account for it, taking the right hon. Gentleman's statement of 20 per cent.


said, that would not be the case. The statement of 20 per cent referred entirely to the price of beer sold by the barrel, and not sold by the pint or quart; but he did not see how the taking off 1s. 2d. per bushel would give the required reduction of ¼d. per quart upon the barrel of beer. Supposing two bushels of malt went to the barrel, the amount would be 2s. 4d., but that would not give ¼d. each upon 144 quarts. No amount of ingenuity would make the 1s. 2d. per bushel cover the reduction of ¼d. per quart of beer, which was the reduction to which he had referred.


said, he should be glad to know from the right hon. Gentleman, how two bushels of malt, at 2s.d. each, which amounted to 5s. 5d., was 20 per cent, or one-sixth of 36s. The statement which the right hon. Gentleman had made was upon a barrel of beer, and he stated that the duty was 20 per cent. A barrel of beer was produced from two bushels of malt, and the duty upon that was 5s. 5d., and therefore it could not be 20 per cent. The right hon. Gentleman stated that the charge, descending through to the brewer, was 20 per cent on the barrel, less 2 per cent for the brewer's licence and hops. The fifth of 36s. was 7s.d., and by a rule-of-three sum, if 65d. produced 7s.d., 28d., which was the double of 1s. 2d. per barrel, would produce 3s. He had not gone down to the price at which beer was produced at the public-house; but he had taken the Chancellor of the Exchequer's figures as being correct, for the sake of argument; and if he were correct, 1s. 2d. taken off barley would give a reduction of ¼d. a quart. He could not see in what other way the right hon. Gentleman could make the calculation.


said, he proceeded on two different principles, according to the operation he had in hand. When he was calculating the loss to the revenue from any given measure, he proceeded on the strictest possible considerations; but when bespoke of 20 per cent he did not proceed with the same rigour. He stated that the 12½ per cent spoken of by the President of the Board of Trade was perfectly just for his purpose, if not, indeed, absolutely just; but taking a liberal view of all the elements, and putting everything in the position most favourable to his opponents, he would put the tax at 20 per cent. The 20 per cent, however, was made up of the tax on malt, together with the addition of the tax on hops and the brewer's licence. The figure of 1s. 6d. he believed to be perfectly accurate, and he was not aware of any ground on which it could be impugned. In dealing with the subject on that footing, he had the highest authority, from which he could not depart, and he believed it to be the only sound basis of calculation.


said, the right hon. Gentleman's statement amounted now to this—that to produce a reduction of a certain amount in the price of an article it was not only necessary to take off that amount of duty, but something more. In mentioning 20 per cent, he had always taken into consideration the 2 per cent for licences, &c.


said, he was afraid that he must be added to the number of those who took exception to the statement of the Chancellor of the Exchequer. The right hon. Gentleman proposed the other day to relieve the heavy barley lands by levying the duty by weight instead of by measure. The Chancellor of the Exchequer laboured under a complete misconception as to the result of this proposal. The barleys obtained from the heavy soils were heavier than those obtained from the barley, generally used for malting, by two or three pounds a bushel, and were of less value by 2s. or 3s. a quarter. Another inconvenience would arise, he was told—namely, that it would be necessary in case of suspected fraud on the revenue to weigh a quantity of malt, and this process would be most injurious to it. He hoped that inquiry would be made on this subject. The right hon. Gentleman said that in 1722 the consumption of malt was five bushels per head, and that the consumption had now arrived at the same point. He was informed, however, that the actual consumption per head of the population was now little more than one-half what it was at the period referred to, although the consumption of beer was the same. This was to be accounted for in two ways. First, the beer now consumed had not half the strength it had in the good old times, and next there were other materials used in the manufacture of the beer, of which one was sugar. Now, the right hon. Gentleman not only refused to take off the duty on malt but he took off the duty on sugar, to enable it to enter into competition with malt. The right hon. Gentleman also dilated on the question of wine and beer, and denied that there was justification for any comparison between the duty on beer and that on the more expensive sorts of wine. That he (Mr. Bentinck) admitted; but the only result of the right hon. Gentleman's policy was to tax the sound, good, wholesome home-made beverage, in favour of that abominable foreign mixture which unfortunately went by the name of the right hon. Gentleman. The one duty was a direct and the other an indirect tax. The right hon. Gentleman stated in his spech the other night that the repeal of the malt duty ought not to he urged for the sake of the agricultural class, hut that was an erroneous statement of the whole position of the question. The agriculturists ask for the repeal of that duty, because they felt that in that way, and by other measures, they were overtaxed in proportion to the rest of the community, and because the malt duty was directly at variance with the principle of taxation and finance of which the right hon. Gentleman was one of the great promoters—the principle of free trade. The agricultural portion of the community, which felt aggrieved by the malt duty, did not come to that House to sue in formâ pauperis, but to demand an act of common justice. He only trusted that at the ensuing election the rural constituencies would bear in mind that they never could obtain justice in that House until they acquired their fair share of the representation, and that fair representation they never would obtain until they sent men to that House to fight their battles, instead of engaging in mere party contests.


said, the agriculturists were not entirely ignored in the Budget, but were glad to have the duty of 2d. off the income tax, which they thought a great relief. As regarded the malt duty, he did not know any subject on which the agriculturists so much differed in opinion. He believed that that difference of opinion extended to the eastern division of Norfolk, represented by the hon. Gentleman (Mr. Bentinck). Speaking for himself and his tenants, he would rather have the 2d. off the income tax than the repeal of the malt duty. Taking the country and the towns together, he believed that no Budget had ever been more popular than the present.


said, the last speaker had been speaking less for East Sussex, where his property was situated, than for Westminster, where he hoped to be re-elected at the next dissolution. Had the hon. Baronet recently canvassed East Sussex, he would have found very little division of opinion on the subject of the malt tax. He thought the Chancellor of the Exchequer made rather a strange assertion in his Budget speech, when he stated that the experiments with regard to the feeding of cattle on malt had been quite conclusive. The right hon. Gentleman said that experience had settled the question, and that it was found that malt was practically useless for that purpose. He (Colonel Barttelot) said the experiments were most inconclusive and indecisive. He stated this the other day, and said the cause of it was the small quantity of feeding that had been the subject of the experiment with regard to milch cows and fatting beasts; and he mentioned an experiment which had been tried in his neighbourhood—"malt versus oilcake"—in which malt was triumphant. He believed that the experiments cited by the Chancellor of the Exchequer were not fair ones as regarded cattle; but they were fairer with regard to sheep, although not then conclusive. Agriculturists said the sheep experimented upon were too young, that they were growing, and therefore did not put on flesh as older sheep would have done. Mr. Rigden of Hove, near Brighton, whom he had consulted on the subject, had told him that he had found a great advantage in using malt for feeding young sheep; and Mr. Thomas, a writer in the Journal of the Farmers' Club, advocated the use of malt in order to preserve the health of the animals fed, and said the preservation in this way of thousands of lambs would have a most important effect on the price of meat. The late lamented Mr. Cobden also advocated the abolition of the malt tax, on a ground stated by Mr. Latimore, that the tax interfered with the proper rotation of crops, and that malt was necessary for sheep and lambs at particular seasons. The Chancellor of the Exchequer was not, then, quite fair the other night when he stated distinctly that the question of feeding cattle with malt was settled, and that there was nothing more to be said on the subject, except with regard to particular circumstances. The House had one thing clearly before it, and that was that the Chancellor of the Exchequer did not intend to touch the malt tax now. He (Colonel Barttelot) hoped that on a future day the agriculturists might find a Chancellor more disposed to deal fairly and honestly with them. The present Chancellor had volunteered a reduction of the duty on tea. The right hon. Gentleman said that he could not touch the malt tax without interfering with the income tax; then why did he reduce the duty on tea, which was not asked for? The right hon. Gentleman did not go so far as the House wished in the case of the insurance duty. As to tea he (Colonel Barttelot) considered it a most noxious drug. He really considered it a most objectionable drink. He believed that beer was much more wholesome. A pamphlet had lately been pub- lished, addressed to Mrs. Gladstone, declaring tea to be a dreadful thing, that it was mischievous to the human frame, and that the doctors had pronounced tea, of all things in the world, unless of the weakest character, to be totally unfit for use. But the ladies of our country went still further, for when they looked down from the boxes of the opera, and saw in the stalls so many young gentlemen hairless at an early age, they declared that their premature baldness was attributable to that dreadfully bad mixture known as tea, that worse concoction called Gladstone's claret, and cigars made of cabbage.


said, he considered that the agriculturists had been very hardly treated. The present Government owed their accession to power a good deal to the assistance given by agriculturists, which would perhaps be remembered when their assistance was again required. He did not think that the Chancellor of the Exchequer had acted rightly in respect of the malt tax. While the duties on every other species of industry had been either diminished or altogether removed, nothing whatever had been done in respect of the manufacture of malt. The right hon. Gentleman had gone into calculations to show how little the reduction of the duty would do in lowering the price of beer, but he did not seem to have taken into account the additional profit which the dealers in beer put on that article in consequence of the existence of the malt duty. The right hon. Gentleman said it would be something like an injustice to Scotland and Ireland to reduce that duty; hut, he had often when in Germany thought how preferable it would be to see the people of Ireland and Scotland in fairs consuming the foaming tankards of pure beer, such as they had in Munich and Vienna, rather than the raw spirits now consumed in such quantities by the people of Ireland and Scotland at such festivities. The slovenliness of agriculture had been often complained of, and the Irish had been told to contrast the neat farming of Belgium with theirs; but it was the general custom of the larger farms in Belgium to have their own malting kiln, and where they were not large enough to support one, two or three farms joined together for that purpose. He believed that if the malt tax were repealed something of the same kind would take place in England, and he, for one, would rejoice to see it.


said, that so far from there being the diversity of opinion referred to by the hon. Baronet the Member for Westminster (Sir John Shelley), there never was a question on which the farmers were so united as their opposition to the malt tax. He should support such repeal on the pure principles of free trade whenever the question came before them. The consumption of beer had proved to be stationary a3 compared with the progress of the population, and he asked the Chancellor of the Exchequer if such a state of things was satisfactory to him. He believed that a remission of a portion of the duty would be a great advantage to the Exchequer and to the community at large, and especially to agricultural labourers, who it was notorious could scarcely ever, except on high days and holidays, obtain beer from one end of the year to the other.


said, he wished to say a word in favour of tea as against beer. They were not to argue the question as to what was beneficial to a particular class, but what would be the most beneficial to all. The grain of the debate had been pretty well thrashed out. He was not going to discuss the question whether it was desirable to reduce the duty on account of the food of cattle, but whether a reduction of the duty would conduce to the good of man. One of the arguments of the repealers was that by reducing the duty we should promote public sobriety by enabling men to drink their beer at home with their families instead of in the beer shop; but he could not understand how cheapening the material of the beer could have that effect. The beer-seller would increase his trade, or sell stronger beer; and he did not see how stronger beer was likely to produce sobriety. The fact was, that a reduction of the duty would be mischievous. It would enable the beer-sellers to offer greater temptations to the people at a cheaper cost. He believed that there was a desire on both sides of the House to do what they believed to be in the interest of the working man; but what he wished to point out was, that they sometimes, with the best intentions, made great mistakes. The working man was not allowed in that House any means of expressing his opinion, his wants, or his wishes. There was a very striking instance of the mistake they made in their well-meant endeavours to benefit the working classes. He alluded to the Beer Bill, which had for its object to make beer cheap, and that he understood to be the object of hon. Gentlemen who advocated the repeal of the malt tax. It was intended by that Bill to wean the working man from the public-house, which was stated to be the great cause of his misery, and to induce him to consume beer at home. But what was the result of that well-meant effort? It was not only his opinion, but the opinion of all persons entitled from their acquaintance with the habits of the working classes to be heard on this subject, that the Beer Act was the greatest curse that was ever inflicted by legislation upon the working people of this country. The House would remember that Sidney Smith was in favour of that Act on the ground that it would prove a boon to the people; but what did he say shortly afterwards in writing to a friend? "The Beer Bill has begun to act; everybody is drunk; those who are not singing are sprawling—the sovereign people are in a beastly state." It had become an acknowledged fact, as stated by the hon. Member for North Essex, that nine-tenths of the crime of this country originated in the visits of the people to the beer shops. The fact was that where they had a large population, as in this country, with an uncontrolled appetite for strong liquors, the consumption of which had been proved to be the great cause of their misery, they would indulge that appetite the more the greater the facility that was given them for its indulgence. He wanted to know, if the repeal of the malt tax would be such a great boon to the working men, how was it that there was so little demand on their part for that boon? While no petitions had been presented from the working classes in favour of the repeal of the malt tax, innumerable petitions had been presented from them to that House praying that a restriction might be placed upon the sale of intoxicating liquors, which was the cause of much of their misery. The advocates of the measure said that drunkenness arose not so much from the beer as from its adulterations; and an hon. Member last year read a list of the ingredients used in the adulterations. They were foots, liquorice, gentian, quassia, shumac, terra japonica, linseed, cocculus indicus, common salt, and Dantzic spruce. The advocates for the beer shops, in 1830, said, "Make the beer-houses, and adulterations will cease." The real results he (Mr. Lawson) had just stated. He could not see the force of this argument. All the legislation which had tended to cheapen intoxicating liquors and give increased facilities for their consumption was a failure, and worse than failure—it was mischievous. Some few years ago the Chancellor of the Exchequer introduced a measure for cheapening wine. He did it, doubtless, with the best intentions, and in the interest, as he said, of public morality. Did he believe that he had succeeded in this object? He (Mr. Lawson) had no faith in this weaning system. The Beer Act was an effort, and it failed. Cheap wine was tried, and this had failed also. The petitions in favour of the repeal of the malt tax had come from the agricultural districts. If the working men wished to get strong, cheap, unadulterated beer they could obtain it through the instrumentality of their cooperative stores. Of these there were not less than 500 in the north, but only one of these was devoted to the sale of beer. To propose the repeal of the malt tax as a benefit to the working classes was little better than mocking them. He thanked the Chancellor of the Exchequer for devoting his surplus to reductions beneficial to the whole of the people instead of to a reduction of the malt tax, which he sincerely believed would be a source of great mischief.

Amendment, by leave, withdrawn.

Another Amendment proposed, to leave out the words "on and after the 6th day of May, 1865."—(Mr. Moffatt.)

Question, "That the words proposed to be left out stand part of the proposed Resolution," put, and negatived.


then proposed to amend the Resolution by omitting the words "on and after the 6th of May, 1865," and adding the words, "provided that on special grounds the said reduction shall not take effect until the 1st day of June, 1865."

Another Amendment proposed, To add at the end of the proposed Resolution the words "Provided, That, on special grounds, the said reduction shall not take effect until the 1st day of June 1865."—(Mr. Moffatt.)

Question, "That those words be added to the proposed Resolution," put, and agreed to.

Original Question, as amended, put, and agreed to. 1. Resolved, That, towards raising the Supply granted to Her Majesty, in lieu of the Duties of Customs now charged on Tea the following Duties of Customs shall, until the 1st day of August 1866, be charged thereon on importation into Great Britain and Ireland: viz.—

£ s. d.
Tea the lb. 0 0 6:

Provided, That, on special grounds, the said reduction shall not take effect until the 1st day of June 1865.

THE CHANCELLOR OF THE EXCHEQUER moved the following Resolution:— That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the sixth day of April, 1865, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on Profits arising from Property, Professions, Trades, and Offices, the following Rates and Duties (that is to say)—For every 20s. of the annual value or amount of all such Property, Profits, and Gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of 4d. And for and in respect of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act for every 20s. of the annual value thereof:—In England, the Rate or Duty of 2d.; and in Scotland and Ireland respectively, the Rate or Duty of 1½d.—subject to the provisions contained in section 3 of the Act 26th of Victoria, chapter 22, for the exemption of Persons whose whole Income from every source in under £100 a year, and relief to those whose Income is under £200 a year.


said, he wished to draw the attention of the Committee to the position in which the income tax now stood. The Chancellor of the Exchequer, in proposing the reduction of 2d. in the pound on that tax, informed the House that the tax appeared to be entering into a new phase. Instead of having continued for three years, as originally intended, it had endured for twenty-three years, during which period it had passed through a variety of changes, sometimes being reduced and sometimes being increased. It had now reached a stage in which it could be either entirely removed or retained as a part of the permanent financial system of the country. It was almost impossible to decide that question without taking into consideration the relative magnitude of the whole direct and indirect taxation. On comparing those two classes of taxation they would find that the direct was remarkably small contrasted with the indirect taxation, and it would be for the House to determine how far direct taxation ought to be diminished, and whether they were prepared to relinquish an important medium for raising the constant revenue of the country. The wealth of the nation was increasing at a rate variously estimated, some placing it as high as £120,000,000 per annum, but he would take it at £100,000,000, of which increase the larger portion by far must be placed under the head of personal and not real property. Under these circumstances it became of great importance to inquire how this vast increase in personal property could be reached by taxation. The only way in which personal property was reached at present was by the probate and legacy duties at a man's death, and by the income tax during his life. Was it intended, then, altogether to relinquish a tax by which alone they could touch the property of an immensely wealthy class, many of whom, by living abroad, or by spending penuriously preserved all but a small portion of their income from being reached by in direct taxation? So far, he thought, the inducement to continue a tax on income was very strong, but then came the consideration which had been always uppermost in their minds—namely the exceedingly unequal and unjust character of the system by which it was now collected, whereby arose a great provocation to fraud, and a consequent demoralization of the community. Could then the tax be re constructed so as to avoid these evils? The Chancellor of the Exchequer had frequently expressed his opinion that the re-construction of the income tax was a task beyond the capabilities of any Government; but if the right hon. Gentleman would apply himself to the matter with an earnest desire to construct with the materials at his command a tax which should be just in its principle and in all its essential points, he felt satisfied that he would be able to solve the difficulty. It was true that the tax now produced £1,300,000 for each penny in the pound, instead of £1,000,000 as formerly, but he referred that improvement in the productiveness of the tax to the increased diligence, science, and zeal of the surveyors, even more than to the increased wealth of the country. But here another subject of inquiry arose. In many cases the surveyors had gone beyond their duty in surcharging numbers of persons, who were thereby put to much inconvenience and expense. Several cases of the kind had come within his personal knowledge; and, upon investigation, he found that the surcharges were most unwarrantable, the surveyor surcharging at a venture, and the persons charged being compelled to establish their right to relief. In the very parish in which they were assembled great complaints had been made. The House should, therefore, most carefully scrutinize any new scheme for raising the tax before it consented to impose it upon the country as a permanent source of revenue. He did not propose to make any Motion on the subject, but, as the tax had been re-imposed for a year only, he thought it would become the duty both of Parliament and of the Government, when they next met, to be prepared to meet the question, whether the tax was to become a permanent portion of the financial system of the country, or whether it was so essentially vicious in principle that they were bound gradually to reduce it, with the view to its ultimate extinction.

2. Resolved, That, towards raising the Supply granted to Her Majesty, there shall be charged, collected, and paid for one year, commencing on the 6th day of April 1865, for and in respect of all Property, Profits, and Gains mentioned or described as chargeable in the Act passed in the 16th and 17th years of Her Majesty's reign, chapter 34, for granting to Her Majesty Duties on Profits arising from Property, Professions, Trades, and Offices, the following Rates and Duties (that is to say): For every twenty shillings of the annual value or amount of all such Property, Profits, and Gains (except those chargeable under Schedule (B) of the said Act), the Rate or Duty of four pence; And for and in respect of the occupation of Lands, Tenements, Hereditaments, and Heritages chargeable under Schedule (B) of the said Act, for every twenty shillings of the annual value thereof, In England, the Rate or Duty of two pence; And in Scotland and Ireland respectively, the Rate or Duty of one penny halfpenny: Subject to the provisions contained in Section 3 of the Act 26th Victoria, chapter 22, for the exemption of Persons whose whole Income from every source is under £100 a year, and relief to those whose income is under £200 a year.

(3.) Motion made, and Question proposed, That, towards raising the Supply granted to Her Majesty, and in lieu of the Duties now payable in respect of Insurances against loss or damage by Fire only, there shall be charged, collected, and paid for the use of Her Majesty, Her heirs and successors, the following Duties (that is to say): For and upon every Policy of Assurance or Insurance, or other Instrument, by whatever name the same shall be called, whereby any Insurance shall on or after the 25th day of June 1865, be made of or upon any Building, Goods, Wares, Merchandise, or other property from loss or damage by Fire only, the Duty of one penny; And for and upon any Note or Memorandum given as a Receipt on the deposit of any sum of money, preparatory to the making out or issuing of any such Policy as aforesaid, the Duty of one penny; And for and in respect of any such Insurance as aforesaid which shall be made, or continued or renewed, on or after the said 25th day of June 1865, a Duty of one shilling and sixpence for every £100 insured for a year, and at and after that Rate for any fractional part of £100 insured, and for any fractional part of a year, as well as for any number of years for which the Insurance shall be made, or continued or renewed, but no fraction of a penny shall be charged; and when any such Insurance as aforesaid shall be made or renewed at any time between the 27th day of April 1865 and the said 25th day of June, for any period of time extending beyond the said last-mentioned day, there shall be charged and paid for and in respect of the time intervening between the making or renewing of the said Insurance and the said 25th day of June the yearly per-centage Duty at and after the rate chargeable on the said 27th day of April, and for and in respect of any subsequent period including the said 25th day of June, the rate of Duty chargeable according to this Resolution; and no return or allowance of Duty, except at and after the last-mentioned rate, shall be made in respect of time unexpired or otherwise, on any such Insurance as aforesaid, which shall have been made or renewed before the said 27th day of April 1865.


said, that he hoped the Chancellor of the Exchequer would consent to an alteration of the time at which the reduction of the duty should come into effect. Great inconvenience would arise to the Scotch insurance offices from the time proposed in the Resolution, and, as no considerable loss could accrue to the revenue from the alteration which he was about to propose, he trusted that the Chancellor of the Exchequer would show the same consideration in this case which he had done in a former instance. The 25th of June was the time at which most of the policies were effected in England; but in Scotland the 15th of May was the great period for effecting insurances and renewing policies. That being so, if the scale of duties were to commence on the 25th of June, the Scotch Companies would be put to the inconvenience either of issuing a receipt for the period between the 15th of May and the 25th of June, or of proceeding on the double scale of duties. No injustice would be done by taking the 15th of May as the date for the whole kingdom, because the duties upon policies of fire insurance effected during the pre- sent year were paid up to the 25th of June, I and therefore it would be only fresh policies after the day named that would be affected by the change. There might be a certain loss to the revenue from the lower scale upon which payments would be made between the two dates, but he was informed if the alteration were not made the people would prefer becoming their own insurers for the intervening month, and one loss might he fairly set against the other. He begged, therefore, to move the substitution of the words "15th day of May" for "the 25th day of June" in the Resolution.

Amendment proposed, in the 7th line of the proposed Resolution, to leave out the words "25th day of June," and insert the words "15th day of May."—(Sir James Fergusson.)

Motion made, and Question proposed, "That the words proposed to be left out stand part of the proposed Resolution."


said, that he would have been very glad to carry throughout the evening the accommodating character which he appeared to have acquired; but it was not in his power to accede to the Amendment, for several reasons. In the first place, the narrow surplus mentioned in the Financial Statement had been still further reduced by the Vote of the House that night, and it would be most unwise to incure any further diminution. Secondly, the proposal of the hon. Baronet would be retrospective legislation of a kind that was entirely without precedent. It was perfectly certain that the Bill could not become law until after the 15th of May, and therefore to fix that day would be an innovation of a serious character only to be justified by the gravest reasons. Lastly, he could not accede to the argument founded upon inconvenience. Unfortunately, they had different quarter days in England and Scotland, and those of England had been adopted in the Bill as the most appropriate. He was sorry any inconvenience should be felt in Scotland, but Scotch transactions being in a very small minority, it would have been a great mistake to have adopted the Scotch date in preference to the English.


said, that he wished to ask a question with regard to the operation of the Resolution. He understood that all who had paid their insurances on the 25th of March, which was the quarter-day on which insurances were made for the whole year, would, under this Resolution, be entitled to claim from the insurance companies a Return after the 25th of June of the excess of duty which they might have paid. But in a great many instances the duty had been already paid to the Government, which collected its duties quarterly, and therefore might have already reached the hands of the right hon. Gentleman. Would the right hon. Gentleman consent to return the money? He had received letters which informed him that a great many persons were in the habit of paying their insurances three, five, and even seven years in advance; and in one case the writer, a solicitor, said he had several houses, upon which he always paid seven years in advance; that he had so paid £11,600, and that the Government would unjustly keep £43 10s. of his money unless some return were made. His correspondent called that "wholesale robbery."


said, with regard to the question of the hon. Gentleman and other similar ones which might arise, he wished to observe that the Government proposed to go on precisely as they had done last year, and if they were to depart from the regulations then made it was quite evident that they would raise a crop of questions not only belonging to the present Session, but, retrospectively, questions which had been settled last year which would involve them in great difficulties. The two proceedings were connected by so many links that they must be regarded as parts of one transaction. No allowance was made last year for payments in advance for more than a year, and he proposed to follow the same course this year. With regard to the other question, he was a little at variance with the hon. Member in his idea of the fact. He was very doubtful whether there were any cases of payments in advance falling in the period of the reduced duty, where the money had already found its way into the hands of the Government. If the hon. Member was as conversant with the practice of insurance companies as to paying their duties as he was with the general bearing of the question of fire insurance, he would find that the payments of duty were mostly considerably in arrears. The money, then, in such cases as he described, would be in the hands of the companies, and would form a matter of account in settling with them. At the same time, if any such eases should occur the Government would be quite willing to deal with them according to their particular merits.


said, he regarded the remission in the Fire Insurance Duty as very gratifying to the House and the country. The hon. Member for Dudley (Mr. Sheridan) was, he thought, rather unreasonable the other evening when he expressed his disappointment at the extent of the reduction. The Chancellor of the Exchequer had taken the Resolution of the House, proposed by the hon. Member himself, as his rule and guide, and had obeyed it literally. There was, therefore, in his opinion, no ground of complaint against the right hon. Gentleman. It was further to be remembered that, taken in connection with the other remissions of taxation, the Chancellor of the Exchequer left himself no margin for a larger reduction of Fire Insurance Duty. From the terms, however, in which he communicated his intention, the House was justified in the certain expectation that before very long the whole of the Fire Insurance Duty would be removed. It had been stated that the lower duty would recoup itself by the impetus it would give to the practice of insuring. He, for one, had never used that argument. He denied the propriety of keeping any duty whatever on Fire Insurance, and he accepted the definition of the tax by the Chancellor of the Exchequer as decisive. The right hon. Gentleman said the duty had been called a tax upon prudence, but he gave a more correct and more telling definition. He described it as a tax upon property with two large exemptions—an exemption to the imprudent and to men of large property. Accepting that definition, he (Mr. Hubbard) regarded a Fire Insurance Duty of 1s., or even of 6d., as too high. There ought to be no duty at all, except a duty of 1d. per cent as a record of the growth of the property coming under that head, it forming an especially interesting branch of domestic economy. The duty on Marine Insurance was very much lighter than it used to be, but it was still in an improper and unsatisfactory condition. The lowest duty was 3d. when the rate did not exceed 10s. premium, but as premium rose the duty rose also. If the premium rose to 50s. the duty rose to 4s. on the value insured. The effect was that, in the worst times of the year, when property was in the most jeopardy, the increased cost of insurance arising out of such circumstances was aggravated from increased duty. These were taxes on the consumer, and it was the object of wise legislation to diminish, ns much as possible, the taxes on imports, which were the fruits of the industry of the country and the means of subsistence of the people. He trusted that at some future period the Chancellor of the Exchequer would make a decisive alteration of the scale of Marine Insurance Duties, so as to take the present minimum rate of 3d. per £100 of the sum insured and make it the invariable duty whatever be the premium paid. The Chancellor of the Exchequer had passed a most useful measure to enable the working classes to insure their lives. There was the same inducement of prudence to insure lives and houses. According to the last tables, a man who began to pay 40s. per annum at the age of twenty-six insured £100 payable to his executors at his death. What would be the effect upon the scheme if a quarter of the sum went as a tax into the Exchequer? It would arrest all action and neutralize the whole of the advantage that was expected from the measure. He maintained that it was the duty of the Government to avoid discouraging the exercise of prudence in any form of insurance, and to reduce the duties on Fire and Marine Insurance to the minimum which he had ventured to suggest.


said, he regretted that the Chancellor of the Exchequer had not seen his way to a more considerable reduction of the Fire Insurance Duty. The objection to such a duty was threefold. It was a tax on prudence, on property of a particular kind that was exposed to risk by fire, and a restraint on a branch of legitimate trade, capital, and enterprise. The tax pressed very heavily on the class of small houses which, if sold, would bring only from ten to fifteen years' purchase, but which were burdened by heavy local imposts in the nature of poor rates, property tax, charges for management, and the risk of loss from failure to pay rent. In the borough he had the honour to represent there was a great variety of opinions upon political subjects, but every man was of the same mind as to the impropriety of this tax, which was a blot upon our financial system. He trusted that the right hon. Gentleman would, before long, see his way to the entire removal of the tax on fire insurances from our fiscal system.


said, he had understood the Chancellor of the Exchequer to say that duties paid to insurance companies yearly, or in a lump, for several years were only paid into the Exchequer quarterly. Was that so?


said, that the practice was, when a person insured to carry on the fraction of a quarter, if there were one, to the next quarter-day, and generally the policies would run twelve months from that quarter-day. The insurances of the four quarter days were separately dealt with, but were not paid at once into the Exchequer. The companies had a certain time allowed them. Practically, the companies were always a quarter in arrear at the Exchequer; but they paid on each quarter-day for all the yearly policies renewed or effected.


said, the wealthier classes of the country were extremely astute in finding reasons to escape from the operation of particular taxes, but he did not find that they were equally on the alert to suggest modes by which other and more equitable taxes might be substituted for those withdrawn, to which they could themselves make an equitable contribution. The Fire Insurance Duty had been denounced upon every moral and political ground, but he had never heard in these debates a suggestion as to how the Chancellor of the Exchequer was to reach the richest classes, to whom the remission would be a great gain. No doubt the attempt to reach property through the medium of the Fire Insurance Duty had been attended with injurious effects; but originally the tax was one of the most constitutional ever imposed. In very early times taxation was placed upon all visible property—not, as some politicians imagined, upon land merely, but on all kinds of visible property. In course of time, no doubt, the land was solely charged, but it was because it was the most obvious source of revenue, visible property of other kinds finding means to escape its proper share of contribution. It was in order to reach the property which thus withdrew itself from taxation, and from being visible became invisible, that the device of a duty upon insurance was first adopted. No better evidence of wealth could be afforded than when a man collected in his house a large amount of unproductive property—not only tarnishing his residence sumptuously, but accumulating and surrounding himself with works of art. Manifestly, such a man could well afford to contribute to the public burdens. Some centuries age a great English financier applied a stringent test to property of this kind, but his agents came to an untimely end. The principle upon which they acted was called "the Dilemma," and their instructions were to examine into the circumstances of every man. If they found anybody spending a great deal, this was accepted as a proof that he had the means of contributing to the necessities of the State; if, on the other hand, a man was sparing in his expenditure, his thriftiness showed that he must have accumulated wealth, and from his store could afford to spare for the service of his Sovereign. That was the principle established by Henry VII., and though it might have been carried to too great an extent, in principle it embodied sound views of taxation. Upon a survey of the Budget of the present Session, he feared the people would scarcely feel that they had got their full share of benefit from the contemplated remissions of taxation, which were bonus rather to the property than the industry of the country. Whenever the Chancellor of the Exchequer came next to review the national taxation, it would be well that this view of the subject should not escape his attention. Nothing, he confessed, had given him more pleasure in the Financial Statement than the passages which showed that in the mind of the right hon. Gentleman the conviction was growing that the idea once prevalent, and for which he himself had contended, as to the necessity for abolishing the income tax, was neither sound nor expedient. He plainly intimated that at whatever figure it might be placed for the time, it would be regarded as one of the permanent sources of public revenue; and if it were retained as a great machine of taxation it ought to be kept in the most perfect working order. No doubt, in some of its aspects the income tax was unjust and oppressive, but no tax yet was ever levied to the perfect satisfaction of those who had to pay the money. The income tax was, to his mind, as legitimate a source of revenue as could exist; the hypercritical arguments about unequal adjustment were not to be accepted against it more than against any other source of revenue. He had no doubt if it were understood that the tax was to be permanent, the Government would apply themselves to insuring a more just assessment, and that at no distant day it would be paid with as little reluctance as any other impost. It seemed to him, that it would be the duty of the Chancellor of the Exchequer to bring the unproductive property of the country within the range of the income tax. He protested against its being supposed that there ought to be this desperate run against the taxation of property in favour of taxing the industry of the working classes.


said, that in order to do what the hon. and learned Gentleman the Member for the Tower Hamlets (Mr. Ayrton) required, it would be necessary to go a step further and compel every one to insure, to get at what he called the unproductive property of the country. He thought it would have been much better if the Chancellor of the Exchequer had reduced the duty to 1s. than to 1s. 6d., and he was inclined to think if that had been done a larger amount of revenue would have been obtained. The sum of 1s. 6d. upon a £100 risk was an enormous duty. He hoped the Chancellor of the Exchequer would not consider this question settled. He supported the Budget because he considered it was on the whole a good one.


said, he was at a loss to understand why the hon. and learned Gentleman the Member for the Tower Hamlets had called it unproductive property because it was not insured, and so far from its not being taxed, he begged to state that it was taxed both for national and local purposes. Insurance was not a question between rich and poor. If a man's house were burnt down, it was a State loss, inasmuch as the payment, and the security for the payment, of a certain amount of rates and taxes were both lost to the State. The tax upon insurance was no more a tax upon property than a bet on the Derby was a tax upon property. Insurance meant nothing more than this—the owner bet the office 1s. 6d. to £100 that his house would not be burnt down; and the office bet the owner £100 against 1s. 6d. that it would be burnt down; and this wager was repeated every time the insurer paid his money, and the event might never happen. The insurance tax was nothing else than a tax upon this system of betting. Besides it was an event that might not come off for some generations, there being instances of houses still standing that were erected 150 or 200 years ago. It would be impossible to convince the country that this was a tax upon property.


said, he thought that the right hon. Gentleman the Chancellor of the Exchequer had lost a grand opportunity of dealing with this tax in a generous manner, by reducing it to Is. He did not rise to take part in the discussion, because hon. Members on the Opposition Benches had reason to congratulate themselves on having for the last six years not only constantly and persistently supported the hon. Member for Dudley (Mr. Sheridan) in obtaining a reduction of this tax, but also others in calling for a reduction of the income tax, but he rose to ask the right hon. Gentleman the Chancellor of the Exchequer a question in which his constituents felt much interest—namely, whether or not they were entitled to a return of the amount of premiums paid by them at Christmas and Lady Day last, on the renewal of their policy at the 3s. rate of duty.


said, they were not.

Question, "That the words proposed to be left out stand part of the proposed Resolution," put, and agreed to.

Original Question put, and agreed to.

House resumed.

Resolutions to be reported To-morrow;

Committee to sit again To-morrow.