§ MR. MARSH
called the attention of the House to the subject of those licences which restrict the trade and commerce of the country, with a view to their abolition, and, in case of a financial necessity, a transfer of the charges to make or sell any article to a direct tax on the article itself; and moved that, in the opinion of this House, it is desirable that all Licences injuriously affecting the industry and commerce of the Country should be abolished. He said that he should endeavour to show that there was no defence for maintaining these licences; that the amount paid was collected in an expensive manner; that they checked the industry and commerce of the country; that they pressed more on some trades than on others, and on some classes of the community more than on others, and especially upon the humbler classes; that they produced, to a certain extent, monopoly and higher prices, and, in some cases, prevented articles from being used. Another objection was that the taxes so imposed were collected by three separate Departments—the Excise, Stamps, and Assessed Tax Offices; and certainly if they were to be continued it would be better that they should all be placed under the control of one Department. The licence to make soap, which was £4 4s. a year, produced £1,234 16s. The time was past, he presumed, 149 when any defenders of taxing soap could be found. The licence to make vinegar, which in fact made itself, was £5 5s., and produced £330 15s. Then the vinegar maker was protected against his foreign competitor, and, that nothing might escape, pickles were taxed. The papermaker had to pay £4 4s. a year, notwithstanding the House had long since declared paper should be free of taxation. Then came a class which was of much greater importance—the licences to tea and coffee dealers. Such persons, if their premises were rated at as much as £8, had to pay 11s. 6½d. for a licence, and if such a person living in a village sold only 30lb. of tea in one year the licence duty would amount to 4½d. per lb., whilst the import duty was only 6d. The consequence of the licence creating a sort of monopoly was, that in villages tea, which could be bought at 2s. 2d per lb. in the towns, was sold for as much as 4s. in the villages. The tea licence produced £66,577; and the import duty on tea, chicory, and coffee £3,110,000; so that a fractional addition to the duty on tea would recoup the Government for any loss it might sustain by abolishing the licence, and the only hardship that would result would be a rise of about half a farthing per pound on tea. Tobacco manufacturers whose make did not exceed 20,000lb a year had to pay £5 5s. for a licence, and the charge increased by a sliding scale, according to the make, up to 100,000lb, for which the charge was £31 10s. The arrangement was exceedingly complicated, and, of course, hampered the manufacturers very much. The dealers in tobacco paid 5s. 3d. for a licence; small dealers paid as much as large, and occasional dealers, such as the man who sold a cigar and a light on the Derby Day, were expected to pay 4d. This last charge was of course evaded, and it would be better at once to abolish it. The total received for tobacco licences amounted to £77,957; the total revenue from duty on tobacco, £6,332,000; so that an increase of 1¼ per cent on the duty would enable the Government to abolish the licence altogether. He now came to the licence duty for selling wines, and he believed that the way in which this duty was imposed had some effect in preventing people from selling wines to the extent that they otherwise would. There were many other licences, including what were called occasional licences, which occasioned much vexation and annoyance, and produced 150 after all, comparatively, very little to the public revenue. In respect to the article of wine, it was charged at a much higher rate than it ought to be. Now, take the case of a traveller by railway; he could procure a newspaper for 1d., a bun for 1d. at a station, a sandwich for 2d., or a sausage and potatoes for 4d.; but if he were to venture upon a glass of wine he would have to pay 6d. for it. Now, he was told that such wine as that usually sold at stations for 6d. a glass could be purchased for 16s. a dozen, and that each bottle contained about sixteen glasses. The result was, that for each bottle costing to the retailer only 1s. 4d. he received 8s., being a profit of above 600 per cent. The total produced from wine licences to the Inland Revenue was £130,911; the revenue from the Customs was £1,409,127. If such an alteration as he suggested were made, and 10 per cent additional put upon the Customs in respect to this article of wine, it would amply recoup the Government for any losses they sustained by this change in the licencing system. Dealers in sweets were taxed to the amount of £11,000. Dealers in plate were also taxed, and the mode in which the tax was levied upon them was unequal and complicated. A very small percentage on the value of the plate would in this case also render licences unnecessary, and at the same time guard the Revenue of the country against loss. He might observe that under the existing system a considerable advantage was given to the French manufacturers of plate. Pawnbrokers in London paid £15 licence, and in the country £7 10s. Pawn-broking was said to be a necessity to the poor, and foreign Governments took this trade into their own hands. He did not say that, as a protection against receivers of stolen property, pawnbrokers ought not to be registered in some way; but he did think that the State ought not to tax the wants of the poor. With respect to malt and beer, they were taxed six times over and in twenty-five different ways. So unequal was the manner in which the licences were levied that the small man had to pay most, the large man paid least, and the country gentleman who brewed his own beer at home paid nothing at all. He did not propose to deal with the retail trade, though he believed that the licencing system was of no use in preventing drunkenness. In some places where there was free trade in brandies and wines there was no 151 drunkenness at all. He knew that the malt tax was an unpopular impost; but it was a question whether it would not be better to raise money by a tax on beer than by means of all those licence payments in the malting and brewing trades. He believed there would be no difficulty in raising a tax on beer, and the great advantage of this would be that the Excise would be levied in the last stage before consumption. Adam Smith laid it down that this was the most advisable way of levying excise on a manufactured article. A brewer had written to him to explain that there would be no difficulty in raising a tax on beer. The private brewers at the present moment were becoming an extinct species. They could not contend in towns against the machinery and capital of the large brewers, and hence private brewing practically was confined to the wealthy farmers and country gentlemen. But these were the very persons least likely to cheat the Excise, and assuming even that the disposition existed, how was it to be done? The income tax might be evaded, because you could not smell it; but he defied any person to conduct brewing operations without the fact becoming known. If the duty levied upon malt were levied at the last moment, instead of at the first, a great many disadvantages would be got rid of. It was impossible for a maltster under the conditions of modern science to comply literally with Excise regulations, some of which were 200 years old. If the course which he advocated were adopted, anybody would be free to use barley, according to its quality, for any purpose that he liked; and it was only if he turned it into beer that he would have to pay duty. The duty raised from spirits was enormous; but it was not merely the amount of the levy which was oppressive, but the operation of the tax, which extended to chymists, and exercised an effect almost prohibitory upon various industries. If we allowed Trench tables to come in duty free, at least we ought to take care that the materials for French polishing were not denied to our own tradesmen. Stage carriages were taxed in ten different ways, and it appeared to him that many of those taxes were most injurious, some of them acting very severely upon cabmen, a much abused but good class of men. It would be better, instead of licences, to increase the assessed taxes on horses and carriages. Why, again, should auctioneers be called upon 152 to pay a license of £10 10s.? Abuses there might be connected with auctions; but, on the whole, the system of public competition was the fairest that could be devised. One would suppose that the classes invidiously subjected to the payment of licence duty would remonstrate and petition Parliament for relief. But as long as they fancied that monopoly was thereby secured to them they reconciled themselves to the payment of these charges. A wine merchant to whom he spoke upon the subject recently avowed that he did not think the licence duty any hardship. For, said he, "it keeps people out of the trade," thereby letting the cat out of the bag. It might be thought that if this small additional percentage were added to the Customs and Excise duties the odd sums would be found very difficult to collect. But tables could, of course, be produced which would give equivalents; and, moreover, the existing proportions of duty — such, for instance, as 3s. 1d. and eight-tenths of 1d. per pound upon tobacco — were often quite incomprehensible. The licence system, in fact, had been tolerated because the payments were almost inappreciable; but surely it was better to pay 6d. and know it, than to pay 1s. and know nothing about it. He objected to the charges which he had enumerated, because they were partial; and unjust in their operations; interfering unequally with many industries, and because they were often evaded, and where paid, established a monopoly resulting in more than commensurate loss to the consumers. The hon. Member concluded by moving the Resolution of which he had given notice, intimating, however, that it was not his intention to put the House to the trouble of dividing.
Motion made, and Question proposed,
That, in the opinion of this House, it is desirable that all Licences injuriously affecting the industry and Commerce of the Country should be abolished."—(Mr. Marsh.)
§ MR. LABOUCHERE
said, he wished to make a few remarks on the subject of one licence, especially as it seemed to be supposed that the burden fell upon the consumer. He referred to the licence upon those unfortunate victims of taxation, the brewers. That licence was entirely paid by the brewers themselves; and what did it amount to? A London brewer who made 100,000 barrels of beer per annum, would require a capital of about £300,000. 153 At the average price of barley, the profit per barrel would be 5s., or £25,000 per year. From that must be deducted the interest on the £300,000, which would leave £10,000. But the duty would be £1,300, which would be 13 per cent. on the trade profit. When the right hon. Gentleman the Member for South Lancashire (Mr. Gladstone) imposed the tax, he urged as an argument in its favour that the brewers would be more than compensated by the abolition of the hop duty; but the fact was that since that time hops had been dearer, the hop-growers being now able to hold their hops, instead of submitting to forced sales in order to pay the duty. The result was that the brewer had to pay an additional tax of 13 per cent, and received no compensation for it. He (Mr. Labouchere) could see no reason why a brewer should be taxed more proportionally than a cotton spinner. There was indeed a species of delusion abroad that brewers made large profits, but that was not the case—certainly not with the London brewers, who very seldom received more than 8 per cent upon their money. If the Chancellor of the Exchequer chose to levy a general tax on trades, there might be some reason for that; but he (Mr. Labouchere) did complain of this invidious burden upon one; and he trusted not only that the right hon. Gentleman would inaugurate his entry into office by modifying to a considerable extent this licence, which was really a measure of spoliation, but that the right hon. Gentleman below him (Mr. Gladstone), whose prediction had not been verified, would assist the brewers in obtaining a modification of the tax.
§ THE CHANCELLOR OF THE EXCHEQUER
I have listened with great attention and interest to the speech of my hon. Friend the Member for Salisbury (Mr. Marsh), and I am glad to find from his concluding remarks that he does not intend to divide the House upon his Motion; because if he had done so I should have opposed it, as no one in my position could assent to a Motion which would, at the present time, strike off so large an amount of the Revenue without proposing a substitute. The question is one of great importance, and I must remind him and the House that the licences to which he has referred come under different categories. These licences were first imposed upon those who sold exciseable or dutiable articles; and though the duties on many of those articles have been relaxed the 154 licence on the vendors still remains; and I must admit there are some anomalies connected with them which I think it would be desirable to remove. The licence for the sale of beer and spirituous liquors produces £1,150,000, and in considering it we must do so, not merely as a licence on the sale of articles for the purposes of revenue, but also to a certain extent with reference to police regulations, as bringing the persons who sell these articles under the control of that body. The stage and hackney carriage and postmasters' licence yields about £170,000 per annum, and the game licences about £158,000. The postmasters' licence is a subject to be dealt with when a convenient time arises; but I think they should all be dealt with together, when the locomotive duties are dealt with as a whole. The brewers', distillers', and auctioneers' licences yield about £420,000 per annum; and tobacco, tea, hawkers' licences, &c., about £270,000. The licences on the larger classes which I have enumerated have been imposed for different reasons, and the hawkers' licence was imposed partly in order to protect small shopkeepers, who complained that these itinerant dealers who paid no rates and taxes ought have a duty imposed on them, and partly as a police regulation, it being necessary that men who were always going about the country, and who had many opportunities of committing frauds and depredations, should be subjected to some supervision. The hon. Gentleman has made a great point with regard to the licence for selling coffee and tea, which is no doubt a matter open for consideration. There is a great difficulty in imposing a fixed rate of licence, because it must press much heavier on the small trader than on the man who carries on an extensive business. In 1853 the right hon. Gentleman (Mr. Gladstone) proposed a scale of trade licences according to the value of the premises; but he found considerable difficulty in dealing with the question, and eventually he was obliged to give it up. It has, however, been urged by some that a general trade licence graduated according to the rateable value of the premises, should be imposed in lieu of the income tax on profits of trade, but great, if not insuperable, difficulties present themselves in devising such a scheme. Now if some trades are required to take out a licence it is difficult to see why all should not. But then again arises the difficulty of imposing it in such a manner 155 as that it shall press equally upon all. The rateable value of the premises does not indicate the magnitude of the trade carried on, because some trades, from the bulky character of the goods, require much larger premises than others. I have referred to these matters to show that this is a subject that ought not to be dealt with hastily, and without due consideration; and with regard to the machine referred to by the hon. Member in Somerset House, I do not think there is in existence any machine which would devise a scale of duties that would be likely to give satisfaction. The subject which the hon. Member has brought before the House is one of considerable importance, and it shall have my best attention.
§ MR. POLLARD-URQUHART
said, the licencing system was one of those subjects that would very early engage the attention of the new Reformed Parliament. The poor in the agricultural districts had gained less by the great reductions that had taken place in the duties of all articles of consumption than any other class in the kingdom, from the fact that the retailers in the small villages had not made a corresponding reduction in the price of those articles of necessity and comfort so largely consumed by the poor. The traders retained a monopoly of the trade, because others were deterred from embarking in business on account of the heavy licences they would have, or thought they would have, to pay. A labouring man with £1 1s. a week in Manchester or Birmingham gained the whole benefit of the reduction, whilst the poor Dorchester labourer, on his 8s. or 10s. a week, got none.
MR. M. T. BASS
said, he could not understand why one trade should pay a licence while others did not—why a soapboiler and a papermaker should pay a licence and a calico maker should not; why a banker should pay and a merchant should be exempt; why a horse-dealer should pay and a cow-keeper be exempt. The hon. and learned Member for Tiverton (Mr. Denman) annually brought forward the grievance of attorneys and their certificates or licences; but the attorneys were by no means singular in this respect. He wished the hon. and learned Gentleman were present that he might challenge him to a discussion of this whole question. Either licencing was good or bad; if good, it should be made general, and if bad, it should be abolished. In America, a vast 156 number of licences were imposed, and where licence duties were imposed almost every trader and manufacturer paid duty on their articles. In this way alone he thought licence duties upon articles should be collected. But he rose chiefly to call attention to one particular licence which he thought the most grievous of all. It was a blot, a special blemish, on the great financial schemes of the right hon. Gentleman opposite (Mr. Gladstone). When he brought forward the measure originally it was presented to the House as a commutation of the hop duty. He argued that every one would pay the duty according to the quantity of malt he consumed. He himself had ventured to oppose that view; but the right hon. Gentleman persisted. It happened that at the last General Election he had the misfortune to incur the displeasure of an important portion of his constituents—the Licensed Victuallers—who took it into their heads that he had supported the right hon. Gentleman in maintaining the proportion he had taken of two bushels of malt to a barrel of beer; whereas the reverse was the fact, and he was obliged to seek a certificate from the right hon. Gentleman in order to appease their wrath, who was kind enough to state that he had taken the opposite course. Instead of two bushels, four bushels of malt were used, and the result was that they paid a double tax. The duty paid upon one cwt. of hops used in the brewing of pale ale was 6s. 7d., and the duty upon the malt £6 5s. 7d. The duty paid upon strong beer was 9s. 9d. for the hops and £10 2s. 8d. on the malt, being 50 per cent more than the other and nearly 100 per cent on the malt duty. The right hon. Gentleman attempted to push this tax further and place it on all private brewers; but he himself, accompanied by an hon. Gentleman engaged in one of the largest trades in this country, said they should not insist on the tax being extended to private brewers. He confessed, however, that he had made a great mistake. It was a real injustice which the right hon. Gentleman had inflicted on the brewer, and the private brewer had been allowed to escape altogether. The right hon. Gentleman gave as one of his prime reasons for imposing this tax that it would be recovered in a reduction of the price of hops. But the very reverse was the fact. There had been an average advance of 35 per cent in the value of hops. The brewing trade had in the interval paid the sum 157 of £1,500,000 in the increased value of hops, and in licence duties over £2,000,000. He defied any person to show that they had received a single penny in exchange for this. It was his firm conviction that the brewers' tax was paid out of capital this year and last; and he had heard, on reliable information, that one of the oldest houses in the trade did not get a single shilling last year. They were required to pay £12,000 before they were allowed to begin business; and he knew a house that had paid £46,000 by means of this tax since 1862, and they had not made forty-six pence in return for it. He asked the House, was it just to impose this additional property-tax on the brewers, whilst other trades were free? The whole system of licences was bad unless it was made general. The licence tax was an iniquity. They might as well require Chancellors of the Exchequer to pay a tax of 50 per cent, although there were no persons he would deal with more liberally. He would double their salaries to-morrow. He hoped in return they would do something for him. He defied any Chancellor of the Exchequer to defend this tax. He would seek some other opportunity of bringing this matter forward.
said, that he thought the hon. Member for Salisbury (Mr. Marsh) had exercised a wise discretion in not calling for a division on the question he had introduced. However important it might be to discuss the principles on which a remission of taxation should be made, it was obvious that such discussions could not have any practical effect in the face of a progressive increase in every branch of the public expenditure. It was on their success in restricting expenditure that they must chiefly depend for the remission of taxation; because, if they continued to increase the expenditure rapidly, it was quite in vain to make the most enlightened speeches on the subject of the reduction of taxes. The right hon. Gentleman the Chancellor of the Exchequer was quite correct in stating that the subject of licencing was a very difficult one to deal with; and, indeed, so great were those difficulties, and so anomalous our licencing laws, that every attempt which he (Mr. Gladstone) had hitherto made to reduce them to something like order and principle had failed; and he had always been obliged to desist from bringing forward any propositions on the subject in a practical shape. When the hon. Member called 158 upon the Chancellor of the Exchequer to establish some principle with respect to licencing, he (Mr. Gladstone) would suggest that there was a class of commodities on which he considered that it was expedient to obtain the maximum amount of revenue which it was possible to obtain. Such a commodity was ardent spirits. It appeared to him to be perfectly fair, with some small reservation, to get as much as they could in the shape of indirect taxes from such a commodity; but it was quite a different case with respect to tea. He did not for a moment suggest that the present was a time when the licence duty on tea could be further reduced; but he thought that, as a general rule, all licences which acted as a restraint to trade ought to be the first to be dispensed with. Then, again, with respect to licences granted to small dealers, which produced only an insignificant amount of revenue, he quite agreed with the hon. Member for Salisbury, although he could not think of parting with that revenue at present. Such licences operated as a restraint to trade, and ought to be parted with at as early a period as was convenient. With regard to the sale of strong liquors, he did not see that the licencing system was at all objectionable, nor ought it, in any probable or proximate circumstances, to be abandoned. The brewers' licence pressed upon brewers beyond the ordinary rules of trade, and could only be justified by necessity. [Mr. M. T. BASS: It is nearly double what you compute it to be.] The question was not now before the House, and his hon. Friend would do him the justice to admit that, when it was proposed in lieu of a duty on hops, it was unanimously accepted by the House, and met with the approval of several eminent members of the trade itself. His hon. Friend, with great magnanimity, refused the advantage offered to private brewers, amidst the cheers of the House. However, he hoped that the time would soon come when the whole question of licences could be fairly considered, and when any objectionable one brought before the attention of the House could be dispensed with altogether. With respect to brewers' licences, he admitted that he would not support them if they could be commuted into a duty upon malt; and if Her Majesty's Government made such a proposal he should not oppose it. He admitted that the brewers' licence was a question which was fairly open to discussion, and should, 159 therefore, be glad to see it brought forward at any time in that House. As regarded licences granted to bankers, they in no degree acted as a restraint upon trade, from the simple fact that they were only required to be taken out by banks of issue, and there were obvious reasons why a licence should be required in their case. He thought the right hon. Gentleman (the Chancellor of the Exchequer) was quite right in sticking to his licences, and he was glad that the hon. Member who had brought forward the Motion was not going to press it to a division, as he should otherwise have been compelled to vote against it.
§ MR. GREENE
complained that the brewer was unable to recoup himself for his licence by raising the retail price of a pint of beer by an impossible fraction of a penny, and therefore the whole sum came out of his pocket. He could not see why the brewer should be taxed while the cotton manufacturer got off free. He did not object to the brewer paying a licence; but he said that the licence in lieu of hop duty was unfair in the extreme. The hon. Member for Salisbury (Mr. Marsh) proposed that the duty should be raised upon the beer, instead of upon the malt; but experience had shown them that the restrictions imposed upon the brewer by such a practice were such as it was impossible they could now submit to; and, moreover, this was not the proper time to propose the reduction of the malt tax now we were at war with Abyssinia. His object in rising was to express his regret that, when practical questions came before the House, there should be so thin an attendance of Members; whereas, if the hon. Member for Birmingham, or any other hon. Member, brought forward a sentimental grievance from the other side of the water to be discussed a large number of Members were invariably present. He hoped that the Motion of the hon. Member for Salisbury would be brought forward on some future occasion, and that a Committee would then be appointed to consider the whole question of trade licences.
§ SIR GEORGE BOWYER
remarked, that according to the Chancellor of the Exchequer, the licences of hawkers were needed for the protection of shopkeepers. But this was an argument that could scarcely be recognized in these days of free trade. Hawkers were amenable to the criminal law of the country; and if 160 they committed any offence they could be pulled up before the magistrates and punished without any aid from the system of licences. He considered that these hawkers' licences were oppressive and exceptional. They produced only about £50,000 a year, and they were a very great restraint on the trade of the poorer classes, many of whom were thus prevented from getting an honest living. To impose such restrictions on those persons was a very likely means of forcing them into the workhouse or the prison.
§ Motion, by leave, withdrawn.