HC Deb 01 March 1878 vol 238 cc559-88

rose to call attention to the present system of levying Customs Duties on Wine, and to move— That a Select Committee be appointed to inquire into the present system of levying Customs Duties on Wines. It would, he said, be within the recollection of hon. Members, that two Sessions ago he brought forward a similar Motion. It was not necessary for him to state why he did not press his Resolution on that occasion, but he did wish to explain why he did not bring it forward last year. Two years ago the Commercial Treaty with France was approaching its termination, and, being convinced that the question of the wine duties de- served attention, he at that time thought the matter should be fairly met. Last year it was known that negotiations were pending on the subject of the Commercial Treaty with France, and it was also known that these wine duties were an important feature in those negotiations, and he felt that to ask for such a Committee as he now proposed would only have been a source of embarrassment to the Government. But now it was different; and, as a matter of fact, those negotiations had been suspended for the present—not only suspended, but postponed almost indefinitely. Under those circumstances, there was no reason why he should not bring forward his Motion. It was commonly said, and commonly believed, that this was a matter intimately connected with the integrity of the fiscal system of the country as far as it depended on the revenue derived from the duty on spirits. That was one of the greatest fallacies that ever existed, and that opinion had been challenged by those outside as well as those who held the garrison of our fiscal system; and it had been combated with remarkable force by many authorities. Surely, then, if he could show that there was a controversy and conflict going on within the area of official circles, he had made out a primâ facie ground for an inquiry. Then there was another reason why this matter should be considered by a Committee. It was a question which had never been the subject of a Parliamentary Inquiry, and the assessment existing now was arrived at in a fog. It was arranged at a time when there was no technical knowledge, without which it was impossible to arrive at a fair, equitable, and, he might say, scientific basis. The only Parliamentary Committee that ever sat on this question was one in 1851, in the days when, as the right hon. Member for Greenwich (Mr. Gladstone) said, those who were engaged in the trade, from the state of the law, really had no knowledge of what constituted natural wine. He must say a few words as to the circumstances under which the assessment was really arrived at. It was arrived at in 1860, at the time of the French Treaty of Commerce. The object of those who were engaged in framing the new regulations were, as the right hon. Member for Greenwich said at the time, to secure the greatest possible amount of simplicity of operation, and the application, as far as possible, of the lowest duties for natural wines. The right hon. Gentleman also defined natural wines to mean the juice of the grape with only that amount of spirit as to make it fit for the market. The result was that neither one nor the other object was secured. He should show that the system was not simple, and its operation did not, as it was intended, secure the lowest duties for natural wines. At that time, in consequence of the state of the law, as already said, there was a general absence of knowledge in regard to wines, and a very curious hitch arose at the outset. What took place when the present unsound standard was fixed was curious as a matter of history. When the negotiators concluded their work, it was evident that they did not know themselves what they had done. Wine was tested by an instrument called an alcoholometer, which was something of the nature of a thermometer. As everybody knew, our thermometer was that called Fahrenheit, while in France they used the Centigrade. By Fahrenheit, if the thermometer stood at 32°, hon. Members would expect to find it freezing, but in France 32° by the Centigrade represented a temperature somewhat of the hottest. Nobody would think of confusing the two thermometers, but that was exactly what the negotiators did with the alcoholometer. They placed the strength at 18°, but they did not know that by the French alcoholometer that would represent 32°, according to the one in use with us. When the French traders brought in their wines, under the conditions as they thought, of the new Treaty, they were stopped at the Custom House as considerably over the strength represented by 18° of the English standard. The result of that was that some fresh understanding had to be arrived at—the blunder had to be remedied, and it was arranged by a happy-go-lucky compromise. As a compromise they took 26° as a sort of half-way figure between 18° and 32°. That was the way the present figure was arrived at. He wished the House to bear that fact in mind, not because it had immediate bearing on the subject of his Motion, but as one pregnant of illustration of the imperfect knowledge of the subject under which the arrangement in regard to the present assessment was arrived at. He would now ask the House to look at what was the practical effect of the present scale. All wine, the alcoholic strength of which was below 25.9 per cent, was admitted at a duty of 1s. per gallon; but if it was a single decimal per cent above that strength, there had to be paid on it a duty of 2s. 6d. per gallon, which amounted to a differential duty of 150 per cent. The only argument there was in defence of that system was, that unless that extra charge of 150 per cent was maintained, the whole principle of our spirit duties would be infringed, and therefore that its maintenance was necessary as a safeguard of the revenue from that source. Now, he would ask the House one question. Was there any other commercial country in the world which adopted the same assessment? There was not one of them did so, although many of them were wine-producing countries, which might well be affected with a disposition to protect their own produce by heavy duties. France was one of those wine-producing countries, and she certainly had not been slow to take to protection; and yet, instead of having a standard of 25.9, the standard there was 36.75; so that a merchant could import into France from Spain or Portugal wines up to the strength of 36.75 without being called upon to pay any additional duty. Again, as regarded the necessity to defend the revenue derived from spirits, the duty in France was only 3⅛d. per gallon on wine, whereas the duty on spirits was 6s. 8d. per gallon. When there was such a vast difference as that between the duty on the one article and the duty upon the other, one must conclude that there was a great temptation held out to illicit distillation, if practicable; yet in France it was not the case that the Revenue was so defrauded, on testimony of the highest authority. The system adopted in this country very soon gave rise to complaints on the part of several wine-producing countries, that their products were subjected to an unfair differential duty; and those complaints acquired such force that they at length became the subject of a Government inquiry. There was a Blue Book which contained the Correspondence which passed bet ween the Board of Trade, the Board of Inland Revenue, and the Board of Customs, and which arose out of the complaints made on the part of those countries. They felt that there was a grievance in the shape of a differential duty, and that the system demanded attention upon more grounds than one. The Board of Trade took the question up, and said justly that the considerations resolved themselves under two heads—-whether, as regarded the Customs, any alteration in the wine duties to a standard above 26 degrees would, as a consequence, admit an importation of beverages—compounded liquors—not real wines, but fraudulent mixtures, which the Board of Customs could not stop or find means of detecting on importation; and whether, as regarded the Board of Inland Revenue, if these compounds were once allowed to be brought in, illicit re-distillation could be prevented. The Board of Trade elaborately considered both these questions, and arrived at its conclusion—which was to the effect that, as regarded the re-distillation of spirits from nominal wines, or the substitution of cordials for wines, there was no room for apprehension. It was further said that precautions could be taken by the Customs to prevent irregularities, and distinct suggestions for such precautions were advanced. The Report made was submitted, in the course of official procedure, to the Boards of Customs and Inland Revenue, and both of these authorities reported on the subject; but he ventured to say that no hon. Member who looked at the Board of Customs' Report would be able to state that the case submitted by the Board of Trade was fully grappled with. The answer of the Customs was simply the utterance of non possumus. It confined itself to observations which had to be taken upon trust, and there was an absolute omission to take into consideration the practical suggestion made by the Board of Trade. The Report of the Board of Inland Revenue was more elaborate, and sought to show that any reduction in the wine duties would result in affording very great temptation—and one which it would not be possible to counteract—to bringing in fictitious, or Hamburg sherries, which were in fact only spirit mixtures, and redistillation from which it would not be possible to stop when they were once allowed to be freely introduced, and that therefore a considerable loss would result to the Revenue from spirits-He took exception to the allegations which were advanced, and which they were asked to accept mainly upon trust, and that was one of the grounds why he now asked for the appointment of a Select Committee—namely, that the arguments which had been advanced by the Boards mentioned were not quite valid. He understood from competent authorities that by the application of certain instruments no fictitious mixtures could pass into this country without detection. There was, however, a case for inquiry. The whole of this subject, as regarded the facility for illicit operations, was one of controversy. The Board of Customs did not subject now certain articles to duty from which spirit could be easily distilled—namely, molasses, cider, and other things; and there were now facilities, as regarded freedom from duty, for deriving spirits from certain mixtures, if it were found possible to carry on the business, without fear of detection by the Board of Inland Revenue. Moreover, he would remark that, notwithstanding the opposition of the two Boards, the Government concluded in favour of a reduction of 20 per cent, and by that conceded what he advocated in principle, for his case was that neither the present duty, nor the present assessment were essential to the integrity of our fiscal system. The reduction proposed had not been acted upon. The Government then again referred the matter to the Boards of Custom and Inland Revenue for them to consider whether the 20 per cent reduction might not be increased. The Customs stood by their old lines, and the Inland Revenue advanced further arguments against any concession. The Board of Trade, however, thought it could be demonstrated that it would be perfectly possible, without loss to the Revenue, to make a further reduction in the duty. At any rate, he ventured to think that he had made out his point that there was such a conflict of opinion between these Boards, and controversy upon the subject as to data and facts, that there ought to be a public inquiry by a Select Committee of the House. He conceded it was the intention of the framers of the present system that only a natural wine should be admitted; but he contended that the data on which it was laid down that wine above 26 degrees could not be regarded as natural wine was fallacious. Lord Derby, in his despatch to the Portuguese Government in 1876, said the only scientific data on the subject was that furnished by the experts sent out by Her Majesty's Government, in 1861, to test the strength of wines. These experts operated upon 17 samples of Portuguese wines, and, finding 12 below 26 degrees, arrived at the conclusion that natural wine was not above this standard; but the vintages of these wines were only two or three months prior to the examination, and they were consequently not completely fermented when tested. Wines so recently made were not at their full strength. They had heard a good deal about Australian wines, one of the great Customs authorities a few years ago saying that without artificial alcoholization it was impossible they could be above 26 degrees; but since then an examination of 200 specimens by the Customs authorities showed that five-eighths were above this. He thought there was a doubt and controversy about the whole question which justified an inquiry. He saw the hon. Member for Youghal (Sir Joseph M'Kenna) had an Amendment on the Paper, and they would no doubt hear now, as they had heard before, something about the imperilled spirit interests in this country. But he (Mr. Cartwright) wished to reduce the duties on wines above 26 degrees, because at present they were most unfairly handicapped as against spirits. The great bulk of the wine exceeding 26 degrees brought into this country ranged from 26 to 36 degrees, that ranging from 36 to 42 being very small in amount. For these 10 degrees—above 26—the importer paid 1s. 6d. duty per gallon, whereas the duty on the same amount of spirits was 1s., so that such wine paid 50 per cent more duty. The effect of this was that the importation of these wines between 26 and 36 degrees had fallen very much behind those of pure alcohol and cognac. Between 1861 and 1877 he found the importation, and consequently the consumption, of the wines that would be affected by any alteration of the duty had only doubled, while the importation of cognac had during the same period quadrupled. The importation of Spanish and Portuguese wines had been steadily declining since 1874. He trusted, therefore, that the right hon. Gentleman the Chancellor of the Exchequer would be able to see his way to grant this Committee, because what information they had on the subject was obsolete. There could not be a more satisfactory tribunal than a Committee of the House, which could make an intelligent and searching examination of experts. There was primâ facie ground for inquiry in the fact that our system was singular, and was to be found in no other country.


said, his hon. Friend (Mr. Cartwright) had asked him to second the Motion, and he did so with great pleasure. Little need be said on the subject. He (Mr. Baxter) would carefully abstain from offering any remarks as to the changes, if any, which ought to be made in our Customs duties on wines, and he would certainly not trouble the House with any of those difficult questions on which good judges differed greatly. This was a subject which always struck him as one of great complexity and no little difficulty. Not only Government officials, but experts, had expressed the most opposite opinions in regard to the wine duties, and it was not for him to dogmatize on the subject. He did not now advocate any reduction on the wine duties, certainly no particular reductions; but he could not help thinking that the system now in use had been adopted very much at haphazard, when there was no proper inquiry into the subject, and that it had never properly come within the province of Parliament. It appeared to him that, after the voluminous Correspondence which had taken place with foreign Government departmental officials and that portion of the outside public who were interested in the matter, the question raised could not be met without a full and searching inquiry. He knew that objection had been raised to an inquiry by a Committee of this House, and two years ago the right hon. Gentleman the Chancellor of the Exchequer gave expression to the most cogent of these objections; but, having weighed the arguments, he thought that those in favour of an inquiry were most entitled to consideration, and he believed that those who had taken part in this difficult question in this and foreign countries would not be satisfied until it had been examined and reported upon by an impartial tribunal. His hon. Friend had not touched that night on the main argument in favour of a reduction. In his opinion, the principal inducement for a re-consideration of the present system was the hope—which skilful negotiation would convert into certainty —that if we made any reduction in the duties on strong wines the Governments of Spain and Portugal would be induced to make a proportional reduction in the duties on British manufactured goods. Everyone who felt any interest in the subject was convinced that our export trade with the Peninsula and its Dependencies was capable of very great expansion. The reduction of the duties on strong wines would lead, he believed, to commercial Treaties with Spain and Portugal of great value to British manufacturers. He thought that a sufficient case had been made out for a Parliamentary inquiry. Those foreign countries which were inhabited by Spaniards and Portuguese were almost the best customers we had for many of our textile fabrics; but as long as the feeling that they were unjustly treated rankled in the minds of Spanish and Portuguese producers, it would be impossible to conclude a commercial Treaty with those countries, or to induce them to lower materially the import duties on British goods. That was to his mind one of the chief arguments that could be raised in favour of his proposal. His hon. Friend had referred to the departmental Correspondence. He had read it with great care, and with perfect impartiality; for, until he began to study the subject, he had formed no very strong opinion on it either way. His mind had been fortified by the perusal, however, and he was strongly in favour of an inquiry. It was more than 10 years since the Government authorized a proposal to be made to the Government of Portugal for a reduction of duty on strong wine from 2s. 6d. to 2s. All the departments had agreed that if the duty were reduced a considerable reduction might be made in the departmental machinery. On reading the arguments in that Correspondence on the part of the Board of Trade for a change, and on the part of the Inland Revenue and the Customs against a change, he could not resist the conclusion that the Board of Trade took the broader and more statesmanlike view of the question, and entered into the subject with a thoroughness and impartiality much to be com- mended. And he would go further, and say, that he thought those Papers alone afforded sufficient ground for a Parliamentary inquiry. But, at the same time, he thought the Customs and Inland Revenue were perfectly right in being very cautious, and in setting forth all the dangers, probable or even possible, which might be caused by such a change. This it was their duty to do. But when he came to the question of illicit distillation, and the wide door which it was said by some people would be opened to fraud by the reduction of the duty on strong wines, he was more puzzled than ever. It was impossible to read the Correspondence without seeing that the difference of opinion was most remarkable, and that difference of opinion seemed to depend on circumstances which had never yet been made clear. They were told, on the one hand, by officials of such great experience that they might be right for aught he knew, that if they were to reduce the duty on strong wines, they would be imported largely for the purpose of manufacturing spirits, and that it would be difficult, if not impossible, to protect the Revenue. But spirit brokers and distillers, so far from admitting that, took the opposite view, and argued that it would be far more easy to detect spirits made that way than it was to detect spirits made from grain, molasses, and other substances. This was a question which might very fairly come before such a Committee as his hon. Friend asked for. Then it was alleged on the one hand, and denied on the other, that the effect of such a change would be to reduce the consumption of spirits in this country, and so to injure the Revenue. That was a subject on which such a Committee might take very important, and perhaps conclusive, evidence. The question was one of such importance in its bearings on trade in other parts of the world that it was worth the while of Parliament to thoroughly investigate it as was proposed. Since they discussed the subject two years ago, they had heard something from some of the Colonies that had entered the field. In many of the Colonies the wine trade was increasing, especially in Australia, and that trade, as the right hon. Gentleman the Chancellor of the Exchequer knew, had joined those who asked for a revision. It was simply because he thought the demand could not be much longer resisted that he had risen to say these words. He should be sorry to commit himself to any particular view; but whilst there was so much difference of opinion, he thought it the duty of Parliament to take up the subject; and if the right hon. Gentleman the Chancellor of the Exchequer had no better counter-proposal to make, he should be glad to hear him say he accepted that of his hon. Friend the Member for Oxfordshire.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "a Select Committee be appointed to inquire into the present system of levying Customs Duties on Wines," —(Mr. William Cartiwright,) —instead thereof.

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

Notice taken that 40 Members were not present; House counted, and 40 Members being found present—


who had the following Amendment on the Paper, but which the Forms of the House prevented him from moving—namely, That, in the opinion of this House, it is not expedient to inquire into the present system of levying Customs duties on wine, or to vary such duties, save as part of a general scheme for equalizing the duties on all alcoholic liquors, having regard to the quantity of alcohol contained in each respectively, said, that the right hon. Gentleman the Member for Montrose, who seconded the Motion of the hon. Member for Oxfordshire commenced his speech by sayingthat he would not speak in favour of the reduction of wine duties; but he followed up that observation by a speech which seemed to have no other object in view than the reduction of those duties. The hon. Member for Oxfordshire, no doubt, sheltered himself by urging upon the House the moderation of his demand for a Committee; but if the House granted that demand, after the speeches made, the Committee would be launched with something of a foregone conclusion that there was something wrong and anomalous in our application of the wine duties which ought to be got rid of by levelling down. Both the hon. Members who had spoken had referred to the anomalies in the present mode of levying the duties. It was said that when wines of 26 degrees proof spirit were taxed at 1s. a-gallon the duty had been raised an additional 1s. 6d. if the wines were 10 degree higher —that was to say, that a fine of 1Is. 6d. a-gallon was put on the wine. That might be an anomaly, but it was not half so great an anomaly as that they should be able to obtain wine of 26 degrees proof spirit at all at 1s. agallon duty. The duty on spirits per gallon was 10s.; but if a man consumed a gallon of spirits diluted with some real or fictitious vinous fluid he could drink that gallon of spirits on a duty of 4s., for four gallons of wine at 26 degrees proof would contain one gallon of spirits. No doubt if he came within the scope of the increased duties, and happened to fancy a wine above 26 and up to 42 degrees he paid more, but even then he only paid 6s. as compared with the 10s. of the man who drank brandy-and-water or whiskey-and-water. The consumer of home-made spirit was therefore placed at a great disadvantage. He mentioned these facts as a species of notice of the grounds on which he intended opposing the appointment of a Committee. The whole question of the duties levied on alcoholic liquors was one of the most important that any Chancellor of the Exchequer could have to deal with. The duties levied upon intoxicating liquors amounted in the total to £32,000,000 a-year in the United Kingdom; and takingthe quantity of wine imported into this country, and accepting the figures given by the hon. and right hon. Gentlemen the Mover and Seconder of the Motion, it was a great anomaly that the amount of duty on that wine was £1,738,000—and this represented an amount of alcohol three, if not four, times as much as would be required to raise the same amount of duty from the Excise. There was an anomaly, too, in the beer duties; and some day or another, when the country might have to draw upon its resources, it was one they would probably have to have recourse to. The duty levied upon beer, taking into account all the different modes of levying it, was £8,973,000 annually. Now, that represented a consumption equivalent in alcohol to about 100,000,000 gallons of proof spirit. The strength of the liquor, taken as a whole from the quantity of malt, was something more than 90,000,000 gallons. He did not dispute the expediency of encouraging the trade with Spain or France; but then charity began at home, and we ought not to encourage foreign trade at the expense of the home producer and consumer. The tax paid by the Irish on the spirits they consumed amounted to 2s. 6d. in the pound on the gross incomes under all Schedules of the whole country. It was most unjust to tax Irish and Scotch spirits at the excessive rate he had mentioned; and he must object to the grant of a Committee to inquire into the best method of enabling Englishmen to drink wine at even a lower rate than at present, and that the aggravation of the great anomaly existing in the relative taxation of wine and spirits should be extended. If the Committee was granted, it should embrace an inquiry into the incidence of duties on all the various kinds of alcoholic drinks, including spirits and malt liquors as well as wines. He would have no objection to such a Committee.


said, this was a subject that was not within the province of a Select Committee to inquire into, but one solely to be dealt with by the Executive, and on the responsibility of the Government. The hon. Member who brought forward this Motion had failed to give any valid reason for the appointment of the Committee. A Committee was appointed when a grievance had to be remedied; or when, in the opinion of this House, a Committee could do some practical good; but he did not believe that the wine growers of Spain and Portugal, or the wine merchants and the consumers of this country, objected to the present rate of duties. No one had cause to complain of the present tariff. If they were to have a Committee, it should be one to inquire into the whole system of levying duties on alcoholic liquors in this country. The hon. Gentleman had also failed to show that the duties on wine were prohibitory, or that there was any necessity for the Committee; but he had not held out through the whole of his speech any inducement to the House to believe that the duties were reduced or assimilated to that of French wines, or that there would be any increase in the consumption of heavy wines in this country. If the Committee were to be appointed, the whole subject of the duty upon alcohol should be submitted to it. They were wines not generally consumed by the masses, but only by a portion of the wealthy classes of this country. If a Committee was wanted only to collect facts, many might be appointed to collect facts of far greater importance than on this subject. The only practical grievance that had been urged was against the standard of 26, which had been fixed after careful examination and scientific inquiry. The system had so far worked well; but the hon. Member who introduced the subject ought to have shown the House that it had not worked well, in order to induce the House to grant this Committee. He said the standard of 26 was a fallacious one, but if it was he had not shown how it was to be altered. There was no public opinion on this subject calling for the appointment of this Committee. It might be that Spain and Portugal would reduce their duties on our goods, but would France do so? At present some of the claret sent from France was dear at the price they had to pay for it, and he had no wish to encourage its consumption in this country.


said, his hon. Friend the Member for Youghal (Sir Joseph M'Kenna) had referred to the injustice which he thought was done to Ireland by the differential duty on spirits, as compared with the duty on beer, and in that grievance he entirely concurred with his hon. Friend. He wished to state the injustice done to Scotland on the same principle as the hon. Gentleman had stated the injustice done to Ireland. He was not going to enter into any detailed argument, but would content himself by stating simple facts. As there were numerous Parliamentary Returns on every subject, some hon. Members took from one Return and some from another; and that his facts might be verified, he might mention that he took his figures from a Return which was ordered by the House of Commons in August last, and had been distributed within the last two or three weeks. The result stood thus—The sum paid by Scotland for duties on whiskey, foreign spirits, malt made into beer, Excise licences, and the quantity of sugar used in the preparation of alcoholic liquors, and everything in the nature of alcohol, within the year was £4,696,000. Now, Scot- land bad just one-seventh, part of the population of England, according to the Report of the Registrar General at Midsummer last. Therefore, if the duties were equitably arranged, so that each consumer of alcohol was made to pay in the same proportion, whether it was consumed in the shape of beer or in the shape of whiskey, England would have to pay £32,872,000, but it paid only £23,920,000; so that England had been favoured, as compared with Scotland, to the extent of nearly £9,000,000 a-year. There could be no fallacy in the calculation, as anyone could judge for himself by looking at the Return. Now, he considered that was a great injustice done to Scotland, and that, if the proposed Committee were appointed, the subject ought to be investigated why alcohol in beer paid so little, while alcohol in whiskey paid so much. He knew that the high duty on whiskey was defended as being on a poisonous and mischievous thing; but he maintained that the alcohol in beer was just as pernicious. If they took the records of the criminal courts in England, Scotland, and Ireland—putting aside agrarian outrages in the sister Kingdom—they would find that more brutal cases occurred among the beer drinkers than among the whiskey drinkers. At the Leeds Assizes, some time ago, there were nine cases of serious assaults upon women tried—some of them of the most serious nature known to the law—and he was sure they would not get an equal number among the whiskey drinkers of Scotland or Ireland for the last 10 years. He agreed that whiskey should be heavily taxed, because it was the parent of much violence; but he did not see why beer should not be proportionally taxed according to the quantity of alcohol it contained, or why there should be such a disproportion between the taxation of whiskey and beer. To drink a little whiskey, mixed with water and a little sugar added, as it was usually taken in Scotland, was just as harmless as to drink the same quantity of alcohol in water with a little hops, and slightly tinged yellow, under the name of beer.


supported the proposal for the appointment of a Committee, remarking that the question was as important in relation to our country as it was in regard to our commercial interests with other countries. In the first place, there had been a great divergence of opinion among the different departments of the Government in this country which had to deal with the matter. The Board of Trade were certainly not against a Committee being appointed; the only fear they had was that it would be more difficult to detect fraud in the case of wine than in distillations from other materials which would take a much longer time in the process. He believed that had been proved to be a groundless fear. The Treasury had also been appealed to on the subject, and were rather in favour of a duty of 2s. per gallon; but they hesitated to deal with the subject for fear of endangering the £13,000,000 or £ 14,000,000 which the Revenue derived from these duties. The Custom House authorities calculated that the reduction would involve a loss of some £800,000 a-year; but, in making this calculation, they had left entirely out of account the increased consumption which would come from a reduction of the duty. He thought these divergences of opinion among the different departments of our Government justified the hon. Member for Oxfordshire in asking for a Committee. As far as our relations with other countries were concerned, it must be remembered that, at the time of the Treaty of 1866, England did not put forward a claim to come under the most favoured nation clause, and so practically admitted that Portugal had a right to the full and impartial hearing of her views on the question. France, under her Treaty with Portugal, obtained from that country her strong wines, which were used to fortify the weaker wines of France before they were sold to England. France got almost all the benefit of this; Portugal comparatively none. Lord Derby, the other day, speaking in reply to a deputation of the Associated Chambers of Commerce, expressed a hope that Spain would soon see the error of her ways in reference to this question of the wine duties; but a speaker in the Spanish Cortes would probably use a tuquoque, and suggest that the time might with advantage speedily arrive at which the noble Lord would himself see the error of his ways. Lord Derby, continuing, said no one would propose the adoption of differential duties with different countries so as to take the form of a reprisal. Those were not the views of another statesman, Prince Bismarck, who a few days ago had said that political friendship was independent of commercial relations, and that if Russia enforced differential duties, the only remedy would be to tax Russian imports. The Correspondence with our Ministers in Spain and Portugal revealed a strong desire that this question should be looked into. In 1865, Mr. Lytton, then Secretary at Lisbon, entertained the idea that these wines were fortified beyond what was needful; but in 1875, when he was Minister, he had reason to change his views, and was anxious, for the sake of our relations with the country, that those who supported its claims should have a fair and just hearing. On these grounds, he could not do otherwise than support the Motion.


Sir, the Motion before the House appears to me to be one that has to be considered without much reference to the Amendment of which Notice has been given by the hon. Member below me (Sir Joseph M'Kenna). That hon. Gentleman seems to have formed a very curious idea in regard to the system of taxation upon intoxicating drinks which has prevailed, I suppose, much longer than our own time in this country, and he wishes that alcohol, as such, should be charged the same, in whatever shape it is presented for the consumption of the public. Now, that would entirely derange or overturn our whole system of finance; and he must know himself that to adopt that principle would be absolutely impossible. The hon. Member for Edinburgh (Mr. M'Laren) has given us two or three facts. I have a fact here which has been furnished by, I believe, the largest distiller in the United Kingdom, and he shows that a quarter of barley made into malt and made into beer produces to the Revenue the sum of 23s., but that a quarter of barley made into spirit will produce to the Revenue the sum of £9 10s. Well, I think it is quite obvious that there must be very strong considerations which have caused that great difference; and, no doubt, in the matter of these taxes, there is something to be said on the question of morals as well as on the question of finance; and if it were thought wise, and likely not to be injurious to the public, to bring whiskey down to the price of beer, and to have, as far as men could bear it, as much whiskey drunk now—at least, in some proportion—as there is of beer, the change might be made which the hon. Member suggested.


I beg to say I did not suggest anything of the kind.


Of course he did not suggest anything of the kind, because it was too absurd. Then, all I say is, that to bring about that state of perfect impartiality as between the man who drinks beer and the man who drinks whiskey, it would be necessary to introduce some such measure as I have been describing. The question before the House is whether we can prevail upon the right hon. Gentleman the Chancellor of the Exchequer to admit a Committee to examine into the question of the wine duties. I am endeavouring to persuade myself, to comfort myself, with the belief that if the Chancellor of the Exchequer does not agree to the Committee, it is because he has himself come very near to the conclusion which he suspects the Committee would be forced to arrive at. The question affects not only this, but other countries, and not only Spain and Portugal, but it affects France very much indeed, and I am not sure it does not affect France even more now than it affects Spain and Portugal. I saw last year a very interesting pamphlet, published by a firm in the City, giving some particulars as to the wine trade in France. One of the statements was that, although the Treaty between this country and France was negotiated in 1860, and although that Treaty has introduced so large a quantity of French wines into this country, still nearly all those wines were from three or four Departments of France. That is a very striking fact, and one that was entirely new to me. Now, I think nearly every one of us in this House believes that the effect of that Treaty has been very advantageous both to France and to England. It has extended the trade very largely between the two countries, and it has smoothed the ill-feeling which at the time, or just before the negotiation of that Treaty, had existed between France and England; but although we find that in France now there is a much larger and more powerful interest in favour of free trade than there was 20 years ago, and owing, to a large extent, to their increased exportations of wines to England, I am not quite certain that if our duties were so regulated that the wines sent here were not the product of only three or four Departments, but the product of nearly all the wine-growing districts of France, we should have in France a very much wider feeling in favour of a free trade with England than we have now, although the Treaty has been in force for 17 or 18 years. Therefore, I think if the duties could be so altered that we could take wines from five times the number of people in France that we do now, we should find they were more in favour of free trade by reason of that change, and also that we should have a much greater number of customers for the manufactures which we export to pay for their wines. If the right hon. Gentleman the Chancellor of the Exchequer could look at these duties broadly—that is, see how they affect Prance, and then see how they affect Portugal and Spain—I believe he might, without any permanent sacrifice, and with only a small present sacrifice, make a change which five years hence we should be able to look back upon with pleasure, with the strong satisfaction that it had been a great advantage to our foreign trade, and had promoted the consumption of articles which, if not beneficial—I doubt very much whether they are—at any rate would tend more towards temperance, rather than the consumption of articles of an intoxicating character, which, I believe, are much stronger and more hurtful. The hon. Member for Guildford (Mr. Onslow) said he had never heard anybody complaining of the wine duties as a grievance. Well, the hon. Member does not generally give his support to any grievance that is brought forward; but there are other persons who know there is a grievance, and although it does not affect me or any other individual, and although you could not point to a man in the street who is injured by this tax on wine, yet still we know from our own sense and past experience that there are two ways of imposing taxes—one which limits trade, and is generally injurious to the country; and another which imposes the same burden, but is raised in a manner that does not so seriously injure trade, and makes the burden almost un-felt. At this moment we are raising more than £60,000,000 from taxes, and 40 years ago we were raising probably not more than £45,000,000, or hardly so much; yet we are all sensible of this fact—that there is not at present in the United Kingdom one-twentieth part of the complaint of the weight of taxation that there was 30 or 40 years ago, when the total amount levied was so much smaller. No doubt this alteration has taken place entirely in consequence of the change in the mode of taxation. A man will carry double the weight if you put it on his shoulders in a convenient form to what he will if it is in some form that is painful and hurtful. The hon. Member for Guildford said he thought a Committee was not in the slightest degree necessary. I will tell the House why I think it is particularly necessary, unless the right hon. Gentleman the Chancellor of the Exchequer has so far converted himself that he does not think it needful to have any further inquiry. I believe the objection to a change in these duties is one very much of tradition. Some years ago, when I was permitted for a short time to be at the office of the Board of Trade, I took some particular means to inquire into the whole question, and had a long conversation with a gentleman then at the head of the Excise Department, and I came to this conclusion—that nobody had any exact facts on which firmly to base or sustain the opinion that the present system was necessary; and I believe now that the opinion is one that has come down from a generation or two back. There is a common idea that if you allowed wine of a certain strength to come into the country at a certain low duty, that wine would by distillation produce a large quantity of spirit, and that that spirit, which ought to pay 10,9. in duty, would only pay the duty due on wine, and that thus the Revenue would be defrauded; but the omniscience of the Excise officers in this country would render it impossible for such a fraud to be committed. That is the opinion of the most honourable men connected with the trade, and of a great number of persons whose view cannot be set aside, because they have paid very great attention to it. Now, if the right hon. Gentleman the Chancellor of the Exchequer will allow this Committee to sit, it will take the evidence of persons who hold that opinion strongly, and of those who hold the contrary opinion. I believe they would come to the conclusion with which I am disposed to agree; but, if they came to a contrary conclusion, there would be strong grounds for maintaining the duties that now exist. I do not suppose the right hon. Gentleman the Chancellor of the Exchequer will be able to make any considerable, or satisfactory, or permanent change in these duties at once; but if he cannot do that, the inquiry of a Committee might help him next Session. This is not a matter in which any of us have the slightest Party interest. It is not a Party question; and when I was sitting on the front bench opposite I spoke entirely in favour of this change; and I am perfectly convinced, from my own experience and investigation, that the change would be a wise one. It has been suggested that it would be a wise thing for the Chancellor of the Exchequer to reduce the duties on French wines below a certain line to 6d., above a certain line to 1s, and the higher kinds to 1s. 6d., which would include all the stronger wines. He would have three scales, and three rates of duties'; but he would include in his net all the wine-growers of France, on the one hand, and the whole of the wine-growers of Spain and Portugal, on the other. I am certain these are matters worthy of the consideration of the right hon. Gentleman. Our trade is not so prosperous that we can afford to throw away markets that are ready to open to us if we would be liberal and wise to them; and I think, looking at the interests of our foreign trade, the condition of our people, and to the fact that it would, in my opinion, tend to the promotion of morals and temperance, it would be wise to adopt this proposition.


said, he could not refrain from saying a few words in favour of the Motion, which was made on the simple ground that the duty on wine was enormous, and based upon no principle whatever. The duties were differential against several countries. The duty was in favour of one country because its wines came in at a certain strength, whereas the wines of other countries did not come in at the only strength at which the wines could be produced. It was anomalous that the wines of France, some of which wore only worth 2s. a gallon, had to pay 1s. duty—50 per cent—while wines from the same country worth 20s. and even more per gallon, still only paid 5percentonthels.duty. Hedidnotmean to refer to the differences now existing between this and other nations; but he would take Italy, who could not send us her wines because of the 2s. 6d. duty, which became an imposition almost to their exclusion. The small quantities of low-priced wine which came from Lisbon, were nothing compared with the produce of Portugal. And, coming to our own wines, he would ask the right hon. Gentleman the Chancellor of the Exchequer to turn his attention to the Colonies, with which we were anxious to exchange our productions more extensively, but whose wines suffered in the same way as the wines to which he had alluded. They could not, from their natural strength, come in under the 1s., and the 2s. 6d. duty was almost a prohibitory one. He therefore felt that it behoved us to consider whether our duties were founded upon any rational principle whatever. In conclusion, he expressed his decided opinion that a Committee of the kind proposed should be appointed.


wished to say a few words, because he represented a large community, including merchants and manufacturers, who had had this question under their consideration for a great many years past. They had always urged that heavy duties on wines pressed against the opening of markets to our textile manufactures. If these duties were equalized, the increased demand for our manufactures would be enormous, particularly in our textile manufactures, and especially in Portugal and Spain. If these tariffs could be made equal, the one against the other, there could be no doubt it would be highly beneficial to this country, as well as to Spain and Portugal, and France, and he was quite sure that in a few years it would be a vast gain to our trade and commerce. He did not think it was necessary to go into the matter of alcohol drinks, and the proportions consumed, in England, Scotland, and Ireland, and he only hoped the Government would allow this Committee to be appointed.


said, he did not rise for the purpose of opposing the Motion before the House, but hon. Gentlemen seemed to think that the wine duties were regulated by no principle whatever. That was not so, for they were charged according to an alcoholic test, Wines of a certain strength were charged at the low duty, while those charged at the higher rate contained a larger percentage of alcohol. The right hon. Gentleman the Member for Birmingham (Mr. John Bright) seemed to contemplate the continuance of the alcoholic test as the principle by which duty should be determined on wines, and, if so, the same test might with, equal propriety and facility, be adopted in the case of beer. He thought that if the officers of Inland Revenue could be examined it would be found that the amount of alcohol in the beer exported was accurately ascertained, and if so, the quantity contained in the beer used for home consumption could readily be determined by the same process. The right hon. Member for Birmingham, in criticizing the speech of the hon. Member for Youghal (Sir Joseph M'Kenna), and speaking of the hon. Genetlman's Amendment as absurd and impracticable, spoke without that accurate information which he usually displayed on every subject on which he addressed the House. The effect of the hon. Gentleman's Amendment would be that a quarter of malt, instead of paying into the Imperial Revenue 23s., would be charged £6, because he believed the beer produced by every quarter of malt contained 12 gallons of proof spirits. He thought the whole question, as to the incidence of these duties, might very well be left to this Committee; and he hoped the right hon. Gentleman the Chancellor of the Exchequer could see his way to granting it.


Sir, I hope that hon. Gentlemen, when they come to a division, if one takes place, will bear in mind what the particular question is upon which they are asked to give their votes. We have hoard a great deal in the discussion which has been going on that has been very interesting, and a great deal that has been said is very true with regard to the wine duties; but I must confess that I have failed to catch, in the arguments either of the hon. Member for Oxfordshire (Mr. Cartwright), or in most of those who have taken his side in the discussion, the connection between the views which they take upon the general question of the wine duties and the particular proposal that a Select Committee should be appointed to inquire into the subject. Many things that the hon. Member for Oxfordshire has said, many things that the right hon. Memberfor Birmingham (Mr. John Bright) and the hon. Member who addressed us with so much knowledge of the particular branch of the question—the hon. Member for Ipswich (Mr. Cobbold)—have said, are perfectly true, and I am prepared to accept much that they have advanced; but I confess I do not see how we are, by appointing this Committee, to do any good towards the realization of the object that they have in view. And I am inclined to think the disadvantages which, as I shall presently venture to say, might attend the appointment of the Committee would outweigh any advantages that have been hinted at. But, in the first place, I must say, with regard to the references that have been made by the hon. Member for Oxfordshire himself, and I think by the right hon. Member for Birmingham and others, to the views which I myself have held in former times when I was in a responsible position as President of the Board of Trade, that I still maintain those views; and I do not by any means undertake to defend everything that has been said with regard to the importance or impropriety of extending or altering the present system of the wine duties. On the contrary, I hold now, as I held in the year 1866, that it would be reasonable and a safe proposal to re-consider the particular incidence of the scales which now exist. I think that the objections that were then taken by the heads of the Revenue Departments to the particular alterations that were proposed were objections which I will not say had nothing in them, but were objections that were by no means conclusive against the proposals. I held then, and I hold now.— that it would be perfectly safe, that it would probably be convenient, to make some modifications in the present scale, with the view of removing some of these obvious inequalities, and especially, I think, to remove the inconvenience which results from the very sudden jump which takes place on the particular standard of 26 degrees. And I am perfectly confident that, if time and opportunity suited, such a proposition might be fairly recommended to Parliament, and I have great hopes that it would be adopted. But I do not think there is any necessity for a Committee to inquire into the soundness or un- soundness of the objections that were taken by the officers of Inland Revenue and Customs in the year 1866 against the modification of the scale. I do not see what good the Committee would do. I do not see what information they would be able to collect which is not either now already collected or might easily be collected by the Government, which, after all, must be responsible for any proposal that is to be made. I think a Committee might be appointed for one or two purposes. A Committee might be appointed to collect information, or it might be appointed in order to assist in forming and developing a policy. Well, with regard to obtaining information, I think no ground has really been laid down in the speeches we have heard for any inquiry of this description in order to obtain such information. We have an enormous mass of information. We have not only the information that was contained in those Reports, but Commissions have sat and tests have been applied to various kinds of wine, and we have a very great deal of information respecting various classes of wine; so that in reality all the materials of the question are fairly before the Government. I am not saying that they are so fully placed before Parliament as might be the result of the labours of a Committee, which would inquire and sit for a long time, hearing the views of all sorts of persons who know a good deal about it. But if it is merely a matter of curiosity and interest, possibly Parliament might fairly say—"We should like to inquire into this question and get the opinions of people who know a great deal about it." I am, however, quite satisfied that that would not add in any degree to the knowledge which the Government possess, and that it would not add to the facilities of dealing with a question which is a very difficult one. You will say—"If you admit that, after all, a Committee might be interesting, and if your only objection to it is that its labours would be superfluous, because the Government already have the information, why do you object to our having this interesting information, which, at the worst, is but superfluous?" Well, I cannot admit that it would be only superfluous. I believe that such an inquiry as we should have to conduct if we went into this Committee, would be to no inconsiderable extent embarrassing, and probably might be mischievous. I will explain this in a few moments. In the first place, with regard to the scale and incidence of the present wine duties, I wish to remind the House of the principle upon which the present scale is established. What I understand to be the principle of the present scale of the wine duties is this—that it is intended to charge all natural wines—that is to say, the wines produced by the process of fermentation only, without the introduction of distilled spirit, at the rate of 1s. per gallon. If wine is strengthened by the introduction of distilled spirit, which it may be to an enormously indefinite extent, then the reasons which induced Parliament some 16 years ago to lower the scale do not apply to wine of that highly fortified character. The effect of large quantities of spirit being introduced into this country under the name of wine, at a very low duty, would, having reference to the general scale of our spirit duties, be very serious, and even dangerous, to the Revenue. Well, we are informed that the point which has been taken— 26 degrees—is not a proper point. It was a point selected at the time, because it was believed, from the information before the Government of the day, that 26 degrees was the limit to naturally fermented wines, and as a rule it would be found that no wines which were not fortified to a considerable extent by distilled spirits would come above 26 degrees. There has been a good deal of question as to whether the point was properly fixed; a good many inquiries have been made; analysis has been made, and information collected in foreign countries and the Colonies, which throws a small light upon the question whether this is a proper point to take. For obvious reasons I will not express my own opinion upon the point at this moment, but generally say that I think there is a great deal to be said by those who consider that 26 degrees does not entirely cover all the natural wines. A great deal of the wine that is sent, especially from Spain and Portugal, is in reality wine that has been fortified with more or less spirit; but there is some controversy as to how much is spirit and how much is not. I quite admit that that is a point upon which consideration ought to be bestowed when we come to deal with the question of the wine duties. If we are to begin to alter the point at which the duty is to be charged, we should undoubtedly cause a certain amount of disturbance to the wine trade—and I think that is very undesirable for trade considerations alone, to say nothing of Revenue considerations. It would be far better, too, that any change that might be made should be made upon the responsibility of the Government, and after but a short notice, as the appointment of a Committee, taking evidence over an extended space of time, would in all probability affect the importation of wine, and materially affect the receipts of the Exchequer. That is a reason for not undertaking lightly, or without a fair prospect of the full equivalent advantage, any inquiry which I must say I think would be of a rather loose character. I think that the speeches of several hon. Members have gone to this point; that they thought a good deal is to be said about the wine duties; that the matter is a very difficult one, and if a Committee were appointed it would get valuable information, and strike out some important light on the subject. But I think that we ought not to appoint a Committee of this House without some more definite object than any held out in the speeches we have heard in its favour. The Committee must necessarily contain many Gentlemen who have no practical experience of the subject, and they would be naturally assailed by persons out-of-doors who have special views and ideas upon it, and so influenced it could hardly be expected that the inquiry would be close, or that it would rigidly exclude what might be considered as extraneous or useless matter. There is another aspect of this question on which I wish to dwell, and which gives a still stronger reason why we should be cautious about the appointment of the Committee. The hon. Member for Ipswich (Mr. Cobbold) has called our attention to the relations between this country and Spain and Portugal, and the right hon. Member for Birmingham (Mr. John Bright)—who it is to be regretted is not now in his place—has called our attention to our relations with France. Reference has also been made to Italy, Austria, and our great Australian and African Colonies. There can be no doubt that these are countries which have a very great interest in the question of the British wine duties. In this country people do not consume anything like the amount of wine per head that is consumed in many foreign countries. There are those who think that if the system of wine duties were altered a larger quantity of wine would be imported into and consumed in this country, and that that would have the effect of bringing about a larger trade with the countries that are wine producers. Certainly, those countries think so. There is no doubt that perhaps Spain and Portugal, and also France, might be very beneficially affected by such a change in the wine duties as would suit those countries. It might be possible in our arrangements with them to use the wine duty as an equivalent in negotiation, and so bring about more satisfactory relations than exist between us and those countries. But then we come to a very great difficulty, which I think has not been sufficiently considered in the arguments addressed to the House. Hon. Members speak as if a measure which will suit one country will suit the other countries also; and that it is a mere matter of the Chancellor of the Exchequer suffering a certain loss of Revenue, which he will make up by the increase of trade produced by the alteration of duty in favour of these foreign countries. But that is not the case, and so far from it being the case that the same measure will satisfy all these countries, it is extremely probable that what will satisfy one will discontent others and cause disputes. For instance, we are asked to alter the point at which the higher duty commences in order to admit the wines of Spain and Portugal; for it is said that as it stood it is a differential duty in favour of French wines and gives then an unfair advantage. The reply to that is that we do not make any distinction in favour of the wines of our country and another, and if Spain and Portugal send in wines under 26 degrees they will have the advantage of the 1s. duty that France has. There is no question of a differential arrangement whatever in favour of one or the other, and that argument is one which Members have no right to use. If we alter our duty in favour of Spain and Portugal, France will say we are no gainers by this, and you are doing us rather a bad turn. At all events, France would gain nothing, and what France asks is that we should do something for them that we have not done yet. The right hon. Member for Birmingham (Mr. John Bright) said, very truly, that it is a remarkable fact that French wines do not come from all parts of that country, but from only four or five winegrowing districts; while there are 40 or 50 Departments producing wine which would be of value to England if it could come in. But why cannot that wine come in? Because it is of so low a value that it cannot pay the 1s. duty, and France may say, reduce your 1s. duty to 6d. or 4d. on wines of that low class. But it appears that it is not all wine of a very low strength. Some of it is wine of no inconsiderable strength, and yet is of coarse quality, and which will sell only at a very low price. But if we admitted wines of a low class and of a weak description, Spain and Portugal would say—-"You are doing nothing for us. We have a great deal of wine of a very low and cheap description which is strong, and which you ought to admit also. If you admit cheap French wines, you ought also to admit the wines of Spain and Portugal." If we entered into any arrangement, I do not see how we could answer that argument; but if we accepted this view, we should have to change our system of alcoholic tests, and introduce duties ad valorem. If we were to attempt to ascertain the value of wines, we should be plunged into difficulties of no ordinary kind, and to ascertain the value of the wines introduced would be a task of no easy solution. Then, if we entered into questions of this sort, and discussed them under the eyes of all the nations of Europe, I doubt very much whether we should make our arrangements easier than at present. As it is now, the question is a very complicated one. I think I have said enough to show that it is an extremely complicated one, and cannot be solved by a certain surrender of duty by the Chancellor of the Exchequer. It is one that must be adjusted very nicely. But, says the hon. Member for Tamworth (Mr. Hanbury), let us have this discussion and go into it for our own sakes without reference to other countries; but if we do it for our own sakes, foreign nations, when we ask them for concessions, will say—"You have nothing to give in exchange; you have already given everything for your own sakes; we decline to alter our system out of love for you or of regard for arguments which may have con- vinced you but do not convince us." It is part of the case of hon. Gentlemen opposite that we have an equivalent in the wine duties which enables us to deal with other nations. I admit that, and it is because I think that we ought to keep that advantage that. I object to plunge the subject into the vortex of a public inquiry, and desire rather to keep the matter in the hands of the Government and of negotiators, and it is for that reason that I object to this Committee. I can assure the House that there is no reason for supposing that this is a question that does not interest the Government. There is no reason for supposing that we are not alive to the great importance of the question, or not disposed to deal with it if we found ourselves able to do so. But, at the present moment, the time is not very favourable for commercial experiments, and it is not very favourable for that sacrifice of Revenue which undoubtedly a change of a satisfactory character would require, and which it would be some time before they could make up again. Even now I do not think we are receiving as much duty on wines as we did before the great changes in 1860 in the duties. Whatever we might do, the change, if made, would involve a sensible loss of Revenue, which I cannot venture to under-take; and, therefore, for all these reasons, I hope that the House and the hon. Member for Oxfordshire (Mr. Cartwright) will see that, in resisting this Motion, I am not taking up a position antagonistic to the principles which are entertained by those who desire that the wine duties should be carefully reviewed with a view to commercial negotiations. On the contrary, acting entirely in the spirit of those who desire that they should be carefully considered, it is my deliberate opinion that the course proposed is not the best course to take, and I trust that the House will support me in declining to take it.

Question put.

The House divided: —Ayes 85; Noes 65: Majority 20.—(Div. List, No. 37.)

Main Question proposed, "That Mr. Speaker do not leave the Chair."

Original Motion, by leave, withdrawn.

Committee deferred till Monday next.