SECOND READING.

HC Deb 24 June 1880 vol 253 cc727-89

Order for Second Reading read.

MR. GLADSTONE,

in moving that the Bill be now read a second time, said: I, of course, do not intend to go back upon any discussion of general principles, though Members who feel it their duty to discuss general principles may find this an opportunity for doing so. But there are two important practical matters on which it is necessary for me to make some observations to the House—they are the alterations proposed by the Budget in respect to the Wine Duties and the Malt Duty. With respect to the Wine Duties, the Government were desirous to give the House the first intimation of their intentions. Overtures which had been made to them from the French Government had led them to entertain the hope that the French Government might be in a position to proceed with negotiations at such a speed as to enable us to settle the law after a short interval, and, therefore, without any violent disturbance of the wine trade. The House is aware of the connection between the Wine Duties and the subject of Commercial Treaties, for the conclusion of which great anxiety is felt among the commercial and the trading classes of this country. Where that connection subsists there are two modes of proceeding, and each of these modes is open to its own particular objections. You may proceed, in the first place, to negotiate with the foreign country, in which case you have to fix all the particulars of your arrangement before that arrangement comes to the knowledge or within the jurisdiction of Parliament. That was the mode in which the French Treaty was concluded in 1860. It has the advantage of presenting the subject to the House in a form in which the House knows exactly the question that is before it, and can judge whether it shall or shall not accept the arrangement. But it has the disadvantage that the House is tied up practically to some affirmative or negative, and cannot exercise a judgment upon the details and forms of the arrangement. The other mode is that which we have adopted on the present occasion. We have submitted our arrangement in detail, and it is perfectly within the power of the House to indicate its preference for this or that form of the arrangement, presuming it well inclined to the general principle, and with the advantage of being enabled to know in what manner we ought to proceed, and what is the best way of meeting the views of Parliament and of the trade. But then the proposal is open to this objection—that we can obtain no positive assurance from the French Government. The proceedings of that Government may be much delayed and may lead to too long a period of uncertainty in the trade, to the great disadvantage of those engaged in that trade, as well as to the consumers of the country and the Re-venue. I had some hope that I might have been able to collect the judgment of Parliament with regard to the Wine Duties in a definitive form, and yet to have been able to proceed with the French Government so as to settle the whole matter after a very short postponement, and I named the 15th of August. I am, however, sorry to say that I can hardly now entertain that hope. I do not think we shall be able to conclude an arrangement with the French Government or any other Government on the subject of the Wine Duties on such conditions as to take effect before the 15th of August. I am very unwilling to ask the House to prolong that term, because the prolongation tends to uncertainty and partial paralysis in the Revenue. I think, in the circumstances, that the most convenient course to adopt is to invite and welcome discussion in this House, as I have welcomed free communication from the trade. There is very general advantage in our obtaining the best information as to the proper mode of proceeding when we come to reduce the Wine Duties; and I shall not grudge having submitted this proposal to the House if I am able to gather such authority and information on the subject that the Government shall feel itself in the condition, in dealing with France, that they are proceeding on safe ground. I have no doubt that there is in this House, as there is in this country, a difference of opinion upon an important question connected with the structure of the wine tariff. I have submitted to the House that course which I believed to be decidedly the best, the most calculated to promote the freedom of trade, and the most conducive to the ultimate convenience and advantage of the trader. But transitions in trade are rarely agreeable to those they immediately affect, and no doubt I must make two admissions. In the first place, there are some arguments to be urged in favour of a different mode of constructing the tariff; and, in the second place, we must look in this matter not exclusively to abstract arguments but to the convenience of all parties, and to the sense and opinion they entertain about their own convenience. The two modes of proceeding to which I referred are these. By one of them the tariff was constructed principally in the manner given in the Bill—that is, by a duty varying with each degree of alcoholic strength of the wine; and the other would be by what I should call a tariff of steps, not varying with each degree of strength of wine, but constructed more like the tariff of 1860 as it originally appeared, when we had three or four different rates of duty, and wines were divided into classes with steps in the duty. I shall, before the time for going into Committee on the Bill, endeavour to arrive at the best judgment in our power as to the choice between those two methods of proceeding. I find there is a great difference of opinion among the trade on the subject; but I shall regard it as being my duty to put an end to all uncertainty in the matter at a very early date. I have scarcely any expectation now of being able to conclude the matter by the 15th of August; and unless, in the course of a week or 10 days, I find reason to change that opinion, I shall not ask the House to enact at present the alterations I have suggested, but rather look to the course which I have now indicated as one which would probably be preferred by the French Government—that is to say, that we should negotiate in the autumn, that we should then arrive at a conclusion which we might present to Parliament, say, in the month of January, without any prolonged agitation or uncertainty. But it is quite evident that if I am to look forward to that mode of proceeding, it is very desirable that I should be well acquainted with the opinions both of Gentlemen of authority who sit in this House and of members of the trade, in order that in our arrangements with France and other countries we may not run the risk of going wide of the general expectation and views that may be entertained by the most competent judges. Some advantage will be derived by the Revenue from the postponement for four or five months of this change in the Wine Duties. It will make an addition to the surplus of £130,000 or £140,000; but, of course, I do not think any change ought to take place in the proposals on that ground. Another subject on which I should wish to say a word is that of the Malt and Beer Duties. The operation which we have to effect is one in which we are aided, I think I may say, by the general approval throughout the country of the substance of the plan, but in its details it is the most difficult with which, in a long experience, I have ever had to deal, because we are not imposing a new duty—in which case parties submit to the authority of Parliament, and the question must be judged by general policy and not by close reference to an actual and fixed standard —but we are rather commuting an old duty, and commuting it into a duty which is to be placed on a new article in the commercial sense, though it is an article representing a more advanced stage of progress towards consumption than the article on which the duty was originally laid. The problem, therefore, which is submitted to us is to determine what is the substantial equivalent in reference to the Revenue of the Malt Duty which has hitherto been levied. The determination of that question is a matter of the extremest nicety. That depends upon a number of matters with regard to which the representatives of the Government and the officers of the Revenue—even the most practical and ablest of them—stand at a considerable disadvantage in their dealings with members of great trades. Members of great trades have a knowledge far more close than any of even the best officers of the Revenue could possess, and their opinions must carry a certain weight. They, of course, are justified in making the most of those opinions in reference to their own interests. But, at the same time, on the other hand, as regards the public Revenue, they have no responsibility whatever; and if it should happen that they present the most plausible representations, which the Government cannot actually at the time confute, but which afterwards entirely break down, the public Revenue has, and can have, no possible reparation or remedy. In this particular instance, we have to see what are the exact relations between two articles, and to ascertain the proportions of the sums levied on malt and upon beer is a question of the greatest complexity and nicety. But it was far more complex than it need have been but for the mode hitherto in use for levying this great branch of the Revenue; for, practically, the duty, as a rule, has been charged, not upon a certain quantity of malt obtained from the grain, but by a charge laid on the grain before it is made into malt, so that the question of the yield of grain into malt is further complicated by a consideration of the yield of malt into beer. The question is one which the most able officers have been engaged in examining; but I am not as yet able to announce that we have arrived with regard to it at any absolute or final conclusion. The highly intelligent and opulent members of the trades connected with brewing and malting, especially brewing, contend that the result of our proposals will be more favourable than we have estimated, and until we have got to the bottom of that question I have not felt myself justified in shutting the door against further investigation, and therefore I do not now state the details which may come up in Committee. As regards the general position of the proposals, taking them altogether there will be no great difference from that originally announced. I have presented, at the request of the late Chancellor of the Exchequer, figures showing as nearly as I can the effect of the change for the present year as connected with the amount of drawback, and I have not the least idea that anything will occur to alter, to any appreciable extent, the figures so presented. In regard to the ultimate results of the change, I would rather reserve my opinion till we have completed our communications with members of the brewing trade. As I estimated the change, it will be in favour of the public, and with an outlay of £1,100,000 we shall obtain, after defraying some temporary charges, between£300,000 and £400,000 a-year solid Revenue, perfectly unexceptionable in its character, and which is due from laying the duty on a manufactured article instead of upon raw material. The brewing trade represented to us that we should make a much larger sum of money than we supposed, and it is with the view of testing that operation that I wish to reserve any judgment on details; because I ad- mit we are not entitled to make any such addition to the Revenue as they presume we should be making by levying on the same quantity of material a very considerably higher tax, while we profess to be levying a tax which it is worth their while to pay in consideration of their relief from the Malt Duty and its accompaniments—the only exception to that being that the turn in cases of this kind is very properly given in favour of the Revenue. There are various points on which I desire it to be known we do intend to make certain concessions to the brewery trade, because they have satisfied us a larger produce will be obtained from a quarter of malt than we had, with our former information, felt justified in reckoning. Something in the direction demanded by the brewers may be freely accorded by the Government, and without any fear of damaging the computations of Revenue we have heretofore laid before the House. The technical form that the change will take will be an augmentation of the figure indicated in the Resolutions and the Bill, for the measure of fermenting liquid when it is in the fermenting vats or squares. As to the degree at which the specific gravity should be taken I wish to withhold judgment; but the view with which we shall pursue our inquiries will be to fulfil in spirit the assurances given to the House when the Resolutions were originally submitted to it, and to observe the general rules of equity towards the trade. Besides some augmentation in the figure which we are going to adopt as the standard of specific gravity, there is another important head upon which we are also going to make an important concession to the trade. The Bill, as it originally stood, provided that an allowance should be made to the brewer as regarded the contents of his fermenting squares of a maximum of 4 per cent for waste—that is to say, for a positive diminution of the liquor before it became a merchantable article. Now, no doubt the waste in a brewing establishment will justify, and even in equity require, the enlargement of that allowance; and instead of making an allowance limited to the maximum of 4 per cent we are disposed to make a uniform allowance, and we shall probably fix that allowance as high as 6 per cent. The third alteration is con- sequent on those changes, and it involves so much of a technical character, and has reference so much to the exceedingly varying position of the brewing process in the different breweries of the country, that I will not enter into details, and will only say there should be augmentation in the limit of variation allowed on what is called the presumptive charge, or the charge upon the materials used in brewing. There is a fourth point, which is simple in its character. The Bill, as it stands, leaves it in the power of the Government to determine at what period the duty on brewing shall become payable after the charge has been taken, subject to the limitation, "not less than 14 days or more than a month." We propose to strike out the reference to the 14 days altogether, and the mode adopted will be that of monthly payments after monthly charges. The present system of the Inland Revenue is to divide the year into periods of six weeks. In lieu of that, it will now be divided into periods of one month. The liquor will be tested in the fermenting squares in the course of each successive month, and the Revenue will be collected on the beer so tested from month to month. These are the points on which I think it will be necessary to make modifications. That is the principal framework of the plan. There have been other questions raised upon which discretion may be reserved both to the Government and the House. There is, for example, the question of the limit of exemption, which the brewers think is too high, but which others hold is not carried far enough, either generally or with regard to some particular class. One particular point has been raised by the brewing trade on which we think their demand is obviously fair. Occasionally it happens that a number of families may club together to brew in a brewhouse, each living in a house below £20, and the brewhouse itself being rated below £20. There might come in very serious evasions of the duty, and a sort of brewing clubs might be established practically exempt from duty. That would be contrary to equity, and it may be easily met by inserting in the exemption clause that brewing which is to take place by virtue of that exemption must be brewing upon the premises. If, as is probable, we are compelled to postpone for some months the change in the Wine Duties, the effect will be to make a certain change to our credit. The figures I have presented this morning are somewhat less favourable for the Revenue than those I presented on the first day. They are £50,000 or £60,000 less favourable. The general upshot is, that the surplus for which I propose to ask the House will probably be somewhat larger than the point at which I stated it, but not so much more that the House will be likely to grudge it, or to entail the necessity of any change in our proposals. It may be that other changes of a minute character may take place when the measure is passed through Parliament in some way affecting the calculations. But the House, on the whole, may understand that we are asking them to vote in this financial change upon what may be comprehended under the four following heads:—First, the imposition of 1d. in the Income Tax; secondly, the imposition of an additional charge on licences. With respect to this, by the way, I may say that no observations have been made to me of a nature to lead me to suppose that we shall have to make any material change in the proposals submitted. The third great point was the Wine Duties, and I do not at all abate my hopes of carrying it out as originally proposed; but some delay is necessary. The fourth and last point is that of the Malt Duty. On the whole, considering the scheme as a financial scheme, and with reference to the surplus, I can present it to the House with more confidence than I did before, as a scheme which is safe and moderate for your adoption, and under which we shall have a surplus Revenue available for meeting any demands, if they should arise, of something between £400,000 and £500,000 for the service of the present year.

Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Gladstone.)

MR. ANDERSON

rose to move, as an Amendment— That, in the opinion of this House, seeing Beer is already exempted from four-fifths of the proper tax upon its alcohol, and the new proposals are expected even further to cheapen it, any loss caused to the Revenue by the abolition of the Duty on Malt should he made good by the Beer Tax, and not by the Income Tax. The hon. Member said, he had listened with great attention to the statement of the Prime Minister. That part of it which related to the Wine Duties did not in any way affect the arguments he desired to present; but that part relating to the Beer Duty did. He confessed he did not understand why the right hon. Gentleman should be so painfully desirous of arriving at absolute exactness in regard to the commutation of the duty from malt to beer. The right hon. Gentleman argued as if the Beer Tax was to be a tax levied on the brewer, and as if what he had to do was to watch over the interests of the brewers. But the tax was not a tax upon the brewers. It was in no sense that; but it was a tax on the consumers of beer, who were, perhaps, the most numerous class of persons in this country. It appeared to him that the right hon. Gentleman ought not to require in any way to be so very conscientious about the exactness of the commutations. All he had to take care of was that his calculations should be such that the Revenue should sustain no loss by the commutation. For his part, he was very pleased to hear the right hon. Gentleman say that there were grounds to suppose he would get a larger sum out of the Beer Tax than he originally computed. The right hon. Gentleman's scheme would be greatly improved by that. That was an amendment in the direction in which he wished to move, and he did not approve of what the right hon. Gentleman had said about making further concessions to the brewers in order to do away with that improvement which he had announced in his speech. He (Mr. Anderson) approved entirely of the abolition of the Malt Tax and its conversion into Beer Duty. There was no novelty in the proposal itself, which had been suggested in that House over and over again. The real novelty consisted in the courage of the Chancellor of the Exchequer in giving practical effect to the suggestion. For that splendid stroke of financial policy the House owed its thanks to the right hon. Gentleman, because it removed the tax on alcohol entirely out of the domain of farmers' grievances, and left to future Chancellors of the Exchequer a power of expansion and contraction of the Revenue such as they had never had before. Wishing to illustrate the facility of con- traction or expansion of the Revenue afforded by the tax on beer, he would propose, when the Bill came into Committee, an increase of ½d. per gallon on beer. That small tax, which would be absolutely unfelt by consumers of beer, would bring into the Exchequer £1,750,000 or £2,000,000. A financial scheme which put it into the power of future Chancellors of the Exchequer, in case of emergency—such as war—to raise that sum by charging an extra ½d. duty on every gallon of beer, was a splendid piece of finance, and he cordially approved of it so far; but what he did not approve of was the discrepancy that existed between the tax on different descriptions or dilutions of alcohol. They had to deal with three countries, each drinking a very considerable quantity of alcohol. The Scotch and Irish took their alcohol diluted with, say, about 50 per cent of water, which brought it into the condition of proof spirit. The English beer drinkers, however, had their alcohol diluted with about 95 per cent of water, hops, and less harmless ingredients; and because it was so the Englishman was allowed to get his alcohol at a totally different calculation, and that was the injustice that he complained of, which was being continued now. He supposed that the right hon. Gentleman's reply was that he did not by his Bill create injustice; but that was not a sufficient answer. It was quite true that he did not create it by the Bill; but the moment he proceeded to deal with this question, he must have found that flagrant injustice staring him in the face, and could not avoid seeing that the drinker of alcohol in Scotland or Ireland was taxed at the rate of 10s. per gallon proof spirits, while the drinker of alcohol in England was only being taxed at the rate of 20d. per gallon. He hoped some good reason would be given for that discrepancy before it passed through the House. The Prime Minister would be bound to do something with it, and however small a step was taken, the undoing of an injustice would be satisfactory to Scotland and Ireland. They did not expect it all at once, after an injustice had lasted for years. They knew they could not have it abolished by one step; but when the time came—and both Scotland and Ireland had been looking forward to it for years—for the abolition of the Malt Tax, and the changing of that tax into a duty on beer, they hoped there would be a time when some step would be taken to redress the grievances of Scotland and Ireland respecting the matter. Therefore, he blamed the Prime Minister for not making some statement with regard to it. The proposal of the Prime Minister was to continue that injustice to the fullest extent; and he was not even sure that the Prime Minister was not somewhat adding to that injustice, because a change was being made to the advantage of the beer drinkers in England that would cost £1,100,000, and that was proposed to be made by an Income Tax levied all over; so that the payers of the Income Tax, who were a small section of the community compared with the drinkers of beer in Scotland and Ireland, would pay equally with Englishmen for the benefit that was being done to England alone by the change on duty. It was no answer to say that the Scotch beer drinker paid for the alcohol in his beer at the same rate as the English drinker; nor was it any answer to say that the English spirit drinker paid for the alcohol in those spirits at the same rate as the Irish or the Scotch for their whisky. That was no reply. They had to deal with national habits, and it could not be pretended that the discrepancy was continued for the purpose of making the Irish and Scotch people sober. It had had no effect in making them take to beer instead of whisky hitherto. The Irish and Scotch had continued unmur-muringly to pay that high tax on spirits; and he firmly believed that if the tax on beer was added to by ½d., the English taxpayer would bear it, even if he murmured at it. It would be no more unjust to disregard his murmurs than it had been to disregard the murmurs of Ireland and Scotland for years past. That was not a new question, for Scotchmen and Irishmen had been speaking of it frequently; and if the Prime Minister had been asked during the last six years—as he hoped he would be during the next six years—he would have had opportunities again and again of hearing the grievances brought up, and of hearing that Scotchmen and Irishmen did look forward to a time when something would be done towards redressing them. He did not think it was necessary for him to go into the argu- ment of the Prime Minister with respect to his expectation, of cheapening beer by the new change he had instituted, and he did not know it was necessary for him to show that there was that great discrepancy in the alcohol in beer and the alcohol in proof spirits. On that point, perhaps, he ought to make himself quite clear. In his speeches the right hon. Gentleman had always spoken of proof spirit, and not of alcohol. The two things were quite different. Proof spirit meant alcohol already diluted, containing only about 50 per cent of alcohol. He had said that beer contained about 10½ degrees. That did not mean 10 degrees of alcohol; it meant 10 degrees of proof spirit, or about 5 degrees of alcohol, and the duty would be only about 1s. 8d., as against the 10s. duty on spirits. He had said quite enough, to prove there was an enormous discrepancy. In his Resolution he had called in four-fifths; but it was really more than that, because more than five times the duty was paid. There was one other point that, perhaps, he ought to touch upon, and that was the amount of change there would be by increasing the duty on beer over that of wine. The duty upon wine the Prime Minister proposed at 6d. per 20 degrees; and, therefore, unless beer paid 3d. per gallon of duty, it would not come up to the low duty for wine. But he wished to propose 2½d. per gallon, which was going half way between the two, and then it would be considerably cheaper than the charge on the foreign spirit imported in the low wine. When he proposed to increase the tax by ½d., he confessed he did so as a step towards the equalization of the question, and to do that it would be necessary to raise the tax to 9s. a-barrel, and it would then be level with the 6d. for the 20 degrees of wine. Therefore, in the event of some future Chancellor of the Exchequer, or the Prime Minister himself, in pursuance of justice to Scotland or Ireland, or in the emergency of a war, finding it necessary to impose a larger duty than 3d., it would be necessary, with a view to a Treaty with a foreign nation, to introduce a saving clause to the effect that if it was found necessary to raise the duty on beer until it became as high as the duty on wine, it should be no violation of the Treaty. At present there were no other points that he wished to raise, although there were some other points he should have liked to have discussed; but as they would interfere with the Amendment he wished to put before the House, he would reserve them for consideration in Committee. With those observations he would move the Amendment which stood in his name.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "in the opinion of this House, seeing Beer is already exempted from four-fifths of the proper tax upon its alcohol, and the new proposals are expected even further to cheapen it, any loss caused to the Revenue by the abolition of the Duty on Malt should he made good by the Beer Tax and not by the Income Tax,"—(Mr. Anderson,) —instead thereof.

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

MR. R. N. FOWLER,

after inquiring about the deductions of Income Tax in July, said, he wished to make a general observation with regard to the Budget which the right hon. Gentleman had brought in. The proposal to take off the Malt Duty and place the tax on beer was very popular with many hon. Gentlemen on his side of the House, and, among others, the hon. Member for Mid Lincolnshire (Mr. Chaplin), who had urged it for a number of years. Those hon. Members who were most pleased with the proposal were county Members. It was not his own fortune to represent a county constituency in that House; and it seemed, from his point of view, to be rather hard that the Income Tax should be raised for the purpose of benefiting the constituents of the county Members. They had had in the past numerous complaints of the Income Tax; and at the close of his last Administration the right hon. Gentleman the present Prime Minister had promised to abolish that impost altogether. To that effect he had put a scheme before the electors of Greenwich in 1874; and it was certainly rather startling that whilst the right hon. Gentleman's last proposal when in Office before was to remove the tax, his first act now should be a measure to increase it.

MR. BAXTER

must say he was entirely satisfied with the Budget of his right hon. Friend. It might be very unpatriotic on his (Mr. Baxter's) part; but he could not get up any feeling of dissatisfaction, far less of indignation, at the fact that the national beverage of Scotland was taxed much more than beer. On the contrary, he should feel better pleased if more beer and more wine were consumed on the other side of the Tweed, and less of that old potent beverage, the excessive consumption of which was productive of so many evils in Scotland. He rejoiced very much at the consensus of opinion which seemed to prevail not only in that House, but all over the country, as to the wisdom of the Prime Minister in proposing to substitute a tax on beer for the tax on malt. According to the last speaker, there was nothing in the circumstances of the present time to justify the change; but the Leader of the House had clearly shown that this was the most favourable opportunity that had presented itself for years for making the change. Malt was, to all intents and purposes, a raw article, which it was against the first principles of political economy to tax at all; and he must confess that many times he had felt the force of the arguments addressed to the House by county Members sitting opposite against this tax, and how difficult it was to answer them. Besides, it would have been almost impossible under any circumstances, and however much the Government might be pressed for money, for a Chancellor of the Exchequer to increase the Malt Tax; whereas the substituted duty afforded the Finance Minister of the day a source of Revenue which he could increase or decrease in accordance with the requirements of the country. On that account he heartily approved the leading feature of the Bill. But he rose chiefly to express his great satisfaction at the last, and to his mind the most important, clause of the Bill now before them—namely, that which empowered Her Majesty in Council to revise ! and reduce the Wine Duties. When his J right hon. Friend spoke the other night he (Mr. Baxter) thought he was rather sanguine in fixing the 15th of August for this change, and he was not in the least surprised at the remarks which had fallen from him that evening. But to him (Mr. Baxter) it was a matter of small importance whether the clause stated August of this year or January or February of next. It was equally un- important to the country. Although he was an out-and-out Free Trader—and he had said in that House before that he should like to go perhaps further than other Members of that House in the way of opening ports and abolishing Custom Houses and duties on many articles now taxed—he had never been able to sympathize at all with the objections made to Commercial Treaties; and he hailed with pleasure the prospect before them of new engagements, whether now or in the course of the autumn or winter, with France, Spain, and Portugal, because he felt satisfied that, if wisely arranged, they would be certain to give an important stimulus to British trade. They were told by certain people that those Treaties were altogether opposed to the principles of Free Trade. Surely the main object they ought to have in view ought to be the increase of trade between nations; and any expedient that would have that effect, in his opinion, ought to be welcomed by all practical men whatever theorists might say. Most of the objections to those Treaties, however, did not emanate from Free Traders, but from Gentlemen who were really, and had been during the whole of their past lives, Protectionists at heart. The statistics of English trade with France since 1860, showing an immense expansion of trade, scattered all those anti-Treaty theories to the winds. The English import of wine had increased nearly tenfold, while that of Spanish wines had almost doubled; and hon. Gentlemen knew what an enormous increase there had been from this country of manufactured goods. If they wanted encouragement to enter upon new negotiations as proposed by Government, it was to be found in the opposition of the Protectionists in France, and to their endeavours to stop the negotiations. He was told the other day, and, no doubt, some people thought, that this whole matter was thoroughly looked into and settled in 1860, but that was 20 years ago; and there ought to be no more finality in matters of finance and commerce than in politics, and the proposals of the Government showed a very clear and practical illustration of those matters. He wished to say that, in his opinion, they were all very much indebted to the right hon. Gentleman opposite the late Chancellor of the Exchequer for having so promptly conceded a Committee on the Wine Duties last year, and also to his hon. Friend the Member for Oxfordshire (Mr. Cartwright) for having presided over the deliberations of the Committee with great industry and ability. He had sat on many Committees, but had never been more interested in any inquiry, the absence of Party feeling and prejudice being most conspicuous throughout. He wanted to draw the attention of the House to three points which the evidence before the Committee clearly brought to his mind and the majority of those present. The first was that the country might set aside all apprehensions lest a material reduction of the Wine Duties should cause illicit distillation, and so injure the Revenue. The officers of the Customs Department treated that suspicion as a mere delusion, and the evidence of the gentlemen from the Inland Revenue Department was scarcely less emphatic. The second and most important point was this—that nearly all the witnesses declared that any material reduction of the Wine Duties must necessarily cause an enormous increase of importation and consumption of wine in this country. The fact which impressed itself most on his mind was that the wine trade of Great Britain was just in its infancy, and that, as compared with other countries, the consumption of wine in Great Britain was ludicrously small. They were told in evidence that the City of Paris consumed more wine in the course of a year than was consumed by the entire population of Great Britain and Ireland. Nearly all the Spanish, Portuguese, and French merchants connected with those trades, speaking from long practical experience, and great knowledge of the subject, stated that a revision and reduction of the Wine Duties would immensely increase the quantity and improve the quality of the wines imported to this country. Another point struck him forcibly, and that was the intense anxiety shown by many of our own Colonies—South Africa and Australia especially—to obtain such a reduction, so as to enable them to do a much larger business in Colonial wines; and one or two of the leading Spanish merchants told the Committee that, in their opinion, South Australia promised in the future to throw into the market the very best wines in the world. The fact was that the heavy duty on strong wines had operated in- juriously on the wine trade of the Colonies. The third point, which was also clearly proved before the Committee, was that a large reduction on the duty on the wines of the Peninsular would, of necessity, in the very nature of things, bring about such a revision and reduction in the tariffs of Spain and Portugal as would enormously add to British trade all over the Peninsula. Our present Wine Duties were regarded as hostile to Spain and Portugal. Those countries tried to meet the duties by their tariffs, and the consequence was the British competition there had been almost entirely annihilated. The recommendations of the Committees in favour of a reduction in the Wine Duties was carried by large majorities, not, as was so often the case, by a majority of one, or the casting vote of the Chairman. The divisions were 9 to 6, 10 to 5, and in one instance 13 to 1, and the recommendations of the Committee, in substance and in spirit, were precisely the present proposals of the Government. He was very glad to hear what fell from the Prime Minister in regard to the scale of duties proposed to be levied, because he wished him to bear in mind that the great preponderance of evidence before the Committee was against a complicated sliding scale such as was proposed in the 4th Schedule of the Bill, and in favour of a uniform duty from 20 degrees up to 35. He was afraid the proposal of the Government in that respect would give rise to a great deal of unnecessary work and expense, and cause some delay and trouble. Indeed, in Spain and Portugal they were already complaining that there was another favour to France. He hoped the right hon. Gentleman would consider the question of bottled wines, and on this head see his way to alter his proposals. For his part, he was was so pleased at the prospect of a reduction in the Wine Duties, and so satisfied that it would give an enormous stimulus to British trade, that he hoped the House would allow the Government to go with a free hand into the negotiations.

SIR STAFFORD NORTHCOTE

It had not been my intention, in any circumstances, to have entered into any very elaborate discussion of the general question; but after what we have heard this evening from the Prime Minister, I feel that I am less able to enter into such a discussion than I should otherwise have been. In several important respects we have not yet got the whole of the Government proposals in such a form as to admit of their being profitably discussed. That is the case, at least, as regards one important portion of the Wine Duties. And then as to the details of the transformation of the Malt Tax into a Beer Duty we have not sufficient information. There are, however, a few remarks which I wish to make. In the first place, I must say it struck mo at the time Notice was given of a Supplementary Budget, and still more when the Budget was introduced, that it was not very easy to explain why we had a Supplementary Budget at that time at all. Undoubtedly the canons which the Prime Minister has repeatedly laid down with regard to the inconvenience of making more than one Financial Statement in the year would have led one to suppose that it would have been only in the case of some great and pressing necessity that he would depart from his own principles and make, at the present time, a Supplementary Financial Statement when the year was so young. Of course, circumstances might have arisen which would render such a Statement necessary. But having given my best consideration to the grounds alleged by right hon. Friend, I still think they were far from being sufficient. I do not think the first ground stated, when my right hon. Friend introduced the Supplementary Budget, was one which the House need take much notice of. He stated that the Estimates which I laid before the House were not very sanguine; that they were cautious, but not too cautious; and gave us to understand that I had not erred by want of care in framing them. At the same time, he did not state that there was a prospect of such a failure in the Estimates as would induce him at this time to make other proposals of additional taxation. He referred to the small amount of £200,000 of Supplementary Estimates which would have to be voted, and which would rather more than absorb the surplus I had in hand. That might or might not be the case. I think it is far too early in the year to say what the effect of the Supplementary Estimates might be. We know that every year there must be Supplementary Estimates, and that in a properly constituted Budget there will be savings of no inconsiderable amount. It is impossible to say where the savings will be; but in ordinary years the amount of savings under different heads will balance and cover the Supplementary Estimates. That, therefore, is not a ground upon which a new Budget involving considerable additional taxation ought to be proposed. But, no doubt, circumstances might have occurred which would render it necessary to provide additional funds for new and additional Services; and when my right hon. Friend referred to the possibility of some call upon us for India, he opened a consideration which might have justified a very important Financial Statement. But having done so, he proceeded to whittle away that ground, and to impress upon us that he had no proposals at that time to make, and that for some considerable time it would not be possible for the Government to bring forward such proposals. He made some observations, sound I think, on the desirableness of making such proposals in one form altogether, so as not to deal with a great question piece by piece. I think, under these circumstances, he would have acted more in accordance with the usual practice and the convenience of the House and the country, if he had waited until he was in a position to make proposals with regard to giving relief to India, and to providing the Ways and Means which might be called for. His object was to make provision for possible calls, without knowing himself that they will ever be made. The financial result of his proposal, as well as the amount he proposed to provide, is so small as rather to preclude the possibility of his making any large assistance to Indian finance unless in the way of some loan raised and the interest upon it. We may therefore, I think, set aside these as considerations which could hardly weigh with us in considering the propriety of bringing in a new Budget at this time. There was another reason which the Prime Minister put forward and laid considerable stress upon. He told us that the French Commercial Treaty was coming to a close; that within a short time it would be necessary to have a new Treaty, unless we were to lose the advantages which the Treaty of 1860 had conferred on our trade; and that, in order to successfully carry on the negotiations which Her Majesty's Government were opening with France, it would be necessary to make some proposals with regard to the Wine Duties; and, therefore, he took the opportunity of asking what certainly is very unusual —that we should give the Government power, by Order in Council, to propose and carry through a particular set of propositions with regard to the alterations in the Wine Duties. At the time it struck me that that was a strange proposal to make—and one in connection with which I have very much doubt as to whether it is likely to conduce to a satisfactory conduct of negotiations with a foreign country. It certainly seemed to me that, before the basis of the negotiations had been laid, a proposal of that kind, and the putting into your Act of Parliament a provision that the whole thing must be settled by a particular day, and that a very short day, was not likely to conduce to a settlement; and what we have heard from the right hon. Gentleman to-night confirms my impression. But, leaving that aside for the moment, we have to consider, not only the alterations in the Wine Duties with France, but what effect they will have on other countries—Spain, Portugal, Italy —whose wines are of greater strength; and we have heard nothing to explain to us with what probability we shall consult the interests of this country in negotiating with these foreign countries by laying down in an act of Parliament a scale that would be applicable to the wines of those countries. So far as I am aware, the scale that is proposed in the Bill is not very likely to give satisfaction to some of those wine-growing countries; and I really do not know in what position we may be to arrange our tariffs with them if we are to be bound by a scale such as this, without knowing how it will be looked at by those Powers. We have to accomplish a most difficult task—to arrange a scale to give satisfaction to several countries, all of them jealous about the scale, and as to its being an equivalent of something to be given on the other side. I do not desire to lay down any strict principle of political economy on the subject of Tariff Treaties. I am not at all indisposed to make Commercial Treaties, and endeavour to obtain advantages in consideration of advantages given to other countries. But I am quite sure, if you enter on that system, if you are to carry it throughout your commercial policy, as matters now stand, you will find yourselves embarked in a most difficult and complicated task, because the "most favoured nation" clause will oblige you to give to several countries unconditionally what you obtain from others in return for equivalent concessions. Now, we are told all this is laid aside for the present. I am not sorry to hear it. The right hon. Gentleman tells us to wait a short time, when he promises us further information. In the meantime, I am quite ready to say this—that it will be of great advantage, now we have these proposals before us, that those who have practical information on the subject should give us the benefit of it. I do not enter into the question myself, feeling that I do not speak with authority upon it; but I do feel great hesitation in accepting the system of a rise of duty by so much per degree. I remember that when the alcoholic scale was first introduced there were two breaks instead of one. There was a break at 18°, and it was found inconvenient, because, to use a phrase familiar at the time, it "cut into the middle of the clarets," and so rendered it necessary to test a great number of samples. This is what I apprehend now. The right hon. Gentleman says it would be inconvenient to the officers of Revenue to examine a great many more samples imported. That is the objection; but it is not confined to the officers of the Revenue; the inconvenience is, no doubt, shared by the public—by the importers of wine, in loss of time, and perhaps in the injury caused to the fine wines by the opening of the casks. But I would rather have that matter discussed by those who are personally conversant with the subject. I have made my contribution to the discussion in a friendly sense, not being at all desirous of setting up my own views on a subject which, I think, requires serious consideration. I believe there will also be objections taken to the particular rate at which it is proposed to rise to higher degrees; but all these questions will come up in Committee on the Bill. Another matter—and really the important question raised on the scheme and Bill—is the transformation of the Malt Tax into the Beer Duty. It is, of course, open to observation that that is a proposal which has its political side. We heard, the other night, from the Home Secretary, what wonderful interest would hereafter attach to the night of the 10th of June, when this proposal was made, and how the Liberals would be greeted with the applause of the agriculturists. I do not, for a moment, deny the right of the Government, if they think fit, to come forward and make a political Budget, and make offers to gain the support and confidence of the agricultural interest. I rather doubt myself whether, when the proposal is thoroughly examined, it will be found to be a benefit so great to the farmers as, at first sight, may appear. But here, again, I think a great deal will depend on the criticisms which will be more properly reserved for Committee as to the exact manner in which the change will operate, the exact restrictions to be put on the brewing trade, and the facilities that will be retained. Of course, we must bear in mind the question of the importation of foreign malt. I altogether dissociate myself from any proposal to object to the taking off the duty; but I should not be surprised if, after all, it caused a good deal of grumbling. This proposal to change the Malt Tax into a Beer Duty is one that has often and often been made; but I agree entirely with the hon. Member for Glasgow (Mr. Anderson), when he said the credit of a proposal of a financial character ought not to rest with irresponsible persons who had sagacity to discover it, but with the Government, which sees its way to adopt and introduce it. Therefore, I do not think it at all worth while to enter into the question as to the origin of the suggestion; but, at the same time, I may say that if there is anyone who is entitled to credit in the matter it is the hon. and gallant Member for. West Sussex (Sir Walter B. Barttelot), who in 1870 brought forward the proposal, and seriously pressed the right hon. Gentleman in favour of a course similar to that which is now being taken. The proposal made was that a brewers' licence duty should be substituted for the Malt Tax. The Chancellor of the Exchequer of that day (Mr. Lowe) admitted the general argument in favour of such a change; but he objected to it mainly on two grounds. It was inconvenient to collect so large an amount of Revenue from something like 33,000 brewers instead of 9,000 maltsters, and it would involve restrictions of the brewing trade which would be vexatious and inconvenient. For these reasons he did not feel himself able to make a proposition; but he promised to consider the subject. The matter was brought before me, and precisely the same objections were raised when I came to consider it. The number of brewers had diminished at the time; but, still, we had to consider—is it safe in the interests of the Revenue to collect taxes which produce £8,000,000 from 23,000 persons instead of from 8,000? Is it safe to do it when you consider that the process of brewing is far more easy than the process of malting; and will it not be necessary, if the change is made, to introduce restrictions into the brewing trade? I did not see my way to deal with the question; my right hon. Friend is bolder, and is attempting to deal with it. I will not say anything with regard to the difficulties he has to encounter. The number of brewers is larger than the number of maltsters, and it may be increased by the new system. [Mr. GLADSTONE dissented.] My right hon. Friend shakes his head; but, at any rate, it would be easier to set up an illicit brewery than an illicit malt kin, and brewing takes a shorter time and requires less apparatus. That is a point which is of serious importance to the Revenue. It has been said that cooperative arrangements for brewing might have furnished a means of evasion; but I am glad to hear that that is to be guarded against in the Act. There are two questions which arise. One is, what will be the financial effect of the change? and the other is, whether it is necessary to pay such a price as we are asked to pay for it? Financially, the change will prove much more favourable to the Revenue than we have hitherto been led to expect. In the Paper placed in our hands it is stated that the amount of Beer Duty receivable in five months will be £3,800,000. I should like to know whether this may be taken as a fair sample of the year? I understand from the right hon. Gentleman it may not, and, therefore, I may not pursue the calculation; but if that might have been done, the Beer Duty would have produced £750,000 more than the Malt Tax. As to the price we have to pay, I admit there is much good in the proposal, provided we are secured against fraudulent evasion. You ought not to look a gift horse in the mouth; but this is not exactly a gift horse, because you have to pay for it, and in a manner extremely unpleasant to a large number of taxpayers, by an addition of 1d. to the Income Tax, at an inconvenient time of the year, to the upsetting of arrangements made on the basis of a lower rate of the tax. It will be a serious addition to the burdens of the Income Tax payer at a time when we know he is not in a flourishing position. Although there is improvement in trade, and there are good hopes of the harvest, yet we know the country is still suffering materially from depression, and an increase of the Income Tax is by no means an acceptable proposal. There is considerable force in the question which has been asked—why should you lay this upon the Income Tax payers, and why not put it upon the beer drinkers? The reply is that it is a good investment of the penny, and that we should gain the advantage of being able, at any time when we want a larger Revenue, to raise it in a simple manner by an addition to the Beer Duty. That is an important consideration; but it cuts both ways. An addition to the duty on the beer consumed by the people of this country is likely to be unpopular, and may lead to inconvenient consequences. It is exceedingly difficult to raise additional Revenue by additional taxes of this kind on articles largely consumed by the working classes, as we found when dealing with the Tobacco Duties. The consumer expected the same quantity for his money, and so, in order to meet the additional tax, the dealer found it to his interest to tamper with the quality; and the same may happen in the case of beer. But I do not care to prophecy all these remote consequences. It seems to me the Budget, as a whole, is hardly justifiable in respect of the time when, and the grounds upon which, it is brought forward. Without denying there is a great deal of good in it, I think there is not sufficient justification for disturbing the financial arrangements of the year at this season. I think there was very great want of judgment in taking the particular line that was taken with regard to the Commercial Treaty and the Wine Duties. As to the Malt Tax and the Beer Duty which is proposed, it is an experiment which is to be tried under conditions that cannot but cause anxiety to the guardians of the Revenue; and with regard to the Income Tax I must say it is a measure likely to be unpopular, and which can be hardly justified Sir Stafford Northcote in the eyes of those upon whom we call to pay it. Considering that the main proposal is not to involve any loss of Revenue, but is to increase it, it would have been better—if it had been thought necessary and desirable to make the change this year—that arrangements should have been made for carrying it into effect without additional taxation. I believe it could have been done by some arrangement which would have been justified. You were not going to incur additional expenditure; you were not surrendering a tax; you were only transferring it to a form in which it will be more profitable. I have no intention of objecting to the second reading of the Bill; but I hope when we get into Committee we shall be in a position to criticize to more advantage some of the details to which I have drawn attention.

MR. CARTWRIGHT

said, he approved the proposal of the right hon. Gentleman to abolish the 27 degree standard as the point of dermarcation between the so-called natural and artificial wines; he also approved of the lowering of the limit of strength for wines below 42 degrees, because that point was so high as to encourage the manufacture for the English market of wines imperfectly fermented through an excessive addition of spirit. To charge the duty according to the alcoholic strength of the wine would avoid all danger of strong wines being made use of for the purpose of illicit distillation. He must, however, take exception to the scale of duties as proposed in the Bill, because it involved a gradation by degree which was certain, in his opinion, to cause great trouble, to lead to disputes between the merchants and Custom House authorities, and prove vexatious to the trade. The present system of charging the duty upon wines had operated adversely to the interests both of the consumers and of the importers, by stimulating the importation of highly brandied but badly fermented wines. The bulk of the bottled wines was imported from Germany and from France; whereas the wines in wood came to this country from Spain and from Portugal, and great care was required in the re-adjustment of the duties not to place their wines in a worse position than the light wines of France. A Return made in 1835 showed that the Peninsular wines, which were of a high alcoholic strength—namely, from 35 to 37 degrees—paid upon the scale then in use 225 per cent more than was charged upon the light wines of 20 degrees, and he was glad that this inequality was about to he reduced. The Committee on the subject had drawn up their Report with a desire not to go beyond the Order of Reference, and to leave the delicate questions involved to be dealt with, as much as possible, by the Executive; but they felt that the alteration in the Wine Duties was a matter which closely affected our commercial relations with other countries. He thought that when they were altering the Wine Duties they ought to have framed the scale in such a way as would have facilitated, to a great degree, the consumption of wine, which was only drunk in the proportion of about 3 per cent of the alcoholic strength to the total consumption of alcohol in this country. The heavier wines were, in his opinion, unduly burdened.

MR. SLAGG

said, that Her Majesty's Government deserved the thanks of the House for the action they had taken with respect to the negotiations with France, which he believed were fraught with great promise to the commerce of this country. The Legislature usually paid too little attention to matters favourable to the raising of revenue, and too much attention to matters which involved its often lavish expenditure. He, therefore, thankfully acknowledged the efforts of the Government to extend the commercial relations of the country with France. The late Chancellor of the Exchequer had expressed his regret that we had no assurance that we should get from France some return for the duties we were surrendering. So far as he understood the letters which had been interchanged between the two Governments he thought they had that assurance. The negotiations had been, and he hoped and believed would be, carried on on that basis. He regretted that such negotiations were necessary, and that France was not prepared to do voluntarily that which was manifestly for her own good. They had, however, to face the condition of things which existed. They were bound to reduce import duties when the Revenue enabled them to do so. The French and other Governments would not approach us unless we brought something in our hands in order to induce them to bargain with us; and the only thing we could bring to the French Government was the Wine Duty. The Treaty of 1860 had been, to some extent, foisted upon the French people. They regarded it as having been the result of underhand negotiations, and that fact had embarrassed us in all our negotiations since that time. A different state of things now, however, existed. France had made an approach to us, and it would be adverse to the interests of the country if the House of Commons and the public opinion of England did not welcome that approach. The products of France were required here, and our products found a ready market in France. In that country they had to deal with a prudent, solvent, and enterprizing class of traders; not, perhaps, so bold or enterprizing as English traders, but that was more than made up by their prudence and solvency. France, too, furnished the key to our Treaty relations with other countries. With regard to Spain and Portugal, we had lost a valuable trade, and it was of the utmost importance that we should come to terms with those countries. In consequence of the Wine Duties, the Spanish Government had imposed such restrictions on the import of English goods as almost to annihilate our trade with the country. Great advantages had, however, resulted from the Commercial Treaty of 1860 with France. Before that Treaty, the textile, stoneware, glassware, hardware, cutlery, and other imported industries were excluded from France. In 1859, our exports to that country amounted to £4,000,000 only, and our imports to £16,000,000, while in 1878 our exports had risen to £14,000,000 and our imports to £41,000,000; and he saw no limit to the increase in the trade if satisfactory terms were made in the new Treaty. Such negotiations as the Government were engaged in in France, and a mutual interchange of opinions, formed the best means of teaching Frenchmen their true trade interests. He rejoiced at the excellent understanding developed between the two countries by the Treaty of Commerce of 1860 and similar engagements. Let anyone compare the heated, jealous, and angry temper which prevailed in the days of Lord Palmerston with the calm, friendly, and businesslike relations that existed to-day. He believed that the good terms upon which England and France were with one another would gain in intensity after the acceptance of the Treaty now proposed by our Government, and would afford another guarantee for the maintenance of peace.

MR. ORR EWING

said, that the hon. Member for Manchester (Mr. Slagg), who had just spoken, complained of the duty upon French wines being only reduced to 6d., and put forward a wish that it should be reduced to 3d., on the ground that the prime cost of wine was 8d. per gallon. He thought the hon. Member would be astonished to hear that the prime cost of whisky was something like 1s. 6d. or 1s. 9d. per gallon of proof spirit, and that there was a tax upon that of no less than 10s. Surely that disparity was much greater than the one he drew attention to. The hon. Gentleman seemed to consider that their import duties ought to be reduced according to their financial condition. Happily they had but few import duties to reduce, for the only one they had was that on wine, brandy, rum, tea, and coffee, which were luxuries of life. He would like to ask the hon. Gentleman if he proposed to reduce the duty on wines, brandy, and rum in proportion to the condition of the country from the financial point of view, without doing justice to the distillers and brewers of the country, by reducing the duties upon the articles they produce in proportion. He did not think that he could seriously mean such a thing, and the country would not submit to it. The hon. Member for Oxfordshire (Mr. Cartwright) thought that the great defect of the proposals of the Chancellor of the Exchequer was in not imposing an increased duty according to the alcoholic strength; and he suggested, as a way of getting out of the difficulty, an ad valorem duty. He said he had no doubt that they might be subjected to fraud under an ad valorem duty, by putting a smaller value upon wine imported into this country than it was really worth; but he afterwards thought as to that that they had a remedy at hand, because they had their Custom House officers to watch, and if they saw that too low a value was put upon the wine which was imported they could take possession of it. He (Mr. Orr Ewing) was afraid, however, that if they allowed of the Customs confiscating wine which was considered as of too low a rate of value, the Government would become a great wine merchant, because it would be so often tried that they would take possession of a great quantity of wine which he presumed they would sell and not destroy. He was quite satisfied that if they looked at the subject from all points of view it would be seen that the suggestion of the hon. Member, if carried out, would lead to serious difficulties. Then, as to the remarks of the right hon. Member for Montrose (Mr. Baxter), he seemed to have a great dislike to whisky, and could not work himself up to the enthusiasm which Scotchmen generally do in demanding that justice or some approach to justice should be done in regard to taxing whisky in comparison with wine and beer, and he asserted that it would be most injurious to the interests of Scotland if whisky should be taxed at a lower duty. He disputed that point. There was a common belief among hon. Members, and among Englishmen especially, that Scotland was a much more dissipated nation than England. The very reverse, however, had been proved, for if they took the quantity of alcohol that was in wine, beer, and spirits drunk by the people of England, compared with that drunk in Scotland, they would find that the people of England drank at the rate of 50 per cent more than the people of Scotland. He felt thankful that the right hon. Member for Montrose, although a Scotchman, was not Chancellor of the Exchequer, because he felt very certain, from the remarks which the present occupant of that Office made in his Budget speech, that he had a much more kindly feeling and a much more kindly intention towards amending the discrepancy in the taxation of England and Scotland than the right hon. Member for Montrose indicated in his speech. He had listened with great interest and satisfaction to the speech of the right hon. Gentleman the Chancellor of the Exchequer, when introducing his Budget to the House. But he did not concur with his proposals as to wine, and he regretted that he should have thought it necessary to put an additional penny on the Income Tax to carry out his proposals. Still, the change he proposed to make by abolishing the Malt Tax and putting a duty on beer, inaugurated a new, and what appeared to him (Mr. Orr Ewing) to be a sound system, and would be a mine of wealth to future Chancellors of the Exchequer, who would be able thus to raise more taxation in an emergency. He trusted, however, that the means thus at command would be used to readjust taxation. By an increased taxation of beer, they might abolish the tea and coffee duties, and even the Income Tax. There was no part of the right hon. Gentleman's speech which gave him more satisfaction than that part in which he announced his intention of abolishing the Malt Tax. The right hon. Gentleman had said— Now, let us consider what that entails. It means, in the first place, that we are to do away with a revenue approaching £8,000,000. It is quite evident that £8,000,000 are not to he had to fill a gap of that kind without financial changes of the most formidable kind—I would say, in a financial sense, of a revolutionary kind. Even this is not the greatest objection. Let us consider the gross inequality which would he established by such a measure, and that in more senses than one in a country like this, where we raise one-third of our Revenue, or something like it, by taxing alcoholic drinks. You would say, in respect of one of these alcoholic drinks, that it should be set entirely free, and that the other two should he made subject to a heavy duty; so that the man who drinks a glass of whisky-punch, even though he dilutes his spirit with water down to the weakness of beer, would be subject to an enormous tax, while the beer-drinker would pay nothing at all. The inequality would be so gross that such a proposal would he inadmissible. But the inequality is not only between the different kind's of alcoholic beverages, but the inequality goes much further. Consider what it would he between the three countries which make up the United Kingdom. Beer is the standing and staple drink of the people of England, but whisky is the standing and staple drink in the same proportion of the people of Scotland and the people of Ireland, and you would he about to establish a state of things in which the staple drink of England should he entirely removed from a tax, and in which the staple drink in Ireland and Scotland should continue to contribute many millions to the English Revenue."— [3 Hansard, c clii. 1638–9.] He was grateful for this frank admission that Scotland and Ireland had a deep interest in the mode and extent to which the people of England contributed to the Exchequer for the alcohol they consumed, and that it would have been unjust to these countries that beer should not have been taxed when the Malt Tax was abolished. But he wished to point out to the right hon. Gentleman, and to the House, that he did not do full justice to Scotland and Ireland by this Budget, because he only proposed, to put a duty upon beer, porter, and ale equivalent to the present Malt Tax. He hoped that in future the Three Kingdoms would be put upon an equality with respect to the taxation on the alcohol they consumed. Taxation on alcoholic drinks should be laid on in proportion to the amount of alcohol they contained. This was the only just principle, and, if it were adopted, no foreign nation would have any ground to complain. How did the matter stand at present? Whisky and other spirits paid 10s. per gallon on proof spirits if distilled in this country; and if they were imported from foreign countries, they paid 10s. 5d. —.the 5d. being paid to compensate the distiller at home for some supposed loss sustained owing to our more stringent Excise Laws—while Spain and Portugal paid on an average 6s. per gallon of proof spirits, and French wines paid on an average 4s., whereas beer paid only 1s. 8d. per gallon of proof spirits. Was it therefore to be wondered at that these countries complained that free-trading England should give such an enormous advantage to the home manufacture of beer? The right hon. Gentleman, by his Budget, intended, to a certain extent, to lessen this inequality by lowering the duty on light wines of 20 degrees to 6d., adding 1d. for every degree up to 35 degrees, so that wines of 20 degrees of strength, which was one-fifth of proof spirits, would only pay 2s. 6d. per gallon of proof spirits, or one-fourth of what was paid in respect to whisky or other spirits. He would like to ask the right hon. Gentleman if this was just to Scotland? He was sure that he must answer that it was not. He had another objection to the proposed alteration of the duty upon wine, and that was the manner in which it was to be done. Power was given to the Government to reduce the wine duties, in order that they might give some sop to the French to induce them to arrange a more favourable Commercial Treaty with this country. He disapproved of this mode of arranging our fiscal duties. We would be placed in an awkward position if we determined at a time of great emergency to increase the duty upon beer. We would be prevented from increasing the duty upon wine by our hands being tied by this Treaty. The only just principle was to tax all alcoholic drinks according to their alcoholic strength. He did not propose that they should raise the duty upon wine and beer at present to the high duty upon whisky and other spirits, and he thought the duty upon whisky should never be reduced. He felt grateful to the right hon. Gentleman for the courage he had displayed in grappling with this drink question by abolishing the Malt Tax, and putting a tax on beer, which was one of the most important measures proposed to the country since the great Free Trade measures of Sir Robert Peel. The question had been for many years before the country. He (Mr. Orr Ewing) had in and out of the House advocated this change. In the Budget discussion of 1874 he said— There is but one way by which the malt tax can he repealed, and I trust the Chancellor of the Exchequer will have the courage to grapple with the question—by placing brewers under the Excise, and charging them for their production, according to its alcoholic strength. If the right hon. Gentleman would have the courage to do that, he would have funds not only to abolish the malt tax, but the tea and coffee duties, and the income tax, and would have a large sum to devote to reduce local taxation. But above all, Sir, he would have the satisfaction of feeling that he, an English Chancellor of the Exchequer, had done justice to Scotland and Ireland, who were powerless of themselves to effect the change in equalizing the taxation of the three countries in their national beverages."—[3 Hansard, ccxviii. 1194.] The Scotch Members and Scotchmen generally would be thankful to the right hon. Gentleman for grappling with this important question.

MR. M. A. BASS

desired to say a few words on the subject of this transfer of the Malt Tax to a duty on the manufactured article—not so much because he, in common with a large body of traders, was interested in the question, as because he also more directly represented a large body of gentlemen whose interests he feared would be prejudicially affected by the proposed change. They deprecated the change that was proposed both in principle and detail. They were told that three classes of persons would be benefited—namely, the farmer, the brewer, and the consumer. They all knew that for the last 50 years the question of the Malt Tax had been made a political stalking-horse out of which to make political capital with the agriculturists; but the more the question was looked into the more adverse the proposed change would appear to be to the real interests of the farmer. The Prime Minister, in introducing his Budget, made no secret of what would be its effect. He said— I am strongly of opinion that a tax like the Malt Tax has a powerful effect in gaining an artificial preference for a particular commodity grown by a farmer to the exclusion of other commodities. He thought there could be no doubt that that was the effect of the Malt Tax. The present excise regulations practically confined the brewer to the use of barley in the shape of malt. There were few countries indeed that in ordinary seasons could grow barley which could compete in quality with that produced in this country. Barley, in fact, was the one article in which the British farmer could compete with advantage with his foreign competitor. They had heard a good deal of protection to the farmer. He should like to ask the House what better form of protection the farmer could possibly have than a system of regulations which compelled the brewer to make use of a particular article manufactured in a particular manner, and that article one in which the British farmer was preeminent. He knew that it was said that the tendency of the present tax on malt was unduly to push up the better class of barley at the expense of the lower. He would not deny that, to some extent, that might be its effect; but, if so, so much the worse for the grower of the better class of barley when the Malt Tax was removed and placed upon beer. But, at any rate, under the present system of taxation, large quantities of medium barley were malted; and that was due, to a great extent, to the preference given to that grain by the present Excise regulations. But he should like to ask the British farmer how he considered that he would fare in future when all restriction was removed on the use of materials by brewers? He would have to compete with the whole world in beer-producing cereals, as he had now to do in the production of food-producing ones. At present the foreign maltster was handicapped by the heavy duty on malt; but when that duty was removed he would, with his cheaper labour and the low rates of carriage, become a formidable competitor to his British rival. The Prime Minister stated that a duty of 6^*. on the average barrel would impose no additional burden on the trader, and almost in the same sentence he told them he was about to get £400,000 more from the trader and to impose additional restrictions on him at a cost of £40,000 a-year to the Revenue. Those who were affected by the proposed change had gone carefully into its details, and on the basis originally propounded by the right hon. Gentleman they thought that the Revenue would benefit to the extent, not of £400,000, but more nearly of £1,400,000. The present Malt and Licence Duties amounted to 22s. 8½d. per quarter. It was proposed to raise that to 25s. The right hon. Gentleman assumed that one-third of the maltster's profit, or 10d., was due to the Malt Tax, and that the restrictions about to be removed would be worth another 1s. to the consumer; and he added 5½d. to give the turn of the scale to the Revenue. He produced a total of 25s. per quarter, and afterwards reduced it to 24s. by throwing them back 1s. for waste. He had somewhat modified his proposition that night. Those interested in that business were unable to see on what basis the consumer would gain the benefit of 10d. on the maltster's profit by the removal of the tax. They denied that the Excise restrictions on the making of malt were any appreciable burden either on the procedure or on the buildings of the maltster. Speaking on the advice of responsible and intelligent managers, and as a member of a firm that made more malt than any other maltster in the Kingdom, he could assure the right hon. Gentleman that the present Excise regulations did not impose any appreciable restrictions on their business, and that if they were done away with they would neither alter their buildings nor their procedure in any respect whatever. But they objected to the right hon. Gentleman's assumption that 24s. was a fair equivalent for the old duty of 22s. 8d.; and they objected still more to the basis on which that 24s. was to be assessed, and to the manner in which it was to be levied. The Inland Revenue estimated the produce of a quarter of malt to be four barrels of 1,055 gravity, equivalent to 79.2lb. of extract. On that assumed standard a duty of 24s., or at the rate of 3.63d. for every pound of extract, was to be levied. But they contended that the minimum average produce of a quarter of malt was not 79 l-51b., but 85lb. That at 33-5d. per pound would make the duty to be paid on each quarter of malt 25s, 8d., or 1s. 8d. per quarter more than the assumed tax of 24s. Again, the Malt Duty had hitherto been calculated on the number of quarters of barley steeped—not on the number of quarters of malt made from a given quantity of barley. On the average, 100 quarters of barley produced 105 quarters of malt, and the extra five quarters had not paid duty, acting, in fact, as a kind of discount or rebate, and making the duty in practice about 20s. 8d. instead of the nominal sum of 21s. 8d. But now the actual produce of the malt was to be taxed; the whole 105 quarters produced from each 100 quarters of barley would pay duty in the shape of beer extract, and thus an additional 1s. per quarter would be laid on the manufacturer. The total amount of the duty would be 26s. 8d. per quarter, or an addition of 4s., as compared with the old tax of 22s. 8d. There were 7,200,000 quarters of malt produced last year, and with the new tax the right hon. Gentleman would get 4s. a-quarter additional, or £1,400,000. The right hon. Gentleman had held out some hope of concessions. He proposed to give them 6 per cent instead, of 4 per cent for waste. That was 6d. per quarter, and it would reduce the £1,400,000 to £1,200,000. Every point in the scale meant a difference of 5d. per barrel; and if the right hon. Gentleman gave them a real, substantial alteration of the scale, many of their objections to his proposal might be removed. The right hon. Gentleman, in introducing his Budget, said he wished to make the regulations as easy as possible to the trade. He said there would be no interference with their premises or times of brewing, and that brewers could brew from what they pleased, and how they pleased. The new method of assessing the tax on beer was, however, derived from Austria; and he understood that the Austrian brewers actually groaned under their oppressive Excise regulations, and were now endeavouring to get the system on which the tax was collected from them modified. The Bill of the right hon. Gentleman absolutely bristled with pains and penalties; and the restrictions on malting, which were now comparatively harmless, were to be transferred in a more onerous and inquisitorial form to the brewer. An Exciseman must live day and night on the brewers' premises, not a very pleasant matter to begin with. Again the Exciseman would be permanently installed in their fermenting rooms, and would supervise and interfere at that special stage of their manufacture which most demanded care and attention, and he would gain a knowledge of those details which they wished to guard most jealously from the eye of a stranger. Then they were to be liable to eight separate penalties of £100 each, and to one of £50. There would be a far greater number of entries and checks than under the old malt regulations. All their vessels were to be fixed in a way to be defined by the Inland Revenue Department, and conditions were laid down which a practical brewer would tell them it was impossible to fulfil, but which, nevertheless, if not complied with, would subject them to fines of £100. They would have to keep the produce of one brewing separate from the produce of another for 24 hours. That was impossible, and yet the brewer would have to pay a fine of £100 for not obeying that regulation. No doubt the Excise officers would meet them fairly; but those things showed the animus of the Bill. The Bill was of a most vexatious and inquisitorial character. The Prime Minister said that he was removing restrictions on the making of malt which would be worth 1s. to the consumer; but he took nothing off the brewer for imposing far more objectionable restrictions on the manufacture. No doubt the number of private breweries had been decreasing from year to year; but he greatly feared that under the stimulus of the bonus of 6s. a-quarter private breweries would largely increase. Hitherto the private brewer had paid the full amount of duty on the malt; now he would have a bonus of 6s. per barrel, and would have to pay only a nominal licence tax. He was glad to hear that private brewing was to be restricted to the occupier; he was satisfied that if that were not done they would have co-operative breweries springing up in every part of the country. He failed to see how the employer of labour could be prevented from brewing large quantities of beer at a cheaper price than he could buy it, and so paying wages partly in beer. As to declaration and assessment by the occupier himself, was it in human nature for him to be more punctilious than many were in assessing themselves for the Income Tax? He feared that in the ultimate result the Revenue would be defrauded to the detriment of the Excise and of the honest trader, or the Inland Revenue, in self-defence, would be compelled to exercise a more stringent supervision, which would lead to an agitation for the withdrawal of all restrictions on private brewing. On the assumption that the brewer would derive a great advantage from being able to use all sorts of materials in substitution for the good, old-fashioned, honest malt, it was proposed to put upon him additional taxation to the amount of 3s. 6d. per quarter, and we were to pay 1d. more of Income Tax; and by a cruel irony the money thus obtained was to be used to cheapen French wines to the extent of £300,000 a-year in order to conciliate the French producer, whose Government was about to impose additional taxation on the import of beer into France. No sufficient reason had been shown for so great and so sudden a fiscal change. He believed the farmer would suffer most of all from the reduction in value of the higher qualities of barley, from the competition in foreign malt, the competition in maize, and other cereals; and he believed the consumer would get beer neither cheaper nor better; while the brewers and the public would have to pay heavily in increased taxation, and the manufacturer would be subject to harassing and inquisitorial supervision and restriction.

MR. WATNEY

said, that, as the right hon. Gentleman only desired a substantial equivalent for what he gave up, he believed the brewers would have no difficulty in showing that their case was a hard one, and in appealing to his sense of justice. The real question was the extract per quarter. The London brewers, who had had several meetings, put it down at 85 lb.; and the Chancellor of the Exchequer was, therefore, taxing them more heavily than he imagined, as he had evidently calculated the new duty on a supposed extract of 80 lb. per quarter. The 22s. 8d. the Government got now would be made 26s. 9d. They had submitted to him a memorial bearing on the supposed benefit of 10d. per quarter in respect of the malt duty and of 1s. per quarter on account of restrictions. The maltster had not kept malt longer than six months; he had been able to get three months' credit from the Government by giving a bond, and almost three months by paying 3¼ per cent per annum to the Revenue, which came to 2d. per quarter. As the maltster was thus able to hold malt for six months, at a cost of only 2d. a-quarter, it was not fair to say he would benefit to the amount of 10d. by the duty being taken off. The estimated profit of 2s. 3d. per quarter was not at all too much for buying barley, holding the malt some time, and running the risk of the market, and it was not to be supposed that of that 2s. 3d. so much as 10d. could be saved by not having to pay the duty. At present the restriction pressed very lightly indeed on the maltster; all the improvements that could be made were incorporated in the Excise regulations, and without the Malt Duty the malting business would have to be carried on in the same way. In the main items of expense —rent, labour, and coal—nothing would be saved. In future there would be restrictions, not on the finishing, but on the middle stage, when they gave most trouble. The removal of the old Beer Duty in 1830 was considered a very good thing by the brewers. It was 10^*., but was reduced to 9s. 2d. by allowances; and when it was taken off the price of beer was reduced 12s., or 2s. 10d. more than the actual duty taken off. The restrictions to be put on the brewers would be much more onerous than those necessary for collecting the Malt Duty. The question arose whether the capacities of all the vessels used were to be tested, and whether the stock was to be constantly checked, as in the case of the distiller. The duty was to be levied on what was called "the square"— when the beer began to ferment. Were they to be prohibited from putting in afterwards sugar, saccharine, or wort? If not, there would have to be a strict guard to protect the honest trader. If the brewers could make out a good case, and could show they were not benefited to the extent supposed, he hoped the Chancellor of the Exchequer would modify his proposal as affecting them. The figures arrived at by the London brewers corresponded with those quoted by the hon. Member for Staffordshire (Mr. M. A. Bass), and they showed that the brewers would have to pay a tax of 26s. 9¼d. per quarter, instead of the 22s. 8d. which they now paid. He trusted that in these circumstances the right hon. Gentleman would consent to receive a deputation on the subject, who would be able to give him ample proof of the accuracy of their views with respect to it. He was glad that the right hon. Gentleman had taken into consideration the question of waste, and that the allowance for waste would be increased from 4 to 6 per cent. Without entering into a discussion with reference to the clauses of the Bill, he might say that he agreed with the hon. Member who had last spoken that many of them would be required to be altered in Committee—for instance, the clause fixing the time that all beer should be collected within the fermenting square within six hours, whereas in hot weather it was sometimes impossible to collect it within 18 hours. Then it was proposed that the beer should remain in the square 36 hours, whereas some brewers kept theirs in it only 12 hours. It was quite evident that the right hon. Gentleman had drawn up the measure without consulting the trade. He was, however, satisfied that the attention of the Government had only to be drawn to these points for them to be at once altered. He objected to the limit of £20 in value being fixed for the exemption of private brewers. He did not think that in proposing such a heavy duty there ought to be any exemptions at all, and certainly they ought not to extend beyond the agricultural labourer pure and simple. A farmer who was in the receipt of an income of £200 or £300 a-year had no claim to exemption; and he therefore thought that the rental limit of £20 should be reduced to £5, and he begged to give Notice that he would move an Amendment in Committee to that effect. In conclusion, he hoped that when we were entering into a Reciprocity Treaty with a foreign country we should require them, as some compensation for our reducing the duty upon their light wines, to reduce their duty on our beer.

MR. DUCKHAM

urged that in the present depression of the agricultural interest it was necessary that something should be done for the farmers. He accepted the abolition of the Malt Tax as a boon; and, although it involved an addition of 1d. to the Income Tax. The cry urged by farmers was unheeded when the heavy addition of a 10d. Income Tax was imposed upon them for the abolition of the Turnpike Tolls, and a further increase of 1s. to 1s. 6d. Income Tax for the purposes of education. The thanks of the farmers were due to the Premier for the proposals he had submitted, and there was a general feeling that it was only right to tax the manufactured article instead of the raw material. If the new tax would produce an additional revenue of £1,000,000 per annum, as had been stated, it would be a fine speculation.

MR. O'SULLIVAN

complained of the large amount of increased taxation put on Ireland by the operation of the scheme of the First Lord of the Treasury. At present the scale of taxation varied from £3 on licensed houses up to £ 11 a-year; but, by the new scheme, it would range from £5 to £24. On the average, the increase would be about £2 5s. a-year in Ireland. He would probably be met with the ob-jection—" We give the power to sell wines as well as beer and spirits." He found, however, that as about one-fourth of the beersellers paid wine licence, the increase in the scale proposed by the right hon. Gentleman would have the effect of placing on Ireland no less a sum than £80,000 a-year in the way of additional taxation. He appealed to the right hon. Gentleman's strong sense of equity to say whether Ireland did not pay quite enough taxation already without adding to it. According to the old scale, the duty charged on the small retailers, those who were valued under £10, was £3 6s. 4½d.; whereas, by the new scale, the duty of £5 would be imposed, and this additional taxation would fall on those who were the least able to bear it —namely, the poorest class. The second scale of duty was to be advanced from £5 10s. 3d. to about £8 10s. Considering the poverty and misery which prevailed in Ireland, he thought the increase altogether disproportionate and unfair. He expected he would be met with the argument that this additional taxation fell upon the people who took drink. To some extent, he admitted that it had; but the fact remained that this £30,000 a-year was to be taken out of the pockets of Irishmen to save the pockets of Englishmen, without the former receiving an equivalent. All he asked the right hon. Gentleman to do in adjusting this taxation was to impose less taxation upon a poor country with a small population than upon a country that was very rich and very populous, if there were scales of charges at all. There ought to be a different scale of charges on that principle between the two countries. Was it fair that a small trader in a village, whether in Ireland, Scotland, or England, with 2,000 or 3,000 inhabitants only to depend upon for a livelihood, should be charged as much duty as the wealthy trader in Regent Street or the Hay-market? It was true that the scale of duty would be regulated in proportion to the valuation of the trader's premises; but it was a well-known fact that some traders in the City of London received more profit in one week than small traders in country villages receive in the whole of the 52 weeks of the year. To apply the same scale to the small and the large trader alike was neither fair nor just. The scale ought to be regulated according to population, drawing the line at, say, 10,000 inhabitants. Another matter to which he invited the attention of the Prime Minister was that the Revenue of Ireland was raised according to the Government tenement valuation; the Income Tax, county cess, and poor rate were all raised on that basis; but an exception in favour of the Excise was made a pretext for increasing the licences of Irish spirit retailers. The Excise officer might now say—"I do not believe in the Government valuation; it is not sufficient. I will make a valuation of my own, and impose the tax accordingly." In that way an unfair and unjust tax would be levied. He, therefore, hoped the right hon. Gentleman would so alter the Bill as to have the tax levied on the Government valuation. If the right hon. Gentleman declined to do so, he would himself move an Amendment to that effect in Committee; and, if necessary, press it to a division, because he knew of cases occurring in Ireland where the Excise officer had increased the valuation, though the Government valuation was at the full amount. With regard to the Amendment of the hon. Member for Glasgow (Mr. Anderson), he, for one, could not support it. He preferred the proposal of the Prime Minister, who wished to raise £1,000,000 by an increase of the Income Tax, while the hon. Member for Glasgow wanted to raise it out of beer. This would be unfair, because a Beer Tax would be put on the poor man who had no income but his daily labour, while the Income Tax would fall on the man who had an income. The proposal of the right hon. Gentleman was, therefore, fairer than that of the hon. Member for Glasgow. A man with an income large enough to render him liable to Income Tax might easily curtail his expenses so as to pay the additional penny in the pound.

MR. D. DAVIES

said, he did not rise to find fault with the Budget, but to make an earnest appeal on behalf of the farmers, who complained bitterly of the Income Tax. He did not object to pay the Income Tax out of the profits he made; but the farmers, who had been supplying his workmen with cheap food, had fair ground of complaint. The landlords had, to a certain extent, come to the rescue of the farmers; but they had only begun to do it, and if more help was not given, he believed a large number of farmers would be ruined. He appealed to the right hon. Gentleman to take into his consideration the case of the farmers in connection with the Income Tax, and to exempt farmers from payment of Income Tax if they could produce a balance-sheet showing that they were not making a profit. He believed that many of them, owing to bad harvests and foreign competition, were not only realizing no profit, but were losing their capital.

COLONEL BARNE

believed that, as the law stood at present, if the farmer could show that he was not realizing a profit, he could, on appealing to the Commissioners, obtain an abatement of Income Tax. He complained that, while the right hon. Gentleman had raised the licences of the wine merchants and publicans, no increase had been made on grocers' licences. This was very much felt by the publicans and the wine merchants. It was well known that the grocers' licences gave great facilities for secret drinking, especially among women.

MR. WILLIAMSON

rose to express the great satisfaction with which he regarded the proposals made by the Chancellor of the Exchequer in his Supplemental Budget—a satisfaction which he was sure would be felt throughout the country. There was one point referred to by the hon. Member for Oxfordshire (Mr. Cartwright) to which he desired to call attention. He referred to the 20 degrees of alcoholic strength upon which it was proposed to impose a duty on light wines. He was, however, informed that the great bulk of common wines grown in France ranged from 12 to 13 degrees, and he apprehended that if they admitted those wines on a lower scale of taxation the French Government would be satisfied with the fixing of such a limit as 6d., which would stimulate the import into this country of cheap wines. The limit of 15 degrees, he thought, might very well be adopted instead of the 20 degrees for the limit of 6d. duty. He had no sympathy with the sentiments expressed by the hon. Member for Glasgow (Mr. Anderson), and re-echoed by the hon. Member for Dumbartonshire (Mr. Orr Ewing), for the taxation of whisky as compared with beer. The hon. Members argued as if Irishmen and Scotchmen were sent into the world on the express condition that they should consume whisky, and that there could be no disadvantage in making a broad distinction between ardent spirits and beer. There could, however, be no injustice, because Scotchmen and Irishmen were as free as were Englishmen to consume beer. But there might be a change in the national taste and habits and customs in Scotland and Ireland which might be of a manifest advantage. The hon. Member for Glasgow argued as if it were the duty of the Government to stereotype bad habits and customs; but he would find that in 1751 and 1753, legislation with respect to the Gin Acts brought about a highly beneficial effect on the public morals, and he thought great advantage to the public morality would be brought about by the proposed changes of the right hon. Gentleman the First Lord of the Treasury. And, just as there must be a broad distinction between the duties charged on ardent spirits and the duty charged on beer, so must they continue to collect higher duties on the higher alcholic wines of Spain and Portugal than on the lighter wines of France. He hoped the right hon. Gentleman the Chancellor of the Exchequer would bring his powerful mind to bear on this question. The removal of the restrictions on the manufacture of beer with regard to malt would, he considered, bring about important results in this country. They knew that Bavarian beer was not made altogether of malt, but to a great extent of raw grain. Bavarian beer, he need not say, was a most excellent beer— and prizes had been awarded it in Germany, Belgium, and other countries because of its excellent qualities, but, perhaps, more especially because it could be kept in open vessels a long time without the chance of its getting stale—and this might be an important consideration with regard to the keeping of beer fresh over Sunday. In conclusion, he trusted the First Lord of the Treasury would be chary in making concessions with regard to the duty on beer, and he congratulated the right hon. Gentleman upon his satisfactory Budget.

MR. BIDDELL

was under the impression that he had heard the Chancellor of the Exchequer once say that wine could bear a good deal higher taxation than beer, which was the beverage of the poorer classes. At all events, those who could afford to drink wine, which was a luxury, could afford to pay a good tax for it. If he was correct in this supposition, the right hon. Gentleman was somewhat inconsistent in placing a tax on beer and facilitating the introduction of wines. The present was a very inappropriate time to increase the tax on beer, as they were called upon to take £300,000 off the duty on French wines. This, no doubt, would please Frenchmen, as it would stimulate the consumption of their wines in this country. Speaking generally, he approved the principles of the Budget, and thought a Beer Duty preferable to a Malt Duty. He hoped the right hon. Gentleman would reduce the poor man's licence from 6s. to 2s., and he would find a line ready drawn in the Small Tenants' Bating Act, which applied to houses rated under £6. His object in rising was to invite the attention of the right hon. Gentleman to the 33rd clause of the Bill, and to ask him to consider whether he would not omit the words, "and lands thereunto appertaining," thus giving relief to a very large number of poor farmers holding from 10 to 20 acres? That class was deserving of great sympathy. They lived as labourers did, but worked a great deal harder, and he trusted their case would be favourably considered, for no class were more worthy of having their burdens lessened, and no class required it more. He quite agreed with the hon. Baronet the Member for Carlisle (Sir Wilfrid Lawson) as to the vice of drunkenness; but he was at the same time strongly of opinion that good sound beer, in mo- derate quantity, was the best possible drink for working men. It suited himself if he had been working, and he should be sorry to see any legislation passed which would have the effect of preventing such persons from procuring at a reasonable price the liquor which was calculated to increase their strength for the duties which they had to perform. There was much good in the proposals of the right hon. Gentleman; but the Bill contained hardly a clause that he would not like to see amended.

MR. GURDON

said, he thought the Bill would give to the farmers a boon which they had scarcely hoped to obtain, and, on behalf of the farmers of Norfolk, he begged to thank the Government for its introduction. At the same time, he regretted that the measure would impose a tax upon persons who brewed their beer in small quantities for purely home consumption; and he should be glad if the right hon. Gentleman could see his way to lessening the amount of that tax.

MR. A. J. BALFOUR

trusted that the negotiations in reference to the Commercial Treaty with France might be brought to a successful issue, and, for that purpose, would gladly see large discretionary powers vested in the hands of the Executive. Hitherto the Government of this country had been able to offer something in exchange for the advantages given by foreign Governments in Commercial Treaties; but he feared that the means at the disposal of the Government by which these concessions were obtained were gradually, but with certainty, coming to an end. People occasionally talked as if foreign Powers modified their tariffs in the direction of Free Trade in consequence of their holding Free Trade doctrines. This was not so. They modified their tariffs because we gave them some substantial inducement to do so. But the substantial inducements it was in our power to give were nearly at an end. We had so simplified our own tariffs that any further simplification was almost impossible. The proposed reduction in the Wine Duties was probably the last, or nearly the last, bribe it would be possible for any English Government to hold out to induce a foreign Government to adopt principles of taxation which would be for its benefit not less than our own. Under these circum- stances, we must face the possibility of having to use threats instead of bribes. Painful as the necessity would be, it might be necessary to impose, or to threaten to impose, retaliatory duties. He admitted that a retaliatory duty was opposed to the spirit of our fiscal system, and was open to many abuses. It was a kind of peaceful war, and, like other forms of warfare, might cost money. Nevertheless, he thought that where a Minister was negotiating with foreign countries he should not be deprived of the strength he would derive in his negotiations from being permitted to employ some means of coercion. He must point out that to threaten retaliatory duties was not in any sense to revert to Protection. The object of a retaliatory duty was to influence a foreign Government. The object of a protection duty was to protect the home manufacturer from foreign competition. And, as the objects of the duties would be different, so also they would be imposed on different articles. He believed that, so far from such a retaliatory system being inconsistent with Free Trade, it would be calculated to promote its extension. They had induced foreign countries partially to adopt Free Trade; but that was done, not by argument, but by Treaties, and by Treaties alone. And he failed to see how, in the future, Treaties were to be negotiated, unless some such system as that which he had recommended were adopted.

MAJOR NOLAN

said, he found no fault with the general scope of the Supplemental Budget; but, with regard to one of its details—namely, the increase of licenses on retail publicans, he maintained that there was good ground for reasonable objection. As the proposal stood at present it must prove most oppressive on the poorer and struggling classes of licensed victuallers in Ireland. On an average their licences would be increased £2 per head, which would be a serious diminution on their net profits. Now, it happened that the licensed sellers of liquors in Ireland were generally retailers of other commodities. The county he represented was the second largest in Ireland, and yet he believed there were only eight publicans pure and simple in the county. All the rest sold groceries and other articles as their main business, and added the sale of liquors thereto. As a matter of con- sequence the profits gained from the sale of liquors were very small, and several severe blows had already been dealt at this branch of their trade by recent legislation. Not only had they to contend against the operation of the Sunday Closing Act, but the bad harvests of the last three years greatly affected their trade. The Irish publicans would be satisfied should the valuation of their premises be made upon the Griffith valuation, instead of the arbitrary value which might be put upon them by the Excise officers. He would also urge that the case of the small sellers should be taken into consideration, to whom it would be a great blow, considering the bad times through which they had lately passed and the small profits which they made, should their licenses be suddenly raised from £3 6^*. to £5; and he appealed to the Chancellor of the Exchequer to give them three or four years of grace before he imposed this new burden upon them. The loss to the Revenue would not be more than a few thousand pounds. The small hotels which existed throughout the country were useful to the bond fide travellers; the profits made in them, however, were very small, so that a small increase of taxation, if it did not shut them up altogether, would not, at all events, make them more comfortable to the travelling public.

COLONEL RUGGLES-BRISE

expressed great sympathy with the smaller brewers, many of whom, he said, would be absolutely ruined by the proposed changes. With reference to the proposition of the right hon. Gentleman as to agricultural labourers brewing at their own homes without paying any licence duty, he thought it would have been much fairer to take the Inhabited House Duty as a criterion than to propose that all those rated under £20 a-year should have that advantage. He wanted to know how a agricultural labourer was to brew in his own home? It would be necessary for him to build a brewhouse. Why should he not be able to brew in a farm-house, where he would find all the appliances ready to hand?

MR. LAING

said, he should not have interfered in this discussion had it not been for the advocacy by the hon. Gentleman opposite (Mr. A. J. Balfour) of retaliatory duties. Such a speech could not be listened to in silence by an earnest advocate of Free Trade. This ingenious theory of retaliatory duties was, in fact, only a disguise for their old friend Protection. Foreign Governments were not to be misled by threats of imposing such duties. For instance, let them take the case of the United States. If the United States could be got to modify their tariff on iron and other metals, it would be most advantageous to us. The only way in which we could work upon their fears was to threaten to impose a duty on grain and other provisions which came to us in such enormous quantities from America. That would be very acceptable to a large class of farmers, for they would be getting a certain amount of protection, and this would ultimately compel the United States to reduce their duties on iron. But would anyone seriously propose legislation to do that? If we took a single step of that kind, we would find ourselves in a commercial warfare with the whole of our customers all over the world, and we would have to retrace our steps with ignominy, or to arrive at the state of things which existed before the late Sir Robert Peel began to reform our tariff. He highly valued Commercial Treaties, if they could be secured without sacrificing principle on our part. He was satisfied of the great advantages of these Treaties with a country like France. But Commercial Treaties would be purchased at too high a price if we were to obtain them by falling back upon the system of commercial warfare. We might assume that we were a Free Trade nation, and that we were going on the principle of doing what we thought best in our own interest. But Commercial Treaties should be confined to those cases, such as France, where, having Wine Duties, it might be possible to obtain some practical results in the way of better commercial relations by reducing them. Anything further would be contrary to the principles of Free Trade, and would injure us. Some objection had been made by the late Chancellor of the Exchequer, at the beginning of the evening, in regard to a Supplemental Budget being introduced. But these objections could not be fairly applied to a case like this. Since the Budget of the late Chancellor of the Exchequer had been brought in we had had a General Election and a change of Ministry. The objections to a Supplemental Budget were only applicable where there was a continuity of Ministry. It was a great slur upon a Chancellor of the Exchequer and a Government that, after bringing in a Budget, they had to take it back and present it afterwards, in an altered shape, to the House of Commons. But the case was totally different in the present instance. The Budget was brought in at an unusually early time in the year. A new Parliament had been elected, which had changed the position of Parties, and this change had been effected in the belief that the Party now in power would give the country a better financial administration than the former Government. The country would, therefore, have been greatly disappointed if, when the new Parliament had met, and a Session of sufficient duration for the purpose was before it, the right hon. Gentleman the present Chancellor of the Exchequer had shown any scruples about altering the financial propositions of the year, and had not given the country the benefit of his great financial experience in framing a new Budget. If they required special circumstances to justify it, they had them in the new position of the French Treaty, which, undoubtedly, did require some discretion to be given to the Government in treating with France, and in the distressed condition of the agricultural interest, which made it important that if any boon was to be held out to that interest, it should not be delayed for another year, but should be given at once. As to the scale of licences to be charged, it was quite true that was a question of detail for Committee, to a certain extent; but he thought there was a question of principle which it would be well if the right hon. Gentleman made clear before they went into Committee—namely, whether the increased scale was proposed entirely in relation to Revenue, or with relation to social regulation, by encouraging places where food and other articles of refreshment were sold, as well as spirits, as against those places which dealt in ardent spirits exclusively. He did not see why the amount charged for licences should stop where it did. The highest charge for licences was but a trifle to a large gin palace or hotel, and he thought the sliding scale should be carried up higher to meet those cases. For his own part, it was better that there should be no exemptions, because it would be difficult to draw the line. The Government would have to consider what course they should adopt.

MR. MULHOLLAND

thought, from the course of the debate, that whatever might be the abstract objections to a Commercial Treaty, both sides of the House recognized the practical benefits that had resulted from the French Treaty, and were equally determined to support the Government in its negotiations with France. The extension of trade in 1860, which had exceeded the expectations of everyone, justified the policy of Commercial Treaties, and the Treaty, being followed by others with the principal nations of Europe, had had a moral effect that was as conspicuous as its material results. With regard to the Wine Duties, taking them in connection with the negotiations now going on, the proposal of the Chancellor of the Exchequer was probably the best that could be devised, though it seemed to him to introduce modifications that were, at the present moment, unnecessary. Some of the considerable changes might have been deferred until negotiations with Spain and Portugal had been entered upon, and the Government need not have shown their readiness to give France greater advantages than were asked for. As things were, there was nothing in the total of the Wine Duties of which anyone could reasonably complain. In fact, it would be generally admitted that wine was taxed lightly, in proportion to its value, rather than heavily; but there was an inequality which could not be logically defended, and a certain amount of hardship also in the largeness of the class of wines above 26 degrees. As the House was aware, the principle on which the duty was fixed in 1860 was that all wines between 26 and 40 degrees of strength should pay the maximum duty. The result of the adoption of that system was that wines of a low strength, as compared with those of a high strength, paid an excessive duty. Two modes of getting rid of this inequality of the duty had been proposed—first, to divide the class from 26 to 40 degrees in the middle; and secondly, to sub-divide it into classes of every 5 degrees of strength. Those modes, however, were open to the same objection as the present system, though in a less degree—namely, that there would be under them always an overcharge upon the wines of the lower strength in each class. He had, therefore, made a proposal in the Wine Committee of last year similar to that which the right hon. Gentleman now made, and it was a singular fact that every Member of the Committee who sat upon the opposite side of the House had then voted against that proposal. It was a satisfaction to him, and to those who thought with him, that a proposal which had emanated from their side of the House had been adopted by the right hon. Gentleman. The hon. Member for Oxford had revived a right of contract, which had engaged the attention of the Wine Committee last year; but he had omitted to mention that he (Mr. Mulholland) had succeeded in carrying an Amondment to his Report by nine votes to five— That the Committee are of opinion that the principle of the alcoholic scale should be maintained. This was in opposition to the proposal of the hon. Member, that wine should be taxed as a specific article, "Wine," at a uniform duty. He need not remind the House of the large proportion of the Revenue which was derived from the taxes on alcoholic drinks; and, with respect to both malt liquor and spirits, the tax was in direct proportion to the strength. On that principle would wine be made an exception? There was no practical difficulty experienced in taxing spirits for each degree of alcoholic strength, and it was given in evidence before the Wine Committee, that there would be no difficulty in applying that same principle to wine. There was one part of the proposal of the Prime Minister to which he hoped he would adhere; that was the proposal to put wine in bottle into the highest class. Wine in bottle was, as a rule, wine of a higher quality; and as it was not practicable to apply an ad valorem principle to wine—although, if practicable, it would be just— this exportation of bottled wines, would in a rough but practical way, attain that object. The French themselves acted on this principle. Their internal duty on wine in bottle was eight times higher than on wine in cask. Even on the lowest strength the proposal of the Prime Minister was only four times higher, and he might mention that the Customs Returns showed the value of wine ex- ported from Prance in bottle to be more than that, while the value of wine in wood was only just exactly the proportion proposed by the Prime Minister. The ordinary cheap wines would not be affected by this duty, as they were never shipped in bottle, the extra cost of freight and carriage on wine in bottle being more than they could afford.

MR. ALDERMAN W. LAWRENCE

remarked, that in this measure the Government had enunciated both a foreign policy and a home policy—a foreign policy in that they sought to obtain power to reduce the Wine Duties, if they could acquire corresponding advantages for the trade and commerce of the country; and a home policy in that they proposed to confer a boon upon the agricultural interests by substituting a Beer Duty for the Malt Tax. It had been admitted that the agriculturists would derive great benefit from the transfer of the duty on malt to beer. It was quite clear that any increase in the Revenue must ultimately be paid by the consumer; and he was not sure that the change might not increase the price of beer. Beer, if pure and unadulterated, was a great advantage to the people, and it would be a great misfortune if the price of the national beverage was increased. As to the increase of the duty on the licences, he was strongly opposed to such a proposal, as it was a great hardship on a large number of inn-keepers, licensed victuallers, dining-room and refreshment-house keepers; and would act unfairly, not only in London, but in many large towns in the country. Touching the licences, they had nothing to do with the principle of the Bill, and they might just as well be left out of it. The increase in the licences would be considered most unequal, most unfair, and unjust, and he saw no reason why the inn-keepers should be called upon to pay extra money when their trade was diminishing.

MR. GLADSTONE

said, it was not wonderful that this discussion had very much assumed the character of a debate comprising many subjects which might be more conveniently considered in detail when the Bill was in Committee. If, unfortunately, he should omit to refer in his remarks to any question of that kind in which hon. Members felt an interest, he should be glad to be reminded of it. In the meantime he would proceed to review the principal topics which had been mentioned. As regarded the Motion immediately before the House, he was not surprised that his hon. Friend the Member for Glasgow (Mr. Anderson) should have raised a question of this kind; but he was open to an answer from this point of view— that, whereas spirits had always been taxed as simply alcoholic drink according to the quantity of alcohol they contained, it was to a great extent deemed desirable not to encourage their consumption, but rather to bring it to what would be the minimum compatible with the collection of the Revenue. There was likewise a financial objection to his hon. Friend's proposal at the present time. His hon. Friend said—"Do not raise the money required to effect a change from the Malt Tax by taxing incomes, but raise it by taxing beer." Now, to get the necessary sum in that way within the present year, he must raise the tax on beer in order to provide for the next year's Service of the country to a very considerable extent, and there was not any reason to know at the present time whether the money would be required for the Service or not. It would be impossible for him now to ask the House to make an extensive change in the Beer Duty that would not only add to the price of the article, but would also enrich the Exchequer for the coming year, and all future years, to a very large extent, and without a knowledge on his part whether the money would be wanted or not. With regard to the Licence Duty, it would be quite open at a future stage of the Bill to consider whether there was anything exceptional in the mode of valuing licensing houses in Ireland which made it necessary to modify the proposals now submitted. It was not, however, a matter which he was called upon to attempt to develop on the second reading of the Bill, and at so late an hour. He could not agree with his hon. Friend behind him (Mr. Laing), who said this was not a Budget for Revenue. There was no doubt that a question of that kind could not be touched without raising several points of considerable difficulty in detail; but, among the general principles on which that part of the scheme rested, there was this to be borne in mind—that the main increase of licences would be borne by those establishments which had for their purpose the consumption of liquor to be drunk on the premises. That was the general principle on which the scale had been made. He would not refer now to many other objects which he had endeavoured to combine with that principle. A considerable authority to enforce the principle upon them was the excellent Committee of the House of Lords, which had justly observed that a large value had been added to drinking-houses of all kinds by the direct action of Parliament in the course of the last 10 or 12 years, and that in respect of this large augmentation of value so brought about by legislation no taxation whatever was imposed. While, therefore, he admitted that the detailed scale was open to observation, he could not hold out any expectation that the Government would depart from the general purpose of that scale. They certainly had not thought it would be just to introduce the principle of equal taxation and to carry it to all lengths as between houses that were mere drinking establishments and the case of hotels, because in the latter instance, where a large business was done, only a moderate part of it consisted in the consumption of strong liquors; and to tax largely, or, indeed, to tax at all, the trade that supplied ordinary provisions for the consumption of the people, was a complete novelty in itself—and if they were to tax the entire business of an hotel, they would be introducing a novelty of that kind. They were sensible, however, of the difficulty pointed out by his hon. Friend the Member for Orkney (Mr. Laing), and, in consequence of that difficulty, they certainly had compromised the matter, and had not pursued to the last point the principle of increase according to rated value. They had endeavoured to make a combination of various considerations which bore on the case; and he believed, that when the House looked into the matter, they would find it was not easy to make a different arrangement. The hon. Member for the City of London (Mr. E. N. Fowler) had asked what course would be taken with regard to the July dividends? He believed he had already stated that they would be levied as if these proposals had never been made, and the whole tax proposed to be added would be collected at the January levy. Coming to the observations of the Leader of the Opposition, he said that he must respectfully reserve his opinion that, when the entire Surplus that the right hon. Gentleman had proposed to provide was more than swallowed up; when the prospects of the Revenue were undoubtedly not in a high degree satisfactory; when it was rather more likely, unless we assumed that some decided change in connection with the harvest would take place, that the results would fall short of the Estimate than go beyond it; and when we had in view the possibility that the assistance of the House might be required for the purpose of meeting emergencies in India, it would have been possible for him to have gone through the Session without proposing some scheme by which to strengthen the position of the Exchequer. As to the Malt Duty, his right hon. Friend had minimized the benefits and maximized the inconveniences attending that transition. The right hon. Gentleman did not admit that the change now made from the Malt Duty to the Beer Duty warranted the imposition of a penny in the Income Tax. He said, in language cautiously vague, that some other arrangement might have been made with a view to providing the £11,000or £12,000 wanted to effect the transition. When the veil was taken off that language, what did it mean? It meant that they might have borrowed the money, and, in the favourite phrase of his right hon. Friend, have" spread the re-payment over a series of years;" or they might have released the Sinking Fund from the charge which the late Government laid upon it for one year. That would have provided the money. He had carefully considered all these methods of procedure, and had arrived at the conclusion that, if the thing was to be done, the best way was to do it in a straightforward manner, making the funds of the year meet the expenditure of the year whenever that could be done without laying extravagant and excessive burdens upon the country. He came next to the question of the Wine Duties. He seldom voted with the hon. Member for Downpatrick (Mr. Mulholland); but on this occasion he certainly shared the views of that hon. Member, while he was opposed to those of the hon. Member for Oxfordshire (Mr. Cartwright), who recommended a plan of re-casting the Wine Duties, the essence of which was that everything that could fairly be called wine, whether the lightest claret or the strongest port or sherry, should pay one equal duty. This plan contained a principle which was quite anomalous in our liquor legislation, which, at present, aimed at taxing liquors according to their alcoholic strength. The proposal, if acted upon, would, he believed, be a new source of commercial discord between this country and France, and would involve a heavy sacrifice of Revenue. The great objection to the Malt Tax seemed to be the inclusion of farmers' hands in reckoning the £20 which formed the standard of exemption. Well, this was a question quite open to consideration. But if a farmer employed a large number of labourers who did not reside in the farmhouse, it was not open to consideration that he should be granted exemption in respect of those labourers. He was quite prepared to consider the question of inclusion of the farmers' hands, because he admitted that there was much to be said on both sides of the question. The hon. and gallant Member for Suffolk (Colonel Barne) was under the impression that the duty as it stood was increased by 10 or 15 per cent. He (Mr. Gladstone) declined to subscribe to that statement; and he could not accept the figures of his hon. Friend the Member for Staffordshire (Mr. M. A. Bass), which showed a large increase in the duty. He admitted that some modification ought to be introduced into the figures he had originally mentioned; but he declined to admit anything like an increase of 15 per cent on the duty. There was another increase of Revenue which he could not venture to predict, but which he was sanguine enough to hope for, and that was an increase in the quantity of beer brewed, because he believed this liberation of the brewing trade as to the choice of its materials, although the trade did not recognize it as a benefit, would lead to great advantages in the conduct of the trade, to great economy in the conduct of the trade, and, consequently, to the cheapening of the article produced; and, if so, it was not at all improbable that this result might take effect, among other ways, in an increase in the quantity of beer brewed, and in the Revenue derived from that source, quite distinct from an augmentation on the assumption that only the same quantity would be consumed. He had already stated that the Government were engaged in a careful examination of what might be the extreme claim which in justice the brewing trade could make, and he must remind the House of this. It was not to be supposed that the case of the brewing trade, as to the attitude it assumed on this occasion, was or could be, taking it all round, fundamentally different from that of all other trades that had been subjected to the effect of legislative changes. In the course of the last 40 years, having been conversant in almost every case with the great legislative changes that had taken place, he had never known any one of them in which the persons engaged in the trade distinguished themselves beyond the rest of the community in appreciating the ulterior results of the change. On the contrary, in a very large number of cases, the trades now among the most flourishing predicted total ruin in consequence of those changes. With regard to brewing by labourers and small farmers, if this were done off their own premises, they certainly would not come within the provisions of the new Bill; because, if the Government were to sanction the brewing off the premises, they would obviously get into difficulties, which they were determined to avoid, in respect of co-operative brewing, and they would find themselves rendering great injustice to the brewing trade. The two hon. Members who had spoken with great ability as members of the great brewing trade, had spoken of the restrictions, as they called them, under this Bill as being very harassing and inquisitorial, and as being more harassing and inquisitorial than those enforced by the law as it stood. The hon. Member for Staffordshire had said it was not particularly pleasant to have Excise officers on the premises. This might be true, though he was very glad that the hon. Member was able to give a just as well as a kind testimony towards the considerate manner in which the very intelligent officers of the Department discharged their duties. But whether or not it was pleasant was a question by itself. He did not maintain that it was pleasant. His doctrine was that the whole system of taxation was a very unpleasant one. He looked upon all taxation with great dislike, and they should try to get rid of it as quickly as possible, and to have as little of it as they could. The point, however, was to have taxation so adjusted as not to interfere disproportionately with capital and industry. The reason they desired to have officers always present was that they thought that this would be far more to the interest of the brewer and of the trade; the liability to the obligation of making frequent returns would take the place of arbitrary restrictions as to the mode of conducting the business. The restrictions of the Malt Tax had been interferences with the trader in the building of premises, the stages of the processes themselves, the time he was to occupy in his different processes. For this interference it was proposed to substitute the obligation of making returns, and it was necessary that the officers should visit the premises for the purpose of inspection. In conclusion, he did not hesitate to say that the passing of that measure would not sensibly affect the course of trade in respect of the times and processes of brewing.

MR. MACIVER

said, he desired to point out that there were, at all events, two great authorities who were opposed to the course proposed to be adopted. He referred to Adam Smith and John Stuart Mill. He was not going to blame the Government for endeavouring to negotiate Commercial Treaties with France and Spain; but he thought they had got hold of the wrong end of the stick. This was no time for a reduction of the duties upon French and Spanish wines, but rather the contrary. Their proposal, described in whatever glowing language they pleased, bore a very strong resemblance to that particular form of reciprocity described by Lord Beaconsfield as a phantom. He would read to the House the opinion of John Stuart Mill upon the subject. In Book V., chapter 4, of Mill's Principles of Political Economy, they would find these words— A country cannot be expected to renounce the power of taxing foreigners unless foreigners will, in return, practise towards itself the same forbearance. The only mode in which any country can save itself from being a loser to the Revenue duties imposed by other countries on its commodities is to impose corresponding Revenue duties upon them. He (Mr. Mac Tver) admitted that in the early days of Free Trade some advantage accrued to this country; but the foreigner had not then learned what he had since learned, that this was the only country in the world which was prepared unresistingly to acquiesce in one-sided arrangements that left all the good to others. That which was now so often called Free Trade, and which each political Party had done so much to give them, was not Free Trade in any true sense of the words. It was only a system of free importation. It was, in reality, a system of protection to the foreigner. We exempted him from that share of our taxation which he ought to pay, and which John Stuart Mill thought this country ought to levy; and by thus relinquishing our power of taxing foreigners, the deficiency fell upon our own manufacturing and agricultural industries at home. Was he not right in saying that this kind of thing—this boasted Free Trade of ours —was only an imposture? The manufactures of all the world came here duty free; but whenever we tried to send our manufactures in return, they were heavily taxed. Was that Free Trade? He (Mr. Mac Iver) did not think it was, or that, so far as France and Spain were concerned, we were much the better of our foreign importations. The things we got from France and Spain were chiefly the luxuries of the rich, and they were imported at the cost of the working men of this country, who, by reason of these importations, were denied the right to labour. In his opinion, we considered unduly the interests of the consumer; and it should be remembered that in this country the working population were the producers as well as consumers. Those who were consumers only were the comparatively rich members of the community; and hon. Members opposite, notwithstanding their protestations to the contrary, considered the interests of the rich alone. The world at large had made no practical advance towards Free Trade principles; and there could not be a franker acknowledgement of this than in the Treaties which the Government were now negotiating. The Cobden-Bright Treaty of 1860 was not Free Trade. It was only an arrangement by which this country undertook to abolish the whole of its duties upon French manufactures in consideration of France slightly reducing her duties on some of ours. What had been the result of their 20 years' experience of that Treaty? Instead of elevating France to the prin- ciples of Free Trade, it had only taught her that this country was a very bad hand at making a bargain. They had not hitherto brought about Free Trade by their Commercial Treaties— arrangements by which, in obedience to the doctrinaire teaching of the Cobden Club, we gave up nearly everthing we possessed, getting next to nothing in return—and they were not likely to do so by the present proposals of the Government. But they had encouraged France in the belief that she had only got to press us a little further and we would give up the Wine Duties too, and patiently submit to the Sugar Bounty system, as well as to the surtaxe d' entre-pot, and to any other injustice which she liked to perpetrate upon British commerce and British shipping. The proposals of the Government in regard to Spanish wines were of a similar character, and nothing less than an invitation to the Spaniards to drive a hard bargain with us. He well remembered the hopes excited by the Cobden-Bright Treaty of 1860. His experience as a carrier, which, with all respect to hon. Members opposite, was worth something, was that our trade with France had been, and was now, a trade principally of raw materials for French industries; but that what we brought from France was the finished products of valuable labour. He would ask whether such importations from France did not destroy our industries at home, and was not a very serious question for the British working man? Loaf sugar they now got, it was true, a farthing a pound cheaper than might otherwise be the case. But this was a wholly inappreciable benefit to the consumer, obtained at the expense of our own refiners, to the great disadvantage of our West Indian possessions, and to the injury of British shipowners. And yet that was what some people call Free Trade! He preferred very much the doctrines of Adam Smith and John Stuart Mill. So long as France taxed our manufactures, we ought certainly to tax hers. The Wine Duties were about all we now had to bargain with, and in themselves they were clearly insufficient to purchase those concessions which we had a right to get; but he (Mr. Mac Iver) saw no reason why some of our former duties should not be replaced. We could then bring some pressure to bear. The House would remember that he had several times asked the Government in regard to their prospective arrangements with France. The hon. Baronet the Under Secretary of State for Foreign Affairs (Sir Charles W. Dilke), with the politeness which always distinguished him, had replied to his questions, but in a manner which conveyed no information. He (Mr. Mac Iver) wanted to know if the Government meant to insist upon those concessions which we had a right to get, and would take measures to obtain them? He wanted to know, specifically, if the Sugar Bounty system was going to be given up? Did France mean to reduce her duties upon British manufactures? Was she going to abolish the surtaxe d'entrepot, and let foreign produce bought and sold in the Liverpool Exchange enter France upon terms as favourable as if imported direct? He had also asked the Government in regard to their negotiations with Spain; and, again, the Under Secretary of State for Foreign Affairs (Sir Charles W. Dilke), with the most perfect courtesy, gave a reply which answered nothing. It was quite a mistake to suppose that our unsatisfactory commercial relations with Spain were a mere Wine Duty dispute. Long before this Wine Duty business Spain had harassed British trade; and, unless she was now going to do something to put matters on a better footing, we ought rather to think of doubling the Wine Duties than of reducing them. Spain was only trying to squeeze us because we had been found willing victims; and if we conceded the Wine Duties, we were only inviting her to press for something more. He would best describe the general condition of our trade with Spain by quoting from a letter which he had just received on the subject. Its words were— The Spanish tariff is a very big affair, the rates being different for nearly every article mentioned therein. Your hat, for instance, being one thing, your coat another, your boots another, and shirt another. This I found was really the fact, for on calling at the Consuls, they handed me a book, which, being in Spanish, I did not understand; but they explained that on glass, for instance, the duty is reckoned at so many pesatos (10d.) per 100 kilos; and there are as many different rates as there are qualities of glass. The rate is equally the same whether the goods come in a Spanish or a British ship; but although there are no differential rates in this sense, it is nevertheless quite true that a tax is levied upon British-owned steamers trading with Spanish ports. At that late hour, he considered that he had said enough; when the proper time arrived he hoped to move the rejection of the Government Wine Duty proposals, as they were clearly not the way to deal with France and Spain. That kind of treatment had been tried before and had failed, and there was already abundant evidence to show that it would fail again. He begged to apologize to Mr. Speaker for having occupied the time of the House so long; but he thought that apology ought properly to come from hon. Gentlemen on the other side, because it was their fault for having so often interrupted him, and refused to listen to what he had to say. They had, however, been obliged to hear him, whether they liked it or not; and it was entirely due to them that his remarks had been so prolonged. He begged to move that that debate be now adjourned.

Motion made, and Question proposed, "That the Debate be now adjourned."—(Mr. Mac Iver.)

The Motion not being seconded, was not put.

MR. ANDERSON

said, he begged to withdraw the Amendment to the Bill that appeared in his name on the Paper. He should put down the Amendment for the Committee on the Bill, and hoped then to press his proposed alteration of the Bill on the attention of the Committee.

Amendment, by leave, withdrawn.

MR. J. G. HUBBARD

said, he had a Motion on the subject which would naturally have followed that discussion; but, on the present occasion, he should postpone it, and bring it again before the House in Committee.

Main Question put, and agreed to.

Bill read a second time, and committed for Thursday next.