HC Deb 14 June 1888 vol 327 cc127-52

Order for Second Reading read.


In moving the second reading of this Bill, I may, perhaps, be allowed to call the attention of the House to the circumstances which have rendered it necessary to introduce it. It will be in the recollection of the House that my right hon. Friend the Chancellor of the Exchequer (Mr. Goschen), in introducing his Budget, asked the House to sanction a tax upon bottled wines to the extent of 5s. per dozen. The House on that occasion was good enough to grant my right hon. Friend's demand; but in the course of the discussion, and on the Report stage of the Bill, the hon. Gentleman the Member for Newcastle (Mr. Craig) moved a Resolution and initiated a discussion, suggesting the exemption from the tax of all wines under 30s. a dozen That proposal met, I may say, with a very large amount of acceptance in the House, and it met also with what I may venture to call a benevolent reception from my right hon. Friend the Chancellor of the Exchequer. It was pointed out most forcibly that the proposal to tax all bottled wines at the same rate of 5s. per dozen would fall very heavily on a very considerable portion of wine which was imported into this country in bottles of a very useful character, but which comes in at a very moderate price. It was quite recognized that if any plan could be found by which exemption, or partial relief, could be given to this class of wines, it was the duty of my right hon. Friend to consider it, and, if possible, to give effect to it. As the result of that discussion, my right hon. Friend promised to the House a plan by which some relief might be given to wines of that character. The difficulties were recognized by my right hon. Friend when he had to consider them previously to the introduction of his Budget to this House. It was pointed out at the time that there were at the disposal of the Government very few figures which enabled my right hon. Friend to form a very accurate estimate, either as to the quantity of bottled wines imported into this country, and still less of the quantity of the proportions of those bottled wines which would have to be exempt because they were less than 30s. a dozen. I believe that for some considerable time there have been no separate statistics kept at the Customs with reference to the importation of bottled wines. But the opportunity which had been offered has enabled some figures, which I believe may be taken to be reliable, to be obtained, showing not only the total import of bottled wines into this country, but also affording an approximate estimate as to the proportion of sparkling wines and still wines comprised in that total. I have said that there were no statistics, and perhaps it may be thought by some hon. Members that my right hon. Friend and the Department over which he pre- sides are to blame because those statistics are not forthcoming. Let me point out to hon. Members what the obvious answer to that is. After the statement I have made that no separate statistics have been kept of the quantity of bottled wines imported into this country, it is obvious to every Member of this House that to have entered into an investigation, and to have called for statistics from all parts of the Kingdom, would have been most effectually to have informed the public beforehand what was in the mind of my right. hon. Friend previously to the introduction of his Budget, and I think that I may say that there is not the smallest evidence to show that in the inquiries which have been made, necessarily limited as they were, the secret was not well kept by the Department, and it was absolutely unknown to the public that my right hon. Friend contemplated imposing a duty on bottled wine. The investigation which has taken place, and I may say that it took place both at home and abroad—has not only furnished us with what I believe to be reliable figures, but it has also, I may say, at the outset, considerably facilitated the task which my right hon. Friend had set before himself. The figures which have been obtained show that the original estimate was under the mark, and that my right hon. Friend had a considerable margin in which to work in his endeavour to find a method of giving exemption to those wines which are under 30s. a-dozen. I will give to the House a few figures which have been obtained as the result of the investigation. These figures, although an estimate only, have been checked in various ways, and are believed to be approximately accurate. It is estimated that the total import of bottled wines into this country is in round figures 2,500,000 gallons. Of those 2,500,000 gallons, about two-fifths or 1,000,000 gallons are represented by still wines, and about three-fifths, or 1,500,000 gallons may be taken to represent the quantity of sparkling wines. Of the still wines, of which the total is said to be about 1,000,000 gallons, it is believed that, at a liberal estimate, about one-fourth—or about 250,000 gallons—consists of wines worth more than 30s. per dozen, while the remaining three-fourths, or 750,000 gallons will, it is estimated, come in below the limit of 30s. per dozen. Then, Sir, with regard to the sparkling wines, at which the total import is estimated at 1,500,000 gallons, about two-thirds, or 1,000,000 gallons will, it is estimated, come in over the limit of 30s. a-dozen, while about one-third, or 500,000, will come in below the limit of 30s. I should like to point out to the House one very important fact that has come to our knowledge and been impressed upon us in the course of these investigations—that is, that the customs and the habits of the people of this country in the direction of drinking wine appears very largely to have changed, and changed not only in regard to the particular wines which they drink, but also with regard to the Quantity of wine they drink. While the total quantity of wine—not bottled wine only—imported into this country and retained for home consumption is now only about the same as it was in the year 1866 the proportion of sparkling wines which is imported into this country has enormously increased. Therefore, the importation of sparkling to still wine imported in bottle bears today a much larger proportion to the total than it did in 1866, or in any subsequent year. This change which has been going on appears from the figures to be, at all events for the present, continuous, and so far as we are able to judge it is likely to continue. I will give the House the figures. While in 1866 the total white wine imported into this country was taken at 958,000 gallons, in 1887 it had risen to 1,538,000 gallons, or an increase of very nearly 60 per cent. This, as I have pointed out, was the case notwithstanding the fact that the total of wine imported into this country for home consumption was in 1866, 13,226,000 gallons, and in 1887, 13,694,000 gallons. These figures go to show that the quantity of sparkling wine imported into this country, and of course imported in bottle, has shown a very considerable tendency to increase to even a larger extent than my right hon. Friend had estimated. Now, Sir, on these figures my right hon. Friend had to ask himself how he could grant relief to the cheaper wines, and thus meet what he believed to be the wishes of the House, and I hope I may also add the claims of Bordeaux. My right hon. Friend had to consider, first, how to protect and preserve his estimated revenue; secondly, how to relieve the cheap wines; and, thirdly, how to do this without giving the least incentive to fraud and friction. Several plans were suggested and were open to him. The first which I will mention was one which naturally presented itself—namely, to exempt generally all wines from the tax which were under the value of 30s. a-dozen. But when this question came to be examined it was found, in the first place, that a general exemption of that kind would, as far as still wines were concerned, leave but a very small proportion of the whole upon which the tax could be calculated. I would remind the House that a general exemption of that kind, or even a special exemption, as applied to some wines would necessitate, of course, not only that an examination with endless forms of procedure should be gone through with regard to wines on which the duty was to be calculated, but also an examination of all the wines imported which were exempt. It would follow, therefore, and I think the House will agree with me, that for the purpose of raising the comparatively limited amount of revenue which would have been obtained from still wines, it was extremely undesirable to impose upon the traders any more irksome condition of dealing with it than was absolutely necessary in the interests of the Revenue. I will point out, further, that so far as still wine is concerned there is the greatest possible difficulty in fixing or making regulations by which, in a reasonably easy manner, the value of the wine can be readily determined and a tax levied. In the first place, in regard to still wine, it is not even enough to rely on the brand, even though that brand be Château Lafite, or Château Latour, or Château Margaux, because, I am told, that it happens that the vintage in certain years is not worth nearly so much as in others. These wines, which are known as high class vintage wines, have their bad seasons, and the wine of a particular vineyard might be inferior and not worth so much as wine grown outside of it in the same year. Perhaps I may be allowed to point out also in regard to these still wines that there is this important difficulty. There are, practically, none of these wines which cannot be imported in cask into this country, and, therefore, if you impose a duty of 2s. 6d. a gallon, or 5s. a dozen on all wines over 30s. a dozen in value, you will be offering a strong temptation, in the first place, to fraudulent declaration, and a strong temptation, in the second place, to import such wines into this country in casks and so evade the duty altogether. My right hon. Friend has come to the conclusion, taking all these circumstances into consideration and also the important fact that he had a margin, to give an exemption to all still bottled wines. With regard to sparkling wine the case is very different. In the first place, a much larger portion of the whole comes to this country as wine of a value beyond 30s. a dozen, and, in the second place, it is believed that such wine cannot be imported into this country except as bottled wine. My right hon. Friend the Chancellor of the Exchequer has received many suggestions, even from high authorities, that if this duty is imposed as it is proposed, attempts will be made to evade the tax by sending sparkling wines into this country with false corks and replacing them when they come here with corks representing their real character. But I do not attach very much importance to that, and my right hon. Friend has arrived at what, I believe, to be a happy solution of the difficulty—namely, to put a tax of 2s. 6d. per gallon upon all sparkling wine over 30s. per dozen in value, and a tax of 1s. per gallon on all sparkling wine under 30s. per dozen in value. He is of opinion that that will fairly meet the difficulty, because, in the first place, it secures the Revenue, and, in the second place, removes all temptation to fraud, because the difference between 2s. per dozen and 5s. per dozen does not leave a sufficient reward or a sufficient incentive to induce anyone to undergo the enormous risk which would be involved in attempting to evade the Revenue and in incurring penalties by falsely declaring the value of wine. I may also remind the House that while we hear so much about temptation to commit fraud, no business firm of reputation could lend themselves to such fraudulent practices without placing themselves entirely at the mercy of their servants by whom the practices would have to be performed. The Bill now before the House makes two alterations in the existing conditions of things. It corrects what I cannot but feel was a mistake in the previous Bill—namely, that the duty was imposed upon the dozen bottles instead of the gallon of wine. That has been remedied in the present Bill. The other alteration is that it changes the method of imposing the duty, that it exempts altogether all still wine from the additional duty, and that it moderates and modifies the duty upon those cheap champagnes of which we have already heard something in this House. I hope that the proposals of my right hon. Friend will meet with the general acceptance of the House. I will only say, in conclusion, that I shall hope to have the support of the right hon. Gentleman the Member for Derby (Sir William Harcourt), because the right hon. Gentleman was good enough to say on the Report stage of the Customs and Inland Revenue Bill, and in reference to this particular question— If the right hon. Gentleman undertook that in the course of the present Session he would introduce some legislation which, under the authority of Parliament, would carry out the principle of relieving the lower class wines, that would be most satisfactory. The right hon. Gentleman the Member for South Edinburgh (Mr. Childers) was also good enough to say— If the Government would undertake to bring in a Bill as rapidly as they could after they had obtained information as to which particular wines, if imported in bottle, would pay the lower rate of duty, they ought to place confidence in the statement of the right hon. Gentleman that that would be done, but the matter would not bear much longer delay. If his right hon. Friend gave an assurance that no time should be lost in formulating a Bill under which the cheaper wines should come in at a cheaper rate, he thought the House might be satisfied. The Government have endeavoured to carry out that undertaking. They have formulated this plan, which they submit to the House with confidence, and I beg now to move the second reading of the Bill.

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

MR. CHILDERS (Edinburgh, S.)

The quotation which the hon. Gentleman the Secretary to the Treasury has read from my speech is not strictly accurate. What I did say was that I hoped the Bill would be formulated as soon as possible by my right hon. Friend, that it would be acceptable to the House, and that we would do what we could to build a bridge for him, considering the retreat which he has to make. The position in which we stand at this moment is that the right hon. Gentleman the Chancellor of the Exchequer the other day gave the House at some length the new plan he proposed with respect to the Wine Duties, and when he had placed that new plan at great length before the House, I ventured to say that I thought so novel a proposal ought to be accompanied by some Paper laid before Parliament. My right hon. Friend said that it was not a novel proposal, and he justified that statement by a reference to what was done by my right hon. Friend the Member for Mid Lothian (Mr. W. E. Gladstone) in 1880, and also by a reference to the first arrangement of the Wine Duties for some years after 1860. Now, those proposals, and particularly that of my right hon. Friend the Member for Mid Lothian, had reference generally to bottled wines, and there was nothing novel, however it might be objectionable, in the first proposal of the Chancellor of the Exchequer; but the novelty of the present proposal in the first place is, that the additional duty is only to be imposed on sparkling wines, and the other and more important novelty is, that all sparkling wines are not to bear the same duty, but there are to be two duties—one with respect to the more valuable wine, and the other with respect to the wine which is of less value. Both of those proposals contain elements of absolute novelty in our recent legislation on this subject. The Bill of the right hon. Gentleman the Chancellor of the Exchequer was only brought in and circulated this morning, and I regret that it has not been accompanied by some document which would have been of interest to all of us. Of course we have not had time to consider the statistical statement which has just been made by the hon. Gentleman the Secretary to the Treasury. Let me state in a few words how it appears to me that the proposal of the right hon. Gentleman should strike hon. Members. In the first place, the right hon. Gentleman the Chancellor of the Exchequer made a proposal in the Budget of a perfectly plain and simple character—namely, to add 5s. a-dozen, or about 2s. 6d. a gallon, to the duty on all wines coming into this country in bottle. Let me remind the House of the reason for taking that course, which the right hon. Gentleman gave at the time the proposal was made. He said— It is very possible that an extra tax imposed upon these high-classed wines may lead to some remonstrances from Foreign Powers; but I am bound to say that remonstrances of ours to Foreign Powers with regard to impositions of duties on British goods have not been so entirely successful as to make it necessary for us, more than is absolutely compatible with our own interests, to look beyond the fiscal merits of the question."—(3 Hansard, [324] 313.) That was the first excuse of the right hon. Gentleman, and it was not unnaturally cheered by Fair Traders and others who looked upon retaliation as not an unwise act. Without in the smallest degree approving of retaliation, I am not at all surprised that that feeling was exhibited. Then my right hon. Friend went on to say, further— I propose a tax of 5s. per dozen on bottled wines, which is equivalent to 2s. 6d. a gallon. I estimate this tax to bring in an additional revenue of £125,000. I take note, in making this estimate, of the probable—nay, certain—diminution of the amount of wine which may at present be imported in bottles, and which will in future be imported in casks. It is possible that the bottling trade in England may receive a certain impetus, but I cannot conceive that that is an objection to the plan. I trust hon. Members will not grudge the imposition of this tax; but I admit that the greater portion of this additional tax will have to be borne by sparkling wines."—(Ibid. 313–14.)


The right hon. Gentleman has left out the reasons I gave for imposing the tax.


I am stating the right hon. Gentleman's answers to the objections which he anticipated would be made, and to objections which had already come. He made a statement on bringing forward his proposal, and in anticipation he met the objections to it. I would point out to my right hon. Friend that his present proposal will not give one iota of encouragement to the bottling trade. All that has gone entirely. No additional duty is to be imposed on still wines, however valuable, and of course sparkling wines always come to this country in bottle; so that the bottling trade, to whose support he appealed, will gain by the present proposal. Then, at any rate, the advantages which were so much cheered in a particular quarter of the House have disappeared altogether. Then, in respect of foreigners, let me point out how different is the tone of my right hon. Friend now from the language he used before. Although he anticipated that objections would come from Foreign Powers, and particularly from France, he made very light of those objections. But now everyone knows that this fresh proposal has been made in consequence of the objections of the French Government. The French Government are now satisfied with the arrangement made by my right hon. Friend; and, therefore, all that he said about our being entitled to disregard the remonstrances of Foreign Powers because they disregard ours was mere tall talk. The arrangement has been made, as everybody knows, after the most careful communications with Foreign Powers, and especially with the French Government, and it is no secret that the French Government are perfectly satisfied.


That is the first intimation that I have received that the French Government is perfectly satisfied.


I think I can inform him that if he is not aware of it, it is apparent to 99 out of every 100 persons who are interested in the matter, and is perfectly notorious in France. What I wish to point out, however, is that all the boast of disregarding the protestations of Foreign Powers has now gone, and so has everything in reference to the encouragement of the bottling trade. The House will fully understand that we have now to deal with my right hon. Friend's proposal on the basis of what the hon. Gentleman the Secretary to the Treasury has stated to-night, and we have to cast aside the Budget speech and come to the simple fact whether it is desirable or not to pick out a certain class of wine—namely, sparkling wine, and to say that because that wine contains a certain amount of carbonic acid gas it should be taxed at a higher price than other wines which do not contain that amount of gas. It is also to be taxed at a higher rate if it is above a certain value, and at a lower rate if it is below that value. I do not think the House will be very well satisfied with the further explanation of the hon, Gentleman the Secretary to the Treasury. Let the House remember this—we abolished, not off-hand, but after careful consideration, the whole of our system of ad valorem duties. The results of a century's experience of the evil working of ad valorem duties are now to be forgotten, and the system is to be applied to an article probably the worst fitted for the change. But in one point the former system is altered for the worse. When ad valorem duties were in force, the value was set by the importer; but to protect the revenue, the Customs had the power of purchasing the goods at an addition of 10 per cent to that value. This is the rule adopted by all foreign countries which still levy ad valorem duties. But if we claim to purchase without any addition to value declared, will not they retaliate? I do not know whether that point has occurred to my right hon. Friend, but, to my mind, it is one worthy of consideration. What will be the result of the plan now put before the House? The plan of the Budget, though, in my opinion, grievously objectionable, and glad as I am that my right hon. Friend has given it up, had, at any rate, one advantage, that it had the support of the trade, and also that it added simply so much to the duty on all wine in bottle. The change now proposed by my right hon. Friend, instead of having the support of the trade, has its strong opposition; the trade has expressed its opinion that the plan is practically unworkable. The hon. Gentleman the Secretary to the Treasury doubts whether it is unworkable, but he will not deny that the trade has expressed that opinion. If carried into effect, we shall have three classes of duty on wine—namely, a duty varying with alcoholic strength on all wine not in bottle, a higher rate on all wine imported in bottle below a certain value, and a third rate on all wine imported above a certain value. Further, if my right hon. Friend's original proposal, as contained in the Budget, had been carried out, he would, no doubt, have received a large amount of revenue. But is it worth while to disturb our Customs system for the sake of so small a sum as this will produce, and to bring back for such a trifle the ad valorem duty principle? Besides, if you introduce this principle as affecting wine, will you not be asked to treat spirits similarly? Brandy imported from North Germany is worth only a few pence a-gallon, whereas brandy imported from the Charente is worth as many shillings. I know the answer to that will be that that is a much more difficult matter, because we have home-made spirits to deal with also, and it would be necessary to disturb the Excise as well as the Customs' system. I presume that the same thing can be said in regard to beer; but there are two in our list of dutiable articles to which the answer would not apply—namely, tea and tobacco. If for the purpose of raising a small amount of revenue you are to introduce the ad valorem principle with regard to wines, you will certainly be asked to introduce the same principle in the case of tea. The higher class teas are worth several shillings per pound more than the inferior qualities, which may not be worth more than 6d. a pound, and if you disturb the rule which has been hitherto adopted for such a small matter as this, you may have ad valorem duties in regard to tea, by which the higher class tea would be taxed at double and treble the rate paid by the lower class tea, instead of the present uniform duty. Again, with respect to tobacco, experiments have been tried recently in reference to growing tobacco in this country. There is no doubt now, after those experiments, that tobacco cannot be grown in this country with commercial advantage if it pays the regular rate of duty. Then, what may follow? The result of my right hon. Friend's proposal may be that you will be asked to tax tobacco ad valorem. The inferior kinds of foreign tobacco are, I am aware, for the most part now imported into Germany, whereas the more expensive kinds come to this country and France; but, for the sake of encouraging the inferior home produce, you may have the strongest pressure to do what would ruin the revenue—namely, to impose two or three different duties on tobacco, varying with its value, to the utter destruction of the present trade. For these reasons, I warn my right hon. Friend that his proposal for the purpose of raising so small an amount of additional revenue is not worth the disturbance it will create. I hope that he will even now see the necessity of withdrawing it.


said, he wished to state the objections which he entertained to the Bill, and which were also urged not only by the trade associations which the right hon. Gentleman who had just sat down had mentioned, but also generally throughout the country It was a great misfortune that the right hon. Gentleman should have departed from his original proposals which had been accepted by the trade universally, and, as far as he knew, by the country generally. There might have been a question whether or not the duty should be levied so high as 5s., but he believed that everybody throughout the country would have been glad to accept the principle. But, of course, the Chancellor of the Exchequer had to deal with the opposition of right hon. Gentleman on the Front Bench opposite, who would, no doubt, have objected to any proposal made by the Government. Their great object was to get his right hon. Friend out of Office and secure it for themselves. That was a very natural feeling; but after having read very carefully the debate which took place on the subject, and having studied the official records of that debate, he (Mr. Bentinck) had come to the conclusion that there had been only two trangible objections made to the original proposals. The first was the fear of offending France and other foreign countries, and the other was lest injustice should be done to the consumers of the cheaper and lighter wines. Now, nobody had greater respect for France than he had, and he had no desire to say anything in disparagement of its Government. He was one of those who had always endeavoured to maintain the entente cordiale, and to promote a good understanding with France. At the same time, he did not agree with the hon. Member for West Bradford (Mr. Illingworth), who appeared to be always wanting to run away from France. He had seen a good deal of that sort of thing in his time, and, no doubt, the hon. Member had also; but we ought always to stick up for our rights, and he believed that if we took that attitude in this matter, there would not have been any with the French, which had much more to lose than we had, and would find the retaliation policy disadvan- tageous in the long run. If the French took offence, they would have to give way in the end, and the views of his right hon. Friend would have prevailed. He believed that the wine introduced from Germany was comparatively small, but might there have been some complaint from that country. He very much regretted that his right hon. Friend had not stuck to his guns. He now came to the other objection, which was raised by the hon. Member for Newcastle (Mr. Craig), and that was, whether any injustice or injury would be done to the consumers of cheap wines. He maintained that no injury or injustice would be done. He thought it was a most unfortunate thing that his right hon. Friend had given up his proposal to tax still wines, especially when they were told that one-fourth of the still wines now imported were worth more than 30s. a-dozen and three-fourths were under 30s. a-dozen. If that were so, there was a stronger reason for adhering to the original proposal. If the figures of the Secretary to the Treasury were absolutely correct, on his own showing, of the still wine introduced into this country 1,000,000 gallons, or three-fourths, were under 30s. per dozen in value, and therefore, if the Chancellor of the Exchequer had kept to the original proposal, three-fourths of that wine would have escaped duty. He thought the Government had committed a great mistake in the matter, without giving any advantage whatever to the consumers of light wine. He was informed by those who were acquainted with the subject that there was no reason whatever why still light wines should not be imported in cask, and that it was very much better that they should be. The importation of still wines in bottle was nothing more than a premium upon adulteration. Many cheap wines which were imported in bottle were the result of mixture; whereas it was more difficult to deal in that manner with the wine imported in cask.

MR. W. E. GLADSTONE (Edinburgh, Mid Lothian)

No; they came principally in cask.


said, he was informed that there was at Cette, in France, a large manufacturer of cheap still wine for importation to this country which consisted of a mixture of three descriptions—a wine grown in France, mixed with a Spanish port, and a coarse wine imported from Naples. These were all mixed together, and came to this country under the name of—perhaps, it would be hardly fair to state the name, but the right hon. Member for Mid Lothian would be familiar with it. It was difficult to adopt that course in regard to wine imported in cask. If the right hon. Gentleman the Chancellor of the Exchequer had stuck to his original proposal, there would have been an advantage to the consumer as well as to the Treasury. With regard to the proposal as to sparkling wine, he entirely agreed with what had fallen from the right hon. Gentleman the Member for South Edinburgh (Mr. Childers). The present proposal was for an ad valorem duty. It made it 2s. 6d. per gallon in one case, and 1s. in the other, according to the value. He believed that to be an unsound principle, and he was very sorry that it should have emanated from the Treasury Bench. He could not imagine for the life of him how the Custom House officers were to discriminate between the value of wines. He was old enough, he was sorry to say, to remember the time when works of art coming into this country from the Continent were subject to an ad valorem duty, and in that case, if there was any difficulty, the owner declared the value, the Custom House officers charged 10 per cent upon it, and there was an end of the matter. How that was to be done in the case of wine he could not imagine. The right hon Gentleman had adopted a very unfortunate principle, and one which he could not support. He should not pretend to divide the House against the second reading of the Bill; but he should feel it his duty to bring forward some Amendments in Committee, and he hoped, therefore, that his right hon. Friend and the Secretary to the Treasury would give ample time for that purpose. He could assure his right hon. Friend that the matter was being gravely considered by the whole trade throughout the country. It was no light question, or one that ought to be decided in a violent hurry; but while he entertained objections to the Bill, he hoped his right hon. Friend would not give way to the suggestion of the right hot. Gentleman the Member for South Edinburgh, that he should withdraw his proposals altogether, because he thought it was possible to amend the Bill in Committee, and it was better that only sparkling wines should be taxed than that there should be no taxation at all. He thought there might be some advantage to the bottled trade, and he did not hesitate to say that the principle established was not at all inconsistent with the principles of Free Trade to put small taxes upon manufactured articles for purposes of revenue. He wished that the proposals of his right hon. Friend had remained as they originally stood; because he believed they would be acceptable to the country at large. He hoped the right hon. Gentleman would tell the House when he proposed to take the Bill in Committee.


What the right hon. Gentleman who has just sat down complains of is this—that, as the plan of the Chancellor of the Exchequer first appeared before us, it undoubtedly contained a protective element, and that protective element has now disappeared. Hence arises the hostility of the right hon. Gentleman to the proposal. The right hon. Gentleman thought that he had obtained from a distinguished supporter of Free Trade a concession which was a sort of incipient conversion, and that right hon. Gentleman was acting contrary to the principles of which he had always been a distinguished advocate. His hopes had been disappointed, and consequently he now opposes the plans of the right hon. Gentleman the Chancellor of the Exchequer. I need not say that that is not an inducement to those who sit on this side of the House to vote with the right hon. Gentleman. But the right hon. Gentleman appears to me, with a singular absence of tact, to do everything in his power to prevent us from voting with him; because he has taken occasion to introduce into his speech the unnecessary expression of his conviction that on this side of the House we never open our mouths to criticize any proposal of the Government, either great or small, except for the purpose of putting the Government out of Office. The right hon. Gentleman has thought it necessary to lash us with the indignation which he has used on many previous occasions, even on this somewhat insignificant occasion. I wish now to say a word upon the proposal of the Government as it now stands before the House, as I feel it my duty to take part in the discussion and to express a very decided opinion on the plan as originally submitted. I cannot quite share the superlative exuberance of the Secretary to the Treasury (Mr. Jackson). Does he really suppose that there has been some wonderful new device formulated by the Chancellor of the Exchequer by which he has extricated himself from a serious and awkward dilemma? The now invention is simply in itself a retractive measure—a falling back on the measure of ad valorum duties, which, after much experience, was abandoned as the principle of our trade legislation. I cannot, therefore, go the length of the Secretary to the Treasury, or say that I am pleased with the proposal of which my right hon. Friend the Member for South Edinburgh has pointed out the inconvenience and danger. I should be glad indeed if the speech of my right hon. Friend could persuade the Chancellor of the Exchequer to recede from the plan altogether, which I believe to be by far the best way of dealing with the subject. It is only fair, however, to the Chancellor of the Exchequer to say that, as between two evils, he has chosen the lesser. For my own part, I regard the mischief contained in the proposal as of an entirely different order, and of a very much milder character than the danger and mischief which seemed to attend the original plan. What we had then in view was the serious apprehension of the disturbance of our trade relations with one of the most important countries of the Continent, and, possibly, by example and by contagion, with other countries on the Continent also. I am very glad indeed to be able to congratulate my right hon. Friend sincerely on the fact that he has so modified his plan that we may, I think, dismiss all apprehension of this kind from our minds. The danger which was to be feared from the first proposals arose in part from the augmentation of the duty which was imposed, and partly from the protective element involved. The original plan appeared to bring those very serious dangers into view. The danger which we have now to consider amounts to this—that the proposal may lead, or, at least, it is conceivable that it may lead, to undervaluing and fraud, and to the disturb- ance and confusion of trade which is connected with fraud, and indirectly in that way to the loss of revenue sooner or later. The Secretary to the Treasury has told us that of the sparkling wines, two-thirds are above the value of 30s. and one-third below that value. I take it for granted that an inquiry has been carefully made, and we may take those figures to be absolutely correct. But I think it will not be at all hazardous to predict that in future years, the proportion of wine entered below that value will increase; while the proportion of that above will have a tendency to diminish. But what I should like to say, however, is that having had very great and serious injuries in view on a former occasion, I now find those evils reduced and brought within a manageable compass. I do not know whether the proposal of the right hon. Gentleman will last long or not; but, at any rate, if inconvenience is found to arise, it will be within our own discretion to remove it, as the proceeds he expects to realize are not of a very important character. We shall not be creating disturbances in our relations with trade in a foreign country, which, when once created, it would have been impossible for us to escape from, because it would not have depended upon our free will and independent agency to abandon the proposal—but once the mischief had been done, the mere abandonment under such circumstances may have been totally ineffectual. Well, what the House has now before it is an experiment of some hazard. I am sure the Chancellor of the Exchequer knows all about the history of the wine trade, and how the difficulty of the ad valorem duty was always regarded as an insurmountable difficulty. I am inclined to agree with my right hon. Friend that the difficulty would not be so great in the case of sparkling wines as if the duty were applied to wine in general. Still, I cannot dismiss the apprehension that the ingenuity of trade would not be satisfied by this imposition upon wines of a higher value than 30s. a dozen if there was nothing of a magical or even of a determinate character in the kind of value so fixed. It may be, and I think it is far from improbable, that it will be found that a door will be opened to fraud under the modified scheme; but I am glad to think that if that be so, the necessity of retracing our steps, although perhaps inconvenient, will not be a national misfortune. In my opinion, at an earlier stage of the matter, we were really within danger of a national misfortune, and that danger has only been removed in consequence of the judicial changes made by the Chancellor of the Exchequer in the direction in which he has moved. Should Parliament find that objectionable practices are resorted to, it will be in its power to apply a remedy. I, therefore, offer a relative congratulation to the Government upon the plan they have proposed, and, undoubtedly, a a portion of my own anxiety having been removed, I am not disposed to offer any opposition to the plan of the right hon. Gentleman as it now stands, and I venture to hope that it may be found to work well.

MR. ILLINGWORTH (Bradford, W.)

said, he was sorry that he was unable to find himself in accord with his right hon. Friend the Member for Mid Lothian (Mr. W. E. Gladstone) with respect to the scheme of the Chancellor of the Exchequer removing the objections which were raised to the scheme in its original form. Now, it would do so partly, but it would still remain a considerable drawback and disadvantage, and he should be glad indeed if the Chancellor of the Exchequer would, even at the eleventh hour, be induced to withdraw the Bill. He had hoped that the right hon. Member for South Edinburgh would have proceeded with a little more vigorous decision, and would have moved the rejection of the Bill at this stage. If the Chancellor of the Exchequer had been at his wit's end how to raise the money on a great emergency, he could not have fallen into a worse plan than the form in which the Bill was originally presented to Parliament. What was it that the right hon. Gentleman was seeking to accomplish. He was trying to scrape together from most objectionable sources a sum of money that would enable him to make up a surplus whereby he would be able to reduce the Income Tax by 1d. in the pound. He (Mr. Illingworth) could not imagine that the right hon. Gentleman seriously meant to retain the proposition that was contained in the original scheme, and he should like to ask the right hon. Gentleman whether its inception had anything to do with the construction of a weapon which might he used against France in reference to the Sugar Duties? [Mr. GOSCHEN said, the Government had no such desire.] He was glad to find that there had been no such desire on the part of the Government. He was, nevertheless, at a loss to conceive why the right hon. Gentleman should have imposed a tax of this character. It was said that this was an ad valorem tax, but it did not even stand on that footing pure and simple; because if it had been a tax on wines above a certain value, it would have applied to still wines as well as to sparkling wines, whereas it was a tax which was to be levied only on a certain class of wine. Hitherto, the tax had been levied on foreign wines according to their alcoholic strength, but a new principle was was now about to be introduced. In reality, this tax would be known in the future as the bubble tax. The right hon. Gentleman had discovered where the bubble lay in the wine, and had made it a basis of increased taxation. It was said on that side of the House that the French Government were satisfied; but, curiously enough, the Government did not seem to be aware of the fact that the alteration of their scheme had given satisfaction to the French Government. He confessed that some of the objections to the original scheme had been removed; but it was impossible to say that the French Government or the French people could be entirely satisfied with a proposal which imposed increased taxation upon French wines, and not on the wines of Germany or any other Government. He thought the French people had a right to complain, and the fact that the imposition of the tax might produce a coolness in our international relations was a question which could not be lightly passed over. He still entertained a hope that the Government would find an easy way of withdrawing their proposal, seeing the objections that were taken to it, and having regard to the fact that it was in the teeth of all the previous convictions of the right hon. Gentleman. He hoped the right hon. Gentleman would listen to the appeal which had been made to him from that side of the House, and the opinion which had been expressed by Gentlemen on the other side that it was not a satisfactory measure. In that case, he might find a method of escaping the difficulties and inconveniences which might possibly arise from standing by the measure. Nothing could be more injurious to this country, standing as it did at the head of the commercial world, than to set an example that would operate injuriously upon the trade of any country. We had adopted Free Trade principles, and he appealed to the House either to stand by them, or in a straightforward manner to abandon them. The present scheme did neither one nor the other, and it gave no satisfaction to anybody. It invited a spirit of retaliation from other countries, and the right hon. Gentleman in levying the tax did not attempt to give any counterbalancing advantage to France. The right hon. Gentleman had given no explanation, or entered into any details, as to the objections which had been raised by France, but it was satisfactory to find that a better feeling had now been established, and that the most obnoxious part of the proposal had been removed.

MR. BRADLAUGH (Northampton)

said, that the Bill was a concession by the Chancellor of the Exchequer, as far as it went, to objections raised from that side of the House and initiated by himself on the earliest mention of these wine duties. Without entering upon the question of sparkling wines, of which he would say nothing whatever, he felt bound to thank the Chancellor of the Exchequer for having made this concession as to still wines, more especially as, from communications which had reached him, he had reason to believe that the right hon. Gentleman had been subjected to pressure from the trade not to make it.

SIR GEORGE CAMPBELL (, &c.) Kirkcaldy

said, that quite apart from the main question of these duties he wished to express his satisfaction that the right hon. Gentleman the Chancellor of the Exchequer had been able to make the change proposed in the Bill, which was to introduce an experiment in the direction of an ad valorem duty. He rejoiced at what had been done, not only on account of the wine trade of the country, but also on account of the wider reasons mentioned by the right hon. Gentleman the Member for Mid Lothian. He had always thought it was right to differentiate between the wine of the rich and the wine of the poor. If the right hon. Gentleman the Chancellor of the Exchequer carried out this experiment with regard to wine, in which he sincerely hoped he would succeed, and in that event the principle of ad valorem duty, which had on account of practical difficulties only not been applied before, might be resorted to with regard to other articles also. He approved the system under which the officers of the Revenue might take wine at its declared value, which system had been in use in India in his time and was found to be a most useful check.


I have to thank the various speakers who have addressed the House for the conciliatory tone which they have adopted towards this proposal. My right hon. Friend the Member for Whitehaven (Mr. Cavendish Bentinck), although he objects entirely to the changes made, was still very conciliatory in his language, and I would especially thank my right hon. Friend the Member for Mid Lothian (Mr. W. E. Gladstone) for what he called his relative congratulation on my proposal. My right hon. Friend objects on the whole to taxes on bottled wine, but less to the present proposal than that which was previously made. There are three points which have been discussed with reference to this matter of duty; one bearing on the wine imported from France, another the introduction of the ad valorem principle, and the third the exemption of cheap wine from duty altogether. The main objection urged in letters received from the wine trade is that the modified proposal is too favourable to cheap wine. It appears for the most part that the trade do not like cheap wines at all. But I understand that there is a feeling in the House that cheap wine should be admitted on as favourable terms as possible. It has been stated to me by wine merchants that they liked the previous tax of 5s. on cheap wines because it discouraged the importation of a great deal of nasty stuff which ought not to be sold. I am bound to say that this has not made a strong impression on my mind, because I believe, however much we may wish to reach what is legitimately called a luxury, there is no disposition in the House to tax unduly what are called cheap wines. My original proposal would have had the effect of taxing the cheaper bottled wines, but I am glad to say that I now feel able to exempt all still bottled wines and to reduce the duty on Saumur. It is perfectly true, as the right hon. Gentleman the Member for South Edinburgh (Mr. Childers) suggested, that by this method some high-class still French wines will escape, but if the duty had been left upon them the result would have been so small, as explained by my hon. Friend the Secretary to the Treasury, that it would not have been worth while to touch all still wines for the sake of the small duty that would have been derived from the high-class portion of them. We have calculated that no more than one-tenth of the still wine now coming to this country in bottle would henceforth have paid duty, if everything under 30s. a-dozen were let off. Therefore, nine-tenths of the still wines would have been subjected to all the difficulty of proving their claim to exemption in order to tax the other one-tenth. For this reason we propose now to tax only sparkling wines, two-thirds of which are above 30s. value, and one-third only below that value. My right hon. Friend the Member for Mid Lothian says that these proportions will diminish as time goes on, and that more wine will come in of less than 30s. a-dozen value. But it seems to me, as my right hon. Friend has stated, that it will be easier to detect the value of sparkling wine than that of still wines. It is infinitely easier to detect the value of sparkling wine, because the whole of the trade is in much fewer hands than in the case of Bordeaux. The great champagne houses have reputations to lose, and you can follow their wines with much greater ease than you can the ordinary red wines. In the case of champagne, the corks in most cases bear the brand of the firm and the year of the vintage, and it would not be worth while for the sake of 2s. a dozen to dispense with those marks which stamp the wines in the London market and secure for them the prices which they obtain. Now, with regard to the ad valorem principle, the right hon. Gentleman the Member for South Edinburgh has asked whether for the small amount of revenue derived from this duty it is worth while to introduce such a novel principle. But, Sir, I do not admit that £125,000, the amount to be derived from sparkling wine, an article of luxury, is an item to be disregarded. My right hon. Friend suggests that it is dangerous to introduce this principle, and that pressure might be used to extend it to other articles. I am not at one with my right hon. Friend, and I do not object to the ad valorem principle, so far as its equity is concerned; I object to it, when I object at all, on account of the difficulty of working it out. But even if you found it could be easily worked out in this case, it would be no argument in favour of its application in the case of tea and tobacco for instance. If you could discriminate between the tobacco smoked by the poor man and the fine cigar of the rich man, I should be only too glad to introduce such a change in our revenue, and the same with regard to tea; but there are no marks indicative of value in these cases which are very easily discoverable, as there are in the case of sparkling wines. There is one point remaining to which I have to ask the attention of the House, and that is the question of the attitude of France. What I stated on this subject to my right hon. Friend the Member for South Edinburgh was perfectly true. We have had no negotiations with the French Government on the subject; they have acknowledged from the first that we have entire fiscal liberty. I have had one or two conversations with my friend M. Waddington; I am more or less acquainted with what is going on in France. But our conversations were entirely unofficial, and what M. Waddington has said had been that he had no instructions to express approval or disapproval of any particular modification, though he might express his own individual opinion about it. The English Government have claimed, and will continue to claim, entire freedom in this matter, and that claim has never been disputed. After the speech of my right hon. Friend the Member for Mid Lothian I do not want to say anything controversial; but, at the same time, I must point out that our position with regard to the original tax was rendered more difficult by the debate which took place, in which the French people were informed on the authority of a right hon. Gentleman of great position that there was a protective character in the Bill. We asserted from the beginning that there was no Protection whatever in our proposal, but I admit it was far more likely to be quoted as a prece- dent for Protection in France after the speech of the right hon. Gentleman. The hon. Member for West Bradford (Mr. Illingworth) appears to regard with unction the prospect of international difficulties on this question, but the House will be glad to know that there is not the least reason to believe that the tax on sparkling wine will interfere in the slightest degree with the friendly commercial relations with France which Members on both sides of the House desired to see maintained. I have now only to thank the House for the way in which they have generally accepted this proposal, and I think that it would be generally for the interest of the trade that the Bill should now be pushed forward with all possible speed.


said, he did not wish to prolong the debate for a single moment, and would not have intervened but for the fact that the right hon. Gentleman the Chancellor of the Exchequer had thought it necessary to complain of the conduct of right hon. Gentlemen on the Front Opposition Benches. If they had not pointed out the danger and mischief of the right hon. Gentleman's original proposal, he would have gone on with proposals which he now himself admitted were founded on an entirely erroneous estimate; he would have discovered that the tax would have been double the amount which he had placed in his Budget. In the Budget the right hon. Gentleman assumed that the tax would produce £100,000, but he now found, on reference to the Customs, what he did not know before—namely, that the tax as originally proposed would produce £300,000. Therefore, their objection had enabled the right hon. Gentleman to ascertain the true facts with regard to the trade, and which led him to review his scheme. It was true that they regarded this plan of the right hon. Gentleman's as less objectionable than the one which he first brought forward, and they were extremely glad that the course which they had taken had brought about an amendment of that scheme, but as the right hon. Gentleman had stated he must not assume that hon. Members on that side approved the imposition of this tax even as altered. The right hon. Gentleman was not going to interfere with the trade in bottled still wine. Of course, it was always inconvenient to have to put an increased duty on wine; but he could not now see any justification or reason for interfering with sparkling wine by imposing this additional duty. He believed the amount expected to be raised was so small compared with the inconvenience, that it was not worth while to impose the duty at all. Whether the ad valorem system was good or not remained to be seen. He had been informed that the ingenuity of the trade had already begun to discount this question of high and low priced wines, and that a plan had also been started to average them and bring them under the 30s. value. If that were so, it was plain that they would in vain endeavour to impose this ad valorem duty. In any case it would, for a very small advantage, cause a great disturbance in the trade, and he regretted the right hon. Gentleman had ever brought forward this proposal. He did not accuse the right hon. Gentleman the Chancellor of the Exchequer of any protectionist proclivities, although an unfortunate phrase, which he did not believe was intended, had been seized upon by persons addicted to those doctrines.

Question put, and agreed to.

Bill read a second time, and committed for To-morrow.