§ Now, I turn to indirect taxation. There is a very old controversy as to the justice of the manner in which a given amount of alcohol is taxed in the various forms in which it is produced and sold for the consumption of the public. I believe that in all civilised countries the rate of taxation is highest upon alcohol in its most compact form, and lowest on alcohol in its most diluted form, obviously in order to encourage lighter drinks. In this country a gallon of proof spirit, if in the shape of brandy or any other spirits, pays on importation 10s. l0d.; if it is in the shape of wine it pays from 8s. to 3s. 4d., varying with the strength of the wine. I think that this gives wine too great an advantage, considering the respective values of the commodities. Now, for some time past, our wine duties have been considered not so much as a means of raising revenue as a means of bargaining with wine-producing countries for such commercial advantages to our own general trade as they might be disposed to give us in their tariffs in return for reductions in our wine duties. That is a policy which was successfully adopted in the Cobden Treaty, and has been attempted on various occasions since; but I think, for some years past, it has failed to meet its objects, and foreign countries, whether wine-producing or not, have raised their tariffs to such points as they thought advantageous to themselves with very little, if any, regard to the amount of duty we charged upon their wine. Sir, until a few 1024 years ago there was a difficulty in dealing with this matter in the ordinary way, because the revenue of wine was a falling revenue, and, of course, you could not increase taxation on a falling revenue. But the wine duties in the last few years have done very well. Their produce has risen from £1,144,000 in 1894–95 to £1,400,000 in the year just closed, and I think there is no longer any reason, either in the condition of the wine trade or in our Treaty engagements with foreign countries, or any fear of what may happen to our general trade, why we should not impose such reasonable duties on wine as we think it can reasonably bear. The present duty on wine is 1s. per gallon on wine not exceeding 30 degs. of proof, 2s. 6d. per gallon on wine between 31 degs. and 42 degs., and 2s. per gallon surtax on sparkling wine. I propose to increase it to 1s. 6d. per gallon on wine not exceeding 30 degs., to 3s. on wine between 31 degs. and 42 degs., and to increase the surtax on sparkling wine to 2s. 6d.; and, further, to impose a duty of 3s. per gallon upon still Wine imported in bottle, the same duty as on wine between 31 degs. and 42 degs. I do not believe, Sir, that this increased duty will materially reduce the consumption of wine in this country. I think that the amount of that consumption depends far more on the habits and tastes of the people than upon such an alteration as I have suggested in the amount to be levied upon it. I would call the attention of the Committee to these two facts—that in the thirties there was a consumption of wine in this country much larger, in proportion, than now, although then the rate of duty per head of the population was something like 2s. 3d., whereas. now it is only 8d.; and that since the surtax was imposed by my right honourable Friend the First Lord of the Admiralty upon sparkling wine, the consumption of sparkling wine in this country has largely increased. I know there is some still wine of low value imported in bottles, but that kind of wine can just as easily come into this country in the wood, and the average value of wine imported in bottle, as compared with the duty, is far greater than the 1025 average value of wine imported in wood. I anticipate from the proposed increased wine duty an increase in the present year of £420,000. Therefore the total increased taxation which I propose will be £870,000.