NEW CLAUSE.—(Preferential Duties on Wines the Product of and Imported from His Majesty's Dominions.) (Hansard, 6 August 1912)

§ Major ARCHER-SHEE
I beg to move that the Clause be read a second time.
This particular matter has not been debated in this House since 1899. The late Sir Howard Vincent's Amendment gave the power to exempt British Empire-grown wines from increased duties. Since then the subject has been brought up at the Colonial Conference of 1907. On that occasion the right hon. Gentleman the Chancellor of the Exchequer made a very notable statement, which I have no doubt he has repeated to this House in relation to Tariff Reform. He said:— We heartily concur in the view that has been presented by the Colonial Minister that the Empire would be a great gainer if much of the products now purchased from foreign countries could be produced and purchased within the Empire. Dr. Jameson said:— Since the reduction of the duties in 1860 the Cape has developed enormously. We are producing infinitely better wine, and if we get a preference on Cape wine it would give an enormous impetus to one of our most important interests in Cape Colony. The principle of a preference on wine has been adopted by Australia, which itself grows wine largely. They give Is. preference upon brandy imported from the Cape. Canada also gives a preference to Cape wines. In this country we used to give a preference to wines grown at the Cape. The preference was as great as 2s. 11d. per gallon. The duty was 5s. 9½d. for foreign wines, and 2s. 10½d. for Colonial wines. In 1860 Mr. Gladstone made it 3s. on foreign wines, the 2s. 10½d. remaining on Colonial wines. He reduced it again in 1861, then the rates were flattened out, and ever since they have been the same, and no preference has been granted to wines grown within the British Empire. It is interesting to observe the figures of the wine grown within the British Empire. They have gone down steadily since the preference was abolished. In 1825 we used to import a great deal more wine from the Cape of Good Hope than from France. We imported 670,000 gallons from the Cape as against 525,000 from France; in 1837, 500,000 gallons as against 439,000 from France; in 1858 we imported 634,000 as against 623,000 gallons from France. Directly we abolished Preferential Duty upon Cape wine the result was an enor- 3102 mous increase in the importation of French, wine and a great diminution in the importation of Cape wine. To-day we import 3,500,000 gallons of French wine as against 3,000 gallons of Cape wine. During the last few years trade with Australia in. wine has grown to a very large extent, and last year we imported nearly one third as much wine from Australia as from France.
If we import so much wine as that from Australia without a Preferential Duty the-case seems perfectly clear for a preference, because here is a case where there would be hardly any loss to the revenue. The amount collected on Australian wine last year was £50,000. By the proposal in this new Clause the duty would be reduced by two-fifths, and that would mean a reduction if there was no increase in importation of Australian wine of £20,000 in the revenue; but as wine from Australia could be sold in very much larger quantities, the-loss to the revenue would not amount to-anything like that figure I mentioned. There is no question of Protection or Free-Trade in this case because wine is not produced in this country, and we would be giving a preference to an existing industry in our own dominions. Hon. Gentlemen opposite have been very keen during the last few weeks in getting the dominions to help us in our defences, and they know perfectly well the dominions are asking us-to give a preference in our markets here to one of the very few articles in which we can give a preference. I also ventured to-put this case to hon. Members opposite from a temperance point of view. It would be a very good thing to promote the sale of light alcoholic drinks like claret and hock rather than heavy wines and brandies. That is a matter that can be defended from the temperance side as well as from the preferential side. I would therefore ask the Chancellor of the Exchequer if he cannot make some concession this year at any rate to look upon it with a favourable eye in next year's Finance Bill.

§ Mr. G. LLOYD
I beg to second the Motion.

§ Mr. LLOYD GEORGE
I think the hon. and gallant Member is wrong in assuming that there has not been a discussion on this tax since 1899. My recollection is that there was a discussion upon it during the Debate on the Address not many years ago, and it was discussed at considerable length. I agree with the hon. and gallant Gentleman's argument that this is not 3103 quite in the same category as duties on some other articles he has mentioned, but I think he has exaggerated the effect his proposal will have. There are 800,000 gallons of Australian wines consumed in this country out of a total of 12,000,000 gallons imported from the Colonies and from France and other countries. I do not want to say anything about the relative merits of Australian and French wines, but I do not think that the slight preference he gives to Australian wines would make any considerable difference in the quantity consumed in this country. Anybody who has been at the Board of Trade knows that questions are constantly arising with regard to duties on wines from France as well as from Australia and I have no doubt that the whole scale will have to be reconsidered. I think it is a mistake to insert in the Finance Bill a proposal of this kind with reference to the general scale and the effect it will have upon our treaties with Portugal, Spain and France. [An HON. MEMBER: "Not with Portugal."] We have not exactly a treaty with Portugal, but she is pressing very hard for a reduction of the duties on her wines. No doubt the right hon. Gentleman opposite knows how difficult it is to revise the wine scale, because while you may be granting relief to one country you may be inflicting injury on another country. The real difficulty is the position of French wines, and naturally they are very sensitive about any change which would be detrimental to their interests. When we deal with these duties we ought to deal with the whole of the problem, and I should be very sorry to attempt to do it in this piece-meal fashion.

§ Mr. AUSTEN CHAMBERLAIN
I only wish to express my views on the points raised by the Chancellor of the Exchequer. The effect of this proposal on the sale and consumption of Colonial wines probably would be much greater than the right hon. Gentleman anticipates, bearing in mind that after all this is a port drinking country and Scotland was made to drink port by the effect of tariffs. [An HON. MEMBER: "No, claret."] Does the hon. Member not recollect the famous lines: Firm and erect the Caledonian stood, Old was his claret and his mutton good. 'Let him drink port,' the Saxon statesman cried, He drank the poison and his spirit died. Mr. Pitt made them drink port, and you will find, if you choose to read the memoirs of the time, how port came in and took the place of claret, just as earlier it had 3104 come into England in consequence of our political and commercial relations with Portugal. I think the effect of the preference would be greater than the right hon. Gentleman supposes. The second observation I have to make is that any rearrangement of the duties on foreign wines adversely affecting one foreign nation as compared with another is no doubt a very delicate operation in regard to which you might have difficult negotiations with foreign countries, but I entirely decline to recognise the right of foreign countries to remonstrate with us about the internal fiscal arrangements of the British Empire. They have no more right to object to our admitting Australian or Cape wine free if we like than we have to object to Portugese wine passing from one part of Portugal to another, or French wine passing from one province of France to another, or German wine passing from one part of Germany to another. That is purely a domestic subject for the British Empire and for no one else to meddle, and whenever it is said in this House that we are not to arrange the internal economy of the British Empire as we please for fear of remonstrances from foreign countries, I shall enter my protest against it.