§ A drawback of twenty-four shillings shall be paid for every thirty-six gallons of beer of an original gravity of one thousand and fifty-five degrees which, under regulations to be sanctioned by the Commissioners of Customs and Excise, has been subjected to a process of dealcoholisation, so as to produce a beverage containing not more than two per cent. of proof spirit; and for the purpose of such dealcoholisation it shall be lawful, subject to such regulations as aforesaid, to distill spirit on the premises of the brewery.
§ Clause brought up, and read the first time.
§ Mr. ANEURIN WILLIAMS
I beg to move, "That the Clause be read a second time."
This is a Clause which I am happy to think will be pleasing both to brewers and publicans and to us temperance people and will not have the effect of costing the Government any substantial sum for the next year or two; altough it might have far-reaching effects in the future. The Clause relates to the dealcoholising of beer. We all know that beer in this country has been made steadily lighter year by year for a considerable time past without any injury to the brewing trade, and probably with great advantage to the public. The object of this Clause is to enable brewers who so desire to produce a beer which is absolutely a temperance beverage. You cannot brew beer so light as that, but you can, after having brewed beer with a considerable amount of alcohol 1038 in it, take out of it the alcohol by a process not so long ago invented, and you can leave a liquor which is absolutely non-intoxicating, and which is a palatable liquor which many people like as well as ordinary beer. There are brewers ready to carry out this process, but the state of the law renders it impossible to do so. The result of the process is to take ordinary beer and extract the alcohol from it. Therefore, the net result is that you produce a non-dutiable beverage, and at the same time you produce a certain quantity of alcohol or spirit. It is perfectly clear that it is quite fair, and indeed necessary, that the Government should tax the spirit so produced in the ordinary way. The matter is a technical one, and the interval between Second Reading and Committee has been so short that I have not been able to refer to experts, but I think what I am about to state is correct.
What happens is this: In the first place, the brewer has to pay full duty on the beer which is only an intermediate stage in the process. In the next place, he has to pay full duty upon the spirit that he produces at the end of the process. In addition to that he is not allowed to carry on the dealcoholising in his brewery, as it is considered to be work for distillers. Therefore he cannot do it in his brewery, and practically he cannot do it at all since the practical difficulties are so great. My Clause would excuse him from duty on the intermediate stage. He is not really producing beer in the sense of an alcoholic dutiable beer. It is only an intermediate stage. He would have to pay the duty when he produced it, but I suggest that when he dealcoholised it he should have a rebate of not quite the whole of the duty, because the Government department would be put to some small expense. If the duty amounted to 25s., I suggest that he should draw a rebate of 24s., leaving the shilling to pay expenses of booking and keeping accounts. I also suggest that the dealcoholising should be allowed to be done in the brewery. In this way the trade would be made possible, and if the process were successful, so as to please the public, the temperance party would be very glad. I think also the brewing interest and the publicans would also be very pleased if they were able to do a business which satisfied the public. I hope that those gentlemen regard temperance people as men and brothers. I have not the slightest suspicion that they want to do injury to the public, but that 1039 they want to produce an article which the people will buy. If by this process they can produce an article which is perfectly innocuous, having no alcohol in it, they will, I am sure, be just as willing to produce that as they are to produce the light beers which have come into fashion of recent years.
I do not think that the possible objections to my proposed Clause are really very serious. I am certain that they are not fatal. In regard to details, I should be only too glad to agree to such Amendments as the Treasury or the Excise authorities considered necessary. It may be suggested that there is something in this proposal that might lead to evasion of the duties. I do not think that that is possible. It will be seen that in the Clause I have provided very carefully that the whole process is to be carried on under regulations made by the Excise and Customs Department. Moreover, there would be no objection at all to the regulations providing that the spirit should be methylated and not sold as ordinary drinking spirit. Another possible objection is there would be a loss of revenue, because the public, if they drank this non-alcoholic, non-dutiable beer, might be paying less to the revenue than they would do if they drank ordinary beer. There would be very little change at present, because this liquor has yet to make its way. It is not yet widely known, although it has been tested and approved by connoisseurs. I would point out that the refusal of the proposal on this ground would really amount to putting a veto on the manufacture of a temperance liquor which might be accepted by many people instead of alcoholic beer, and the Government would be putting pressure upon people to drink intoxicating liquor in order to keep up the revenue.
At the present time in view of the circumstances of the War we are adopting many exceptional measures to promote temperance. Those measures are, I fully recognise, causing great sacrifice to people engaged in the brewing and publican trade, and I am quite sure the Government will not use the question of revenue as a reason for hindering a measure which would promote the cause of temperance without doing the slightest injury to that trade. This Clause is an act of justice which I hope the Government will accept and the Committee approve. If for any reason the Government are unable to 1040 accept it at the present moment, I hope they will at any rate give this important matter their consideration, as it is one which may have far-reaching consequences in the future. Beer has already changed its character very much, and become a much lighter article than it was in the old days, and I do not see that we ought to put any artificial limit to the progress of that movement.
§ Mr. MONTAGU
I hope my hon. Friend will not mind my suggesting that we should defer the discussion of this matter in greater detail until the ordinary financial arrangements for the year come to be considered. If he looks at the Finance Bill which we are now discussing he will see that every one of its Clauses deals with emergency taxation, and the provisions incidental thereto, arising directly out of the War. The interesting proposal which he has brought forward would be more applicable to a general discussion of the financial system of the country than to this emergency interim Budget. What he advocates is really a very great departure from our fiscal system. He knows of an interesting new beer made from beer, which has what is to him the advantage of not containing any alcohol. I venture to suggest that he is unduly optimistic if he thinks the proposal that, at the very moment when we are increasing the taxation on other beers, we should exempt this beer from, taxation would be a popular move with brewers and publicans. However that may be, we do not at present tax beer in accordance with the alcohol which it contains. It has already been suggested once this afternoon that that would be a good system. If we adopted that system a beer containing no alcohol would of course escape taxation. As the hon. Member knows, if at present he succeeded in brewing a beer which contained no alcohol but which was a beer, it would be taxed. Beer is taxed on its specific gravity, and not on the alcohol it contains. Brewers may, I am told, arrest fermentation at any time during the process of manufacture in order to limit the quantity of alcohol which shall be contained in the beer when in a finished state. So that the suggestion of my hon. Friend is an alteration in the whole system upon which beer is taxed. The beverage in which he is interested, and in which he desires to interest the Committee, is frankly something which is to be put on the market in competition 1041 with other beers. For that reason I would suggest that we should be given longer time to consider so great a departure from our present system, and discuss it when we come to the wider financial questions next year.
The teetotaler, if he does not smoke, pays none of the War taxation. If he succeeds in brewing a beer which is a teetotal beverage, that will be the opportunity to which the Chancellor of the Exchequer referred the other day of catching the elusive teetotaler. Therefore we ought to keep the tax on this beer, particularly if it becomes a teetotal beverage. The more teetotal this drink is made, the more necessity there is to tax it.
§ Mr. LEIF JONES
I do not think that this proposal has anything to do with taxing teetotalers. I agree that the present is not a very happy time to bring the matter forward, and that it would be better to defer it until we consider the financial arrangements for next year. But I hope my hon. Friend is not going to put the suggestion out of his mind, now that he has disposed of it in the House. I trust that he will consider the point, because I understand that there are two or three processes of this kind which manufacturers are endeavouring to bring to perfection, and the present state of the law, largely in connection with the point touched on by the Secretary to the Treasury, that beer is not taxed on its alcoholic strength, does press very hardly on those who are experimenting. I am sure the Committee will not think that I am a good judge of beer, but I have tasted one of these de-alcoholiscd beers—[An HON. MEMBER: "And you are still here!"]—and, as far as I can judge, it has the same smell and the same taste as ordinary beer. [An HON. MEMBER: "How do you know?"] I have smelt ordinary beer. [An HON. MEMBER: "Taste?"] Taste is from memory of college days. If manufacturers can carry the experiments to perfection and produce a non-alcoholic beer, I think it will probably meet a public demand. Therefore it is an experiment which the Treasury should encourage rather than discourage, though I quite agree that this is not the moment to relieve teetotalers of taxation.
§ Motion and Clause, by leave, withdrawn.
§ Bill reported; as amended, to be considered To-morrow.