§ In addition to the duties of Customs payable on spirits imported into Great Britain or Ireland there shall, as from the eighteenth day of May, nineteen hundred and fifteen, be charged, levied and paid the duties specified in Part I. of the Schedule to this Act; and in addition to the Excise duty payable on spirits there shall, as from the same date, be charged, levied and paid the duties specified in Part II. of the Schedule to this Act:
§ Provided that—
- (a) The additional duties under this Section shall not be charged on mixtures, compounds, or preparations which on importation are charged with duty in respect of the spirit contained in them or used in their preparation or manufacture; and
- (b) If any person proves to the satisfaction of the Commissioners of Customs and Excise that any spirits to which the restrictions contained in the Immature Spirits (Restriction) Act, 1915, do not apply, have been delivered to him and used solely in the manufacture or preparation of any article recognised by the Commissioners of Customs and Excise as an article used for medical purposes or have been used for scientific purposes, that person shall be entitled to obtain from the Commissioners repayment of the amount of duty (if any) paid under this Section in respect of the spirit used.
§ Mr. GLYN-JONESI beg to move, in paragraph (a), after the word "which" ["mixtures, compounds, or preparations which"], to insert the words "if they were imported, would."
I am sorry, and I must apologise to the Committee for the fact, that the Amendment is not on the Paper, and is simply a manuscript Amendment; but, like most of the Members of the House, I did not at all anticipate that we should be taking the Committee stage of the Finance Bill today; and when I say that the Commissioners of Customs and Excise are tomorrow meeting the representatives of the Pharmaceutical Society and those interested in this matter, it does seem rather like putting the cart before the horse for the House to-day to actually deal with provisions which are to be the subject of consultation to-morrow between the Commissioners and those whom they have undertaken to see. I suppose that there is some reason for the Committee stage being taken to-day, but I hope that we are not going to take the new Clauses. There are new provisions entirely which only appeared on the Paper this morning. None of us have seen them until now, and they raise very difficult issues. I therefore hope the Chancellor of the Exchequer, if he feels that he must proceed with the Committee stage to-day, will not go further than the Clauses of the Bill as they stand.
This is not an emergency Bill. There is every excuse for the House dealing with emergency matters. They can be taken rapidly and very often with very little consideration; but this is the Finance Bill of the year, and I cannot help thinking it will be only right that further opportunities should be given to the House to deal not only with this particular Clause, but more especially with the new Clauses which are to-day put on the Paper for the first time. This Clause provides for duties on immature spirits. The only reason why duty has to be placed on immature spirits is so that spirit which is kept the proper length of time should not be prejudiced in the market by spirit which may be immature. I deplore exceedingly the necessity for having to place this small tax upon this form of spirit, because it leads to enormous complications which the Revenue and the House want to avoid.
§ Sir F. BANBURYWould the hon. Gentleman mind telling us what the Amendment is?
§ Mr. GLYN-JONESI read it out.
§ Sir F. BANBURYI am sorry, but I did not hear it.
§ Mr. GLYN-JONESPerhaps I may be allowed to make this preliminary comment on what the Section really does in order to show the importance, if my Amendment is not accepted, of this point at any rate being made clear. It imposes a duty not for the purpose of revenue and then it exempts from the duty certain mixtures, compounds, or preparations. They are exempted by two provisions, "A" and "B." "A" says that the additional duty under this Section shall not be charged on "mixtures, compounds, or preparations which, on importation, are charged with duty in respect of spirit contained in them, or used in their preparation or manufacture." There is nothing there about preparations used in medicine. It is "preparations which, on importation, are charged with duty." They are to be exempted from the additional duty. When you come to "B," it is clearly intended to deal not with imported mixtures at all but with mixtures which are made in this country. Then you have got the stipulation that those things are to be for medicinal purposes only.
It is true that the Chancellor of the Exchequer has to-day got a new Amendment which makes it clear that the mixtures referred to in "A" shall only be mixtures to be used in medicines. Trouble, however, has arisen, and, if my Amendment cannot be accepted, I hope at any rate that the Chancellor of the Exchequer will promise that between now and the Report stage he will see whether the words cannot be made clear. The Bill, as it stands, says "mixtures, compounds or preparations which on importation are charged with duty in respect of spirit contained in them." One of the leading technical journals has pointed out that those who will have to deal with this matter in the profession or trade read it in two ways. Does it mean imported mixtures, mixtures which have actually been imported, and which when imported pay duty, or is it a description of a class of mixture which on importation pays a duty? It, of course, makes the whole difference. My Amendment is moved in order that the Chancellor of the Exchequer may make it quite clear what he means to include by "mixtures" in paragraph (a), and if he is satisfied, as I hope he may be, that there is room for doubt on the point, perhaps he will before the Report stage agree to insert the necessary words.
The DEPUTY-CHAIRMANI must point out to the hon. Member that if these words are accepted they will not read.
§ Mr. GLYN-JONESI quite understand that it will be necessary to move a further Amendment.
§ Mr. McKENNAI quite admit that the language of Revenue Clauses is not usually simple, but the explanation here is quite clear. The first part of Clause 2 deals with the additional Customs Duties payable on immature spirits. Then there is a proviso which discharges the additional duty in respect of certain articles. That proviso is in two parts. The first part (a) says that the additional duty—that is the Customs and Excise Duty—shall not be charged on certain "mixtures, compounds of preparations." So far as the Customs Duty is concerned, it is quite easy to let off the additional duty on importation, but, so far as the Excise Duties are concerned, this Clause (a) will not let them off, because the preparations when made in this country are made with spirit which has paid duty, and which would have paid, consequently, under the first part of this Clause, the additional duty. Hence, in practice, while (a) says the additional duties under this Section shall not be charged on certain mixtures, it can only in fact relate to the Customs Duties. We have, therefore, a second Clause (b), which deals with the Excise Duties. My hon. Friend's explanation of the meaning of the Clause is quite simple, and, as he has given it, it is the correct explanation. The additional duties under this Section are not to be charged on certain mixtures, compounds, or preparations which are defined in the rest of the Clause. This relief was given in response to arguments addressed by my hon. Friend to my predecessor, who, however, gave relief which went beyond the arguments of my hon. Friend. We propose now, in a subsequent Amendment, to cut down the relief to the precise point which my hon. Friend intended, and to limit it to those mixtures, compounds, or preparations which are in fact being used for medical purposes. The effect is that all mixtures, compounds, or preparations which are used for medical purposes will, on importation, not pay the additional duty, and, further, all medical preparations and compounds used for medical or scientific purposes will not pay the additional Excise Duty under proviso (b). That is the whole meaning of this Clause. It is 707 really quite simple, and with great respect to my hon. Friend I suggest that his Amendment is not necessary. I hope in these circumstances he will not press it.
§ Sir GEORGE YOUNGERI think the Chancellor of the Exchequer has taken a very wise course indeed in restricting the extremely wide words of this Clause. I doubt, however, whether he has gone far enough. He has used the words "medical purposes." How is it proposed to define those words? There are all sorts of wines and other medicated articles—con-coctions of a most villainous kind, which are said to be for medicinal purposes. Are they to be included?
§ Mr. McKENNAThat can be dealt with in the next Amendment.
§ Mr. GLYN-JONESI can assure my right hon. Friend that this Clause is not clear at any rate to the trade. The right hon. Gentleman says it refers to the additional Customs Duty. The Excise does not affect imported articles. If the right hon. Gentleman will look at these words, he will find that, under this Section the additional duties are set out as Customs and Excise Duties. All I want from my right hon. Friend is an assurance that between now and the Report stage, if he is satisfied there is any ambiguity here which may cause trouble to the trade, he will take steps to make the words quite clear.
§ Mr. McKENNACertainly.
§ Amendment, by leave, withdrawn.
§ Mr. McKENNAI beg to move, in paragraph (a), after the word "manufacture" ["preparation or manufacture"], to insert the words "if the mixture, compound, or preparation is one which is recognised by the Commissioners of Customs and Excise as being used for medical purposes."
§ Mr. GLYN-JONESI beg to propose, as an Amendment to the proposed Amendment, after the word "recognised," to insert the words "by an advisory body representing medicine, pharmacy, and the Commissioners of Customs and Excise appointed."
I want to move this because it is quite clear the Clause does not say who is to decide what is or is not a medical purpose. However expert the Commissioners of Excise may be, 708 it is clear cases will arise when they will want somebody to assist them in reference to this one point. It might be said, for instance, that everything in the British Pharmacopoeia is an article used for medicinal purposes, and, therefore, ought to be exempt. But who is to decide that? If my Amendment is adopted, instead of leaving the decision to the Commissioners of Customs and Excise, they will have the advice of some body which represents medical men and the pharmacists, as well as the Revenue side. I have no doubt the Chancellor of the Exchequer will tell me that it is the intention of the Department to seek some such advice, but I think it is important this House should see that it goes to a properly constituted body for that advice, for one often finds that people who may have particular interests to serve secure the ear for the time being of a particular official who may be perfectly bonâ fide and yet accept the advice of the expert who has that special interest to serve. It surely would be much better to say in the Bill what the advisory body shall be. Let us see that it consists of representatives of medicine and pharmacy, as well as of the Commissioners. We have a precedent for that in connection with the Insurance Commissioners, who have a large number of technical questions upon which they want advice, and, under the Act, an advisory body is appointed. I quite admit that that body is a very large one, and a large body may not be the best body that can be devised. I therefore do not stipulate for any particular number. You may have a small number if you choose, but I do suggest the House should see that the Commissioners do not take an arbitrary view of what is to come within these exemptions and should have at their back some authoritative body, representing medicine as well as themselves.
§ Sir G. YOUNGERHow is it proposed to define the words "medical purposes"? I submit that they do require some further definition. One must remember that in the Bible St. Paul told Timothy to take some wine for his stomach's sake. Are the inventors of the various concoctions to which I have already referred to say that they are to be taken for the stomach's sake, and is that to be deemed to be a medicinal purpose?
§ Mr. McKENNAThe Amendment as it, now stands would make the Commissioners of Customs and Excise final arbiters of 709 what is to be properly described as a medical preparation. My hon. Friend raises a question whether the Commissioners of Excise are competent to be the final authority upon this very important medical point. I quite agree with him that, without the assistance of well-trained advisers they would not be competent. I do not think the ordinary Commissioners of Excise are appointed from the point of view of their medical qualification. Would it be wise, on the other hand, to accept my hon. Friend's Amendment and to insert in an Act of Parliament a particular body which at the moment appeals to him or may appeal to us as a suitable body, but which, five or ten years hence, might be most unsuitable? I ask my hon. Friend to accept my assurance that we will set up and consult a body which will not be a statutory body, but which will be a properly qualified medical body to advise the Commissioners of Customs and Excise what preparations may properly be described as medical preparations.
§ Mr. JONATHAN SAMUELYou are setting up another advisory committee.
§ Mr. McKENNANo, we are not setting up a statutory advisory committee, but we will take steps to see that the Commissioners of Excise are properly advised as to what is or is not a medical preparation, and I hope, under these circumstances my hon. Friend will not press this Amendment.
§ Sir T. WHITTAKERI am a little uneasy about this matter. Reference has been made to a number of concoctions which have been sold—"Wincamis," "Hall's Wine," and a number of preparations which are advertised very widely—as medical and as medicines, but which do contain somewhere about 20 per cent. of alcohol. In my judgment they are most deleterious preparations, the use of which ought to be discouraged in every way. They are really very strong liquor being sold under the name of medicine. [An HON. MEMBER: "By chemists?"] Yes, by chemists. I am not at all satisfied that they would be excluded by these words, nor am I clear as to whether the decision of the Commissioners of Customs and Excise would exclude them. I do not know whether the people who sell them would have the power to appeal to the Law Courts. That is a matter of law upon which I cannot express an opinion. We all know that these things are advertised 710 and are sent out on the authority and with the support of a large number of medical men. The last thing we want to do is to relieve these preparations from these duties. I am rather anxious on that point.
§ Mr. GLYN-JONESThe wines referred to by my right hon. Friend are not touched by the Bill and are quite outside it. This Bill only deals with spirits.
§ Mr. McKENNAImmature spirits.
§ Mr. GLYN-JONESThe Clause deals only with spirits, while all the articles referred to come within the category of wines, and nothing in the Clause touches them in any way. In answer to my right hon. Friend's appeal that I should not press the Amendment, it is quite clear that he himself admits the necessity for expert advice. I understand him to say that he will see that a small body, not a statutory body, will be set up which will be representative of the interests named in my Amendment. If that is so, I see no reason to press the Amendment. I would, however, say to the right hon. Gentleman that he is wrong if he thinks we are going to get a Bill that will not want altering for ten years. He says that the advisory body might want altering in less than ten years. I can tell him that there are many things in this Bill which will require altering long before ten years. Personally I should have preferred a statutory body being set up in one year's time, and if next year it was not wanted, it could be altered. In view of the right hon. Gentleman's assurance I will not press the Amendment.
§ Amendment to proposed Amendment, by leave, withdrawn.
§ Mr. RAWLINSONI doubt very much whether this Clause will carry out what was intended in the Debate we had upon the matter the other night. We had instances given of preparations, such as hair oil, which requires spirits in small proportions but which could hardly be said to be used for medical purposes. I hope the Government will look into the matter and see that all classes of manufactures dealt with in the Debate the other night come under the words "medical purposes." I rather support what was said by the right hon. Gentleman opposite (Sir T. Whittaker). My hon. Friend next me (Sir G. Younger) has quoted the scripture for his own purposes upon this point.
§ Sir G. YOUNGERWhy not?
§ Mr. RAWLINSONThere is a precedent for another person doing the same thing under the same circumstances.
§ Mr. LEIF JONESThat was not a doctor's prescription.
§ Mr. RAWLINSONI remember the hon. Gentleman pointing out on another occasion that that quotation might have meant that the wine was for outside application only, therefore, it does not prove his case at all. I do not think much attention should be paid to that point, or that this Bill will deal with the wines to which the right hon. Gentleman opposite and my hon. Friend object and which are used for medical purposes. A small tax upon the amount of spirit contained in them is not likely to stop their use in any way, and it is no use altering the Clause for the purpose of dealing with them. If their use is to be stopped, and I agree as to the desirability of stopping it, the matter will have to be dealt with by legislation of some other kind.
§ Sir J. D. REESWould not port wine come within these words? It is, in point of fact, as drunk in this country a mixture, compound, or preparation. It is also used for medicinal purposes, and is one of the best medicines in the world. So far as I understand these words they do not cover port in the wood, as you drink it in Portugal, but they would apply to all ports sent over to this country, and it is very well known that people get into the habit of drinking their own pet port, which is well known to be a mixture or preparation which is made by the wine merchants out of different ingredients, not all of them being port wine, but other ingredients which produce a particular wine suitable to the taste of the particular customer. I submit, in all seriousness, that these words will cover port wine.
§ Mr. McKENNAI think, if the hon. Gentleman will look at the words of the Clause, he will see that the point is made quite clear. It says
mixtures, compounds, or preparations which on importation are charged with duty in respect of the spirit contained in them.How are they charged? This is a Clause which deals with duties on immature spirits. The port wine he refers to is charged as wine and not as spirits. I will, however, inquire further into the point, but, as I am at present advised on the subject, there is no confusion between the two.
§ Question, "That the words, 'if the mixture, compound or preparation is one which is recognised by the Commissioners of Customs and Excise as being used for medical purposes,' be there inserted," put, and agreed to.
§ The CHAIRMANcalled upon Mr. McKenna—
§ Sir J. D. REESOn a point of Order. Inasmuch as the Amendment which the Chancellor of the Exchequer is about to move presupposes the acceptance of an Amendment at the end of the Notice Paper which creates Part III. of the Schedule, to which the Amendment relates, should not my Amendment take precedence for the reason that this Amendment does not satisfy its requirements?
§ The CHAIRMANThe hon. Member has handed in a manuscript Amendment to come at the end of the Clause which is an alternative proposal to that made by the Government. Of course, if the Government are defeated on that proposal, I shall call on the hon. Gentleman.
§ Sir J. D. REESSeeing that that is not quite probable, would it not be reasonable to take my Amendment first?
§ The CHAIRMANWhere there are two Amendments at the same place, it lies with the Chairman to decide which shall be taken first.
§ Sir J. D. REESFor that reason I submit—
§ The CHAIRMANIt is customary to give precedence to the Chancellor of the Exchequer over a private Member.
§ Sir J. D. REESI submit there is reason, apart from the superior position of the Chancellor of the Exchequer and because of the merits of the case, why my Amendment should come first.
§ The CHAIRMANOn the hon. Member's submission I have given my decision the other way.
§ Mr. McKENNAI beg to move, at the end of the Clause, to add, "and
(c) The additional duties under this Section shall, in the case of blended spirits, be subject to the modifications specified ill Part III. of the Schedule of this Act."
If hon. Members will turn to the Amendment Paper, they will see the modifications dealing with Part III. of the Schedule, 713 and I do not think it is necessary to read them through. What we propose is that spirits blended in bond after to-morrow cannot be let out of bond until the youngest spirit in blend is three years old. That is to say, that anybody who blends after to-day, if he blends the spirit in bond, cannot let it out of bond unless the youngest spirit in the blend is three years old. The age will be the age of the youngest spirit for future blend.
§ Mr. R. McNEILLRegardless of proportion?
§ Mr. McKENNAYes, in future. That does not relate to what is blended now in bond, but to the future. Anybody who blends knows he must not blend with immature spirits, or, if he does, he must keep it in bond until the youngest spirit is three years old. Existing blends of whiskies cannot be taken out of bond until the youngest spirit is two years old. When we remember that the sale of immature spirits under two years old is prohibited, that proposal will not be unreasonable. Where the youngest spirit is between two and three years old, for this year we propose that the blend may be taken out of bond and sold without additional duty—that is to say, we let off the additional duty in the case of existing blends where the youngest spirit is between two and three years old. It is a somewhat technical matter, and in the presence of hon. Gentlemen who understand the matter extremely well, I hope this may be regarded as reasonable in view of the difficulties of the blender.
§ Mr. R. McNEILLIn the case of existing blends, how is it proposed to ascertain the age of the youngest spirit involved in the blend?
§ Mr. McKENNAIt is all on record.
§ Mr. R. McNEILLIs that in the case of existing blends?
§ Mr. McKENNAYes, it is all on record. The existing blends will be treated more favourably than future blends. Existing blends may be sold without the payment of additional duty where the youngest spirit in the blend is less than three years, but more than two years old.
§ Sir G. YOUNGERI do not know how far this proposal will meet the difficulties that have been placed before myself. I understand that in a large number of cases where whiskies are blended that 714 the blenders have been in the habit of using a very small percentage, indeed, of newer spirit, not the immature spirit of which we have heard, but spirit about a year old, in order in some kind of way to break the blend, I suppose to put sting into it. The difficulty which arises is that very fine whiskies which were blended before the Bill was introduced placing the embargo on immature spirits will not be allowed to be sold at all, because there is a portion of whisky under two years old in that blend. The right hon. Gentleman is not thinking of that case at all; he is still preventing these blends from being sold if there is any whisky at all in the blend under two years old.
§ Mr. McKENNAThat is so.
§ Sir G. YOUNGERI do not know how far his advisers have told him that that will meet the difficulty. I cannot tell that myself, and I do not suppose anyone here knows anything about it. A great many complaints have been brought to me about the hardships in the case of blends made before the Bill was brought in. There can be no hardship in future, because everyone knows the conditions regarding immature spirits.
§ Sir J. D. REESI beg leave to differ with the hon. Baronet (Sir G. Younger). There will be difficulties and injustice in regard to blends made subsequently to 17th June. As I understand this proviso, it does not give such relief to the whisky trade as blenders expect and desire.
§ Mr. McKENNAIt will be very difficult for me to determine what is necessary in order to meet the reasonable claims of the trade. I would suggest that the Amendment I have put down be accepted now and if on examination hereafter it is found that the trade is dissatisfied, representations might be made to me as to meeting them, if necessary, on the Report stage, pf course, it must not be understood that I am giving any undertaking that I can alter the existing Amendment, but I shall be quite ready to listen to arguments which hon. Members may not be ready at the moment to deliver on the subject. I shall be glad to hear privately between now and Report stage any representations which they may have to make.
§ Sir J. D. REESI have an Amendment down that the average age shall be taken as the basis for taxation.
§ Mr. McKENNANo, clearly I could not accept that.
§ Question, "That those words be there added," put, and agreed to.
§ Sir J. D. REESI have another Amendment
§ The CHAIRMANThe hon. Member's Amendment conflicts now with what the Committee has already decided.
§ Sir J. D. REESI should like to make a few remarks on the Amendment.
§ The CHAIRMANTwo conflicting proposals cannot be put in the same Clause. When the hon. Member comes to the Schedule he will have an opportunity of moving the Amendment to the Government words if they do not meet with his satisfaction. I think that is the correct way of arriving at the object he has in view.
§ Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
§ Sir J. D. REESI cannot pretend to be an expert in whisky, though a moderate drinker thereof myself. I understand you to say that there will be a discussion on Part III. when it is moved, but practically the Committee by adopting the right hon. Gentleman's Amendment, accepts Part III. When the Immature Spirits Bill was passed it was regarded as a very severe addition to present taxation, and it was passed by a reluctant House at the urgent instance of the Chancellor of the Exchequer, who seemed to value each bit of the wreck of his original proposals like the owner of the Sibylline books, who charged more and more for the remaining volumes as each one was destroyed. I am not referring to what has happened up till to-morrow. Take the case of what is to happen in future in regard to assessing the age of a blend for the purpose of taxation, because that is what concerns the trade. That is the real point of interest. If a blend now contains even the smallest amount of immature whisky which is liable to the higher charge of 1s. 6d., the whole blend is taxed at that rate instead of the average of the whiskies employed, which obviously is the only fair procedure to adopt. Why, because there is a small quantity, a mere liqueur glass, or what you like, of immature whisky in the blend, is the whole amount to be charged at the higher price as if, as is the case for the Government, which is unaccepted, I believe, by the heart of the House, it makes the whole 716 thing an injurious compound and on that ground liable to the higher taxation?
I submit—and I believe really it is just as well to do it now as when the final Amendment is being put—that the right hon. Gentleman should take into account just dealing with those whose business is concerned in making these blends, and that the fair thing to do would be to take the average—to say so much whisky of such an age and so much of another age, and with the help of those experts in mathematics who are always at his disposal he could easily strike from that the proper average of taxation to be levied upon the whole blend and not exact from the unfortunate blender the taxation which would be due on the little leaven which he holds leavens the whole lump, or parcel, of whisky concerned. This is a case which really requires treatment. This is a very unjust proposal. Perhaps it is out of the question to suggest that the whisky blender should receive justice. Nevertheless, I think there is no ground whatever for taxing the whole hogshead of whisky at a certain rate because it contains a small amount of immature spirit. The only just thing to do is to take the ingredients of that hogshead, or whatever the amount be, to average it and to tax according to what I believe really was the intention of the House. There is no provision in the Bill whatsoever dealing with this point. There is nothing providing in what manner, in regard to the ingredients and their age, the taxation should be levied. It is for that reason that I want to get something into the Bill in the words of my Amendment, and at any rate, if that is impossible, as we do not divide the House now and do everything that the Chancellor of the Exchequer wants, which ought to make him anxious to listen to what others want, I suggest that the least he can do is to state that he will give instructions to his Excise authorities to levy taxation upon the basis which I have explained.
§ Mr. R. McNEILLI agree with the remarks of my hon. Friend. I do not pretend to be an expert any more than my hon. Friend (Sir G. Younger) on this matter, but at the same time it seems to me a very much fairer principle that the taxation should be based upon the average of the blend rather than upon the age of one ingredient, which may be a very small' proportion of the whole. The right hon. Gentleman rather brushed aside that suggestion and seemed to think that it was 717 impossible. There may be some technical reason for it being impossible, but he has not explained it to the Committee, and I hope when we come to the discussion of the Schedule at the end of the Bill he will be in a position to explain to the House why it is impossible to charge the tax upon a principle which is so obviously a much fairer principle than that which he contemplates being placed upon the age of a single portion of the whole.
§ Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.