HC Deb 19 October 1915 vol 74 cc1713-9

(1) In addition to the duties of Excise payable under the Medicines Stamp Act, 1802, the Stamp Act, 1804, and the Medicines Stamp Act, 1812, and any Act amending those Acts, there shall be charged, levied, and paid, as from the twentieth day of October, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, additional duties of an amount equal in each case to that payable under the said Acts.

(2) There shall be charged, levied, and paid in respect of any medicine liable to duty under the said Acts, and on which that duty has been paid before the twenty-first day of October, nineteen hundred and fifteen, on the first sale thereof on or after that date, an Excise Duty of an amount equal to the amount of duty originally paid; and if any person sells any medicine liable to the duty payable under this provision without paying the duty, he shall be liable to an Excise penalty of twenty pounds.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

8.0 P.M.


This is the Clause which imposes the additional duties on medicines. The present duties are raised according to a scale of values, and the Amendment which I had put upon the Paper was one which sought to modify the existing scale of values. I do not propose to move it, because I realise it is a technical subject and one which, if the case is to be made good in the Committee, would mean a great deal of detail. I do not think at this time I should be justified in taking up the time of the Committee with such a matter, especially because if I made a case in the Committee I should have to convince the Chancellor of the Exchequer. I gather that the Chancellor of the Exchequer at present is not convinced, but I think that may be because he has not had, as I have, an opportunity of hearing what those who propose these modifications have to say in support of them. I believe he is willing, without making any promise at all that he is prepared to accept these proposals or any modifications of them, to see those who make the proposals and hear what they have to say in support of them between now and the Report stage. I feel that is by far the most convenient way, and I am quite sure the course that I have taken will not at all prejudice the consideration by the Chancellor of the Exchequer of the arguments which are to be put forward by them in support of these proposals. If the Chancellor of the Exchequer is not to be convinced, I am quite certain that those who put them forward will not wish to carry them any further. They believe that if the Chancellor of the Exchequer gives that which I understand he is prepared to give, namely, consideration between now and the Report stage, they will convert him to this proposal or some modification of it.


I believe I handed in an Amendment to leave out Sub-section (2), but, perhaps owing to the difficulty under which we are working, it has not got on the Paper. It has probably been overlooked. I did not put it down in any hostile spirit, but because I wanted to ask the right hon. Gentleman a question with regard to Sub-section (2). It is the first illustration of one fault I find with the drafting of this Bill. It bristles with penalties—new and unnecessary penalties. There is a very curious one in Subsection (2). The Sub-section is not wanted at all.


On a point of Order. I do not wish to interrupt the right hon. Gentleman, but I do not understand what Question is before the Committee.


It is with regard to Clause 11, "That the Clause stand part of the Bill." The right hon. Gentleman is quite in order in speaking of Sub-section (2) on that Question.


I beg pardon. I did not understand.


It looks at if the Clause were complete with Sub-section (1) only. There is a question of principle raised in Sub-section (2) to which the Committee might give passing attention. The Subsection says:— There shall be charged, levied, and paid the increased duty, and that if the duty has been paid before the 21st day of October, on the first sale thereof on or after that date, an Excise Duty shall be levied equal to the original duty. and if any person sells any medicine liable to the duty payable under this provision and he does not pay the Excise Duty he shall be liable to a penalty of £20. I believe there are 20,000 or 30,000 chemists in the country—the hon. Gentleman opposite (Mr. Glyn-Jones) knows how many there are. If one of them, say in one of the most remote parts of Ireland, sells one bottle of medicine on which the duty was properly paid before the date mentioned and who knows nothing about our proceedings here to-night, if he does not pay 1½d. more on that bottle—he may have bought three bottles and sold two of them, but instead of selling the third bottle with the extra 1½d. stamp on it, it will involve him in a penalty of £20. That is very hard. It is very difficult for small tradesmen to follow these small points. I can hardly think I am interpreting the Clause aright in putting it in that extreme way. I think the meaning must be that the wholesale people are not to send out any more medicine without putting on the additional stamp. There must be some line drawn. It must mean that a person who legally bought a bottle of medicine with a certain Stamp Duty on it at a certain date, and sells it with only that stamp upon it, is liable to this heavy penalty. Unless the penalty of £20 is mentioned, it is not neces- sary to embody the Sub-section in the Clause. Would it not be better to leave Sub-section (1) standing, without bringing in Sub-section (2), which only deals with rather serious penalties people may incur without in the least desiring to do anything wrong or knowing what they are doing. I am sure my right hon. Friend will give me an answer. The Clause would be greatly improved by dropping the Subsection.


It is quite possible that the Sub-section is not really necessary, but it does no harm whatever, and it may be a help to the people referred to by the right hon. Gentleman, such as the small trader, who, perhaps, might be in some doubt if the matter were not stated here in plain terms. The first Sub-section says that in future the duties are to be doubled, and that after the 20th October the duty which is to be payable is to be a certain amount, namely, 3d. Sub-section (2) does not add any fresh law, because the existing penalty for not properly stamping is £20, and the duty of stamping is upon every seller, from the manufacturer right away down. If this were not put in the Bill, a retailer might say, "Oh, I thought that as the thing had been once stamped, therefore the law was complied with." That must be the intention. I do not think it would be fair if it were not. The first part of the Clause lays down the new duty which will be payable, and the fact of an article leaving a manufacturer to-day with a 1½d. stamp would not excuse the retailer from selling it to-morrow with a 1½d. stamp if the first part of the Clause proposes a 3d. duty. I, personally, do not take any objection, and I am sure the trade do not take any objection to the Sub-section, because it does make quite clear what they understand to be the law, to which they cannot take any objection. There are many hundreds of thousand of pounds of medicines at present in the hands of manufacturers and wholesale chemists bearing the stamp for the former duty. The Chancellor the Exchequer was good enough to meet us when we asked that he should provide a special stamp for bringing up the old duty to the new duty. That has been done. I do not anticipate there will be any difficulty at all about the matter. Although I rather agree with the right hon. Gentleman that the first part of the Clause would impose the same duty and the same penalty whether the second Sub-section were added or not, still I do not object to it, because I think it makes the matter quite clear.


Upon the question of the general advisability of the tax, I have been asked to put this point to the Chancellor of the Exchequer. Will it not be likely that he will not gain so much as he thinks by doubling the tax in the case of drugs sold under a shilling? I understand that plasters and small things which at present pay 1½d. are to be increased to 3d. Will not the first effect of that be that the sale will be less, and, secondly, that these people will avoid paying any duty altogether by doing what is not difficult to imagine them doing, namely, making the article no longer come under the Act. Although the article may be well known, it may be altered from "Somebody's plaster" to a "plaster manufactured by So-and-so." As regards the higher-class medicines which are sold from 3s. to 4s. 6d., no doubt the doubling of the duty will not be so serious a matter as in the case of the lower-priced medicine. Sub-section (1) provides that there shall be a charge levied and paid after the 20th October. That would not necessarily apply to a sale after the 20th October, because the charge would be levied before the 20th October. Sub-section (2) is necessary to make clear what is the intention of the Chancellor of the Exchequer, namely, that nothing shall be sold, even though it has been taxed prior to the 20th October, except with an extra stamp denoting the additional duty. I might ask why the 20th October is chosen as the date? It has nothing to do with me, but I hope it does not mean we are going to have this Bill rushed through by the 20th October.


It has nothing to do with that.


If it does not mean that, the right hon. Gentleman will probably have to alter the date, because a man may be fined on Friday next for the retrospective sale of an article, when this Bill may be amended on Report stage. My main point is that the right hon. Gentleman should release the cheaper articles from the tax.


I understand there is no taxation being imposed by this Bill on medicines which have not been subject to taxation before—that is, patent medicines only—and it is not being extended, but there is some doubt felt upon the point I know from letters which have reached me, and perhaps it may have been occasioned by the rather ambiguous nature of a notice which has been issued by the Customs. If I have an assurance that that is so, and that this is merely increasing the taxation of patent medicines which have always been liable to taxation, that is the assurance I want.


This is a patent medicine duty only, and no article will be taxed under it which has not been liable to taxation in the past. In regard to what the hon. and learned Gentleman (Mr. Rawlinson) said, this scale has been decided upon as the simplest. It commends itself to us because it is simple, and because it produces a revenue which we estimate at £250,000 a year. My hon. Friend (Mr. Glyn-Jones) is of opinion that his scale would, in working, be just as simple, and although it seems to me at first sight to impose lower duties on considerable numbers of these medicines, he contends that it would be equally profitable to the State. If he can make good his case the Government would naturally recommend that the trade should be taxed in the way that it likes. I do not see how he can do it, but he is going to try to convince us on the matter, and when a possible revision is considered the point which the hon. and learned Gentleman (Mr. Rawlinson) raised as to the cheaper medicines will also be considered. We have allowed a reduction of £50,000 in a full year for any possible diminution among those who like medicine. With regard to what my right hon. Friend (Mr. Lough) said, the duty is imposed, by the Acts in which it originated, on the first sale. It does not matter whether it is the manufacturer or the retail chemist. The man who sells it first after the date specified must stamp it under a penalty of £20. Unless we put this Clause in it might be held to exempt the retailer who saw a stamp, but an inadequate stamp, upon the medicine from the duty which he has had from time immemorial of seeing that the medicine he sells is properly stamped. There is nothing new in that, and there is really no new duty. With regard to the date, we originally suggested 29th September for the imposition of these duties, dating them from a week later than the introduction of the Resolution, because we wished to give the trade time, not to forestall—I do not think you can forestall in the case of medicines—but to handle the enormous stocks which have been accumulating in small boxes which will have to be opened and restamped. We thought they would want a week, but they made representations to us that it was physically impossible to handle the medicines in stock under three weeks, and so we postponed the date, with the assent of the trade, to 20th October.

Question, "That the Clause stand part of the Bill," put, and agreed to.