§ Now I come to another source of revenue, with regard to which also there has been great difficulty in coming to a decision. The House will not be surprised to learn that I propose to get additional revenue out of the spirit and beer trade. The trade, as everyone knows, is in a position which is entirely artificial. On the one hand, the commodity is so scarce and the desire for it is so great—I know in some quarters they do not desire it—but the desire is so great that sellers, if left to themselves, 713 could obtain practically any price. It is, therefore, a monopoly. On the other hand, the condition is artificial, because prices are regulated by the Food Controller. As regards spirits, the present duty is 14s. 9d. per proof gallon. I propose to make that duty in the future 30s., or an addition of 15s. 3d. per proof gallon. That will bring in during the present year £10,500,000, and in a full year £11,150,000. I have, in coming to this decision, not only examined the figures most carefully, but I have consulted many of those connected with the industry, whose advice is worth having, and I have no doubt whatever that the trade, at the prices fixed by the Food Controller, which will be announced tomorrow, can pay this additional duty and still make reasonable profits.
§ Now I come to beer. If spirits interest a large section of the House, beer, I think, will interest a still larger section. What I propose to do in the case of beer is to double the present duty, which is 25s. per standard barrel, and to make it 50s. This will bring in £9,700,000 this year and £15,700,000 in a full year, on the present output. The prices of beer have been fixed by the Food Controller, in consultation with my self, at figures, which justify us in believing that the duty can be paid, while still leaving fair profits for those engaged in the trade. I have no doubt, from observations which have been made at different times in the House of Commons, that many Members of the House have in their minds the big profits that have been made in this trade during the past year.
§ Mr. LEIF JONESI prophesied it!
§ Mr. BONAR LAWI am afraid I must take anything my right hon. Friend says with a certain amount of discount.
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§ Mr. BONAR LAWAt all events, if I had foreseen what has happened, there would have been a change in the duties a year ago. I do wish the House of Commons now to look at this question as I am looking at it, simply from the point of view of revenue, and, in any discussions which take place, to leave absolutely out of their minds whether they are for or against particular trades. This was the position on which I had to decide. I had to decide whether this duty could be borne, 'while still leaving fair profits to those engaged 714 in the industry. There was a difficulty about that. There is a great variety in the nature of the businesses of different brewers; there is a great difference between those who were free brewers, who have not tied houses, and those who have; there is great difference in the methods in which they carry on their trades; and I was satisfied at the outset that it was quite impossible to hit on any figure which would be exactly equal as between all the people engaged in the trade. I had, therefore, to take a figure which seemed to me fair to the trade as a whole, and which would not inflict undue hardship on any members of that trade who were conducting it properly.
I believe that this figure which I have chosen fulfils that condition, but I would like to point out one advantage which the Excess Profits Duty gives in regard to these trades. Take either spirits or beer, and the firms which have paid excess profits. Under the conditions of that duty, if in a particular year a firm which has paid the duty does not make the prewar standard, it is entitled to recover from the Treasury 80 per cent. of the deficiency. I would have imposed this with more hesitation, but for that fact. Let the House consider what that means, and consider to what extent it is a protection to those engaged in the trade. Supposing a firm had made before the War £15,000; if under this duty it is only able to make £10,000, it would get back out of the Excess Profits Tax paid rather more than £4,000, or 80 per cent.—that is to say, in respect of £15,000, that firm would, be certain of receiving £14,000, and I think it is £150 more. Now I would ask the House to bear that in mind and consider that, after all, an arrangement, which gives this trade a certainty of making almost its pre-war profits, is not an unfair arrangement to make in the stress of taxation in which we are placed
§ Mr. PRINGLEWhy not treat them like the ship owners?
§ Mr. BONAR LAWThere is another point with regard to the excess profits. I said there was great variety in the way in which these businesses are carried on, and consequently in their profits. But the Excess Profits Duty protects the Treasury as well as the trade. If the duty, which I am now proposing, does not get as large a revenue from these firms as might in ordinary course be expected, 715 then we will take 80 per cent. of the excess profits which they make over and above their pre-war profits. On the whole, therefore, I hope the House will consider that these two taxes in all the circumstances are not unfair, and not inequitable to those whom they affect.