§ 5.0 p.m.
Mr. CHAMBERLAINI pass by a not unnatural transition from spirits to beer. Beer is no less favourable to my attentions. A year ago when the authorised annual output of beer was 33⅓ per cent. of the 1916 output, my predecessor found that excessive profits were being made, that the prices charged to the consumer were higher than could be justified by the then existing conditions. He decided in consultation with the Food Controller to increase the duty from 25s. to 50s. a barrel. At the same time the partial control of prices previously instituted was continued in a modified form. The order limiting prices did not touch sales on any portion of licensed premises other than public bars, and it did not refer to all articles sold. It did not touch draught beer above 1034 degrees or any bottled beer. The controlled prices, which were fixed so as to enable the trade to secure sufficient profit without unduly raising the prices of the beers, were not affected by the Order. It was, however, subsequently found that 202 for beers of higher gravity and bottled beers the prices charged were in many cases increased much beyond the limit which would have provided a reasonable profit. Further, after the Armistice, it became possible to some extent to meet the public demand for more and better beer, and as from 1st January an additional quantity has been allowed to be brewed at a higher average gravity. The increase, which was in the proportion of 25 per cent. of the standard barrelage for 1918, had of course the effect of reducing the cost of production, and the trade was thus in a position to make still larger profits than before. In view of that, the Government thought it right to warn the trade that while they might have the run of those profits until Budget day, they must expect an increase of duty at that time. A new scale of prices was issued at the same time that the increased barrelage was allowed. This scale allowed, as I have said, a fair margin for further taxation to be taken in respect of the increased barrelage. The necessity which existed during the War of rigidly restricting the amount of grain to be used in brewing has now passed away, and the Government after full consideration are prepared to take a further step in allowing increased supplies of beer, and of beer of a better quality, and brewers will accordingly be allowed to increase their output by 50 per cent. on their 1918 barrelage. This, added to the 25 per cent. increase sanctioned last January, will mean that the restricted barrelage which was allowed in 1918 will be increased by 75 per cent., bringing the total authorised barrelage for the year up to 20,000,000 barrels, compared with the pre-war barrelage of about 36,000,000.
In order that the consumer may be able to obtain beer of better quality brewers will be at liberty henceforth to brew to an average gravity not exceeding 1040 degrees in Great Britain, as compared with the 1032 degrees which is the existing limit, and with the pre-war gravity of 1050 degrees under unrestricted conditions. The average gravity of beer brewed in Ireland, which has always been higher, will remain at 1047 degrees, as compared with 1065 degrees before the War. [An HON. MEMBER: "Why?"] In consequence of the particular conditions and character of their trade. This increase in the average gravity which the brewers in Great Britain are allowed to brew will, I hope, go far to remove the grievance, of which 203 some of them have complained, that they were unable to maintain their special trade at the low gravity hitherto imposed upon them. The effect of further relaxing the restrictions on output while continuing the present scale of prices to the consumer, which we do not propose to alter, will be to increase the margin of profit for taxation beyond what was contemplated when the prices were fixed in February last and the trade warned to expect it, and I now feel justified in proposing to appropriate to the Exchequer from these profits a total amount of 20s. per standard barrel by raising the duty from 50s. to 70s. In fixing this rate of duty I have had to consider the diversity of conditions existing in the trade and to give fair consideration to those who are least fortunately situated.