HC Deb 30 April 1919 vol 115 cc200-1

I am warned by the clock to get on with my task as rapidly as I can. Therefore I confine myself at this moment to saying that I do not propose to proceed with the Luxury Tax. I am quite ready to give my reasons for this, but I think that I should unduly delay the Committee if I did so now. I come first to spirits. I may remind the Committee that it was found necessary to restrict the delivery of spirits from bond, as from the 1st of April, 1917, to a limit not exceeding 50 per cent. of the deliveries in 1916. Owing to a variety of causes, including the restriction just referred to, the increased duty on spirits, the operation of the Immature Spirits Act, and I am afraid I must add some withholding of stock, the supply of spirits fell short of the demand and the prices rose to an extent which led the Food Controller, in consultation with my predecessor, in the spring of last year, to limit them by imposing a maximum scale of prices, which was announced on Budget Day and provided for a substantial increase in the then duty.

Two changes affecting the position have since occurred. In the first place the scale of prices was revised in August so as to afford relief to a section of the trade which had bought their stocks at somewhat inflated prices and had not then had an opportunity of disposing of them. Secondly, the quantities allowed to be delivered from bond were increased as from the 24th February last from 50 to 75 per cent. of the quantities delivered in 1916, bringing the authorised clearance up to 21,400.000 gallons a year. Both of these changes have further increased the profits of the trade, and they are now in the aggregate more than my predecessor estimated, and more than I think is reasonable. And the Committee will not be surprised to learn that I propose to ask that, at any rate, part of these profits should be diverted to the Exchequer by a further increase in spirit duty from 30s. to 50s. per proof gallon. This increase will, involve some readjustment of trade prices to prevent the burden falling unequally on different sections of the trade. The scale consequently is being revised so as to distribute the additional duty as equitably as possible throughout. The alteration will only affect the consumer in a few cases, such as the price of spirits sold to him in bottle, or in jar or cask. Owing to the great rise in the cost of bottling and the prices fixed for the bottle and the glass respectively, the sale of spirits by glass has been much more remunerative than the sale by bottle, and I think that some of the difficulties complained of in the early part of the year during the epidemic of influenza in reference to the obtaining of spirit were due to this cause. The new price for the bottle will be 10s. 6d., and this will remove this cause of complaint. That increase will produce an additional revenue of £21,650,000 in the full year on the present authorised amount of clearance. For the current financial year, a month of which has already passed, it will bring in an increased yield of £19,350,000.