HC Deb 21 June 1921 vol 143 cc1320-7

Section 48 of the Finance (1909–10) Act, 1910 (which provides for a duty on purchases of intoxicating liquor to be supplied in a club), shall have effect as if "fourpence halfpenny" were therein substituted for "sixpence."—[Sir J. Butcher.]

Brought up, and read the First time.

Sir J. BUTCHER

I beg to move, "That the Clause be read a Second time."

The object of the Clause is to relieve a very definite and a very serious hardship in the way of taxation which falls on clubs. The clubs which I have more particularly in my mind are the very large and increasing number of working-men's clubs in the country. The way in which the tax operates is this. By the historic Budget of 1910 a tax of 6d. in the £ was imposed on the cost of intoxicating liquor supplied to clubs. That may or may not have been right, but as a matter of fact at that time it was a comparatively small burden on the clubs. The average amount which it placed on each club in an average year was about £7 or £8. That went on until the year 1914. Since then the burden of the tax has been growing by leaps and bounds, so much so that, in the present year, the average amount paid per club in this country per annum in respect of that tax is about £40.

The Committee may well ask what is the reason for this enormous increase in the tax? One might imagine that it is due to increased consumption of liquor per member. But it is nothing of the sort. As a matter of fact, I have statistics to show that the amount of intoxicating liquor consumed per man in these working-men's clubs is less now than it was in 1910. The real reason why this burden is so enormously increased is because the tax on the liquor has increased, and the cost of the liquor has increased. The tax on the liquor has increased enormously—three or four times—and you have this extraordinary result, that the man who drinks liquor in clubs has to pay more for his liquor on account of the increased tax, and then he has to pay, or the club has to pay, a very much larger sum in respect of the 6d. in the £ on the cost of the liquor, because the cost of the liquor has increased so greatly by the amount of this tax. So that a man has to pay a tax upon a tax, not only upon the liquor itself—possibly if it were good enough he might pay that tax—but he is paying a tax upon this enormously increased tax imposed by the Exchequer. I would ask my right hon. Friend whether there is any precedent for a tax of that sort; first of all for the Exchequer to impose a tax on the article and then to ask the consumer of that article to pay a further tax upon the tax he has already paid? I believe that it is a totally new principle in taxation. I have never seen it before and I doubt if anyone else has ever heard of it before. But what a monstrous principle it is! It is as if the Chancellor of the Exchequer were to say, "I will put up the tax on the article itself from 1s. to 5s. and then I have this increased tax on the person who consumes the article of an additional 4s." Surely that is not right.

It is sought to justify this tax by saying that public-houses pay a somewhat smaller amount in licensing. That is a matter for argument which I do not propose to go into to-night. It can be shown that this tax on liquor consumed in the clubs is quite as much as or rather more, than the tax on the liquor consumed in the public-house. I am not arguing on that footing, but simply on the footing that when this 6d. in the £ was imposed in 1910, no one could ever have contemplated that the imposition of that tax would have such an effect as it has to-day, and if it was reasonable in 1910 it certainly is wrong now, owing to the increased tax on the liquor itself. I am making an exceedingly moderate proposal in my Amendment. I suggest that instead of the 6d. charge there should be a charge of 4½d. in the £. I might have asked the Chancellor of the Exchequer to reduce it to 1d. or 2d., but owing to the state of the Exchequer I am only asking him to reduce it to 4½d. The sum which would be lost to the revenue is only £76,000 in all. Therefore I really do ask him to accept this as an act of mere reasonable justice.

Sir E. POLLOCK

The hon. and learned Member pleads very hard and is very convincing. He asks that his Amendment should be accepted as a mere act of justice, and he does not base his argument on any question of clarity of taxation between clubs and public-houses, but he merely cites an historical argument. He says that if in 1910 it had been realised that this tax would have risen so much it ought never to have been put on.

Sir J. BUTCHER

My hon. and learned Friend must not misinterpret me. I said that assuming it was right in 1910 it was totally wrong now, owing to the increased taxation on liquor.

Sir E. POLLOCK

I apologise to my hon. and learned Friend if I misunderstood him. I am going to plead what I think is really the only justification for a tax at all, and that is that the State wants the money. I do not think it is possible to justify putting on a tax in cases of this sort merely for the sake of putting taxes on. One has to justify it on the ground of the needs of the State. Otherwise I should be very glad to remove this and a great many other taxes. The hon. and learned Member has given a figure which my right hon. Friend the Chancellor of the Exchequer understands is too low. It is estimated that the sum involved is £95,000, which is not an inconsiderable sum at the present time.

I want to say a word or two upon the broader lines, because the hon. and learned Member has argued on very fair lines. We all wish, if we can, to enhance the prosperity of clubs. I think we are all interested in them. We all know they do much good, and we all wish to advance the whole system of clubs. That would be common ground amongst all Members of the Committee in all parts of the House. I hope to approach the question from that point of view, at the same time keeping revenue and maintaining revenue, as the Chancellor of the Exchequer has nothing to give away at the present time. I do not think that it is wholly irrelevant if we consider whether the situation in which these clubs are placed is better or worse than the licensed house. They may be standing on very different platforms, but I think it is right to make a contradistinction if one is to keep, and get, a general perspective of the liquor taxes in the field of liquor control. At the present time the licence holders suffer a taxation considerably more severe than do clubs. In answer to a question the figures were given to the House the other day by the Financial Secretary to the Treasury. To that extent clubs do enjoy a privilege and advantage over the public-house. Although the hon. and learned Member may desire to ask for more, I think we must maintain the present scale as between these two classes of premises, and having regard to the amount involved I think it is quite impossible to make a concession which would still further grant privilege to clubs. I am sure that their members are aware of the importance of contributing to the necessities of the State at a time when we have to meet the great burdens of the War.

Mr. LANE-FOX

I wish the right hon. Gentleman would contribute, intellectually, a little more to justify this extraordinary system of taxation which has no precedent and certainly requires more investigation than it has received from the hon. and learned Solicitor-General. In 1914 the Club Tax was only £63,000. It is £383,000 this year, whereas the tax on licences is rather less this year than in 1914. No one can compare the condition and standing of clubs of respectable British working men with public-houses. Surely it is unfair for the hon. and learned Solicitor-General to have done so—

Sir E. POLLOCK

I am sure the hon. Member cannot say I made that comparison. I particularly said I had to consider the matter all round. I had to take into consideration what was paid in places where liquor was consumed. It would be quite unfair to me to quote my words in the sense of making a comparison between public-houses and clubs.

Mr. LANE-FOX

I certainly would not wish to be unfair to the Solicitor-General. At the same time I very much regret the answer which the Government has given.

Sir F. YOUNG

I regret that the Solicitor-General has not been able to meet the request of my hon. Friend in this new Clause. The very great increase in the taxation of clubs is entirely incidental and is not deliberate taxation put on by this House. I am quite sure that when we increased from time to time the tax on liquor, it was not contemplated that it was going to have the extra effect this taxation on taxation has involved. Members are familiar with the figures which have been given. As regards clubs generally, they are a little misleading, as there are many trifling clubs selling liquor for portions of the year which make the average very low. If we consider the working men's clubs, the average payment under this taxation has risen to an extreme figure. I have instances in my own district where the tax has risen from £30 to £130 without increased drinking, but rather due to the excessive cost of liquor, which is mainly due to the tax upon it. Whilst we are apparently in agreement that we cannot compare the position of clubs and licensed premises, we can take the Solicitor-General's point that we have to survey the field of liquor taxation. There is a very interesting fact, and that is that the taxation of hotels has not increased, in the average, during this period, whereas in the case of clubs it has increased to the extent which has been pointed out. If, therefore, we are to maintain the equilibrium between clubs and licensed premises, I think we have a strong case in asking the Treasury to make the reduction suggested by this Amendment. I hope we will go to a Division upon this. The appeal to the Government is founded on justice as opposed to a wrong principle—taxation upon taxation.

Captain BOWYER

I am dissatisfied with the answer of the learned Solicitor-General, especially with his remarks upon the general perspective of the case. I would like to call his attention to the general perspective as between 1914 and 1921. The tax paid by licence- holders is less than in 1914. The tax paid by clubs is greater than it was in 1914. I hold a letter in my hand from a working-man's club—one of many in my constituency which gives the actual figure for this year. The amount spent in the purchase of drink was £9,235, and the tax amounted to £230 17s. 6d. I do think that these figures show that a very undue burden is placed on them.

Sir J. BUTCHER

I was greatly pleased with the speech of the learned Solicitor-General and greatly disappointed with his decision. I was pleased with the speech because it could give no reason for the continuance of this tax, and I was disappointed with his conclusion because he has decided to continue it. I know him so well that I am sure that if there had been any justification for a continuance of the tax he would have put it forward. I challenged him to give any case in which a tax had been put upon a tax. I said it was unprecedented, and he did not deny it. The only reason that he gave for continuing the tax was that he had got it, and did not like to give it up. That is the argument of the dog with a pound of butter in his mouth. If my hon. and learned Friend insists on retaining a tax of this sort, which is wholly unjustifiable, then it will make this House all the more cautious in granting him taxes which cannot be justified, and which are used for purposes that were never intended. I beg the Chancellor of the Exchequer to

try either now, or to give some undertaking as between now and the Report, to consider it, and give some relief which will concede the principle for which we are asking.

Sir R. HORNE

I would beg the Committee not to press me too far on this matter. The House is constantly urging on the Government to restrict expenditure and to save money, and this proposal is really to take away £95,000 a year of money which is very badly required. The tax at the moment, so far as one can gather, is one which is, no doubt, burdensome. But so are all taxes. You must anticipate that if club taxation is reduced public-house taxation will have to be reduced, and even now the taxation paid by the public-house is greater than that paid by the club. You have to keep these things in mind, and when the country is so' badly in need of money as it is, to sacrifice £95,000 is more than I can consent to at the present time. I urge the Committee not to press it.

Major WHELER

Can the right hon. Gentleman give some promise to consider the lightening of this taxation next year?

Sir R. HORNE

Certainly; I should be pleased to consider the lightening of taxation all round.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 24; Noes, 77.

Division No. 190.] AYES. [4.37 a.m.
Atkey, A. R. Foxcroft, Captain Charles Talbot Lyle, C. E. Leonard
Bell, Lieut.-Col. w. C. H. (Devizes) Ganzoni, Sir John Ormsby-Gore, Hon. William
Bellairs, Commander Carlyon W. Glanville, Harold James Seddon, J. A.
Benn, Capt. Sir I. H., Bart. (Gr'nw'h) Goff, Sir R. Park Wheler, Col. Granville C. H.
Betterton, Henry B. Gould, James C. Wills, Lt.-Col. Sir Gilbert Alan H.
Bowyer, Captain G. W. E. Green, Joseph F. (Leicester, W.) Young, Sir Frederick W. (Swindon)
Bruton, Sir James Hannon, Patrick Joseph Henry
Cope, Major William Hennessy, Major J. R. G. TELLERS FOR THE AYES.—
Davies, Thomas (Cirencester) Hopkins, John W. W. Sir John Butcher and Mr. Lane-
Fox.
NOES.
Agg-Gardner, Sir James Tynte Chamberlain, Rt. Hn. J. A. (Birm. W.) Hacking, Captain Douglas H.
Amery, Leopold C. M. S. Chamberlain, N. (Birm., Ladywood) Hailwood, Augustine
Armitage, Robert Colvin, Brig.-General Richard Beale Harmsworth, C. B. (Bedford, Luton)
Bagley, Captain E. Ashton Conway, Sir W. Martin Henderson, Major V. L. (Tradeston)
Baird, Sir John Lawrence Coote, Colin Reith (Isle of Ely) Holbrook, Sir Arthur Richard
Baldwin, Rt. Hon. Stanley Curzon, Captain Viscount Holmes, J. Stanley
Balfour, George (Hampstead) Davidson, J. C. C. (Hemel Hempstead) Hope, Lt.-Col. Sir J. A. (Midlothian)
Barlow, Sir Montague Elliot, Capt. Walter E. (Lanark) Home, Sir R. S. (Glasgow, Hillhead)
Barnett, Major Richard W. Evans, Ernest Hotchkin, Captain Stafford Vere
Barnston, Major Harry Eyres-Monsell, Com. Bolton M. Hunter, General Sir A. (Lancaster)
Birchall, Major J. Dearman Falle, Major Sir Bertram Godfray Jameson, John Gordon
Boscawen, Rt. Hon. Sir A. Griffith- Ford, Patrick Johnston Kellaway, Rt. Hon. Fredk. George
Briggs, Harold Fremantle, Lieut.-Colonel Francis E. Kidd, James
Brown, Major D. C. Gibbs, Colonel George Abraham King, Captain Henry Douglas
Buckley, Lieut.-Colonel A. Gilmour, Lieut.-Colonel Sir John Lindsay, William Arthur
Carr, W. Theodore Greene, Lt.-Col. Sir W. (Hackn'y, N.) Lloyd-Greame, Sir P.
Locker-Lampson, Com. O. (H'tingd'n) Roberts, Samuel (Hereford, Hereford) Thomson, T. (Middlesbrough, West)
Mallalieu, Frederick William Robinson, S. (Brecon and Radnor) Thomson, Sir W. Mitchell- (Maryhill)
Moore-Brabazon, Lieut.-Col. J. T. C. Samuel, Samuel (W'dsworth, Putney) Tryon, Major George Clement
Neal, Arthur Sanders, Colonel Sir Robert Arthur Ward, William Dudley (Southampton)
Newman, Sir R. H. S. D. L. (Exeter) Shaw, Hon. Alex. (Kilmarnock) Weston, Colonel John Wakefield
Parker, James Shaw, Capt. William T. (Forfar) White, Col. G. D. (Southport)
Parry, Lieut.-Colonel Thomas Henry Sprot, Colonel Sir Alexander Young, E. H. (Norwich)
Pollock, Sir Ernest Murray Stanier, Captain Sir Beville
Pownall, Lieut.-Colonel Assheton Stanley, Major Hon. G. (Preston) TELLERS FOR THE NOES.—
Pretyman, Rt. Hon. Ernest G. Sutherland, Sir William Colonel Leslie Wilson and Mr.
Purchase, H. G. Thomson, F. C. (Aberdeen, South) McCurdy.

Question, "That the Clause be read a Second time," put, and agreed to.