§ Mr. CHURCHILL
Now I come to the intricate subject of the Wine Duties. These Duties were doubled in 1920. Despite those increases the consumption of wine to-day is about 50 per cent. above the consumption before the War and in 1921. But the various classes of wines have not all shared equally in the advance. Port has gained the most, perhaps at the expense of whisky. Moreover, under the substantial preference which we accorded in 1925, Empire sweet wines found a market in this country for the first time, and have achieved a very remarkable success. Light beverage wines, on the other hand, although showing an increase over 1921, have not as a whole maintained their pre-War position, and the consumption of sparkling wines has fallen below the pre-War level. Whilst therefore imported wines, taken generally, appear to be able to support an additional burden, it seems right that any increase that has to be imposed should not be distributed equally over the whole trade.
The Committee are no doubt aware of the main rates of Duty on foreign wines. Six shillings per gallon is charged on wines containing more than 30 degrees of proof spirit, and 2s. 6d. a gallon on wines containing less. The first question therefore to be considered is whether the dividing line should be maintained at 30 degrees, or whether it should be altered to some lower point in the scale. The object of the dividing line should be to render wines to which extraneous spirit is added liable to a higher rate of Duty than wines which when entering the country contain no spirit beyond that produced by the natural process of fermentation. No dividing line can wholly achieve this purpose, but it is common ground between all parties whom we have consulted that the present dividing line bears no relation to the facts. Wines fortified by spirit enter the country in large quantities below the 30 degrees limit as well as above it. In these circumstances, I have come to the conclusion that it will be right to take advantage of the present need of revenue to lower the dividing line for foreign wine to 25 degrees. This figure, after exhaustive 92 inquiries, in which we have been greatly assisted by the trade, appears to be in every way the most appropriate. As Empire dry wines appear to develop naturally a higher alcoholic content than foreign wines, I propose to fix the dividing line for Empire wine at a slightly higher point in the scale, namely, 27 degrees.
These alterations for this year would not produce sufficient revenue for our needs. I propose, therefore, that non-Empire wines containing more than 25 degrees of proof spirit shall pay in future 8s. per gallon, and those which contain less shall pay 3s. per gallon. The corresponding rates for Empire wine above and below 27 degrees will be 4s. and 2s. per gallon respectively. These changes in the Wine Duties are estimated to yield £1,500,000 in a full year and £1,250,000 this year. We arranged some time ago to terminate on 23rd April the Anglo-Spanish Commercial Treaty of 1922, and the new rates upon imported wines will come into force on Monday, the 25th April. Before I pass from the subject of imported wines, I should like to express my regret that it has been necessary to cause inconvenience to the trade by imposing restrictions on clearances so far in advance of the Budget statement as the 1st February. But the rate of clearance at that date had become so abnormal that, unless immediate action had been taken, the revenue for this year would have suffered. The restrictions will cease to apply on the 25th April.