NEW CLAUSE.—(Amendment of law relating to excise liquor licences.) (Hansard, 7 July 1930)

§ Sir PATRICK FORD
I beg to move, "That the Clause he read a Second time."
In view of what the Chancellor of the Exchequer has said, I am not very much encouraged, in bringing forward this new Clause, standing in my name and the name of the hon. and learned Member for Argyllshire (Mr. Macquisten). I say quite frankly that the adoption of this new Clause would mean the giving up of about £1,000,000 of revenue. In spite of his kindness, his self confessed and super-Aberdonian zeal in collecting sixpences shows the right hon. Gentleman to be very thorough; in fact, he is as thorough as the American thought our police. He lost his wallet containing a large wad of notes, and reported his loss to Scotland Yard, where they told him that no stone would be left unturned to recover it. Next morning the road-breaking gang started operations with their pneumatic drill under his hotel window, and he remarked to his English valet, "Say, ho, I hand it to your police guys for thoroughness." The Chancellor of the Exchequer has shown great thoroughness, but in some cases it is misplaced thoroughness. The principle of justice has to be considered and the proverb about killing the goose that lays the golden eggs. I know that the right hon. Gentleman is a just man, and I think he might grant this concession and avoid the danger of killing the goose. It would not be in order for me on this new Clause to deal in detail with the enormous taxation which is borne by the licensing trade of this country. Perhaps I may be permitted to point out that everybody who buys a 12s. 6d. bottle of spirits pays something like 8s. to the Revenue, and consequently this is a very valuable source of revenue. Whatever people may think about the consumption of wines and spirits, no one can deny that it is a very valuable source of revenue. From the point of view of justice it is bad and taxation means adding that extra turn of the screw that may wring the goose's neck.
85 We have now to consider the position very carefully. This new Clause asks that a quarter of the Licence Duty for the sale of beer, wines and spirits in licensed houses should be remitted. My new Clause also asks that in relation to off-licence houses in the case of licences for the sale of spirits, there should be a reduction of the minimum allowed in the scale. There was a complicated scale in 1910, and the minimum duty allowed in towns of a certain size was £35. It is now asked that the minimum should be reduced to £10. In large towns the rentals are apt to be high, and under this proposal there is a danger of small houses being wiped out if they have to pay as a minimum as much as £35. We cannot see why a small off-licence trade should not be decently conducted, and it is often more for the convenience of the poor people in the neighbourhood of a large town. We feel that we are only asking for a simple measure of justice.
In 1910, when these licences were imposed, the hours were very different. As between Scotland and England at that time the hours varied between 19 and 18, and now they vary from nine to 10, and that is a very great reduction. There has also been a great fall in the consumption of spirits from over 30,000,000 gallons at the time of the imposition of the duty to about 19,000,000 gallons at the present time. The amount of consumption in Scotland is about 2,500,000 gallons. I say this to show that this is a question which is of interest not only to Scotland but also to the whole country. It should be remembered that the assessment of licensed premises is based on the rental, and the rentals are larger in all kinds of industrial subjects and hereditaments, and show a tendency to go up. There is the additional danger that if the licence holder decides to spend money upon the improvement of his premises, as moderate people advise him to do, he is liable to have his assessment raised, and I think that is another hardship from which he might be protected, to some extent, in the interests of the public.
On the whole question of varying the amount of the licence duty on off-licences on account of the reduction of hours and the reduction of turn-over, I think that is a principle which has already been accepted. It was accepted in 1872 when 86 a reduction of licence duties was made when Sunday closing came into force. A rebate was made during the War when certain restrictions with regard to hours and the amount of consumption were brought into force. Those restrictions were embodied in the Finance Act, 1917. Since then some of those regulations have been swept away, but the reduced hours of sale have remained, and that means a large reduction in consumption. There has also been a large reduction in the consumption of beer. In view of these facts, it is obvious that some reduction should be made. We should recognise the principle of altering the levy according to the probable turn-over. The present Chancellor of the Exchequer, in the year of grace 1924, in reply to a deputation, showed considerable sympathy, although he did not put that sympathy into effect. The late Chancellor of the Exchequer, in his preliminary Budget statement, said that when he was returned he would introduce in the second part of his Budget the concessions for which I am asking. We had great hopes in view of the sympathetic attitude of the present Chancellor of the Exchequer in 1924, and in what the late Chancellor promised in 1929, which was not put into operation owing to certain regrettable incidents at the poll. We hope that this act of justice will be done to-day to the very hard-working and from the Chancellor's point of view well-deserving members of this trade.

§ Mr. MACQUISTEN
The hon. Baronet the Member for North Edinburgh (Sir P. Ford) has made such an able speech in moving this new Clause that it is not at all necessary for me to take up much time in supporting the Motion. The hours are down by half, and, in addition, there is very high taxation on account of increased assessments. Besides this, the trade has had to face a great diminution in consumption. In spite of all these drawbacks, the trade is more efficient in this country than it is on the other side of the Atlantic, and it has enforced prohibition almost to an extent that would satisfy the hon. Member for Dundee (Mr. Scrymgeour). As a matter of fact, the trade is acting as tax collector; indeed the original meaning of the word "publican" was "tax collector." In the part of the Highlands which I represent, there are 12 or 13 87 distilleries, which collect an enormous amount of revenue for the Chancellor of the Exchequer, and yet I cannot even get a telephone out of the right hon. Gentleman to enable them to carry on that work, which is the chief business of the district. I was surprised to learn that this proposal involves such large figures. It only shows how heavy the burden is, and, if the Chancellor of the Exchequer is getting, through these diligent servants of his, such an enormous sum, surely, when he has cut down their opportunities of serving him faithfully to the extent that he has, he ought to make this concession. It will not do to destroy them utterly, because then he will have to find a new source of revenue, and possibly he may even have to follow the suggestion that I have made on former occasions, and call upon those people who do not consume excisable liquor, and who thereby escape, especially if they do not smoke either, a very large proportion of the taxation which is borne by their fellow-countrymen, to take out a licence for indulging in such virtues. Unless something of that kind is done, and if this sort of penal taxation is to be continued, the whole business may be exterminated, and those people to whom I have just referred may wake up and find that they will have to spend a great deal more money in taxation than would otherwise be the case.

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)
I am sure that the hon. and learned Member for Argyllshire (Mr. Macquisten) will not expect me to follow him into the question of the merits of the modern publican, or the origin of his name. I will address myself to the more direct subject-matter of the proposal contained in this Clause. The suggestion is that the licence duty should be reduced by one-fourth, and that the minimum licence duty also should be at a lower rate in towns than has hitherto been the case; and it is proposed that these alterations should apply both to on-licences and to off-licences. In this latter respect, the proposal contained in the Clause goes beyond what was suggested by the late Chancellor of the Exchequer, whose proposal only applied to on-licences. It is unfortunate for the sponsors of this Clause that they did not persuade the late Chancellor of the Exchequer 88 to introduce the proposal in what he called his first Budget. As the Mover has reminded us, he postponed it until his second Budget, which never eventuated owing to the result of the General Election.
This proposal would involve the revenue in a loss of over £1,000,000 a year in a normal year; but, unlike certain other remissions, it would involve the revenue in a still greater loss in the current year. The reason for that is as follows. It is proposed that the licence duty should be reduced as from the 28th May, that being due to the fact that both the Mover and the Seconder come from north of the Tweed, where most licences expire on the 28th May. In England and Wales, however, a large number of licences expire at a later date, mostly on the 30th September, and therefore, if this proposal were carried, there would be first of all a rebate on the licences for the current year, and there would be further a whole year's loss of revenue on the licences which would be taken out on the 30th September. Therefore, in the current year, the loss would exceed £1,300,000.

§ Sir P. FORD
May I say that my hon. and learned Friend and myself are perfectly willing to make this part of our Clause applicable only to Scotland?

§ Mr. PETHICK-LAWRENCE
I am afraid that, even in that amended and truncated form, the Clause would not be acceptable to my right hon. Friend. He is not able to see his way to suffer the loss of revenue which would be involved by the proposals of the Clause, either in its present form or even if the date proposed in it were only applicable to Scotland. Apart, however, from the loss of revenue, the Committee must remember that the present Government have remitted to Royal Commissions, for England and Wales and for Scotland respectively, the whole question of legislation relating to intoxicating liquors, and no doubt the question of licences and the right rate to pay for licences will come before those Commissions. In these circumstances, we cannot see our way to make any changes of this character pending the reports of the Royal Commissions.

§ Mr. SCRYMGEOUR
I do not think that anything is to be looked for from 89 the Royal Commissions as far as this or any other important aspect of the question is concerned. There is no reason why any quarter should be given to the trade as a whole, but there is something to be said, and something has been said by those who are given to special pleading, in regard particularly to the retail interest, from the point of view that a great deal of the condemnation and criticism that is meted out to them is not, after all, fully warranted, in view of the approval which is given to the idea of imposing still further heavier taxation as a kind of temperance legislation, in which connection the tax-gatherer is not looked upon as he ought to be looked upon. As to the question of loss of revenue, it is certainly revenue, but it spells a dead loss to the country as a whole. We should do far better to give up drawing any revenue at all in this fashion. The prosperity of the country and the position in regard to employment would be much more substantially improved if we were not in this unfortunate predicament of having to pay so much—

The DEPUTY-CHAIRMAN
I am afraid that we cannot enter into the merits or demerits of temperance now. The only question before the Committee is that of the duties payable upon excise liquor licences.

§ Mr. SCRYMGEOUR
I am not speaking about the advocacy of temperance legislation—I am not given to that at all—but on an entirely different point, which is the one before the Committee, namely, the drawing of revenue from these licences. To that I object on the score that we are Proceeding on entirely wrong lines in exacting revenue from this source of trouble in the country. Further, I am submitting that, when the case is looked at fairly, the man who acts as the tax-gatherer does not merit the avalanche of condemnation which is poured upon him, as if he were the only factor that was causing trouble in this connection. It is the concern as a whole, and the exaction of revenue from that source, against which I am now making my protest.