§ (1) Section one of the Finance Act, 1933, which imposes duties of excise and provides for drawbacks on certain descriptions of beer, shall have effect as if the paragraphs set out in Parts I, II, III, and IV of the Schedule (Duties and Drawbacks on Beer) to this Act were respectively substituted for Parts I, II, III, and IV of the First Schedule to the Finance Act, 1933.—[Sir W. Wayland.]
§ Brought up, and read the First time.
§ 7.21 p.m.
§ Sir WILLIAM WAYLAND
I beg to move, "That the Clause be read a Second time."
It may appear to be rather a complicated Clause, but, in reality, it represents a reduction of 1d. per pint on the present tax on beer. After the answer which the Chancellor of the Exchequer gave to the Mover of a reduction of the tax on whisky, I have no great hopes that he will accept my Clause, but, nevertheless, it is my duty to point out to the House that at the present beer is taxed ten times what it was pre-war. Beer and whisky are twin sisters in distress. They are subject to what I may term penal punishment. They represent the Cinderellas of the Budget, and have done so for some years past. I admit that the Chancellor granted a reduction of 1d. per pint in 1933, but that was very much overdue, and was given because the revenue was rapidly falling. All Chancellors of the Exchequer usually take a very narrow view of anything in the shape of futures; they try to go on "certs." In regard to the beer tax, I have heard it said that if 1606 it were reduced by such a sum as would enable the working men of the country to buy a pint of good beer for 3d., the Chancellor would recoup himself within a period of two years. He may say that he may not be here two years hence. I believe he will, and for many years after that—we know his value, except on the beer question.
Last week I listened to the eloquent speech of the hon. Member for Westhoughton (Mr. Rhys Davies) in opposing a reduction of the whisky tax. He opposed it on what he calls moral grounds. There is no morality in Budgets; the position of the Chancellor of the Exchequer is to obtain as much money as he can and to treat all taxpayers as fairly as possible. I maintain that he has bled the indirect taxpayer very unfairly. They claim that beer should be put on the same footing as cocoa and tea. When the hon. Member for Westhoughton put his own point of view so eloquently, he reminded me of the words which were used by one great statesman of another great statesman in the Victorian era, that he was "drunk with the exuberance of his own verbosity." I do not say that disrespectfully but simply that if he is going to use the same arguments to-day he is not fair. He speaks from an absolutely temperance point of view. I should like to ask him and the Chancellor this question. Suppose we were turned into a teetotal country to-morrow and drank neither whisky, beer nor wine, what would be the position of the Budget? At the present time the Chancellor of the Exchequer obtains £100,000,000 per annum from the 1607 excessive duties on alcoholic liquors. Surely that £100,000,000 cries out for fair treatment, which it does not receive at present. Beer alone contributes £55,000,000 per annum and the agricultural labourer for whom I speak, and whom I represent, as well as the hop growers, cries out that he cannot afford to buy beer in moderate quantities at the present price.
§ 7.26 p.m.
§ Mr. HANNON
I beg to second the Motion.
I do so without any great feeling that the Chancellor of the Exchequer will give a warm response to the proposal. But there are times when a continuous attachment to a principle must be made manifest. On occasions other hon. Members of this House are prepared to prove their continuous attachment to the old gospel of not taxing foodstuffs, and we who feel that the beer trade of this country has been continuously excessively taxed desire from year to year to indicate our feelings that the tax is out of all proportion to other taxes in the Budget. In this country beer is an article of food. The hon. Member for Westhoughton (Mr. Rhys Davies) knows that perfectly well. He knows that the most attractive, sensible and helpful people in his constituency are the drinkers of beer; the moderate beer drinker is the most wholesome citizen we have. The right hon. Gentleman the Leader of the Opposition does not appear to agree with that statement, but as he does not drink beer he cannot understand the genial feelings of the man who does. At all events beer is the largest contributor, except Income Tax, to the revenue, and, in my view, it has been excessively taxed for a long series of years. It is an essential part of the food of the wage-earning classes, and in all fairness the tax should bear some proportion to the tax on tea and cocoa and other drinks.
It may be that the Chancellor of the Exchequer cannot afford to sacrifice £7,000,000 or £8,000,000 and he may say to-night, as he did the other day, that although he cannot remit the tax, he agrees that it is overdue, and that at some time in the future, when circumstances are more favourable and the prosperity of the country is still advancing, he may see his way to make a further advance to the beer drinkers of 1608 this country and remit another 1d. on the pint.
§ 7.29 p.m.
I desire to associate myself in the request to the Chancellor of the Exchequer to reconsider this matter of the Beer Duty, particularly from the point of view of the agricultural labourer, who finds it extremely difficult in these hard times to buy his normal quantity of beer. I believe that if the Chancellor of the Exchequer will look into this matter again he will find that he will not lose the amount of revenue which may be apparent on paper if the new Clause were accepted. But if the Chancellor does not consider this matter favourably I ask him again to call together the brewers, and to see what they are going to do towards helping with the price of malting barley. The last time there was a reduction in the Beer Duty the brewers made a gentlemen's agreement with the Chancellor on the matter of malting barley. The brewers certainly have taken more barley from the farmers of our country, but they have taken it at such a low figure that no further advantage has been given to the farmers, and the position in my own constituency, which relies very largely on the production of beer and on the price of malting barley, has been seriously affected.
I do not know whether I shall be in order in asking the Chancellor to tell us whether he considers that since he made the last concession in this matter the brewers have done everything they should have done in their responsibility to the farmers. Personally I feel that they have not done as well as they might have done. Before he makes any concessions my right hon. Friend would be well advised, in the interests of the agricultural industry, to make a strong representation to the brewers that any further advantage they may get by relief of taxation should be passed on to the farmers. It is a most important matter and one which is having the anxious consideration of every branch of agriculture, because barley is a balancing crop, and if you have these disproportionate prices they are entirely unremunerative. Last year in my constituency the brewers bought malting barley at feeding-stock prices, quite contrary to the arrangement that the Chancellor made with them. 1609 Much as I would like to see this concession made, I hope that my right hon. Friend will take the opportunity which a remission of this sort will give to him of providing that a proper price be paid for malting barley.
§ 7.33 p.m.
My hon. Friend the Member for Canterbury (Sir W. Wayland) said that his proposal was equivalent to reducing the cost of beer by a penny a pint. It is not quite correct to say that, because you get to that reduction only when you arrive at beer of 1055 degrees, and as a matter of fact that means only the heavier beers—the beers that are said to be good for you—and it does not apply to a very considerable range of beers consumed now. I have ascertained that my hon. Friend's proposal would do nothing at all for beers of a gravity of 1027 degrees and below, and that between 1035 and 1045 degrees, representing two-fifths of the consumption of the country, the average would be a halfpenny and not a penny. The first question is, what would that cost? If it resulted in a rise of 5 per cent. in consumption it would cost about £11,000,000 or £12,000,000 for a full year. If the rise in consumption were 10 per cent. the cost would fall to about £9,000,000 or £10,000,000. My hon. Friend will see that in either case the cost would be sufficient to upset the Budget. He may say, perhaps, that the Chancellor underrates the increase in consumption which would follow this reduction of duty, and that it would be more than 10 per cent.; but I would remind him that the last time I reduced the duty the actual loss of revenue was about £15,000,000, and I think he will see from the figures I have given already on various occasions that I am really not in a position to risk another loss of revenue of the order of that which I have mentioned.
The hon. Member for Canterbury and my hon. Friend the Member for Moseley (Mr. Hannon) really were rather disarming, because they made it clear that they were not expecting me to accept this Clause and they put it forward as a sort of gesture. We have had a good many gestures this afternoon. There were the gestures of those who said that we ought to remit taxation to the industries that were doing well in order to encourage them to do better; the gesture of those 1610 who want taxation remitted to industries that are not doing well in order that they may be saved from destruction; the gesture of those who want taxation remitted on foodstuffs; and now the gesture of those who are interested in drink stuffs. I do not know where the Chancellor is to look for any sources of revenue on these occasions. I would remind the House again that I have been guided by certain principles in considering how any surplus may be distributed. One principle was that the extra impositions of taxation in 1931 should come under review before I went further afield. The remission in the duty on beer two years ago was in fact a little bit more than the restoration of the position before 1931, from the point of view of my hon. Friend, who now wants me to make a further remission. If I did so I should of course be flying absolutely in the face of the principle that I myself have laid down.
When I consider that, and consider the cost involved, and consider the other claims upon me, particularly the claims of people who are continually calling attention to the enormous taxation of spirits, I feel I cannot go further. I fear that the support of the brewers by my hon. and gallant Friend the Member for Buckrose (Major Braithwaite) will not be entirely agreeable to them. They will wish to be saved from such friends. My hon. and gallant Friend endeavoured to attack them for not having carried out the arrangement that they made with me, but I would remind him that I never asked the brewers to guarantee that when they bought more British barley they would buy at any particular price. They must, of course, buy at the market price, whatever it is. While I sympathise with my hon. and gallant Friend's constituents, who find that the price they receive is not remunerative to them, still I dare say they will prefer that price than that no malting barley should be bought at all. If more barley was bought by the arrangement with the brewers that was as far as I could ask the brewers to go at the time.
§ Sir W. WAYLAND
I do not want to force a Division this year, but I hope to do so next year. My feelings remain just the same. I now ask permission to withdraw the new Clause.
§ Motion, and Clause, by leave, withdrawn.