HC Deb 21 April 1943 vol 388 cc1740-3

First Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Mr. Tinker (Leigh)

I think the Chancellor of the Exchequer could very well have left this extra taxation out of account. This is an unbalanced Budget. The taxation represents, according to the Chancellor's figure, 56 per cent. of the total amount we have to raise, and therefore there can be no question of stabilisation. We have to get money from somewhere or other to balance the Budget, but we cannot get 100 per cent. from taxation. Why has he increased the taxation on a commodity which is already overtaxed? He could very well have left this tax off and either have borrowed money, with which I do not agree, or added so much more to the National Debt. It is very unwise at a moment like this to increase the tax on beer, because in many cases, although it is not an absolute necessity, beer goes a long way towards keeping the workmen in a good frame of mind. That is why I think it is unwise to put on this extra taxation.

Mr. David Adams (Consett)

I would like to support my hon. Friend the Member for Leigh (Mr. Tinker) and to say that it is believed in the Durham coalfield that a mistake has been made in this particular by the Chancellor of the Exchequer. He ought to have turned in other directions to find the money required, because his action is disturbing the equanimity and the good will which prevail at the present time in that basic industry. Those who know of the labours of the mining areas in particular agree that they are steeped in toil, and I think it can be affirmed that that applies generally to the working classes. In this case there are two sections of the community that are affected—the normal workers, and those with fixed incomes, such as pensioners and others, who have no relief and for whom there is no escape. If there had been some in- crease in Income Tax, that class would have been permitted to escape, as they are the most necessitous in the community. I am satisfied that a very disturbing feature has been raised by this particular taxation. The consumption of beer, which in pre-war days could be looked upon as a luxury, has become a necessity owing to the restriction on entertainment, variety, change and travel. It is an additional taxation upon an urgent necessity, and the Chancellor of the Exchequer ought, if possible, to reconsider the position and not increase the tax on beer.

Mr. Benson (Chesterfield)

When one turns to the White Paper on the resources of the country and discovers that we are spending in the fourth year of the war £912,000,000 on alcohol and tobacco, I do not think that anybody can say that this country is being too heavily taxed. The mere fact that we can spend such enormous sums on what are luxuries—and I want to deny any idea that I am a teetotaller——

Sir Edward Campbell (Bromley)

Prove it.

Mr. Benson

I will, if the hon. Gentleman will meet me afterwards. The fact that we are spending such enormous sums shows that there is still a large amount of slack in our belt which can be taken up. It is not so much a question of balancing the Budget. Everybody knows that that is impossible. Refer to the White Paper and you see where the bulk of the spending power is and that spending power has to be reduced. We either have the option of increasing the incidence of Income Tax upon the lower incomes, or we have the alternative of putting indirect taxation upon them. The hon. Member for Consett (Mr. D. Adams) suggested that this tax was likely to upset the equanimity of the coalfields, ml I can say is that the imposition of a tax upon wages produced a very great deal of friction, and I am not sure that that friction has already died down. It may be that direct taxation is something to which you have to get used over a period. We on this side of the House have always been in favour of direct taxation, but as far as the present war-time conditions are concerned, I think the Chancellor of the Exchequer has been very wise in avoiding direct taxation of lower incomes and putting it instead on indirect taxation, though that does not apply to peace-time. It only applies to the very exceptional conditions, and I am very pleased that the Chancellor of the Exchequer has increased the tax upon these obvious luxuries.

Sir Stanley Reed (Aylesbury)

I support the point of view put forward by the hon. Member for Chesterfield (Mr. Benson). I have every sympathy with the aspect of the case presented by the hon. Member for Leigh (Mr. Tinker) and the hon. Member for Consett, (Mr. D. Adams), but I do not think that they should slightly mislead the House. What the Chancellor of the Exchequer is proposing to do is not to raise the tax on beer, but to put a heavy tax upon water. If my information is correct, the amount of barley to be released for brewing is to be cut down by ten per cent. and the quantity of hop substitute by ten per cent., and the amount of beer to be brewed is as much as, if not greater than, it was before, But those who feel rather aggrieved at the duty have an excellent remedy in drinking water, although I do not think that the Chancellor of the Exchequer will encourage it. As night follows day, from the figures presented by the hon. Member for Chesterfield this of all commodities is the one on which the tax ought to be raised at the present time.

The Chancellor of the Exchequer (Sir Kingsley Wood)

I do not think that I really need take up the time of the House in answering the observations of the hon. Member for Leigh (Mr. Tinker) and the hon. Member for Consett (Mr. D. Adams). I very much regret myself that beer has to be taxed. It is the easiest thing to go to one's constituency and say, "I opposed it," but if one looks at the merits of the situation, I think I can say that the whole of the country, and certainly the whole of the House, have been with me in this action. It was not a matter of desiring to tax the people; it was simply the alternative of taking this course or going in for direct taxation, which, in its turn, might bring many more difficulties to bear upon a large number of people. I have not taken up any hard and fast line on direct and indirect taxation. I have endeavoured to hold the balance between the two. I think that the whole of the country are with the Government, with the Chancellor of the Exchequer and with this House in agreeing that on the whole, in the circum- stances in which we have to deal with the situation, this is a fair way of dealing with it. Anyone who does not want to pay this indirect taxation has, as I have explained before, to take only a simple course. It means giving up only a small quantity each week, and I suggest that the great majority of people will be prepared to take that course in the interests of the country at the present time.

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Second to Sixth Resolutions agreed to.