HC Deb 02 December 1947 vol 445 cc208-20

Motion made, and Question proposed, "That the Clause stand part of the Bill."—[Sir S. Cripps.]

3.40 p.m.

Captain Crookshank (Gainsborough)

The enormous increase in the Beer Duty should not be allowed to pass without any reference being made to it at this stage of our deliberations on the Finance Bill. In other times, no doubt, we would have had a great discussion on these Clauses in regard to the relative differences between direct and indirect taxation, but we recognise the position of the Government, and that they are making terrific increases in taxation with a view to closing the inflationary gap, to which so much reference has been made. While we do not propose to delay the Committee on this Clause, or to divide against it, we ought to make it clear that in our view, this increase is only necessary because of the bad financial and economic policy of the Government, and each time anyone drinks a glass of beer at the enhanced price he should be reminded where the responsibility lies for the increased price, always excepting those who are teetotallers who prefer water the price of which has not been increased. [HON. MEMBERS: "It has."] Not by this Budget.

It is timely to remind the Committee of the enormous contribution which is now being made to our finances by this section of the community, generally described nowadays as the "lower income groups," which both they and others recognise better as being the working man whe enjoys a glass of beer. In the Budget, the total taxation on beer is estimated at the colossal sum of £260 million. This Budget increases that amount by £10 million for the rest of the year, making an estimated total of £270 million for this year, and, unless there is to be any change, a total of £295 million for next year.

This is a tremendous sum to exact from those who find some solace in an occasional half pint of beer in "the local." The Chancellor of the Exchequer ought to be able to give an assurance on behalf of the Government that there will be the beer to drink, if there is to be this increased price, because, in spite of the high taxation last year, beer was apt to run out during the summer harvest and most of the festive seasons. On many occasions there have been real shortages in different parts of the country, particularly at harvest time, which is a matter of some consequence in the countryside.

The Chancellor of the Exchequer (Sir Stafford Cripps)

It ought to run out.

3.45 p.m.

Captain Crookshank

The right hon. and learned Gentleman should be the last person to say that, because he is looking for revenue, and if the beer runs out, his revenue drops, unless there are more barrels to be opened. In spite of the levity, which I can appreciate, it is stating the obvious to point out that the amount of taxation to be raised depends upon how much beer is available, and that depends on how much raw materials, apart from water, the Ministry of Food are prepared to make available. I hope that the right hon. and learned Gentleman will give us an assurance that beer will be available, even at these high prices, for those who wish to pay this contribution to our national difficulties.

The Chancellor of the Exchequer, in reply to a Question on 19th November, said that for a pint of beer at the present reduced average strength of beer, the duty amounted to 8d., and the cost of the raw materials and all the rest of it was covered by the small difference between 8d. and whatever might be the total charge, according to the quality of the beer. As far as I can see, the Clause and the Schedule are in the common form when there is to be an increase in this type of taxation. If there is any change, I am sure that the Financial Secretary will tell us about it.

This is a tremendous imposition upon the working people to whom beer is a solace, encouragement in their labours, or provides a pleasurable means of meeting their friends, quite apart from the drink aspect, because in these days the beer is very weak, and therefore it hardly comes into the picture. This is an enormous sum to raise from this section of the community, but, from the point of view of checking inflation the right hon. and learned Gentleman is probably right in his contention that there is some purchasing power which can be mopped up without necessarily creating very great hardship, because, like all these indirect taxes, it is left to the option of the individual whether or not he pays the tax. It should be noted that, in this year of grace, no less than £270 million is to be raised from our fellow countrymen who choose to drink beer.

All I ask is that the right hon. and learned Gentleman and the Government will do their part, and if they want to get this revenue, they will see that the beer is available. There should not be these shortages, not only because of the inconvenience caused to potential customers, but because of the hardship caused to publicans who frequently by law have to keep their establishments open in spite of the fact that they have nothing to sell. We shall let this Clause go through because we consider this is one of the important aspects of the economic problem the Government have put before the Committee, but we must again remind everyone concerned that if it had not been for the folly of the Government and the incompetent handling of our finances by the right hon. and learned Gentleman's predecessor, none of these things would have been necessary. It is due entirely to the Government that it has been found necessary to do this at all, and I hope that everyone will always remember that.

Mr. Charles Williams (Torquay)

I wish to declare to the Committee that I have no direct interest in this matter, because I do not happen to be a consumer of this commodity. Perhaps I may gain some small credit for that with the hon. Member opposite who may follow me. I am not asking the Treasury to look at this matter solely from the agricultural point of view, which has already been referred to by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank). This increase is a very heavy burden on certain sections of the community, and it can have a very bad effect on production in the case of the heavy industries, such as steel, shipping, mining and particularly quarrying in my particular area. These workers, with few exceptions, look forward to having their beer fairly regularly.

As we are accepting this tax unwillingly, knowing that we cannot get out of it, I would ask the Government to see that in future there is a reasonably plentiful supply of beer for those engaged in heavy industries as well as agriculture. I would like to make a special appeal to the Government to see that more beer is available in our seaports, not only at great ports like Liverpool, but the smaller ones, particularly the naval ports. Often sailors come back to shore after a very long time at sea, during which they have not had any beer in England. [An HON. MEMBER: "What about the beer on board?"] They do not get so much there as they ought to be allowed, and, in any case, no sailor would ever want to take an unfair share of beer. As we are being asked to pay a very much heavier tax, and as the Government are doing so well out of the beer drinker, I am asking that there should be adequate supplies of beer.

I would like to put this point of view from another angle. We are being told by the Government to encourage visitors from abroad. Besides such small resorts as Brighton and places in Scotland, there are the leading health resorts, such as Torquay and Paignton, to which Members opposite go and afterwards say that they have never had a better time in their lives. I am asking that during the summer season especially, when these places have so many visitors, there should be an adequate supply of beer. It is not a good thing to be short of beer when there are visitors from abroad. It is not a good thing, if there is an American ship lying off Torbay, and their sailors come ashore, to be told that all the beer has been sold. Further, an adequate supply of beer at these resorts enables our own people to build up their strength while on holiday, and go back to work rejuvenated. That is the main object of holidays with pay. Those who drink beer—and, as I have said, I am not among them; I am putting a completely disinterested point of view—ought to be able to have a sufficient supply of beer.

I do not wish to take up a lot of time on this matter, because I realise I have not the sympathy of the plutocrats sitting opposite. I am appealing as a representative of ordinary people, working men and women, that they should be allowed to enjoy one of the luxuries of life. The Treasury are making people pay through the nose for this luxury—though it is not a luxury to many, but a necessity. It is one of the few things which people have left to them today at a time when the country is suffering severely from the actions of this Government. I believe that I am about to be supported by one of the strongest supporters of the Government, the hon. Member for West Ealing (Mr. J. Hudson). I am sure he will join with me in urging that beer, which cannot be called anything but a teetotal drink nowadays, should be supplied to the people of this country in adequate quantities. I hope that the Treasury representative will say, in reply, that he will put pressure on to his partners in the Government to see that adequate supplies of beer are provided, especially for the West Country.

Mr. James Hudson (Ealing, West)

I am very glad to support the Government and their proposals in this Clause. I gather, from what the right hon. and gallant Member for Gainsborough (Capt. Crookshank) said, that the Opposition will support the Government as well; at any rate, by their acquiescence if there is no Division. The Opposition have managed to find an opportunity to put forward a good many inconsequential statements about this increased beer tax. It was suggested that there would be a heavy burden on the working classes as the result of this increase and, at the same time, that there should be a plentiful supply of beer. I support the Government because their aim is to attempt, by a process of taxation, to limit what we cannot afford to have today. They are doing with beer what they have attempted to do with tobacco. I must point out, however, that if taxation is the only thing which the Government can rely on they are not likely to secure the aim they have in view.

In the last few years, while taxation on beer has been heavy, supplies have become more and more plentiful with every increase in that taxation——

Mr. Scollan (Renfrew, Western)

How does my hon. Friend know?

Mr. Hudson

I can tell from the published figures. I do not drink beer myself, but there are means of finding out how much other people drink. In 1938, the total consumption of beer was 24 million barrels. Consumption advanced steadily, and in the following year the total was 25 million barrels. By the middle of the war the figure was 29 million, at the end of the war 31 million, and it is now practically 32 million. I know that someone will say that the water put into it has added to the barrel-age, but that cannot be substantiated.

4.0 p.m.

There has been, in addition to the inclusion of water, a considerable increase in the commodities for the making of beer, which this country badly needs in other directions. This is particularly so with regard to sugar. Up to recently, when the Government made their decision about the reduction of sugar, the amount which the brewers were using was nearly the same as at the beginning of the war. I suggest to the Government that if their intention with regard to beer is the same as it was stated to be with regard to tobacco, to reduce the amount at the time of the present crisis, so that there shall not be wasted in the manufacture of beer what is badly needed in food and by way of provender for cattle, they will not be able to rely on the process of taxation alone. I agree that they must use the tax instrument to whatever extent is possible, but there still remains this dreadful question of wastage of absolute necessities as a result of continuing to brew beer to the present extent.

On behalf of the sailors, who, according to the hon. Member for Torquay (Mr. C. Williams), must have plentiful supplies of beer, and on behalf of the steel smelters, I would remind the hon. Gentleman that there are many steel smelters today who have discovered, what the miners discovered earlier, that it is better from the point of view of their own safety—whatever it may be with regard to efficiency—to keep work in the coalmines and the supply of beer entirely separate. It is a law today that liquor, like matches, may not be taken into a coalmine. For people engaged on steel smelting, I admit that the temptation must be very great, on account of the onerous nature of the jobs which they have to do, to turn to anything in the drink form which will help them to face up to their work; but beer is not really an aid to their work. Indeed, the Royal Commission dealing with this question of beer, in its report in 1929, explicitly stated that, whatever other merits it may have, it should not be regarded in that light.

I suggest to hon. Members opposite, and, perhaps, to some of my hon. Friends on this side of the House who are unduly impressed by the experiences of the last war, when in a number of towns there was an agitation because beer supplies became short, that we are not in that position today. In 1917 and 1918, during the first European war, resentment was expressed that the supplies of beer under the operation of the Liquor Control Board in the time of Mr. Lloyd George's Government were intended to fall to 10 million barrels in the year. It never, however, reached that figure. It actually reached between 15 million and 16 million barrels, and it was at that time of shortage in supply that public agitation took place, which is so much in the memories of people today who protest about the nature of the supply of beer. We are not in that position at all.

I beg of the Government to proceed with this tax and any other measures which they may consider necessary to do the job which they have set out to do. I hope that the right hon. and gallant Gentleman opposite, when he talks about the economic problem, will support the Government in continuing their work along these lines. I am very glad to be able to support the Government in the proposal which they make.

Mr. Piratin (Mile End)

The Committee has listened with interest to the speech of the hon. Member for West Ealing (Mr. J. Hudson). I am sure that, whatever our attitude towards drinking beer, we all have a deep sympathy for his sincerity, and for that of all other hon. Members who have addressed the Committee in similar terms. I do not, however, think that now is the opportunity to discuss the merits or demerits of abstention. The question before the Committee is the merits of the Clause. I think that the hon. Member for West Ealing drew a red herring across the purpose of this Clause. It is to raise £35 million in a full year from beer drinkers who, in the main, are working people. On average, this works out, in my calculation, at about 1s. per week per beer drinker. Some people may say that that is not much, but for the working man today, who cannot find it possible to make ends meet, it is a lot.

No matter what we think on this side about the sincerity of the views held by hon. Members on the other side, the fact is that this is a burden on the working people. That much has to be acknowledged. I regret that the Government have brought in this Clause in their Supplementary Budget, because it is a burden on the workers and, at the same time, as pointed out from all sources and in papers representing all parties, the supplementary Budget as a whole has not really made any large contribution to closing the inflationary gap. Therefore, although I do not expect the Government to withdraw this Clause because the feeling of the House is in support of it, I personally regret that it has been introduced.

Mr. Oliver Stanley (Bristol, West)

I intervene now because I am anxious that the Financial Secretary should reply to one aspect of the Debate. I was extremely interested in the short speech of the hon. Member for Mile End (Mr. Piratin) and his very decided view that this tax constitutes a burden on the working-class. I ventured to suggest that in my speech on the Budget Resolution, and I was immediately contradicted by the hon. Member for North Portsmouth (Major Bruce), who speaks on all these matters with such authority—an authority added to by the position which he occupies in the House on the bench opposite at the head of the queue. Incidentally, I congratulate the hon. Member for Chesterfield (Mr. Benson) on making an unexpected appearance in that position. I only hope that it is significant. The hon. Member for North Portsmouth denied my suggestion at once, and said that it constituted no burden at all. I will leave it to the two hon. Members to fight it out between themselves.

The hon. Member for West Ealing approached this matter largely from the moral aspect which is a different angle from the one which I wish to pursue, but he posed the question whether this extra taxation was intended to reduce the consumption of beer.. That is a question to which the right hon. Gentleman ought to reply. We support this new taxation, burdensome though we think it is, because we believe it to be one of the ways of combating inflation, but a tax of this kind is only operative in mopping up purchasing power and combating the vast amount of money in circulation if the supplies upon which it is imposed are available. It obviously has no effect whatsoever in reducing the amount of money available if, pro tanto, the amount of beer is reduced, and, therefore, the total expenditure on beer, including the new tax, is the same as it was before. There is a great fallacy in the hon. Member for West Ealing comparing this with the Tobacco Duty, which is set on an entirely different footing. There the idea was not to combat inflation, but to reduce the amount of tobacco imported from abroad, so that it was a tax introduced for a wholly different purpose.

It has become of great importance that the right hon. Gentleman should tell us what is in the Government's mind as to the operation of this tax. Is it their view that it is intended to reduce the consumption of beer which possibly would result in a trivial reduction in the materials which are used, or is it their intention to use sales of beer as a means of mopping up purchasing power which otherwise would be diverted into other channels? That really is fundamental to the whole of the economic conception lying behind the new tax proposed in this Bill. I look forward to the answer of the right hon. Gentleman, because I think this afternoon he will be in particularly good form. After all, only a short time ago he listened to the pleasant announcement that tomorrow he will have a little baby brother or possibly a little baby sister. I can only assure him that this Benjamin will not in any way supplant the right hon. Gentleman in the affection which the House has towards him.

Lieut.-Colonel Sir Thomas Moore (Ayr Burghs)

I should like to say one word with regard to the speech of the hon. Member for Mile End (Mr. Piratin). I do not know whether my arithmetic is wrong or whether his is wrong, but he said that a penny on a pint of beer was going to mean a shilling on a working class home each week.

Mr. Piratin

What I said was that in my calculation the increased taxation amounting to £35 million would be roughly equivalent to one shilling per beer drinker per week—not per home but per drinker. I am sure that in the home of the hon. Member for West Ealing (Mr. J. Hudson) there is no beer drinker.

Sir T. Moore

I thought the hon. Gentleman was endeavouring to protect the beer drinkers, who, as he said, are the working class of this country. The other day those of us who thought that the food subsidies might be looked at again were accused of making an attack on the working classes, because they represent 125. 6d. a week in a four-member family, but here this additional tax, according to the hon. Member for Mile End, will mean a cost to the working people per drinker of about 12s. to 14s. a week. [HON. MEMBERS: "No."] Then I can only assume that my arithmetic has been wrong, and so I will resume my seat.

4.15 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

First may I say in reply to the hon. and gallant Member for Gainsborough (Captain Crookshank) that this Clause is in common form, and there is nothing in it which is not plain to previous and distinguished holders of the office which I have the honour to occupy. I agree that this is a very heavy tax, and, taken with the impositions which have been placed on beer before, the amount now to be taken out of the pockets of those who drink beer is very considerable. As I sat listening to the Debate I went back over the figures for previous years, and the Committee might like to be reminded that in August, 1914, the duty on beer was no more than 7s. 9d. a standard barrel. It is today 159s. 9d. a bulk barrel, apart from the surtax that can be levied for higher strengths. That is an enormous increase and it is true we have in this Budget put an additional duty of 19s. 1½d. on the bulk barrel of 36 gallons.

This is by no means the highest single increase that has been placed on beer. In September, 1939, the duty was doubled from 24s. to 48s. and the next April it was increased again to 65s., a rise of no less than £2 1s. in about six months. It is true that that occurred during the war, and further increases were made as the war proceeded, but I would remind the Committee that no increase in the duty on beer has been proposed by any Chancellor of the Exchequer since April, 1944. As other things have gone up and as Purchase Tax has been very steeply increased on so many articles of consumption, it is not unreasonable that something should be done about beer in our present general mopping up process. On the ordinary pint of beer of average strength, the increase works out at something just under 1d. per pint. It has been agreed by the Brewers' Society that the difference between one penny and the actual amount of the new increase will go to the publican, who it is realised, has considerable overheads and has, in the past at any rate, been short of supplies. Therefore, what is called a turn of 1s. 4d. on the barrel will be passed on to the retailer, with the agreement of the brewers.

As to whether supplies can be kept going it is not for me to say. As the right hon. and gallant Member for Gains-borough very properly said, that is more a matter for the Minister of Food than the Chancellor of the Exchequer. All I can say is that the expected yield during this year is practically the same as this tax yielded during the last financial year. The assumption from this is that it is expected that supplies will be running more or less as they ran last year, that is at the rate of about 30 million bulk barrels a year. I should add that it is quite impossible in my capacity either to prophesy or to give an assurance. It is only the Minister of Food who can speak in regard to the materials for the making of beer during the coming months, but it is possible that even he may not know at this juncture. None of us can see what changed circumstances there may be. So far as we know and so far as the Ministry can be any judge, it looks as though the amount that will be manufactured will be about as much as was manufactured during the previous year. As I say, I can give no assurance on that point, and what I am now saying may turn out to be wrong.

I was asked by the right hon. Member for West Bristol (Mr. Stanley) to reply to the observations of my hon. Friend the Member for West Ealing (Mr. J. Hudson) and to give some indication of whether the tax increase was intended to lower the consumption of this beverage or to mop up excess purchasing power and prevent an increased risk of inflation. The short answer is that this is one of the ways devised by the ex-Chancellor of the Exchequer for preventing the inflationary pressure becoming too great. The increased duty is not intended in itself to reduce the consumption of beer. If it were, the increase would have had to be a great deal bigger. So far as I know, those who like beer are hardly likely to be deterred by an increase of a penny on the pint on average strength beer. The Tobacco Duty was, of course, increased to a considerable degree for the purpose of reducing consumption. Although it is obviously desirable that people should not drink too much beer and that they should keep their appetite within bounds, nevertheless, we are not here legislating for that sort of thing.

This is one way of mopping up the present excess of purchasing power and we feel that we are levying a not unreasonable increased duty on those who drink beer in order to tax them just as we tax those who buy other consumable goods and spend their money in other ways. We are grateful to the Committee for realising that this clause is necessary and to the Opposition for not taking it to a Division.

Mr. C. Williams

The Committee as a whole have accepted this proposal to raise a vast sum of money, and the only request that has been made is that the supply should be adequate. Whether that is possible or not I do not know, but that is the Committee's request. The Financial Secretary to the Treasury said that he could not guarantee that but that it was a matter for the Ministry of Food. I shall not go into this in detail, because many of us realise the difficulty of his position, but when the Committee on a Clause such as this, which places a vast burden on the community, asks for a guarantee before money is voted, it is a very bad precedent if we are given absolutely no assurance that the matter will be looked into by the appropriate Minister. If we are to have any power whatever over finance, it is no good making our complaint and then whatever happens voting for the proposals and not protesting very strongly when the Government show absolutely no inclination to meet the difficulties of the ordinary taxpayers.

Question put, and agreed to.

Clause ordered to stand part of the Bill.