CLAUSE 2.—(Spirits.) (Hansard, 2 December 1947)

§ Mr. Godfrey Nicholson (Farnham)
I do not want to repeat the Debate which has just taken place, nor to go into the actual merits of this case. I am a distiller myself and I do not wish to raise my own personal interests in the Committee. As a consumer of spirits I shall accept this increase in price, always bearing in mind that the Chancellor of the Exchequer the other day said that the purpose of the Budget was, … to reduce the inflationary pressure consequent upon the economic action which is being taken by the Government."—[OFFICIAL REPORT, 25th November, 1947; Vol. 444, c. 1917.] That seems to put it quite bluntly that they have got us into a mess and this is how they are trying to get out of it. I now have a technical question which may be of general interest. What considerations governed the exact sums by which the Spirit Duty has been raised?
I have tried to find some parallel between the figures in this Budget and the amounts by which the duty has been raised on previous occasions, but I cannot find any relationship between them. No relationship may be intended, but as a matter of interest, I would like to know upon what calculations and considerations these figures were based.

§ Captain Crookshank
Apart from that, which I hope the right hon. Gentleman will be able to tell my hon. Friend, it must here again be noted how great a contribution is being made by this sector of the community, which is not exactly the same as the last. The price of spirits is so high that I do not think that very many of the lower income tax groups, alias the working class people, can use them, but, of course, it is true that the higher the duty on spirits becomes, the greater the hardship on certain people who have to have spirits for reasons of health. That applies in all sections of the community. There are many doctors 221 who prescribe—rightly or wrongly, I do not know, because I am not a doctor—that in certain cases small quantities of spirits should be available. It is very hard upon those people that what is prescribed to them for health reasons is so very expensive.
Here again, the figures are very large. In the original Budget £70 million were to be raised from these duties. The emergency Budget now brings that figure up to £75,500,000 this year and £84,500,000 next year, a very large sum, particularly when one bears in mind the information which the Chancellor of the Exchequer gave on 19th November that, taking the price of a bottle of whisky at 30s., no less than 22s. 3d. of that was duty. That is an enormous impost. We are driven to accept this as one of what the right hon Gentleman the other day called the sandbags against the inflationary pressure and as being, in the considered view of the Government, one of the things which ought to be done, but we cannot help once again pointing out that none of this would have been necessary had there been a better and wiser financial and economic policy on the part of the Government.

§ Mr. Glenvil Hall
The only question that needs an answer is that put by the hon. Member for Farnham (Mr. Nicholson). He asked how the amount of 33s. 4d. a proof gallon by which this tax has been increased this time had been arrived at. It was thought that this was a reasonable figure in itself, and that it would make the price of a bottle of whisky something like 30s. As those who have followed these matters will have noticed, up to now the duty has broken itself up to odd halfpennies. In the figure now given we have got away from that. Taking, as we always do, the basis that the duty should relate to the circumstances of the time, we thought that reasonable, and it made the amount a round figure. As the Committee know, the distillers have not made the price of a bottle of whisky 30s., but have increased it to 31s. That is for reasons of their own and is not because of the extra duty.

§ Mr. Keeling (Twickenham)
Would the right hon. Gentleman be a little more specific and say whether this increased 222 duty and the proposed price for a bottle of spirits will mean that (a) the distiller and (b) the retailer will get more than at present?

§ Mr. Glenvil Hall
That is not for us to decide. The price of a bottle of whisky is not fixed by the Treasury, but by the distillers. They decide what the consumer will pay and make their price accordingly. Therefore, in that sense we do not come into it. We come into it only in so far as we levy a duty on spirits.

§ Mr. Keeling
I referred to the proposed price of 31s. On that basis, what is the answer to my question?

§ Mr. Glenvil Hall
If I understand the hon. Gentleman aright, he wants to know why 31s. was fixed—

§ Mr. Keeling
No. What I asked was whether the proposed retail price of 31s. would give a larger return (a) to the distiller and (b) to the retailer.

§ Mr. Glenvil Hall
I understand that the answer is "Yes" and that that is why the amount has been increased. It has gone up by more than the immediate increase in the duty, because distillers feel that prices are rising, that their costs are greater and that they must, in fairness to the retailers with whom they do business, make this extra charge. I am sorry that did not quite follow what the hon. Gentleman said earlier.

§ Mr. Nicholson
I am not a whisky distiller so I cannot speak from first-hand knowledge in that respect, but the Committee must be aware that there is a terrible temptation to any producer of whisky to sell it in the black market and that the whisky distillers of this country have resisted that temptation.

§ Mr. Glenvil Hall
indicated assent.

§ Mr. Nicholson
They have not profiteered. So far as the gin distillers are concerned, the wholesale price of gin has gone up 1s. 4d. per dozen bottles, over and above this increase in the duty, that is, under 1½d., actually 1⅔ of a penny per bottle. That increase is more than accounted for by the extra cost of bottling materials since the duty was last raised in 1943. The industry can be completely acquitted of any attempt to profiteer. In fact, I think they are one of 223 the most admirable sections of the community. If there is any discrepancy it is in the course of distribution, by retailers and people like that, whose overheads have gone up out of proportion to the quantity of the goods they sell, and because of the great restriction of the goods.

§ Lieut.-Commander Gurney Braithwaite (Holderness)
I was rather disappointed to hear the Financial Secretary say that the only point to which he had to reply was one made by my hon. Friend the Member for Farnham (Mr. Nicholson). I was hoping we would hear something in reply to the speech made by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) who produced arguments of very great importance about the effect of the increased duty upon people who take spirits on medical grounds. I understood the Financial Secretary to say that the figure of the new duty had been fixed largely with the desire to get rid of the ha'pence and to keep to nice round figures, by taking the duty up 6d. or 1s. at a time. That may be more convenient, but it is a very unsound theory to come from the Treasury. The steep steps which we are now experiencing in these duties mean that spirits such as whisky and brandy have been placed out of the reach altogether of what we call the lower income groups, despite the fact that many people in those groups may be prescribed whisky or brandy by their doctors as a stimulant in illness.
I wonder what has become of the Government's slogan of fair shares for all. Here are these spirits placed entirely out of the reach of very large sections of the community. The experts of the right hon. and learned Gentleman might go into this matter again with very much the same motive as in the case of the increased Tobacco Duty last April. Here is a problem for the acute brains of the Treasury, and I am certain they can solve it. If they cannot, then the new Chancellor of the Exchequer can, because he is very competent at statistics.
Why could not old age pensioners and sick people, upon production of a proper medical certificate, have a supply of spirits at the pre-Budget level, or even below it? Even the late Chancellor of the Exchequer, before he left us in a cloud of smoke, succeeded in settling a problem 224 for old age pensioners in a similar case. I ask the Government to look at the matter again. There is plenty of time. There will be the Report stage and the Third Reading of the Bill, and then another place. There will be plenty of opportunity. I make this suggestion not in order to embarrass the right hon. and learned Gentleman but as a serious point. Where a medical certificate can be produced on behalf of an old age pensioner or a person similarly circumstanced, a concession might be made by which they would not be called upon to pay the extra duty.

§ Sir S. Cripps
The hon. and gallant Member may remember a lot of difficulty which arose in regard to prescriptions in the United States of America, when there were certain prohibitions, and the legislation which ensued upon it. I do not think it would be wise for us to embark upon it in this country.

§ Lieut.-Commander Braithwaite
That is a most alarming intervention by the Chancellor of the Exchequer. Are we now peeping into the future? Are we to find ourselves saddled with prohibition or something like that? [HON. MEMBERS: "Oh."] Oh, yes. It is no use the right hon. and learned Gentleman citing to us what happened under prohibition when we live in a country where prohibition does not exist. I know there are difficulties in the matter, and that they can be accentuated where there is complete prohibition because of the most ingenious methods which have been devised, but there is no prohibition in this country. We are still permitted to drink, if we can afford to do so. All we ask is that certain sections of the community should be enabled to obtain those spirits at a lower figure. I am sure that the right hon. and learned Gentleman is as capable as was his predecessor of getting round the difficulties and of allowing the old people to have their liquor at a more reasonable price. Prohibition does not enter into it, unless we are getting a peep into the future.