HC Deb 02 December 1947 vol 445 cc225-33

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Boyd-Carpenter (Kingston-upon-Thames)

The Clause introduces a substantial change into once branch of excise practice. The Financial Secretary will no doubt recollect that when he spoke on the Second Reading of the Bill he said: For the first time in history, British wines are to be divided into two groups, light and heavy. No doubt there will be a discussion of this arrangement when we reach the Committee stage, and that criticism will be levelled at the fact that this has been done for the first time."—[OFFICIAL REPORT, 25th November, 1947; Vol. 444, c. 1816.] The right hon. Gentleman was wholly right when he invited attention to the fact that the Clause introduces a change into the system of levying Excise Duty upon British manufactured wines. The change is that in future British wines shall, for excise purposes, be divided into two categories and that the dividing line shall be the strength 27 degrees. The difficulty arising from the change is the matter to which I wish to draw the attention of the Chancellor of the Exchequer.

I am advised that the great bulk of British wines is in the category from 27 to 29 degrees of strength. That is to say, they are just over the border into the heavier category. The greater part of the output of British wines, therefore, suffers the increased Excise Duty without going very far into the heavier category. I believe that the change and the selection of the figure 27 for the line of demarcation was intended to bring the position in respect of British wines into a position parallel to that of Empire wines. In the case of Empire wines there are already two categories, and have been for a good many years, with the line of demarcation at 27.

That is, on the face of it, a not unreasonable change, but there is a factor which makes it rather less reasonable than it would first appear. It is that over a number of years, under an excise regulation whose number I cannot recollect, Empire wines imported under this scheme, with a demarcation line of 27, have had the valuable privilege of permission to fortify—that is, raise the strength—in bond by the addition of duty free spirit which has been, and is, very valuable to them. British wines have not that privilege, and therefore it seems unfair that if, on the one hand, British wines are to be placed in the same position as Empire wines, they should not at the same time be given the privilege of fortification in bond. At the moment they are getting the worst of both worlds—they are losing the advantage they had previously, without being given any compensation such as, for example, a share in the privilege of fortification in bond.

In those circumstances it seems a curious moment to handicap a home product, which involves much less strain on the resources of foreign currency than any imported products can do, and I wonder if this aspect of the matter was overlooked when this change was made. I would be grateful if the right hon. and learned Gentleman would consider in a dispassionate and reasonable frame of mind the point I have put, that is, that British wines have been put in the same position as Empire wines, while being denied the valuable privilege which Empire wines are enjoying.

Mr. Glenvil Hall

I think I can give this assurance, on behalf of my right hon. and learned Friend, that he will look at this matter between now and next April and consider what should be done, if anything, to alter these proposals which may possibly become law in a week or two. It is true that this is the first time that this differentiation between light and heavy has been applied to British wines, though it has been applied to Empire wines for some time. Empire wines have been allowed, in addition, to fortify the spirit while only paying the same duty as on wine. That will not apply to British wines, and the British wine industry is afraid that it may affect their industry in the coming months. We recognise all that, and I have the authority of my right hon. and learned Friend to say that in the intervening months between now and the next Budget he will watch this and, if it is essential to do something in order to be just to the British wine industry, he will certainly take whatever course is desirable.

Mr. Assheton (City of London)

Though, of course, we are most grateful to the right hon. Gentleman for telling us that the Chancellor of the Exchequer will look at this matter, it seems rather hard that we should have to wait until next April for the result of this examination because, as I understand this, it is to come into effect forthwith. I should have thought we would not be going too far in asking the Chancellor of the Exchequer to look at it before the Report stage of this Bill. After all, the Report stage is next week, and it would not be a big matter for the Board of Customs to have some discussions on this matter. It would be more satisfactory if the right hon. and learned Gentleman could assure us that the matter will be dealt with now, and not next April.

Mr. Keeling

I ask the right hon. and learned Gentleman to agree to that course. I cannot think there is any precedent on the Committee stage of a Finance Bill, when a prima facie case for an Amendment has been made out, for the Government to say that they will wait three or four months before considering it. Why not look into this before the Report stage next week? The wine manufacturers concerned are being subjected to treatment which they think is unfair and shows bias against them, and it will be serious if they have to suffer this unfair burden for another four or five months. I cannot help thinking that the Financial Secretary meant to say "before the Report stage," and I hope he will now undertake so to consider it.

4.45 P.m.

Mr. Joynson-Hicks (Chichester)

The right hon. Gentleman has told the Committee that he is aware that the industry in question is disturbed about this. What is the point of introducing this new system with the knowledge that it may only be operative for a maximum of five months? If in April, when the next Budget comes along, the right hon. and learned Gentleman has thought again and, after consultation with the industry, has come to the conclusion that something on the lines of this Amendment should be accepted, surely the comparatively trivial amount of money which the Treasury will receive as a result of not accepting this Amendment now is not worth while?

The Chairman

May I draw the hon. Member's attention to the fact that there is no Amendment before the Committee? I have not selected the Amendment. The Question is, "That the Clause stand part of the Bill."

Mr. Joynson-Hicks

I am sorry, Major Milner, I had overlooked that minor point. The argument upon the Clause standing part has largely been directed towards the point of an Amendment which has not been called. I would urge the right hon. and learned Gentleman to consider what would be the financial advantages to the Treasury in putting into operation the Clause as it now stands for a period of four or five months, if he were to decide at the end of that time to introduce into the next Budget an Amendment which would meet the point raised by my hon. Friend.

Mr. Glenvil Hall

May I make quite clear what is in the mind of my right hon. and learned Friend? If, by my phrasing, I gave the Committee to understand that I was, on his behalf, practically undertaking that he would do something to bring the British wine industry into line with the wine industries of other countries, particularly those of the Empire, I am sorry, for I did not intend anything of the kind. All I intended to say, and all that I will say, is that this division between light and heavy is something new so far as the British industry is concerned. It is therefore, a step in the dark. As has been said, the British industry is perturbed about it, and we must see whether the fears they have expressed eventuate. We do not know that they will. We think that six months is not a long time, but it is certainly long enough to give my right hon. and learned Friend a chance to see whether there is something in the fears expressed to us at the Treasury, and by certain hon. Members opposite. It is a reasonable attitude to take in the circumstances.

I would add that about 80 per cent. of the product of the British wine industry is composed of port and sherry types, which are heavy wines. If we take into account that the duty is the same as on Empire wines—10d. and 1s. 8d. respectively—it is not a great increase and we think they will not be ruined. In fact, it may well he that, between now and April, they will find a good deal to be said for this change. I have not gone into this for obvious reasons. However, there is a case to be made for it.

Mr. Vernon Bartlett (Bridgwater)

May I urge my right hon. and learned Friend not to take this too seriously, but to bear in mind the respective influence on the palate of the consumer of an Empire or foreign wine made from fresh grapes on the spot, and of a wine which is certainly not made from fresh grapes in this country?

Mr. Stanley

I hope we shall not allow the intervention of the hon. Member for Bridgwater (Mr. Bartlett) to deflect us into the pleasant paths of wine connoisseurship from what we are discussing, namely, the effect of this duty on a not unimportant section of British industry. I was rather disconcerted by the second reply of the Financial Secretary to the Treasury. He told us that there was a case for the duty, but, because by next April his right hon. and learned Friend may or may not have looked at the matter again, he did not think it worth while at this moment to tell us what the case is. I do not think the Committee can be satisfied with that. I do not pretend to understand the technicalities of the case, but we are informed that the British wine industry is seriously perturbed about the repercussions on that industry, and we are entitled to a definite statement by the Government of the reasons for the tax, and why they think this new step in the dark, as the Financial Secretary called it, is not likely to be injurious to the trade. It had not been our original intention to divide against this small measure, but, unless we can be given

some more adequate explanation than we have had already, it will be our duty to take the matter into the Division Lobbies.

Mr. Boyd-Carpenter

I was a little disquieted by the second intervention of the Financial Secretary. He gave me the impression that he did not really understand the problem. I think he said that the bulk of British wines—he used the expression 80 per cent.—were heavy stuff, but I am advised that that is quite wrong, and that the greater part of the production is in the 27–29 group. That is just inside the heavy category, and is the category most hit by this duty. The right hon. Gentleman did not touch on the second argument, that if this 27 line of demarcation is to be introduced, the alternative possibility of giving to the-home product the privilege of duty free fortification in bond already enjoyed by Empire wines should be considered. He did not address his mind to that. All he said was that there was an argument for the change, an argument of which he was aware, but which, for some reason or other, he was not prepared to give to the Committee.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 265; Noes, 135.

Division No. 35.] AYES. [4.53 p.m.
Allen, A. C. (Bosworth) Chetwynd, G R. Evans, E. (Lowestoft)
Allen, Scholefield (Crewe) Cluse, W. S. Evans, John (Ogmore)
Anderson, A. (Motherwell) Cocks, F. S. Evans, S. N. (Wednesbury)
Attewell, H. C. Coldrick, W. Ewart, R.
Austin, H. Lewis Collick, P Farthing, W. J
Awbery, S. S. Collindridge, F. Foot, M. M.
Ayles, W H. Colman, Miss G. M Forman, J. C.
Ayrton Gould, Mrs. B. Comyns, Dr. L. Fraser, T. (Hamilton)
Bacon, Miss A. Cook, T. F. Gaitskell, Rt. Hon. H. T. N.
Balfour, A. Corlett, Dr. J. Ganley, Mrs. C. S.
Barstow, P. G. Corvedale, Viscount George, Lady M. Lloyd (Anglesey)
Bartlett, V. Cove, W. G. Gibbins, J.
Barton, C. Crawley, A. Gilzean, A.
Battley, J. R. Cripps, Rt. Hon. Sir S Glanville, J. E. (Consett)
Bechervaise, A. E Daggar, G Gordon-Walker, P. C.
Benson, G. Daines, P. Greenwood, Rt. Hon. A. (Wakefield)
Beswick, F. Davies, Clement (Montgomery) Greenwood, A. W. J. (Heywood)
Bing, G. H. C. Davies, Edward (Burslem) Grenfell, D. R
Binns, J. Davies, Harold (Leek) Grey, C. F.
Blackburn, A. R. Davies, Hadyn (St. Pancras, S.W.) Grierson, E.
Blyton, W. R. Davies, R. J. (Westhoughton) Griffiths, D. (Rother Valley)
Bowden, Flg.-Offr. H. W. Davies, S. O. (Merthyr) Griffiths, W. D. (Moss Side)
Bowen, R. Deer, G. Gunter, R. J.
Bowles, F. G. (Nuneaton) do Freitas, Geoffrey Haire, John E. (Wycombe)
Braddock, Mrs. E. M. (L'pl, Exch'ge) Delargy, H. J. Hail, Rt. Hon. Glenvil
Braddock, T. (Mitcham) Diamond, J. Hannan, W. (Maryhill)
Brook, D. (Halifax) Dobbie, W. Hardy, E. A.
Brooks, T. J. (Rothwell) Dodds, N. N. Harrison, J.
Brown, George (Belper) Driberg, T. E. N. Hastings, Dr. Somerville
Bruce, Maj. D. W. T. Dumpleton, C. W Haworth, J.
Butler, H. W (Hackney, S.) Dye, S. Henderson, Joseph (Ardwick)
Castle, Mrs B. A. Ede, Rt. Hon. J. C. Herbison, Miss M.
Chamberlain, R. A. Edelman, M. Holman, P.
Chater, D. Edwards, Rt. Hon. Sir C. (Bedwellty) Holmes, H. E. (Hemsworth)
Hoy, J. Morris, P. (Swansea, W.) Smith, S. H. (Hull, S.W.)
Hudson, J. H. (Ealing, W.) Morris, Hopkin (Carmarthen) Solley, L. J.
Hughes, Emrys (S. Ayr) Morrison, Rt. Hon. H. (Lewisham, E) Soskice, Maj. Sir F
Hughes, Hector (Aberdeen, N.) Mort, D. L. Sparks, J. A.
Hughes, H. D. (W'lverh'pton, W.) Moyle, A. Stamford, W.
Hutchinson, H. L. (Rusholme) Murray, J. D Steele, T.
Hynd, H. (Hackney, C.) Naylor, T. E. Stokes, R. R.
Hynd, J. B. (Attercliffe) Neal, H (Claycross) Stubbs, A. E.
Irvine, A. J. (Liverpool, Edge Hill) Nicholls, H. R. (Stratford) Swingler, S.
Irving, W. J. (Tottenham, N.) Noel-Baker, Capt. F. E. (Brentford) Sylvester, G. O.
Jay, D. P. T. Noel-Buxton, Lady Symonds, A. L.
Jeger, Dr. S. W. (St. Pancras, S.E.) O'Brien, T. Taylor, H. B. (Mansfield)
John, W. Oldfield, W. H. Taylor, R. J. (Morpeth)
Jones, D. T. (Hartlepool) Oliver, G. H. Taylor, Dr. S. (Barnet)
Jones, Elwyn (Plaistow) Paget, R. T. Thomas, D. E. (Aberdare)
Keenan, W. Paling, Will T. (Dewsbury) Thomas, I. O. (Wrekin)
Kendall, W D Parker, J. Thomas, John R. (Dover)
Kenyon, C. Parkin, B T. Thorneycroft, Harry (Clayton)
Kinghorn, Sqn.-Ldr. E. Paton, Mrs. F. (Rushcliffe) Thurtle, Ernest
Kinley, J. Peart, T. F. Tiffany, S.
Lang, G. Perrins, W. Titterington, M. F
Lawson, Rt. Hon. J. J. Piratin, P Tolley, L.
Lee, F. (Hulme) Pools, Cecil (Lichfield) Usborne, Henry
Leonard, W. Popplewell, E. Vernon, Maj. W. F.
Lever, N. H. Porter, E. (Warrington) Viant, S. P.
Levy, B. W. Porter, G. (Leeds) Wadsworth, G.
Lewis, T. (Southampton) Price, M. Philips Walker, G. H.
Lipson, D. L. Proctor, W. T. Wallace, H. W (Walthamstow, E.)
Lipton, Lt.-Col. M. Pryde, D. J. Warbey, W. N.
Longden, F. Pursey, Cmdr. H. Watkins, T. E.
Lyne, A. W. Randall, H. E. Watson, W. M.
McAdam, W. Ranger, J. Webb, M. (Bradford, C.)
McEntee, V. La T Reeves, J. Wells, P. L. (Faversham)
McGhee, H G. Reid, T. (Swindon) Wells, W. T. (Walsall)
McGovern, J. Rhodes, H. West, D. G.
Mack, J. D. Ridealgh, Mrs. M. Wheatley, J. T. (Edinburgh, E.)
Mackay, R. W. G. (Hull, N.W.) Robens, A. White, C. F. (Derbyshire, W.)
Mckinlay, A. S. Roberts, Emrys (Merioneth) White, H. (Derbyshire, N.E.)
Maclean, N. (Govan) Roberts, Goronwy (Caernarvonshire) Whiteley, Rt. Hon. W.
McLeavy, F. Rogers, G. H. R. Wilkins, W. A.
MacMillan, M. K. (Western Isles) Ross, William (Kilmarnock) Willey, O. G. (Cleveland)
Macpherson, T. (Romford) Royle, C. Williams, D. J. (Neath)
Mainwaring, W. H. Scollan, T. Williams, J. L. (Kelvingrove)
Mallalieu, J. P. W Scott-Elliot, W. Williams, W. R. (Heston)
Mann, Mrs. J. Segal, Dr. S. Willis, E.
Manning, Mrs. L. (Epping) Shackleton, E. A. A. Wills, Mrs. E. A.
Marquand, H. A. Sharp, Granville Wise, Major F J
Marshall, F. (Brightside) Shawcross, C. N. (Widnes) Woods, G. S.
Mathers, Rt. Hon. George Shinwell, Rt. Hon. E. Wyatt, W.
Mellish, R. J. Silverman, J. (Erdington) Yates, V. F.
Middleton, Mrs. L. Silverman, S. S. (Nelson) Younger, Hon. Kenneth
Mitchison, G. R. Simmons, C. J.
Monslow, W. Skeffington, A. M TELLERS FOR THE AYES:
Moody, A. S. Skeffington-Lodge, T. C Mr. Pearson and
Morgan, Dr. H. B. Skinnard, F. W. Mr. Richard Adams.
Morris, Lt.-Col. H. (Sheffield, C.) Smith, Ellis (Stoke)
Amory, D. Heathcoat Cuthbert, W. N. Henderson, John (Cathcart)
Assheton, Rt. Hon. R. Darling, Sir W. Y. Herbert, Sir A. P
Baldwin, A. E. Davidson, Viscountess Hollis, M. C.
Barlow, Sir J. Digby, S. W. Howard, Hon. A.
Beamish, Maj. T. V. H Dodds-Parker, A. D. Hulbert, Wing-Cdr. N. J.
Beechman, N. A. Drayson, G. B. Hutchison, Col. J. R. (Glasgow, C.)
Bennett, Sir P. Drewe, C. Jeffreys, General Sir G.
Birch, Nigel Dugdale, Maj. Sir T. (Richmond) Jennings, R.
Boles, Lt.-Col. D. C. (Wells) Duthie, W. S. Joynson-Hicks, Hon. L W
Bower, N. Eccles, D. M. Keeling, E. H
Boyd-Carpenter, J. A. Eden, Rt. Hon. A. Lambert, Hon. G.
Braithwaite, Lt.-Comdr. J. G. Elliot, Rt. Hon. Walter Lancaster, Col. C. G.
Bromley-Davenport, Lt.-Col. W Erroll, F. J. Langford-Holt, J.
Buchan-Hepburn, P. G. T Fraser, Sir I. (Lonsdale) Law, Rt. Hon. R. K.
Butcher, H. W. Galbraith, Cmdr. T. D Legge-Bourke, Maj. E. A. H
Challen, C. Gammans, L. D. Linstead, H. N.
Channon, H. Glyn, Sir R. Lloyd, Major Guy (Renfrew, E.)
Churchill, Rt. Hon. W. S Gomme-Duncan, Col. A Lloyd, Selwyn (Wirral)
Clarke, Col. R. S. Grant, Lady Low, A. R. W.
Clifton-Brown, Lt.-Col. G. Gridley, Sir A. Lucas-Tooth, Sir H.
Cooper-Key, E. M. Grimston, R. V. Lyttelton, Rt. Hon. O
Corbett, Lieut.-Col U. (Ludlow) Hannon, Sir P. (Moseley) MacAndrew, Col. Sir C.
Crookshank, Capt. Rt. Hon. H. F. C Harvey, Air-Comdre, A. V. Macdonald, Sir P. (I. of Wight)
Crosthwaite-Eyre, Col. O. E Head, Brig. A. H. Mackeson, Brig. H. R.
Crowder, Capt. John E. Headlam, Lieut.-Col. Rt. Hon Sir C McKie, J. H. (Galloway)
Maclay, Hon. J. S. Poole, O. B. S. (Oswestry) Studholme, H. G.
MacLeod, J. Prescott, Stanley Sutcliffe, H.
Macpherson, N. (Dumfries) Prior-Palmer, Brig. O. Taylor, C. S. (Eastbourne)
Manningham-Buller, R. E. Raikes, H. V. Taylor, Vice-Adm. E. A. (P'dd's'n, S.)
Marlowe, A. A. H. Rayner, Brig. R. Teeling, William
Marsden, Capt. A. Reid, Rt. Hon. J. S. C. (Hillhead) Thorneycroft, G. E. P. (Monmouth)
Marshall, D. (Bodmin) Roberts, Major P. G. (Ecclesall) Thornton-Kemsley, C. N.
Mellor, Sir J. Ropner, Col. L. Thorp, Lt.-Col. R. A. F.
Molson, A. H. E. Ross, Sir R. D. (Londonderry) Touche, G. C.
Moore, Lt.-Col. Sir T. Sanderson, Sir F. Turton, R. H.
Morris-Jones, Sir H. Scott, Lord W. Vane, W. M. F.
Morrison, Maj. J. G. (Salisbury) Shephard, S. (Newark) Walker-Smith, D.
Morrison, Rt. Hon. W. S. (Cirencester) Shepherd, W. S. (Bucklow) Ward, Hon. G. R.
Mott-Radclyffe, Maj. C. E. Smiles, Lt.-Col. Sir W. Wheatley, Col. M. J. (Dorset, E.)
Neven-Spence, Sir B. Smith, E P. (Ashford) White, Sir D. (Fareham)
Nicholson, G. Smithers, Sir W. White, J. B. (Canterbury)
Noble, Comdr. A. H. P. Snadden, W. M. Williams, C. (Torquay)
O'Neill, Rt. Hon. Sir H. Spearman, A. C. M. Willoughby de Eresby, Lord
Osborne, C. Stanley, Rt. Hon. O.
Peto, Brig. C. H. M. Stoddart-Scott, Col. M. TELLERS FOR THE NOES:
Pitman, I. J. Strauss, H. G. (English Universities) Sir Arthur Young and
Major Conant.