Section four of the Finance Act, 1949 (which in lieu of the duties of customs charged on wines under section three of the Finance (No. 2) Act, 1939, charged the duties at the rates set out in the Second Schedule to the first-named Act), shall have effect as if in the said Second Schedule the expression "light wine" meant in every case wine not exceeding twenty-seven degrees of proof spirit, and accordingly for the last paragraph of the said Schedule there shall be substituted the following paragraph:—
For the purposes of this Schedule, the expression 'light wine' means wine not exceeding twenty-seven degrees of proof spirit"—[Mr. Nicholson.]
§ Brought up, and read the First time.
§ 1.0 a.m.
§ Mr. Godfrey Nicholson (Farnham)
I beg to move, "That the Clause be read a Second time."
I do not exaggerate the importance of the Clause and I shall be very brief in dealing with it. I apologise to the Committee for keeping up hon. Members even for a few minutes at this hour on such a minor matter. I must declare my interest in that I am a wine merchant.
This is the point of the Clause. Wines imported into this country are classified either as light or fortified, and they pay different rates of duty accordingly. Occasionally a few French wines, very good Burgundies or Rhone wines, and sometimes exceptional Sauternes, Chateau Yquem, and so on, are just a little over-strength, and fall into the higher rate. But in actual fact they do not pay the higher rate, for the shippers do not import them in those circumstances. The object of this Clause is to give a little extra margin.
The effect of the Clause, if adopted, would not be to entail any loss of revenue to the Exchequer, but we in this country would get a few better quality wines that we are not now getting. That puts it as briefly and simply as it can be put. The Clause is generally desired by the wine trade as a whole, although I cannot claim to speak on their behalf.
§ The Solicitor-General
My hon. Friend began by disclosing the interest he had in this subject. I feel that for reasons I need not specify I should disclose an interest in all the actions and omissions of my hon. Friend, apart from the interest one has as a very occasional consumer of the liquid now under consideration. After 1551 what I said about water recently, I dare say my hon. Friend is quite hopeful about the result of my proceeding from water to wine. I am afraid I must disappoint him. The question of the line of demarcation between light and heavy wine involves a great many technicalities. It has varied from time to time since it was first imposed in 1861.
The purpose of drawing the line was to distinguish between natural wines and fortified wines, and it has varied both upwards and downwards since that time. In 1927, the figures were put at their present level—namely, 25 degrees Continental wines and 27 degrees Commonwealth wines. The then Prime Minister said that the object of the change should be a dividing line when wines entering the country contained any spirit beyond that produced by the natural processes of fermentation.
No dividing line could wholly achieve that purpose. My hon. Friend has suggested that this alteration would not entail any loss of revenue to the country. I rather doubt that, having regard to the course of trade after the alteration made in 1927. The effect of having a different level for Commonwealth as opposed to Continental wines led to a considerable increase in consumption of Commonwealth wines, and the elimination of that difference now might have an appreciable effect on the consumption of Commonwealth wines and an effect on the revenue from that source.
It is a rather difficult technical matter, and, of course, it has repercussions not only on the interest of the revenue but also on the relative position of different sections of the trade in this country, as well as, to some extent, our commercial policy as a country. For these reasons I am not in a position to accept my hon. Friend's proposal, but I can say that we are perfectly willing to consider this technical question again, in consultation with the trade, before next year.
§ Mr. Nicholson
I thank the Solicitor-General for what he said and for the promise to reconsider the question. I do not think that what he said about the possible loss of revenue will stand up to examination, but by all means let us have an examination. If I am right, no doubt the Govern- 1552 ment will yield another year. I beg to ask leave to withdrawn the Motion.
§ Motion and Clause, by leave, withdrawn.