Clause 1.—(TOBACCO.)

HC Deb 05 June 1956 vol 553 cc880-990

3.31 p.m.

Mr. Tom Brown (Ince)

I beg to move, in page 2, line 4, at the end to insert: (3) Section four of the Finance Act. 1947 (which provides for relief for pensioners), shall have effect as if the reference in paragraph (a) of subsection (1) thereof to the increase in the retail price of tobacco occasioned by the duties imposed by that Act included (in addition to the reference provided for by subsection (7) of section one of the Finance Act, 1948) a reference to the effect of the further increase in the retail price of tobacco occasioned by the provisions of this section. This afternoon I start with a distinct advantage, inasmuch as my appeal is addressed to the Chancellor of the Exchequer—who has already left his place. He is a smoker and should not, therefore, be prejudiced against the Amendment. From the observations which I have made over a number of years I have found that he is fond of his pipe. He is also fond of his cigarette and an occasional cigar. After having listened to the arguments from hon. Members on this side of the Committee, I do not think that he will venture to refuse to accept the Amendment.

Another advantage is that during the course of his speech on the fourth day of the Budget debate he failed to reply to many requests from hon. Members on both sides to give consideration to the plight of the old-age pensioners. When questioned by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) about tobacco tokens, he said: That is a wider question which I will debate when we come to the discussion on the Finance Bill. As the right hon. Gentleman said, ' It is all open '. I do not propose to enter into these details at the moment. I think that it would be better to leave it to the Finance Bill debates."—[OFFICIAL REPORT, 23rd April, 1956; Vol. 551, c. 1570.] We now have an opportunity of responding to the request which he then made.

During the Budget debate many hon. Members on both sides referred to the effect that the Budget would have upon the condition of old-age pensioners and, since then, several Questions have been tabled by hon. Members on bath sides indicating that the increase in Tobacco Duty would be an additional hardship in the lives of old-age pensioners. That is why we have put down this Amendment.

Whatever may be our political philosophies, it is generally agreed that if there is one section of the community which is hard-hit by present-day conditions it is the old-age pensioners and those in the lower income groups. It is also generally agreed that if there is anything we can do to help this section of the community we should do it. That section is feeling the full blast of the economic blizzard which has descended upon us, as I can substantiate from my experiences when visiting these people in their homes.

In July, these people will experience a further increase in the cost of living, brought about by the removal of the subsidy on milk. I hope that you will not rule me out of order, Sir Charles. Furthermore, in September further inroads will be made upon their economic conditions, by way of the increase in the price of bread, through the removal of the remaining bread subsidy. In September, whether or not we like it, old-age pensioners and all other workers will have to pay the highest price for a loaf of bread since the days of Cobden and Bright. That is a reflection upon the policy of the Government—but I know that if I continue to refer to other commodities whose price has been increased I shall be ruled out of order, so I will leave the matter there.

The question whether smoking is or is not a bad habit is not under discussion. The main question before us now is whether we can help those who have reached the eventide of life to enjoy that eventide by making it easier for them to have their pipe of tobacco, their cigarette and their pinch of snuff. We must remember that the people for whom we are pleading are those who, during their activities in various vocations through the years which now lie behind them, played their part well by a manifestation of loyalty, devotion and courage and helped in no small way to enable this nation to attain its position as one of the greatest nations of its size in the world.

For what they have done in the past, for the country, for industry and for commerce, they are entitled to any help that the Government can afford to give. Surely, this Committee will not deny them some solace in their solitude. Let it be remembered that many of the old-age pensioners and people in the lower income groups live in loneliness, and loneliness is a terrible thing. If, by enabling them to have a pipe of tobacco or a cigarette, we can alleviate that loneliness, let us do so.

In my constituency, there are a number of clubs for old people. I visit them occasionally. Whether hon. Members will laugh at me or not does not concern me, but when on those visits I take with me a few of my old pipes which have been cleaned up, and I also take a little extra tobacco. Believe me, there is nothing which gives the old people greater joy than being able to enjoy an extra pipe of tobacco. It has a wonderful psychological effect on them.

It is not much that we are asking for these old people. According to prison regulations, men who are serving sentences for wrong-doing are allowed 1 oz. of tobacco a week or 100 cigarettes. Shall we deny the same thing to these people who are at liberty and who have done no wrong? The whole thing is crazy, in my opinion. I am not finding fault with prison regulations. But the people responsible for drawing up the regulations realised that, to a smoker, a pipe of tobacco is a source of consolation. If that can be afforded, even to those who are in bondage, surely people at liberty should be able to enjoy at least a pipe of tobacco or a cigarette. The visits which I occasionally make to these clubs for old people make me feel angry at the situation in which these old folk find themselves. They cannot afford more than I oz. of tobacco a week.

I know that there are many arguments which may be advanced against this proposal. We are told that they ought to save on this and on that. But I suggest that no hon. Member would be able to provide for the tobacco he required out of such a meagre pension as these old people receive from the Government. I do not intend to weary the Committee by giving details of the numbers of budgets which I have received from old-age pensioners living in various parts of the country, but I have failed to find any indication that these old people are able to make provision for buying the amount of tobacco which would give them satisfaction or even some consolation.

The history of the Tobacco Duty is very interesting. Anyone who cares to examine how it has grown over the years will be amazed and staggered. It is almost three hundred years since a duty was first placed on tobacco. It originated in the year 1660. Then the duty on 1 lb. of tobacco was 2d. In the early part of the eighteenth century the duty was raised to 6½d. In 1910, the figure was 3s. 8d. per lb. In 1915, it was 5s. 6d. In 1917, it reached 7s. 4d. In that year the agitation against the high Tobacco Duty was so strong that the then Government were compelled to reduce is to 6s. 5d. per lb.—

Sir John Barlow (Middleton and Prestwich)

Will the hon. Member give way?

Mr. Brown

I will give way in a moment.

From 1918 to 1926 the figure stood at 8s. 2d. By 1931 there had been a slow but gradual increase, and in that year the figure was 9s. 6d. per lb. In 1939, it was 11s. 6d.; in 1940, 17s. 6d.; in 1942, 29s. 6d.; in 1945, 38s. 8d. and on 16th April, 1947, when a concession to old-age pensioners was made by my right hon. Friend the Member for Bishop Auckland it stood at 54s. 10d. per lb. On 7th April, 1948, it was raised to 58s. 2d. On 17th April of this year it was raised to 61s. 2d. per lb. Every time, without exception, the increase in the Tobacco Duty has hit the old-age pensioners and people in the lower income groups. Now I will give way to the hon. Baronet.

3.45 p.m.

Sir J. Barlow

I wonder whether the hon. Member, as part of his obvious researches, can tell the Committee what was the price of the tobacco leaf at the various times when the Tobacco Duty was increased?

Mr. Brown

If the hon. Baronet will examine the records, he will soon find what was the price of tobacco per oz. in the years which I have mentioned. From my own experience I can tell him that there was a time during my youth when I fetched tobacco for my dear old dad and paid ld. for it. One put the ld. on the weight side of the scales and the tobacco was put on the other side to balance the 1d. and one got a pennyworth of tobacco. In those days that was a godsend to the old-age pensioner.

What is the size of the family with which we have to deal, and to which the proposal contained in this Amendment will apply? It is well we should examine that. The number of pensioners benefiting from the relief of 2s. 4d. per week increased from 2–24 million in 1953–54 to 2?38 million in 1954–55. Of course, the cost of the concession originally made by my right hon. Friend the Member for Bishop Auckland also rose. It rose from £13?8 million to £14.6 million over the same period. If we examine the receipts from the Tobacco Duty, even the net receipts, we find that in 1950 the figure was £544 million, and in 1955–56 it was £650 million, a figure undreamed of when the duty was imposed so many years ago.

According to the OFFICIAL REPORT of 24th April this year, in a Written Answer to Questions the Chancellor of the Exchequer said: Just over 2½ million pensioners are at present getting this benefit, and the estimated cost for the year 1956–57 is about £15½ million."-[OFFICIAL REPORT, 24th April, 1956; vol. 551, c. 124.] On the same date—again I have extracted this information from the OFFICIAL REPORT—the Chancellor of the Exchequer said that the cost to the Treasury of increasing the value of the old-age pensioners' tobacco vouchers to include the increase in the Tobacco Duty would be about £2¼ million in the first full year.

Therefore, if we add to the already known cost of £14.9 million for the last year the estimated cost of £2¼ million for this concession, we reach £17 million as the total cost of giving this concession to old-age pensioners and those in the lower-income groups. The Chancellor of the Exchequer budgeted for a surplus of £464 million. Surely we are not asking too much that he should continue this concession to these sections of the community for the services they have rendered to the country.

The Chancellor of the Exchequer is a smoker. I am not saying that he is a heavy smoker. I see him sometimes enjoying a pipe, and rightly so, and occasionally a cigar or a cigarette, and rightly so. When he went to Newcastle he enjoyed a cigar. I am not finding fault. He even said, "A little of what you fancy does you good". I am asking him not to forget that what he enjoys he ought not to deny to others. I understand that his London residence is at 11, Downing Street. If he went there, tonight, looked on the mantlepiece and failed to find his pipe or his cigarette case, M.I. 5 would be called in and would have to find that pipe immediately because the right hon. Gentleman would want a smoke. That is all that the old folk want. That is what they are entitled to and ought to get, and that is why I have moved this Amendment.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

No one better than the hon. Member for Ince (Mr. T. Brown) could have been chosen by the Opposition to engage the sympathetic feelings of the Committee towards this Amendment. All of us thank him for the very human way in which he presented his case.

The hon. Gentleman said that the Chancellor had failed to reply on this matter at the close of the Budget debate. That has given the hon Gentleman his opportunity to canvass the matter now. He has overlooked the fact that, perhaps as a foretaste of this debate, I discussed this very question at some length when moving the Second Reading of the Bill. I did that purposely because I felt sure that this was a subject which it would be right for the Committee to debate, and that it might be of value to hon. Members on all sides if I indicated at that stage the reasons why my right hon. Friend had reached this conclusion.

Mr. T. Brown

I am not attacking the Financial Secretary of the Treasury at all. Far be it from me to do that. My target this afternoon is the Chancellor of the Exchequer.

Mr. Brooke

I hope the hon. Gentleman will not mind my rising at once. Let me come clean and say that I cannot expect that I shall close this debate. I hope he will not mind my developing somewhat the case which it was my duty to put before the House on Second Reading. I always feel that it is right for a Treasury Minister to indicate the cost of any Amendment, regardless of its merits. If the Amendment were accepted, it would cost £2¼ million in a full year. I should make it clear that it is not on the financial magnitude or otherwise of that figure that I am resting my case. I give the figure as a piece of information which the Committee should have.

The story of this Tobacco Duty relief is that in 1947 the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) put up the Tobacco Duty very sharply. There was a further increase in 1948. Those two increases had the effect of raising the price of cigarettes by 50 per cent. We had never experienced a price rise of that kind in a dutiable commodity before. The Labour Government decided that their right course would be to temper the wind to the old-age pensioner. No wonder, because it is well known that many old people smoke freely, and an increase of 50 per cent., almost at a blow, in the price of one of the necessities of the old people would indeed be a heavy impost.

Mr. Douglas Jay (Battersea, North)

The two increases together may have been 50 per cent. I think that the right lion. Gentleman is right. What was the percentage increase of the second rise on its own?

Mr. Brooke

The first increase was about 43 per cent. and the second was 6 per cent. or 7 per cent.

The right hon. Gentleman the Member for Battersea, North (Mr. Jay) put a similar question to me on the Second Reading and I was quite frank about it. I have no intention of running away from this question. I am well aware that the increase of duty in this Budget is comparable to the increase in the 1948 budget. At that time the Tobacco Duty relief of 2s. a week which had been granted in 1947 was increased to 2s. 4d. What the hon. Member for Ince wishes now is that it should be increased from 2s. 4d. to 2s. 8d.

Mr. Brown

2s. 8½d.

Mr. Brooke

I was leaving out the halfpenny, for the purposes of my argument.

Mr. Brown

It is very important to the old-age pensioners.

Mr. Brooke

The effect of the present increase in the duty is to put up the price of cigarettes by 5 per cent., which is nothing like 50 per cent.

It is an interesting fact that tobacco and cigarettes have risen in price far less than almost everything since 1948. I appreciate the hon. Gentleman's argument about what happened in 1948, but he will find it hard to develop an argument that old-age pensioners should be given additional help in meeting the cost of tobacco and cigarettes because of a steep increase in price. The prices of many things have risen by 50 per cent. since 1948. Retirement pensions have been raised by this Government by more than 50 per cent. On the other hand, the actual rise in the price of tobacco is 5 per cent. since the Budget, and the total increase in the price of tobacco and cigarettes since 1948 is about 10 per cent.

Mr. John Rankin (Glasgow, Govan)

Will the right hon. Gentleman remember that during the period he is covering the size of the cigarette has considerably decreased, while the price has gone up?

Mr. Brooke

The hon. Member may argue in that way if he wishes, but the fact remains that the price of tobacco and cigarettes has remained stable over the last eight years to an extent which we all wish were true of other things we buy. The hon. Member for Ince is urging that, despite all that I have said, the Tobacco Duty relief should be increased from 2s. 4d. to 2s. 8½d. per week.

4.0 p.m.

We have to examine just what effect that would have and whom it would help. I say nothing whatever about the wisdom or otherwise of the right hon. Gentleman's decision in 1947, when he imposed that tremendous increase in the duty. I appreciate how he felt that the old-age pensioner could not stand that increase without some assistance. As is well known, however, on both sides of the Committee, the Tobacco Duty relief scheme has given rise to constant complaint and a fairly widespread sense of injustice.

The hon. Member for Ince spoke, and naturally so, because he wished to make his case, from the standpoint of the ordinary old-age pensioner, the man or woman drawing a retirement pension under the National Insurance Acts. The Tobacco Duty relief, however, applies only, and has always applied only, to certain classes of pensioner and not to others. It applies to the ordinary retirement pensioner, to the non-contributory old-age pensioner and to people drawing blind pensions under the 1936 Act.

It applies to people drawing widows' or widowed mothers' allowances under National Insurance Acts, although those are not very many. All the other pensioners, however, who are in exactly the same position and who will be affected in precisely the same way by this Budget change, have no benefit whatever from Tobacco Duty relief.

The reason for that is that when the Labour Government introduced the relief, in 1947, they found that there was no other way of administering it except in such a manner that it benefited only those who drew pensions by weekly books at a post office. Other pensioners, therefore, are excluded although their claim in equity, one would think, was just as great.

War disability pensioners do not get the relief. People drawing railway pensions do not receive it. People drawing police pensions cannot get it. People drawing Service pensions, war widows drawing war widows' pensions and industrial disability pensioners are denied it. They are excluded—I must say, artificially excluded—because no way of administering the relief has been discovered which would operate at reasonable cost and bring them in.

I am sorry that no Government have discovered a means of overcoming this difficulty, but the fact remains that it has been looked at by successive Governments, of different colours, and no one has found an alternative method of administering the scheme.

Mr. T. Brown

The argument concerning the classes of cases enumerated by the right hon. Gentleman was advanced in 1947 and again in 1948, but outstanding above all that was the desire of the House, on both sides, to help the old-age pensioner. We anticipated that at least something would be done to bring in the other grades and give them the same concession as was given to the old-age pensioner.

Mr. Brooke

I do not think it was realised in 1947 or 1948 how strong a sense of grievance these regulations would create which pick out certain pensioners for benefit and exclude others. In the course of his argument, the hon. Member referred to the removal of part of the subsidies on milk and bread, but that, of course, affects all pensioners. What he said was no argument at all for selecting certain pensioners and giving them help over their tobacco.

It is not only a sense of grievance between one type of pensioner and another. It is also a grievance, as, I am sure, hon. Members have sensed in their constituencles, between smokers and nonsmokers. I have constantly been asked Questions in the House seeking to know why people who are non-smokers cannot he given comparable benefit to the Tobacco Duty relief and I can well appreciate that a powerful case of that kind can be made. If, however, there is that grievance, the hon. Member's Amendment would accentuate it. It would give more to the smokers while helping the non-smoker not at all.

There are, therefore, those two quite separate but severe grievances, and I am bound to advise the Committee that a third grievance is growing up. I am made aware of this also through letters which I receive from hon. Members, on both sides. I here is a grievance among the honest people, who, quite rightly refrain from making a declaration that they are habitual smokers, against those who are not habitual smokers but who, I am sorry to say, are attracted by the possibility of getting 2s. 4d. a week if they make a false declaration that they are habitual smokers and thereby bring themselves within the benefit of the relief. There are these three different grievances, all quite separate and all with considerable justification behind them.

Mr. Gordon Walker (Smethwick)

Is the right hon. Gentleman not proving too much? If we follow the logic of his argument, he will be in favour of abolishing the existing benefit to old-age pensioners, for he is only saying that these grievances exist now. If he really means this, he should abolish the existing reliefs. If he does not mean it, he should be prepared to extend the benefits, because the grievances will not be any worse than now in so far as they exist at all.

Mr. Brooke

The grievances would be worse because the effect of the Amendment would be in every case to widen the gap which is the whole cause of complaint.

There is no doubt whatever that the present operation of the Tobacco Duty relief scheme causes injustice between one pensioner and another and between one person and another. While I fully appreciate the human strength of the case which the hon. Member for Ince has made, I must equally put it to the Committee that by accepting the Amendment we would be worsening a situation which is very unsatisfactory already and which is admitted on both sides to be far from satisfactory.

This Budget increase in 1956 is small compared with the 1947 increase. I grant that it is equal to the 1948 increase, but several things have happened since then. First, the unsatisfactory nature of the relief scheme has become more and more apparent. Secondly, tobacco and cigarette prices have lagged behind other prices. Thirdly, although the hon. Member spoke of the meagre pension which people receive from the present Government, he must be aware that it was increased by nearly a quarter last year and that this pension, which he describes as so meagre, has a greater purchasing power than it had throughout a large part of the time of the Labour Government.

I must advise the Committee that we should not be bettering the situation by accepting the Amendment. I fully understand how it engages public sympathy. I entirely agree that we should debate it, but I hope I have made clear to the Committee that there is a very substantial case in favour of the Chancellor's action.

Mrs. Barbara Castle (Blackburn)

We have listened to one of the most dishonest speeches ever made in the Committee. We have had from the Financial Secretary a long technical explanation about how undesirable this Tobacco Duty relief is. It would have had some sort of validity had he or his right hon. Friend the Chancellor of the Exchequer been prepared to say to the Committee, "There are these malpractices, these injustices. The only answer is to wipe the whole thing out and to have, instead, a general increase in old-age pensions."

As recently as yesterday this argument was put to the Government Front Bench by one of their own hon. Members, and the Minister of Pensions and National Insurance, in dismissing it, made it clear that this was not Government policy at all. The Minister of Pensions and National Insurance yesterday, when he was asked whether it would not be better to abolish the tobacco token scheme altogether and compensate all old-age pensioners, smokers and non-smokers alike, by an increase in pension of 2s. 6d. replied flatly—and I suppose that he is a Member of the same Government as his right hon. Friend the Chancellor of the Exchequer—

Retirement pensions are National Insurance payments depending on contributions, and a change in this rate would involve wider considerations than that of the tobacco token scheme.'

Mr. Edward du Cann (Taunton)

I asked that Question yesterday, and I think I ought to say that the impression that I had from the Answer given by the Minister of Pensions and National Insurance was not that the Government did not accept my suggestion. Rather I was referred to the Financial Secretary to the Treasury. Hence my presence here today.

Mrs. Castle

I shall follow up the attack of the hon. Member yesterday, because I think that he will be as disappointed as we are over this matter. I have the hon. Member's supplementary question in front of me, and the reply of the Minister of Pensions and National Insurance. The Minister said: Questions about this scheme "— not about old-age pensions increases—

as my hon. Friend will be aware, are put to my right hon. Friend the Chancellor of the Exchequer…. "-[OFFICIAL REPORT, 4th June, 1956; Vol. 553, c. 691] Now we are putting them, and we have had the answer. The answer is that there will not be an abolition of the scheme. There is merely to be a refusal to bring it up-to-date to match the increase in prices. Therefore, I think that the hon. Member has been answered, and, as he has got his answer, all the arguments that we have had this afternoon from the Financial Secretary are totally irrelevant.

It is no good telling us about a sense of grievance between smokers and nonsmokers among old-age pensioners. There will be a far greater sense of grievance among all old-age pensioners of every category by the fact that the Government are once again doing a little economising at their expense. I think that the nonsmokers will stand by the smokers on this, because it is typical that the nonsmokers have had it on the bread subsidy, and now the smokers are having it also on the tobacco tokens.

On every single item, the Government come along and say that the increase is only 1d., 2d. or 3d., and the cost of living generally for the old-age pensioner creeps up. When we put this to the Government, we have smarmy words about the human story and that there are technical objections to the tobacco token scheme. We challenge the Government to get rid of the tobacco token scheme and to give an overall increase to old-age pensioners to offset it. We would accept that if the overall increase met the situation, but until the Government do that the technical arguments of the Financial Secretary are merely a smoke-screen over the Government's policy, which is one of miserable cheese-paring at the expense of old-age pensioners on every possible occasion. That is the real grievance behind the old-age pensioners' feelings today.

Neither will it do for the Financial Secretary to say that tobacco has gone up less in price than anything else. It may have done. But now the Government are deliberately putting it up in price by a tax addition and telling the old-age pensioners that they must stand the burden. Whether we look at the particular items of the cost of living or at the general level of prices, we say that there is not a ld. or a margin which will permit of old-age pensioners bearing any additional burden.

Everyone in the Committee this afternoon ought to be ashamed to put even a 2d. burden on old-age pensioners, when we compare their relative standard of living with that of any Member of Parliament. Yet we sit here in our smug complacency and say, "It is only 2d. They can once again tighten their belts a little." When the Questions were asked from this side of the House about the steady increase in the burden on old-age pensioners because of the abolition of the bread subsidy and the increase in the tobacco tax, we were told not to take particular items but to take the general rise of prices, because that is what matters.

4.15 p.m.

I am prepared to do so, but the Financial Secretary must know that by the time the last increase was given to meet the cost of living, the rise in prices had already overtaken that increase. The last increase was out-of-date before it was given. We have now to start a long painful agitation to enable old-age pensioners once again to catch up, and they are the last people in the country who can afford to fall behind. We know that last year retail prices went up by over 4 per cent. In The Times yesterday a statement by the Royal Statistical Society gave a forecast of what is to happen to retail prices this year. The estimate is that the increase this year in retail prices will be 5.6 per cent., or possibly more—a steeper rise than it was last year.

Of course, it does not matter to the Chancellor of the Exchequer whether prices go up by 5.6 per cent., but how long have old-age pensioners to wait? We are told today that this is a great human story and that there are technical objections to the tobacco token scheme. It is time that the House of Commons got angry with the Government and their treatment of old-age pensioners.

Yesterday, the Minister of Pensions and National Insurance came here with cool, calm arrogance and quoted from the Phillips Committee, saying that that Committee said that the main rates of benefit under National Insurance should not be subject to frequent alterations, and that the old-age pensioners had better wait until enough time has elapsed for it to be administratively desirable to consider a further increase. But if the rates of benefit ought not to be subject to frequent alterations, according to the Phillips Committee, the fact is that, as a result of Government policy, we are having a series of frequent reductions in the rates of benefit.

That is what the Government policy means. It does not mean that benefits are standing still; it means that they are being reduced, not merely by inflation but by deliberate acts of Government policy in the frequent changes which we have been having. Old-age pensions are being deliberately reduced by the Government cutting the bread subsidy. They are now being deliberately reduced by increasing the tobacco tax. The Government are themselves, therefore, making a mockery of the arguments which they used yesterday.

Mr. Scholefield Allen (Crewe)

Perhaps my hon. Friend was not old enough to smoke before the war, but I wonder whether she knows of any other item which has risen in price since those days from 11½d. to 3s. 10d.?

Mrs. Castle

I may be a litle dense, but I do not follow my hon. and learned Friend.

Mr. Scholefield Allen

The rise in the price of 20 cigarettes is from 11½d. to 3s. 10d. Does my hon. Friend know of any other item which has shown as great a rise in price?

Mrs. Castle

I am grateful to my hon. and learned Friend, but I think the Government's recent figures are enough to be going on with. I admit that if we turned back to the 1930s the position would be worse still; but I like an up-to-date analysis of the Government's crimes. If we are to have from the Chancellor the same sort of technical set-up that we have had from the Financial Secretary this afternoon, the country will know the attitude of the Government towards that most helpless section of the community, the old-age pensioners.

Mr. du Cann

I am pleased to learn that my right hon. Friend has decided not to accept this Amendment, because it does not and cannot provide an answer to what we all recognise to be a difficult problem. The proposal of the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) in his autumn Budget, in 1947, to introduce the tobacco token relief scheme was a praiseworthy attempt to protect certain classes of old-age pensioners from the enormous increase in the Tobacco Duty which he saw fit to impose upon everybody else.

One can sympathise with and applaud his aim, but the tragedy is—and this was well brought out by the speech of the Financial Secretary this afternoon—that, in practice, the relief scheme has proved to be so unfair that one can go so far as to say that it is really almost impossible to see any reason for its continuance. However much one may sympathise with the aim of the authors of this Amendment, even if one suspects the political purpose of some of the arguments put forward, it is clear that, far from alleviating distress among old people, the Amendment, if carried, would make a bad situation worse by perpetuating an injustice.

The tobacco token scheme as it exists is unfair, as my right hon. Friend has demonstrated, between different classes of pensioners. Why should it be suggested, for instance, that those who are drawing a war disability pension or a railway pension should not be entitled to benefit from the scheme? What have these people done that they cannot have the same benefits to which the other classes are entitled? In addition, it is unfair in respect of those people who are entitled to apply for relief, if they so wish. One can say that it is unfair and unreasonable from almost any and every point of view.

If we consider the people who are entitled to benefit at this stage, we can perhaps divide them into three classes. There is the minority of people who are genuinely habitual smokers. There is a small group who, understandably, draw these tokens and give the cigarettes to members of their own household or their families. Last, but by no means least, there is the still smaller section of the community which trades in these tokens. In other words, this is a scheme which virtually forces some old people into dishonesty.

Mr. A. E. Hunter (Feltham)

rose—

Mr. du Cann

I will not give way. [HON. MEMBERS: "Oh."] It is reasonable that I should not give way. I have little experience of the Committee and am entitled to ask the indulgence of the Committee when making only my second speech. I am making no charge against old-age pensioners at all.

Since I first raised this flatter in my maiden speech, and asked Questions about it, one of which has been quoted by the hon. Lady the Member for Blackburn (Mrs. Castle), I have received a number of letters from old-age pensioners fully backing up everything which my right hon. Friend the Financial Secretary said and everything which I said. There is a great sense of injustice among all classes of old people at the existence of this scheme. They want it abolished, as I should like to see it abolished. It is unfair between different classes of pensioners— [Interruption.] The right hon. Member for Belper (Mr. G. Brown) is very good at interrupting, as we know; he has great experience of it. This scheme is unfair to different classes of people and unfair between those who are entitled to benefit from it. If we accept the Amendment we add to the injustice, and I am therefore glad that we are to reject it.

I am glad to make common cause with the hon. Member for Ince (Mr. T. Brown); it is right, if I may say so with respect, that an older Member and a younger Member should make common cause in this matter for the old people.

Mr. Donald Chapman (Birmingham, Northfield)

But look at the company which the hon. Member for Taunton (Mr. du Cann) keeps.

Mr. du Cann

I agree with the hon. Member for Ince that we must endeavour to do something positive. In fairness, we must—I do not suggest today—abolish the scheme at the earliest possible date and increase those pension rates which we have the power to increase. I am aware of the recent pension increases under the Government and it is right that attention should be called to them, but I suggest that in due course we should go the whole distance, irrespective of cost.

Some say that the margin of comfort for old-age pensioners is small. I say that the margin of existence for them at any time is small. With a projected Budget surplus of the size of which we are all aware, I do not believe that we cannot afford in due time to do better for the old-age pensioners, and I hope with all my heart that the suggestion to abolish the scheme and increase certain pension rates will commend itself to my right hon. Friend.

Mr. Michael Stewart (Fulham)

Nothing that has been said by hon. Members opposite alters one simple fact about this Clause in its unamended form —that it will increase the burden of taxation on a certain section of old-age pensioners. If everything which has been alleged about the present working of the scheme by the hon. Member for Taunton (Mr. du Cann) were true, it would still be beyond dispute that there are a great many old-age pensioners who are fully entitled to benefit and were intended to benefit from the scheme, and that all of them will be hit by the operation of the Finance Bill if the Amendment is not accepted.

The issue which the Committee is discussing, and the only issue which, under the rules of order, it can discuss is whether we are to hit them or not— and that is the answer to the hon. Member for Taunton. May I say to him that it is our custom in the House that there is only one occasion on which an hon. Member can plead inexperience in defence against interruptors? I must say that his speech did not appear to be a defence of the Government. Had we been debating the tobacco token scheme as a whole, it would have been a most interesting speech, but we are not discussing the scheme as a whole. The same comment applies to some arguments advanced by the Financial Secretary. Is it suggested that if we make the value of this concession 2s. 8½d. instead of 2s. 4d. it will add any weight to such criticisms of the scheme as may be made at present?

I do not dispute, nor, I think, does anyone, the validity of some of those criticisms—that it has not proved possible to embrace every kind of pensioner which one could embrace and that some old-age pensioners who have not acquired the smoking habit do not take kindly, perhaps, to this scheme. But if there are complaints, and if there is a feeling of injustice, is it to be suggested that those feelings will be increased by a nice proportion when the value of the concession is increased from 2s. 4d. to 2s. 8½d.? All those complaints will be exactly what they were when this increased tax has been imposed.

If we carry the Clause in its unamended form we do not remove a single one of the objections which have been raised to the tobacco scheme as a whole. All we do by passing the Clause unamended is to hit by the tax a certain section of old-age pensioners. That ought always to be an extremely distasteful thing to do. What the Financial Secretary did not seem to realise was that if there were any justification for that, the burden of producing that justification lay with him. The Committee ought not to want to increase the taxation of those pensioners. We ought to do it only if the most overwhelming argument for doing it has been advanced.

What did the Financial Secretary do? He proceeded to advance one argument after another, each of which, if it were valid, would lead to a conclusion quite different from that to which he wished to lead the Committee. He began by saying that the Amendment would cost £2¼ million, but I am at least glad that he did not advance that as an argument for rejecting the Amendment. I do not think the Government will be prepared to say at this juncture that they have brought the country to such a pass that we can be delivered from disaster only by collecting £2¼ million in taxation of old-age pensioners. We must accept that statement, as I think he meant it to be accepted, as a mere point of information and in no sense an argument against the Amendment.

He then suggested that these concessions were granted in earlier Budgets because the rise in the price of tobacco was so steep that it was essential to give the concession, but in reply to an interjection by my right hon. Friend the Member for Battersea, North (Mr. Jay). he had to agree that on the second occasion on which this concession was given the rise was only 4d. Now it is 4½d. and if there was a justification, as I think we all agree there was, for extending this concession on the second occasion, there is a further justification for extending it now.

4.30 p.m.

Most remarkable of all was the Financial Secretary's suggestion that if we really wanted to help the old people we should not bother so much about tobacco, as there were other articles which had increased in price much more in the last eight years. That really is the most remarkable proposition. It is as if the Government were saying to the old-age pensioners "This Government, partly by their neglect and partly by their deliberate policy, have succeeded in pushing up the prices of a great many things much more than they have pushed up the price of tobacco, and that is now a reason why we should push up the price of tobacco as well."

It is the Financial Secretary's itch to go on sticking a bit of tax on anything within reach, as was very well pointed out in earlier debates by my right hon. Friend the Member for Huyton (Mr. H. Wilson). The right hon. Gentleman looks round at the cost-of-living-index figure. He notes the Government's success in pushing up the price of almost everything, shakes his head over tobacco and says, "I have not succeeded in pushing that up quite so much as. I have the price of other articles. Let us do it, therefore, and make sure that the old-age pensioners bear the brunt as well as anyone else."

That is what his argument meant, if it meant anything. I should have thought that the common-sense conclusion was that, if old-age pensioners are finding that everything else is very dear, that is surely an argument against making their tobacco dearer as well. That is why I think the Committee could reasonably accept the Amendment of my hon. Friend.

We are not discussing completely from the start what ought to be the level of Tobacco Duty. We are in a situation created by earlier legislation, in which it is administratively easy and straightforward to raise the Tobacco Duty without burdening the old-age pensioners. It may or may not be desirable that those legal and administrative arrangements should exist, but they do exist, and the Government do not propose to sweep them away. We say that as long as they do exist, and as long as old-age pensioners face their present difficulties—which have been added to by this Government—it is reasonable to use those legal and administrative arrangements to prevent the increase in the price of tobacco falling upon them.

Moreover, we have to notice this about tobacco. Smoking is, as some of us know to our cost, very much a matter of habit, and the older one gets the harder it is to break that habit. That is why it can be a really desperate hardship for an old person to be in such a position that every time he buys a packet of cigarettes or a little tobacco he feels that he is really being extravagant but, because of long years of habit, he simply cannot resist the temptation to buy. People who have by no means reached the age of the old-age pensioner feel that same pull, one way or the other, when they have to arrange their private budgets. There is really no excuse for putting this increased burden and vexation and anxiety upon old-age pensioners, with their limited means and long years of habit.

I think it is generally agreed that the Government's financial proposals for this year are, on the whole, of a rather trivial, and almost flippant, nature. What is remarkable about them is that even in a trifling Budget like this the Government do not lose the opportunity to "go" for bread and for tobacco—bread, which is for many old-age pensioners their staple article of diet; and tobacco, which is for many of them their only luxury. No doubt the Government will tell us that it represents only point so and so in the cost of living. It is partly that attitude that is so distasteful; that even in a trivial little Budget like this they cannot miss the opportunity to make a little worse off those people who already find life difficult. If right hon. Gentlemen opposite have any generosity at all, for goodness' sake let them look at the matter again and accept the Amendment.

Mr. A. E. Hunter (Feltham)

I should first like to refute the statement made by the hon. Member for Taunton (Mr. du Cann) that some old-age pensioners sell these tokens. He has offered no evidence to support his statement and if he refers to HANSARD he will find that some months ago his right hon. Friend the Financial Secretary stated that there was no evidence of any abuse by the selling of these tokens. I hope, therefore, that when he reflects upon the matter he will withdraw his statement, for it is unfair to make that statement without evidence.

I support this Amendment because it is a human one and one which will give some comfort to old people. At the present time this is a small concession. Old-age pensioners drawing a State pension under the National Insurance scheme receive this allowance of 2s. 4d. a week. It does not amount to a great deal, yet it means a lot to these old people. My hon. Friend the Member for Fulham (Mr. M. Stewart) said, quite rightly, that the tobacco habit is hard to break, and for those who have smoked all their lives it is not a habit that can easily be put aside. It gives comfort to lonely old people, and old people are often by themselves and need some consolation. Though statements have been made by medical people about the habit causing cancer of the lung, the habit is yet so strong that I am afraid the statement is not likely to have a great effect on the sale of cigarettes and tobacco.

The old people are in a special class. In the main, they have the smallest incomes. They do not get many of the luxuries of life. They often do not get very good food. They rarely get the comfort of holidays unless those holidays are organised by Darby and Joan Clubs or by the National Federation of Old-Age Pensions Associations. and smoking is one of their small pleasures.

The Financial Secretary said that the proposal would cost £2¼ million which, broken down, means roughly 4d. per week according to him, and, according to my hon. Friend the Member for Ince (Mr. T. Brown), 4½d. per week. This is a very small concession. Surely we can afford £2¼ million in order to maintain for old-age pensioners the full concession that was given to them in 1947. I appeal to the Chancellor, even at this late hour, to make this concession and so make sure that the old people who have the smallest incomes do not go without what is a luxury to them in the evening of their lives. It is mean of the Government not to give this concession.

Mr. Denis Howell (Birmingham, All Saints)

This is a matter of very great principle to anybody connected with our social life. One has only to serve on a local authority, or to visit old people's homes, or Darby and Joan Clubs and the like in one's own constituency to realise the great part smoking plays in the life of the old people. I do not smoke, but as a non-smoker I have been struck by the sustenance these old people seem to get out of the habit and the considerable hardship to which they are put to find the extra money involved.

As I say, there is a very important principle involved. The Financial Secretary dealt with the increases in pensions that have been given under this Government. They have gone up, and I think 40s. is the present weekly pension for single people. Even since that was given, just before—and conveniently just before—the last Election, there have been increases in the cost of living generally. In this very Bill which we are discussing, increases are imposed on the cost of milk and bread. An increase in the cost of coal was announced last week, and an announcement by the Central Electricity Board has indicated that the cost of electricity will go up. This morning there is the news that the cost of gas is to go up, and in Birmingham, a constituency of which city I represent, an announcement has been made that an application to increase transport fares is to be made.

One can therefore see that the cumulative effects of all these increases in the cost of living will certainly constitute the major part of the worries of these old folk. Although the cold logic of the Treasury might find it undesirable to increase what they undoubtedly regard as an anomaly, those of us who have some responsibility for social conditions and for the social atmosphere in relation to old people think that a concession which was given in the past might reasonably be continued to cover the increased duties in this case.

I must say that I regard the opposition of the Treasury to this Amendment as one of the most paltry arguments to which this House could have been subjected for very many years indeed. I find the arguments of the Financial Secretary amazing. It was not my intention to speak in this debate until I listened to the Financial Secretary and could not believe the arguments put forward on behalf of the Treasury. Those arguments fall into three categories, and I should like to say something about each of them.

First, he dealt with the anomaly that other pensioners are not involved. The very simple way of dealing with that would be to include all the pensioners who are not included already. I am not at all impressed by the argument that, because both the major parties in the House have met this problem in the past and have done nothing about it, it is impossible of solution. Although a young man, I find it increasingly the case that there are few things that are impossible in this world.

I am satisfied that, if the Chancellor of the Exchequer made up his mind and decided to include all pensioners within the scope of this privilege, a way would soon be found to do so. Indeed, I have a sneaking feeling that, when this privilege was first granted by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), he was probably told the very same thing—that it was impossible to grant it, even under the original dispensation, though, in fact, a way found round the difficulty.

I am also aware of the fact that, twelve months ago, the present Government were faced with the Birmingham Corporation. Bill, which proposed free travelling facilities for old people, and it was said on that occasion that there were anomalies exactly similar to those which the Financial Secretary has been talking about today. It was pointed out then that the concession did not include all pensioners, but excluded some, and it was this very Government, who are today saying that they are not willing to extend this privilege because of the anomalies, which placed that Bill on the Statute Book, and are therefore responsible for the situation about which they are complaining today.

Secondly, the Financial Secretary drew a distinction between smokers and nonsmokers which I find rather amazing. He said that we cannot extend the scope of this concession to smokers because many people are non-smokers, and they will not get the benefit of it. Is not that precisely the same basis on which the Government draw the taxation from tobacco in the first place? Surely, the Government actually get the tax on the same discrepancy. They receive the tax from the people who smoke and not from the people who do not smoke. I am a nonsmoker, and therefore I am not paying my fair share of the taxation.

Fundamentally, I am a believer in direct taxation. For the Chancellor of the Exchequer to draw so much money from indirect taxes, and then to say that the people who pay the bulk of the indirect taxes cannot get a little of the benefit because those people who do not pay indirect taxes would not benefit, seems to be a very deplorable argument, which one would not expect from the Treasury on an occasion like this.

4.45 p.m.

Finally, we heard from the Financial Secretary, in guarded tones—and it was supported by the hon. Member for Taunton (Mr. du Cann) in more unguarded tones—a suggestion that there was a great deal of dishonesty going on among old people so far as trading in tobacco tokens is concerned.

Mr. H. Brooke

I am quite sure that I did not use the words "a great deal of dishonesty". There is some dishonesty, and it is complained about. I cannot tell how much there is, but there is no doubt whatever that this is a serious source of grievance, however much actual justification there may be.

Mr. Howell

I was very careful in my remarks to say that the Financial Secretary used guarded tones, and, of course, I am glad of the right hon. Gentleman's interruption, because I at once acquit him and apologise to him if I falsely represented his position. He is now saying that there is a grievance, and a sense of grievance obviously springing from the point with which I was dealing and with which the hon. Member for Taunton dealt more forcefully. It is that people are selling these coupons, and the Financial Secretary, in the intervention which he has just made, has made the point about this question of grievance, and has also given the answer to a question I was about to put to him about the evidence for that statement.

The right hon. Gentleman has said that he cannot produce the evidence, and, of course, he cannot do so. If, in fact, anything like this is going on on a wide scale, it is not an argument against this concession, but an argument against the people whom we pay to enforce the laws. One would have thought that that sort of abuse, if it exists, ought to be dealt with. If it exists on a sufficiently wide scale to be produced as one of the three main planks in the Treasury's arguments today, I submit that it ought to be backed up with evidence. The fact is that we have had no evidence at all about it from the Financial Secretary, who has admitted that he has none, and we have certainly had none from the hon. Member for Taunton.

Mr. du Cann

I ought to make it quite clear that I have made the most careful inquiries, and that I have had letters from constituencies other than my own in reference to this point. I have spoken to large numbers of old-age pensioners in my constituency and others, and I find that it is really well-known by anybody who tries to study the problem of the old-age pensioners that there is, as I have said and as has been said also by the Financial Secretary to the Treasury, a great deal of unhappiness at the effect resulting from this scheme, because the position of the old-age pensioners was so marginal as to force them into what one might perhaps best describe as an understandable "fiddle".

Mr. Howell

I understand that the position of the hon. Member for Taunton now is that he has made a very careful and detailed study of the problem, but yet he is still unable to produce any evidence. That seems to be the burden of his interruption. At any rate, if the hon. Member has any evidence, he can still address the Committee; I am sure that my hon. Friends on this side of the Committee would be most anxious to give him every facility. One ought not to make that sort of statement in this Committee without backing it up with evidence. All of us expect that there are some small anomalies, and that some people actually do that sort of thing.

It is the same kind of suggestion as was made about the effect of the Birmingham Corporation Bill and the proposal for free travel which I mentioned earlier. We have had the very same charges levied against us in Birmingham, suggesting that if we conceded free travel facilities to old-age pensioners, some of them would give their passes to other people, and there would be considerable dishonesty, etc. I want to say most emphatically, on all evidence available to the Birmingham city transport undertaking, that these charges proved to be entirely false. In fact, the old jeople jealously guard those privileges and are very careful not to abuse them.

I believe that abuse, where it does exist, is very restricted indeed, and that any such cases of abuse ought to be dealt with by prosecuting the people concerned and not by using such a feeble argument as one of the main points of the Treasury's refusal to accept the Amendment of my hon. Friend.

I believe that, on the grounds which I have put to the Committee and those which other hon. Members have put, the Government's case here fails. I believe that because of the increasing difficulty in which the old-age pensioners find themselves in these days, this concession ought to be made. These are the people who came through the years of the slump, without any opportunity of putting by nest-eggs in the 'thirties and the days of depression, and the people who need much more of our sympathy. Most of them are without the benefit of superannuation schemes to which they can turn. They are the people who are really feeling the full brunt of the cost of living today; their position is far more difficult than that of any others.

Old-age pensioners require, not only our sympathy—which, from what I have heard today, they have from both sides of this Committee—but they require action, speedy action. The first and best sign of action that the Government could take would be for them gracefully to accept the Amendment which we are now discussing.

Mr. W. A. Wilkins (Bristol, South)

I rise, not so much to add to the pleas which have been made by my hon. Friends, as to say a word in the ear of the hon. Member for Taunton (Mr. du Cann). I believe that those on this side of the Committee have been rather shocked by the extravagant tone of the speech which he made on this subject this afternoon. The only excuse which can be offered is the one which he himself offered, that of inexperience.

If the hon. Member had been in the House for any length of time, I think he would not have indulged in such generalisations. Many of us, both inside and outside the Committee, believe that generalisations are usually unfair and that it is wrong to condemn a section of the community because of the wrongdoing of, perhaps, a very small number. I do not accept the hon. Gentleman's inference that there is such a considerable amount of dishonesty, or, to use the word which he subsequently substituted, of "fiddling." in tobacco coupons as he seemed to imply.

I do not know what other hon. Members do. We all have old-age pensioners coming to us, asking us to sign their application forms. I am always most careful about the signing of these application forms. I always point out to people the nature of the document they are signing, and what they are telling the Chancellor of the Exchequer they do. If we were all rigid about the appending of our signatures to documents of this kind, there would be very small opportunity for dishonesty. However, accepting that perhaps there is a limited number of people who sign the document quite wilfully, perhaps wrongfully, I still suggest to the Committee that it is entirely wrong for us to impose a penalty upon the vast majority of those who obtain the benefit of this concession.

I would plead with the Chancellor of the Exchequer, even now, not to close his mind entirely to the proposal in this Amendment. The hon. Member for Taunton did suggest, again by inference, that there may be some political purpose actuating the authors of the Amendment. Again, I would say to him that clearly his suggestion springs from inexperience; this matter has been a hardy annual in every Budget in this House since 1947. I think I have taken a part in every debate, during the Committee stage, trying to retain or advance the concession to old-age pensioners in this matter. Indeed, it is my very proud claim that I was probably largely, if not entirely, instrumental in persuading the then Chancellor of the Exchequer, my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) to make this concession in the first place. I am more proud of that fact than I would have been if we had failed on that occasion.

I should like to remind the Chancellor of the Exchequer that on that occasion, when this concession was first made, the then Chancellor, having listened to the debate, agreeing that there was some point in the arguments we had advanced, told us that there was a grave technical difficulty—exactly the language of the Financial Secretary to the Treasury this afternoon. But he did go so far as to say that his officials in the Treasury would look at the matter sympathetically. They would see whether there was any way whereby the scheme could be made reasonably watertight. He said he did not expect they would be able to tie it up completely so that there would be no evasions; but they would look at it and try to find a scheme which could be put into operation for the benefit of old people. The scheme which we have now is the scheme which was then produced, following upon that debate.

I find the situation rather strange. At that time, in 1947, there was good will shown on both sides of the House towards old-age pensioners; it was not a monopoly of sympathy that we had; it was the sympathy of the whole House. I would even say that it might have been because of the unanimous feeling in the House that the then Chancellor of the Exchequer was prepared to bend his time and study to the offering of the concession. I would suggest to hon. Members opposite that if they showed the same enthusiasm now, when they are members of the Government, as they showed then as members of the Opposition, when they could exert pressure without responsibility, it might well be we could even shift their own Chancellor this afternoon. Perhaps more voices from those upon the opposite benches may be linked to the plea we are making to him today.

I would ask the Chancellor to look again at this, and to consider whether he is satisfied that the technical objections which we are told have been raised are in any way substantial, whether they are insurmountable. Can those objections not be overcome? If he is still adamant, if he is still unwilling to make this perfectly reasonable concession to the old folk, then, if he gives credence at all to the alleged suggestions by nonsmokers that they are penalised as compared with old-age pensioners who do smoke, he ought to give some consideration to the suggestion of my hon. Friend the Member for Blackburn (Mrs. Castle) that there should be an overall increase, thereby eliminating any cause for complaint in any section.

I am speaking entirely personally now; I do not know whose views I represent, other than my own, but I think that in these days, in the light of experience, I would prefer to see an overall increase. Failing that, I believe we ought still to continue to make this concession available to old people, very largely because they are the victims of habit. The majority of those of us who smoke know very well that we would like to give it up, and we know that we find it extremely difficult to do so. These old men have probably been smoking their pipes for 40 or 50 years, and it is not very easy for them to throw them in the dustbin and say that they have finished with smoking.

I would plead with the Chancellor to think again about it. If he cannot make the concession provided for in the Amendment we are offering to him this afternoon, perhaps he would give further consideration to some overall increase for the benefit of all old-age pensioners.

Mr. M. Turner-Samuels (Gloucester)

I am quite sure that the Chancellor of the Exchequer is a very humane individual. He has sat here very patiently, listening very intently to the speeches which have been made on this side of the Committee, and I am sure that he has registered in his mind the fact that there is obviously a feeling on this side that a deep injustice is being done to old-age pensioners by imposing this added burden upon them. That, as a starting point, will, I know, urge the Chancellor to consider whether he ought not to make some concession to that strong feeling which has been so forcibly shown.

The Chancellor of the Exchequer is the guardian of the great fortunes of this country; he has, at the Treasury had to deal with thousands of millions of pounds. I would ask him whether he really does not think that this small item which we are now discussing, this imposition which he is putting on the old-age pensioners, is an egregiously shabby act.

5.0 p.m.

What regret in addition is that the hon. Member for Taunton (Mr. du Cann) should have gone out of his way to add insult to this injury by the allegation of dishonesty which he made. I am perfectly certain he is thoroughly ashamed of himself now for doing it, and he ought to be. He did give some evidence of it, and that is to his credit, in the intervention which he made in a speech made by one of my hon. Friends. The hon. Member for Taunton, in his intervention, advisedly refrained from using the objectionable and unfounded term which he had used before, namely that of dishonesty, and substituted some other words, which showed that he was striving very strenuously to get out of the unwarrantable position which he had put himself in during his speech.

I ask the Chancellor, who, I am sure, wants to give his full attention to this matter—notwithstanding that I have no doubt he is preparing a reply to the speeches which have been made, to try to justify this very deep injustice which is being done—why he is doing this. Why do this particular thing against a helpless and aged section of the community? This tax may appear to be a small sum to the Treasury, but it is a very large sum to old-age pensioners. The Chancellor will no doubt reflect that the less people have anything, however small, assumes large proportions. What may be small to other people—is very substantial to them. Therefore, he should see that this is a very large item to the old-age pensioner. It may be only 4½d. on paper, but in their pocket it is a very considerable consideration.

The Financial Secretary, who really, in logic, made a most deplorable speech, no doubt because he found it very difficult to justify what is being done, gave us a reason—although he did so by the way— that there was, in this matter, a £2¼ million loss involved if this burden were not in fact thrown on old-age pensioners. Of course that is not correct and the Chancellor knows it is not correct. This is not a loss at all. This is a question of the imposition of a new tax. There is no question of a loss here; it is, in fact, a question of a gain. So far as any loss is concerned it is the old-age pensioner who is being made to carry it. There is no question here of any £2¼ million loss at all. It is a £2¼ million gain taken from the old-age pensioner.

The Financial Secretary also seemed to think that this matter came under some sort of law of gravity. Of course we know that the price of things is going up all the time. Indeed, one of the main targets of the Government seems to be to raise the cost of living. They have done it successfully during the whole time they have been in office, and it is still going on. The Financial Secretary seemed, because of that, as I say, to have the idea that this was a sort of law of gravity, and the fact that other things were rising in cost made it necessary for the price of tobacco also to rise a little more. That is patently stupid and perfectly wrong.

I ask the Chancellor to take the following into account, because he knows it to be the correct position. The allowance that was made to the old-age pensioner with regard to tobacco was a concession to the pensioner because he needed it. I think that as a starting premise the Chancellor will concede that that is correct. If he concedes that, then it follows that if the old-age pensioner needed that help then, the cost of living has since become greater and greater, and he now needs that help more than ever. In those circumstances I ask the Chancellor how he can possibly justify this new burden which he is seeking to put on this helpless and aged section of the community?

We have been told that it is being done —this seems to be the only reason—because not to do it would be unfair to others. There has been no attempt to justify that perfectly nonsensical argument. Originally it was regarded as proper and just—as undoubtedly it was then, and still is—that this concession should be made to the old-age pensioner because of his financial inability to meet the ordinary necessities of life. Why is that argument not valid today? In my submission it is stronger today than ever it was. How can it be said now that it is unfair to others if it was not unfair when the concession was first made?

I ask the Chancellor to see whether he cannot put this Budget through without having to place upon it the stigma that it is to carry by this attack upon a small and not very well-off part of the community. Surely this small sum of money, which is involved as a possible gain and not as an incurred loss, cannot commend itself to the Treasury as being so absolutely essential to the welfare of the country and to the soundness of our finances that it must be imposed upon this particular class of people?

I ask the Chancellor, is there any need for this? Why is he seeking to do it? Why is he, on the one hand, accepting the position that the old-age pensioner should have had this tobacco concession previously and then, at all events partially, destroying that concession by now reducing that very concession through the imposition of this new taxation in regard to the very tobacco upon which it rests? I therefore ask the right hon. Gentleman to think again about this matter, to see whether it is not possible to rid the Budget of what I submit will be an unfortunate stigma.

Mr. Thomas Hubbard (Kirkcaldy Burghs)

I speak with some authority in regard to old folks as the honorary President of the Scottish Old-Age Pensioners' Association and also as a vice-president of the British Council of Old-Age Pensioners' Associations. In my opinion, old-age pensioners do not want concessions; they ought not to need concessions, They are very proud people.

It is shocking that anyone should for one moment cast doubts on the honesty of old-age pensioners. They are honest and their standard of morality is very high. Anyone who suggests under any circumstances that one of the reasons for not granting the concession is that old people do not know how to behave themselves, that they might trade—in fact have traded —in tobacco coupons, is something that is shocking. The hon. Member who made such a suggestion ought to rise forthwith and withdraw it.

Mr. du Cann

Since the hon. Member for Kirkcaldy Burghs (Mr. Hubbard) is looking at me, may I say—and I think it is important that I should say it— that I went through a whole list of reasons why I thought the concession should be withdrawn? At the end of the list—and if the hon. Member will read the record tomorrow he will see that it was the last of the reasons I gave—I said that a very small number of pensioners sell these tobacco tokens to other people. That is something which has been repeated on both sides of the Committee. Everyone who knows something about old-age pensioners knows it to be true. There is a minority who trade in these tobacco coupons. I have no intention of casting reflections on the honesty of old-age pensioners as a whole. Of course not, but there is a minority who, because their standard of living is marginal, trade in the tokens. I do not accuse them of anything. Indeed, I feel sympathy with them, but it is a fact, and it is right to bring it out, and I stand by what I said and do notwithdraw it.

Mr. Hubbard

That is a rather long interruption. If the hon. Gentleman had produced any facts to support his allegations, no one would complain, but he has not done so. He did not say how many of the old people were doing this. He said he had information. How solid was it? How much was there of it? Does he know of one case? Does he know of twenty cases? Does he know what proportion of the 5 million old-age pensioners get tobacco concessions in the first instance? What proportion of them, does he allege, try to dispose of the tokens?

Mr. du Cann

Since I am being pressed I am quite willing to answer, and I am grateful to the hon. Member for allowing me to do so. I am myself an officer of an old-age pensioners' society. I have made inquiries about this matter. I am not prepared to say any more about it at this stage, but I shall very willingly discuss the matter with the hon. Member in private in due time if he wishes. There is a criminal offence involved in this.

The Temporary Chairman (Mr. George Thomas)

If the hon. Member wishes to speak again he will have an opportunity, but interruptions by any hon. Member ought not to be too long and sustained.

Mr. E. G. Willis (Edinburgh, East)

Is it not in accordance with the custom of the Committee, Mr. Thomas, that if an hon. Member makes an accusation, which, he says, is of a criminal offence, against members of the community, he should substantiate the accusation here in the Committee?

The Temporary Chairman

That remains the responsibility of the hon. Member who makes the charge.

Mr. Hubbard

I shall leave the matter there, Mr. Thomas. I am quite sure that the old-age pensioners, of whom the hon. Member claims to be an officer, will know how to deal with him and what he has said about them. This is the first time in the twelve years I have been a Member of Parliament that I have heard such a charge levelled against the old-age pensioners.

The old people who today are drawing these concessions are people who, by dint of great saving during their working lives, when their wages were very low, managed to put a bit by, only to find now that the value of their savings has declined because of rising prices. In my constituency, just before the First World War, the average wage was about 17s. a week, and in agriculture there were workers drawing only 12s. a week. In spite of those low wages, by doing without holidays, by denying themselves every little pleasure which they possibly might have had, they managed to save a few pounds. They stored them carefully away in their banks. Those savings have not the value which they had when they were put by.

It is really shocking that, in those circumstances, the Chancellor seeks to add to the financial strain on the old people. I have been a Member of this House long enough to know that hon. and right hon. Members opposite would not individually be hard on the old-age pensioners. Individually, they are as anxious as we on this side of the Committee are to help them. How collectively they can be so mean to the old-age pensioners I shall never be able to understand. Individually, they put their hands in their pockets at Christmas time to bring out contributions to Christmas parties for the old people. They contribute to their outings, etc. Yet when they have responsibility in Government they impose, through the Budget, new burdens on the old people. They take this opportunity of being collectively stringent.

It is nonsense to say that this is a matter of only 4½d. That is the sort of argument which hon. and right hon. Members opposite always put forward when any price goes up. When bread went up in price they argued that it meant only a copper or two. They said that that would not affect the old-age pensioners very much. When milk went up in price they argued that that meant only a copper or two. When the price of coal goes up they say it is only a copper or two. When vegetable prices go up it is only a matter of a copper or two, they say.

They must realise that all these gradual increases, which have taken place since they came to power in 1951, which, indeed, began even before that, in the days of the Labour Government, amount in the aggregate to a very great burden on the old people. They make a financial problem for them which is really baffling, and they are made to suffer all the time.

What business is it of the Chancellor whether the old people smoke or not? Smoking is the only pleasure which many of them have. Many of them, now that they are retired, have the first chance in their lives of having a smoke in peace and quietness. Now that for the first time they have long leisure hours and time to enjoy a quiet smoke the Government deny them that pleasure by making it too expensive. Is there one hon. Member on the other side of the Committee who agrees that that is right? If so, would he say so?

Do hon. Members opposite think it right that the old people should smoke less? Would the Chancellor of the Exchequer suggest that they should smoke less? Of course he would not. No one would dare to suggest that old-age pensioners ought to cut out smoking—not even the doctors on the committees investigating lung cancer would suggest that, because for the majority of the old people that aspect does not matter very much.

The Chancellor sets out to acquire more money by increasing the duty on tobacco. It would be so easy for him to make a corresponding increase in the amount of the old-age pensioners' tobacco concession so that the old-age pensioners would not be any worse off than they were before, despite the increase in duty. I am, as I said before, opposed to concessions, as are the old people themselves. Why should they have to produce coupons in shops to get tobacco? It is only because their pensions are too low. In every respect the old people are the greatest sufferers of all.

5.15 p.m.

The last time I spoke in this Chamber about the old-age pensioners I spoke about the pension increments which they could earn by working more years in industry. The old people were told that if they worked a few more years longer they would get an improved pension, and many were induced to work for some years more in the hope and expectation of receiving an improved pension in the hope of getting a little more comfort through the extra few shillings. Some of them thought of their smoking, and wanted the extra few shillings to enable them to enjoy this little pleasure in the eventide of their lives. Now they lose it, because in estimating supplementary pensions the increments in pension are taken into account, and so they are of no benefit to them whatever. And now it seems the Government are not even prepared to reconsider this matter which is before the Committee.

Whenever one goes to conferences of the old-age pensioners one finds that they have one plea only. They say, "We have worked hard all our lives and have made our contribution to the country. If we had been fortunate enough to have been in jobs for which superannuation was payable, and now had decent pensions, all would be well. Having laboured all our lives, and being no longer able to work, are we to be set aside to live in misery, or merely to exist?"

That is the question they ask. It can be answered by this Committee. It can be answered in one way only. So far as it lies in our power we must see that the old people get the maximum pleasure in the eventide of their lives. I plead with the Chancellor of the Exchequer. If he will accept the Amendment the old folk of the country will give him a hearty "Thank you". Some of them have served in two wars, let him remember. Let him accept this Amendment and show that he and the other Ministers can be as sympathetic collectively as they often are individually.

The concession would permit of a little pleasure without the sacrifice of a necessity—perhaps of food. The Chancellor of the Exchequer has only to say he will give further consideration to the matter to win the thanks of the old-age pensioners and of hon. Members of this Committee, even, I am sure, of those sitting behind him.

Dr. Horace King (Southampton, Itchen)

I had hoped that the pleas which have been made by my hon. Friends would have been reinforced by appeals from hon. Members opposite, because there must be many back benchers on the Government side who have the same interest in and affection for old folk as my hon. Friends. If we could have reinforcement from back benches on the Government side, one speech from them today would be worth a dozen from this side. [HON. MEMBERS: "They always are."] I am quite willing to give way at once to the first backbencher opposite to make a plea on behalf of the old-age pensioners' tobacco allowance this afternoon.

I think that I can say quite sincerely to the Chancellor of the Exchequer that if the Whips were off the Amendment would be carried and the old folk would get the concession that we on this side of the Committee seek to give them. The experience of one hon. Member is as valuable as another's in this debate, and against the investigations which have been made by the hon. Member for Taunton (Mr. du Cann) I might say that I too have some experience of old people. Indeed, I have a peculiar experience in that I am one of the few hon. Members who spend time entertaining old folk in their clubs. Whatever letters the Chancellor may receive from individual old-age pensioners, I have never heard in many years of experience and in many contacts with old folk, individually and in old folk associations, any grudging by the non-smoking old-age pensioners of the concession which those who smoke get by their tobacco allowance.

It is worth observing that old folk are much more cheerful and generous than people of our generation, and their attitude, on the whole, has never been to grudge any concession that any group of them manages to obtain. By the same token, if the Government choose to abolish the tobacco concession and give in lieu of it some concession in cash to all old-age pensioners, I am quite sure that those who have enjoyed the tobacco concession would be delighted to think that non-smokers were also getting the benefit. I say to the hon. Member for Taunton that to me it is a remarkable fact and a tribute to the character and quality of our old-age pensioners that not every old-age pensioner has claimed the tobacco allowance.

It would have been quite possible, when this concession was given, for every old-age pensioner suddenly to discover that all his life he had had a passionate desire for smoking and suddenly to take up this noxious habit in order to qualify for the allowance. There may be odd exceptions. There are odd exceptions in any group of people. There is nothing in the whole range of community benefits which is not "fiddled" by somebody, but to make this part of the case against the tobacco concession is a very unfortunate intervention on the part of the hon. Member for Taunton.

I sometimes wonder when those who bear the unfair burdens of indirect taxation are going to revolt. It is about time that we had a Poujadist movement of beer drinkers and tobacco smokers in this country which could bring the Chancellor to his knees in a week by staging a strike. [HON. MEMBERS; "Oh."] I notice that future occupants of the Treasury Bench are alarmed at the prospect of such a strike.

If there is no danger of the mass of people indulging in strike action and depriving themselves of beer and tobacco in order to get the Chancellor to reduce the taxation on those commodities, obviously one could not expect such action from old people. They cannot meet the Chancellor's new Budget proposal to charge them the extra amount on tobacco by doing what millions of other people have failed to do in spite of resolutions to give up made every time any Chancellor imposes extra duty on tobacco or beer. Their habits are obviously far too long established and too strong. Therefore, this means for all of them a new expense which they must meet, and it is our experience that they can meet it only by going without some of the other things which they must have, some of the bare necessities of life.

I do not regard the Financial Secretary's argument that this tax concession will cost £2¼ million as an argument in favour of not making it. I regard that as an argument for the Amendment. This £2¼ million is a measure—and I am surprised at the figure—of the size of the new burden that we are putting on about the poorest group in the country. On the wider economic battle that we are fighting, there may be difference of opinion about the instrument that the Chancellor is using, but in his battle against inflation I do not think that the Chancellor could justify putting on the shoulders of the old-age pensioners a £2¼ million burden for any economic reason, for any part of the great financial and economic strategy of the Government. To this £2¼ million, which the old-age pensioners have to bear, we must also add the burden of the increase in price of all the other things on which they spend their money —the food, the milk, the coal and the rest.

The Chancellor of the Exchequer should remember that whereas the new duty on cigarettes and tobacco is an irritation to people like myself, because the percentage of increase is very tiny, the percentage increase to the old-age pensioners is really quite colossal. If the right hon. Gentleman imposed to the same extent on people of average income the burden that he will be imposing on the old-age pensioners who smoke by not accepting the Amendment, he would indeed get a revolt from the smokers.

I understand that the Chancellor always has room to manoeuvre in his Budget. In a Budget with such a colossal surplus as is the case this year, his room to manoeuvre is so vast that he can almost get lost in the space. I also understand that Chancellors have a habit of making concessions from time to time, and I am pleading with the right hon. Gentleman to make this concession today.

Measured against the vast surplus for which he has budgeted, the concession is nothing, but the burden itself is a heavy one to the poor old people who will have to carry it. This has nothing to do with inflation and deflation. The right hon. Gentleman need not be alarmed that if he gives back this £2¼ million spending-power to the old folk they will buy television sets and the motor cars which we cannot sell, and all the rest of the commodities whose consumption he wants to damp down. They will use the £2¼ million, as they use every tiny scrap of their income, for the necessities of life. Even if we on this side of the Committee are not supported, as we had hoped to be, by hon. Members opposite, I hope that the Chancellor will make this concession and give the Committee stage of the Finance Bill a good, healthy and generous start.

5.30 p.m.

Mr. W. T. Proctor (Eccles)

The simple question which confronts us is whether we are going to support the mean, sordid, miserable and unnecessary action of the Chancellor. I think it was unnecessary for the Chancellor to make this proposal in the first instance, and I am as surprised as the previous speaker about the amount of money which the right hon. Gentleman expects to take from the old-age pensioners. The Financial Secretary revealed that £2¼ million will be collected from these people in order to help tide us over our alleged difficulties. The right hon. Member for Woodford (Sir W. Churchill) once said that 5s. is a very small amount of money unless one has not got it. Whilst this sum may be regarded by the Chancellor as very small, since he is dealing in millions of pounds, it is a large sum for the old-age pensioners who are living on what we are so prone to be proud about, the Welfare State.

I am not pleased with what we have accomplished as a Welfare State. I remember well the first report of Sir William Beveridge, as he then was. He calculated his proposals upon the basis of providing 3d. a meal for the old-age pensioners. That was all he provided. I have had some experience of such a provision because it was the amount that a grateful railway company allowed me when I first worked for it. I received 11s. a week, of which 4s. went for lodgings, and I had 1s. a day left, so I know what 3d. a meal means. That standard has not taken into account the increase in the cost of living, and it is a shameful act on the part of the Chancellor to impose this burden on these people. It is also unnecessary, and I hope that the Committee will refuse to give the right hon. Gentleman the necessary authority.

The Chancellor is a reasonable man, especially so in his early writings. I hope he will read the letter of the hon. Member for Aberdeenshire, East (Sir R. Boothby) in the News Chronicle today. Let us hope that the close collaboration of the hon. Gentleman with some of the old ideas of the Chancellor will cause the right hon. Gentleman to return to some of those ideas in dealing with our present difficulties. It would be much more appropriate for him to do that, to take a grand view of reorganising our national life, than to commit the sordid act of taking £2¼ million from the pockets of our old-age pensioners in this way.

The hon. Member for Taunton (Mr. du Cann) intervened in this debate. We are always pleased to hear a new Member 'speak, and I was specially interested to note what he had done. Yesterday he attacked the Government and hoped that they would adopt a scheme of abolishing these coupons and of giving every old-age pensioner an increase. That is not a new suggestion. Every hon. Member of this House has received that proposal from the old-age pensioners. I have myself sent it along to the Chancellor, and so have dozens and dozens of other hon. Members, and it has been turned down by previous Chancellors.

I am sorry to disappoint the hon. Member for Taunton by telling him that this is not a new scheme, but we are glad that he is supporting it. If he could have had his way yesterday he would have given a great benefit to all the old-age pensioners. Those not included in the present scheme would have been included by his suggestion. Today, however, when my right hon. Friend proposes a scheme that will benefit every old-age pensioner now receiving coupons to the extent of £2¼ million, for some mysterious 'reason the hon. Gentleman opposes it.

The hon. Gentleman could do something tangible this afternoon by going into the Lobby and voting for a real benefit for those people, but he refuses to do so, and by some extraordinary reasoning, which I cannot understand, says that because of yesterday he cannot take this action today. I am surprised that the hon. Gentleman cannot find a better excuse for not opposing his own Whip—

Mr. du Cann

If the hon. Gentleman will allow me to interrupt, my point is a logical one, with which I am sure the majority of hon. Members of this Committee will agree. It is no good giving a benefit to some old-age pensioners. What we want to do is to give it the maximum number.

Mr. Proctor

That is right. We want to give it to the maximum number, and the maximum number to which the hon. Gentleman can give it today is represented by those who smoke and receive coupons. If he comes into the Lobby with us it will prove his courage, if not his logic, because many hon. Members before him have defied their Whips.

The hon. Gentleman made another suggestion. He asked why the railway pensioners should not have this concession as well. I must point out to him that the abolition of this scheme would prevent railway pensioners from having the benefit. So it is no good praying them in aid for abolishing the scheme. The logical thing for the hon. Gentleman to do is to ask that all the old-age pensioners should come into the present scheme.

By every process of reason, by every process of common sense, logic and honesty, the hon. Gentleman should come with us into the Lobby this afternoon. I beg him to do so for his own good, especially when he goes back to his old-age pensioners, in order to be able to explain his position to them. Before I made this speech the hon. Gentleman might have said, "I did not know exactly what I was doing," but now he understands that he is taking part in an attack upon the old-age pensioners by supporting the Chancellor of the Exchequer. Unless he changes his mind, which I hope he will, the hon. Gentleman will be helping to filch £2¼ million from their pockets. It is a despicable business.

Sitting here we perhaps do not realise the difficulties in the homes of old-age pensioners. Today we have to face many great difficulties, to take big decisions and to make sweeping changes in order to put this country on its feet. Only the other day the Chancellor warned the trade unions and all other sections of the community. In his next speech the right hon. Gentleman will be able to tell the country what has been accomplished. He has raised the Bank Rate. He has put all those who need houses in a difficult position. The one shining thing he can claim is that he has filched £2¼ million from the old-age pensioners who are in the worst position of any section of the community.

If the hon. Member for Taunton makes another speech, he will be able to say, "I did it." I hope, however, we shall not allow £2¼ million to be taken from the old-age pensioners in this way. We are not as badly off as that. I ask the Chancellor of the Exchequer to ponder over this small matter in the light of the immense sums of money with which he is dealing, and to make this concession.

Mr. Willis

There is no doubt that the only point at issue in this debate is whether or not we as a nation at present have to take £2¼ million from the old-age pensioners. All the other arguments that we have heard about the anomalies and the alleged dishonesty are beside the point. They are really condemnations of a scheme, and should be argued in connection with the alteration of that scheme, not in connection with whether or not we should extend that scheme to give an additional 4d. or 4½d. to the pensioners. The only point at issue is whether we, under a Tory Government, have reached such a deplorable position financially that we have to filch £2¼ million from the old-age pensioners. I should have thought that any Government would have been ashamed to admit it.

The only arguments by the Financial Secretary have been about the way in which pensions have increased and other things have risen in price. To what extent are these arguments valid? Recently I asked some Questions of the Minister of Pensions and National Insurance, who said—he said it several times in consecutive weeks—that the pensioner's purchasing power today is about the same as it was in 1947. That means that the improvement in our standard of living since 1947 has not been shared by old-age pensioners.

In other words, according to the Minister of Pensions and National Service, old-age pensioners are relatively worse off today than they were seven years ago, and despite the fact that they are worse off relatively than they were ten years ago, when we had just emerged from war, we are now going to take £2¼ million a year from them.

It is a shabby thing to do. The old-age pensioner is given a sum to keep himself for a week which many hon. Members and people outside spend on one meal. Why go to the poorest? Why not let the amount be paid by people who can afford a couple of pounds for a meal instead of by old-age pensioners?

The Financial Secretary has given us no real argument at all. All he has done has been successfully to draw a red herring across the debate by talking about anomalies and the increases that there have been in the pensions, increases which have in any case come too late and have merely brought old-age pensioners up to the standard which they had in 1947. The arguments advanced by the right hon. Gentleman have been paltry ones.

I would ask the Chancellor to look at the matter again. The country has nearly 1½ million people seeking National Assistance because they cannot live on their pensions. They are people who have difficulty in obtaining sufficient food for themselves. According to Edinburgh's medical officer of health, speaking recently at Stirling, many of them do not get sufficient food and suffer from malnutrition. Yet the Chancellor says to them "We want another £2¼ million from you". What a state to sink to.

I do not know what the Government are coming to. They want to put the nation on its feet by allowing it to indulge in a great gamble. They seek to put B.O.A.C. on its feet by selling drink at London and Prestwick airports. These are the remedies of the Tory Government. We have now reached the stage where, in order to pull us out of our difficulties, we have to take £2¼ million from the old-age pensioners.

I sincerely hope that the Chancellor will have second thoughts about this matter. It is a question not simply of £s. d. but of bread and butter. We are discussing human misery. I should have thought that the Chancellor would, without question, have been magnaminous and accepted the Amendment.

Mr. William Ross (Kilmarnock)

When the Budget was introduced and when we had the Budget debate I really thought that this was one of those things with which we meet so often in a Budget —the Chancellor standing firm on Budget day, but in Committee on the Finance Bill giving way after a little hesitation. This is obviously the kind of Amendment that the Chancellor should accept. Not a single person, not even the hon. Member for Taunton (Mr. du Cann), who has been badgered about so much, would object if the Chancellor said, "I have been convinced by the arguments. I believe that the provision would be unfair. I will accept the Amendment."

5.45 p.m.

The debate has gone on a long time, but the Chancellor has said nothing and has given no indication at all. The interventions by the Financial Secretary are such as to lead my colleagues and me to believe that the hearts of those in the Treasury have been hardened against the arguments that we have put forward on behalf of the old-age pensioners.

My hon. Friend the Member for Edinburgh, East (Mr. Willis) is right. What is at stake here is whether or not, as a consequence of passing Clause I and increasing the price of tobacco, we should pass the extra cost on to the old-age pensioners who have hitherto been protected by a concession. It has nothing to do with the fact that there are anomalies. I should have been delighted if the Chancellor had recognised the injustice of the anomaly and had decided to increase the pension by an equivalent amount and to permit all pensioners to spend the increase in the way they wished. The Chancellor has not done that.

We have to recognise that there is another thing that the Chancellor has done. He is a Chancellor in search of £100 million. If he had thought that there was no hardship he would have wiped out the concession altogether. Instead, he retains the concession without making it a real one and without facing up to the difficulty that he has created by increasing the price of tobacco. Recognising that there is hardship, he continues the former concession. He must equally recognise that there is an additional hardship because he insists that the pensioner should pay more. There is no justification for any dodging of the issue by any hon. Member opposite. The plain, stark fact is that the Chancellor's case, if it is a case at all, must rest on the basis that he requires to tax old-age pensioners to the extent of £2¼ million.

Apparently the only way in which we can reach a plateau of stability is by taxing old-age pensioners to the extent of £2¼ million. There is no plateau of stability for old-age pensioners. Even with the increases given during the past year, they have been pushed nearer and nearer the brink of misery. Now we have the Chancellor saying that old-age pensioners who smoke have to take a step nearer the edge before the nation can reach a plateau of stability. Is not the Chancellor ashamed to be still insisting on this? Hardship exists and the Chancellor recognises that it does because he has not wiped out the concession. We ask him to make the concession real. By not increasing the concession, he is creating hardship.

All the arguments about dishonesty are fantastic. Is there any provision in the Finance Acts which has not caused some dishonesty? Can we not all think of Income Tax evasion dodges in respect of which the Government, if they acted properly, could have saved far more than they are demanding from the old-age pensioners? As to moral issues, we are looking forward to a debate on another Clause with regard to which there is some concern about the morals of the nation. Are we not straining things a little far in condemning all old-age pensioners who take the coupons and saying that they are dishonest?

There is less dishonesty, if there is any dishonesty at all, in that respect than in any other aspect of the Budget. It was not old-age pensioners who used to sell petrol coupons. This talk of a "fiddle" about the price of tobacco and the price of beer reminds me of a nursery rhyme with which, because of my two young children, I am these days familiar. It tells of a king who called for his pipe, his glass and his fiddlers three. Judging by the price of a pipe and a glass in these days, he would have been better advised to call for his fiddlers first in order to "fiddle "the price.

I hope that the Chancellor has heard enough from this side of the Committee, coupled with his failure to get any backing from his own side—because the silence of hon. Members opposite is telling and means that hon. Members opposite are ashamed of what the Chancellor is doing, even if he is not—to make him decide to accept the Amendment.

Mr. Percy Shurmer (Birmingham, Sparkbrook)

There is very little that can now be said about this matter; all possible arguments have been used, Nevertheless, I hope that the Chancellor will think again on this question. I hope that he has not closed the book, and that there is still a chance that he will give this concession. I think I am correct in saying that the first statement which the financial Secretary made was that he wanted to make it clear to the Committee that this was not a question of £2¼ million. If it was not that which caused the Government to turn down the Amendment, what is the reason for refusing the Amendment and thus allowing old-age pensioners an extra 4½d. per coupon?

It has already been said that there are anomalies in all sorts of concessions. Whatever the concession, there will always be certain people who will grumble and say that others ought not to have this or that concession because they themselves do not get it. As the right hon. Member for Woodford (Sir W. Churchill) once said about Members' salaries, if we give nobody anything at all until everybody has something, nobody will ever get anything. That is true. If wo do not give concessions because people are grumbling about concessions, we will never give any concessions.

I am a smoker. I agree that it can be said that if one wants food, one should go without luxuries. However, it has already been said that to poor people a smoke is a great luxury and one of the few which they get. There is no social worker who is not continually pleading on behalf of old-age pensioners that if they lose a halfpenny, it is a hardship. They have to look after every farthing and, indeed, it is a shame that farthings are not spent in shops as they were years ago, when we could buy a farthing's worth of something. Even so, pensioners would then have to look at every farthing.

I do not want to say too much about the hon. Member for Taunton (Mr. du Cann), but it is true that occasionally an old-age pensioner hands a packet of cigarettes to his son; but his son may hand a packet of cigarettes to him when he has a packet and the old-age pensioner has not. It is not true that that old-age pensioner is dishonest. In every aspect of life one can find somebody who "twists" and none of us is not guilty of doing something in our lives for which, were we caught, we would be punished.

I live in a city where there is one of the largest bodies of old-age pensioners, known as the Sons of Rest Association. In every part in Birmingham are huts where old-age pensioners can meet. I have lived in a poor slum district all my public life and I have never yet heard a person ask "I do not smoke, why should pensioners? "I have never even heard it said that pensioners who do not smoke should have coupons for milk.

The Financial Secretary, after saying that the Government were not concerned with the £2¼ million, referred to the anomalies which exist because some pensioners are not able to get the coupons. Those pensioners must be receiving amounts over and above that drawn by a pensioner who has only his pension plus National Assistance. For the average pensioner to get a penny less constitutes a real hardship. In the City of Birmingham men and women thirty and forty years ago worked for 15s. and 16s. a week. When I first went to Birmingham I worked in a factory for 15s. 9d. a week for a 54-hour week. Those old people were unable to save for a rainy day.

They were the people who built the great industries of Birmingham and of the rest of the country. They served in the First World War, and some who served in the Boer War are still alive. They are people who have only the last few years of their lives to live. I feel sure that the Chancellor can find some way to make this concession, and to add another 4½d. to the value of the tobacco tokens for old-age pensioners. If we had a free vote, hon. Members opposite would join with us, and they would not bring the Government down if this concession were granted. I ask the Chancellor to give old-age pensioners a chance to have a little extra comfort. Giving them this extra 4½d. will not break the country.

Mrs. Jean Mann (Coatbridge and Airdrie)

I did not intend to enter the debate because I have always felt that there was a great volume of opinion in the House about old-age pensioners and that almost everyone agreed with everyone else. I have often felt that the case of widows has been understated, because everyone was so intent about old-age pensioners. I have therefore withdrawn from recent debates about old-age pensioners, but this afternoon I am constrained to speak after searching the faces of hon. Members opposite. I shall not say, as Disraeli did, that they represent not Vesuvius in eruption, but extinct volcanoes.

What impresses me is that when in 1947 my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), as Chancellor of the Exchequer, steeply upgraded the tobacco tax, there was rebellion by 300 Labour Members. They saw at once that such a steep upgrading would affect the old-age pensioners and back bench Labour Members gave their Front Bench no rest or peace. That is why I looked at the extinct volcanoes opposite. There are so few of them even to look at, in spite of the fact that this is an important discussion. There are only six altogether, apart from the Front Bench and its satellites. My hon. Friend the Member for Kirkcaldy Burghs (Mr. Hubbard) said that he knew that, individually, hon. Members opposite could be quite generous and he hoped that, collectively, they would prove equally generous tonight.

6.0 p.m.

I know that hon. Members opposite are meeting their constituents and telling them that they have every sympathy with the old-age pensioners. Again, however, I contrast their attitude with that of my colleagues when the Labour Party was in power. We had the courage to attack our Front Bench and let it know that we were not supporting a change which meant so much to old-age pensioners. As a result of back bench pressure from almost every Labour Member a rather revolutionary change was made, namely, the issue of the tobacco token book. If the Labour Chancellor at that time had wanted to plead administrative difficulties he could have done so, for the production of such a book meant an entirely new departure.

There were then further difficulties. Not all old-age pensioners smoked. We had to consider what we could do about that. The then Chancellor could have presented us with monumental obstructions to our demands. The present Chancellor, however, has an easy administrative task. These tobacco coupons are all dated and marked "2s. 4d.". He merely has to announce that the coupons are now worth 2s. 8d., and that is the end of his administrative difficulties. He really has no argument on that score.

We are becoming accustomed to the argument put forward by people who say, "After all, what is 4d. extra for an ounce of tobacco? It really does not matter very much," or, "What is 2d. extra upon a loaf of bread? If you divide a loaf into 24 slices it works out at a decimal fraction of 1d. per slice. What is this 10. extra on a pint of milk? If you split the bottle into three, it amounts only to ½d. per third of a pint." We get that argument all the time, while we have additions of Id. here and 2d. there time after time. This argument is put forward by statisticians who are accustomed to spending perhaps 30s. on a meal. I hope that this argument will not be put forward today, because all these small additions, having continued over so long a period, are having their effect on the appearance of old-age pensioners.

During the last 20 years I have become accustomed to looking at my audiences. When an hon. Member has an audience gathered together it is very interesting for him just to look at it. I have been amazed at the change in the appearance of mothers and young working women. In some cases it is hardly possible to tell the difference between the working girl and the duchess. It is very pleasant to see that.

I can remember in 1946 and 1947 old-age pensioners coming to my meetings wearing fine new coats and looking very well and very young. I now notice that their coats are beginning to get shabby and threadbare and their footwear is becoming very badly worn. All male Members will know that a decent shirt is a pretty costly item for an old-age pensioner these days. I have been wondering why they come to my meetings with mufflers round their necks. I am afraid it is because they feel that their shirts are becoming rather shabby, especially round the necks. Some of them cannot even afford a shirt.

The signs of increasing hardship are all there, visible and very pathetic to see. These people cannot look forward to obtaining work next year; all they can look forward to is seeing their coats getting shabbier and their linoleum becoming more worn, with no money to buy their necessary food, underwear and other articles.

The Temporary Chairman (Mr. G. Thomas)

I am sorry to interrupt the hon. Member. I have tried to give her as much latitude as I can, but we must get to the question of the tobacco token, and the proposal contained in the Amendment.

Mrs. Mann

I am very sorry to have gone so wide of the Amendment, Mr. Thomas. I ask the Chancellor to take all these matters into consideration. I have tried to soften his heart. I do not think that he is a hard-hearted man. Surely it is not worth his standing up to all these innuendoes and opposition for the sake of £2¼ million.

Mr. A. G. Bottomley (Rochester and Chatham)

I am quite sure that my hon. and right hon. Friends will join with me in congratulating my hon. Friend the Member for Ince (Mr. T. Brown) for tabling this Amendment and also for the way in which he delivered his speech in support of it. I believe that hon. Members opposite secretly share his sentiments, and that if they could they would go into the Lobby tonight and vote with the Opposition.

At least, the hon. Member for Taunton (Mr. du Cann), who had to face the electors very recently, knows what they think about these matters—and he is the only hon. Member opposite who has given any verbal support to the plea for further consideration to be given to the case of old-age pensioners. It is true that he did not support the Amendment; he took the view which is held by many people, that the pension should be an adequate one, and that old-age pensioners should not have to depend upon concessions, charity or assistance.

I imagine that most hon. Members meet their constituents fairly regularly. Now we have what are termed "surgeries" and constituents come to see their Members. At my "surgery" last Friday there were a number of people to see me, not out of politeness, but because of an anxiety to communicate with me. A deputation from the old-age pensioners of Rochester and Chatham came to my office before their usual time to make the strongest possible representations against the behaviour of the Chancellor and his attitude toward old-age pensioners as revealed by his Budget.

My view, and it is shared by my hon. Friends, is that the Chancellor has been rather vicious in his attitude towards old-age pensioners. Not only is there this additional tax which will add to the cost of their one pleasure, but, also, in the same Budget, essentials of life such as bread and milk, have been taxed. It would seem that the right hon. Gentleman has singled out this section of the population for the harshest treatment. As he is a kindly disposed man, I should have thought that the right hon. Gentleman would desire to remedy that. I think that he might easily have followed what my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was able to do in 1947, and pass on this relief to the old-age pensioners.

When my right hon. Friend suggested this concession, in 1947, those who had to operate the scheme put forward the most formidable arguments against it. It was their duty to do so, but it is also the duty of Ministers to over-ride the carefully thought-out plans and tidy arrangements which good civil servants consider necessary if that is desirable for political reasons. I suggest to the right hon. Gentleman that on this occasion there are good political reasons for giving this concession to the old-age pensioners.

I am sure that my right hon. and hon. Friends were intensely disappointed by the arguments advanced by the Financial Secretary. When the right hon. Gentleman rose so early in the discussion we thought that he was proposing to accept this Amendment. Why, otherwise, should he take part in the discussion so soon? But we were disappointed. One of the arguments deployed by the right hon. Gentleman was that old-age pensioners are not now so badly off. He suggested that they could go one cigarette short if they found it too difficult to meet the cost. But they had had an increase in their pension which more than adequately repaid any difficulties they might now find.

On the figures presented by his colleagues in the Government the Financial Secretary is wrong in that estimation. The Minister of Pensions and National Insurance was not very encouraging yesterday. According to official reports the indication is that the present pension is not adequate to meet the standard laid down in 1954, when there was an increase of 4s. The then Minister of Pensions and National Insurance said that the yardstick of the standard and the amount of the pension should be the number of people who were receiving National Assistance.

Today, the number of people receiving National Assistance is 1,600,000. If we include wives, the figure would probably amount to over 2 million, a higher number than ever before. It may be 3 million, but I am being conservative in my estimate. Last year, the National Assistance Board was compelled to give an increase of 2s. 6d. a week because of rising costs. That let in other people who previously were not in receipt of assistance and the number increased by 30,000. In other words, the pension given in 1954 is inadequate for present day standards, and, therefore, the arguments of the Financial Secretary are not supported by facts and, in my view, are weak arguments with which to support the proposal to put this additional tax on old-age pensioners.

6.15 p.m.

The Financial Secretary was rather unwise to single out old-age pensioners as being less honourable than other members of the public. It was unfortunate that he should do so. When the scheme was introduced, in 1947, everyone realised that it was a risk and that it was necessary to make provision to impose penalties on people who broke the law. People had to sign forms to say that they would smoke the tobacco themselves, or that they were "habitual smokers". Is it suggested that honourable men and women who signed those documents have so abused this scheme that the Minister has to make the comments which he made this afternoon?

Is the Financial Secretary proposing to support the statements he has made by evidence? How many cases have been taken to the courts? If none has been taken, why not? Is there no evidence? These allegations should not be made against members of the public particularly the old-age pensioners who, in my opinion—I am sure it is shared by the majority of the people in this country— are more honourable than many other citizens. I hope, therefore, that upon reflection the Financial Secretary will consider he was unwise to advance that argument.

The right hon. Gentleman said that the estimated cost was about £2¼ million. I have made some rough calculations and, while I do not doubt the accuracy of the right hon. Gentleman's statement, I hope that he will give me some further information so that I may be clear. The figures show that in 1953–54 there were 2¼ million pensioners and the cost of the scheme was £13.8 million. As a result of the 1946 Act, more people received retirement pensions than before and it was inevitable that the number of pensioners would increase.

In 1954–55, the cost had gone up to £14.6 million. As I understand, the estimated cost for 1956–57 is £15½ million. If we subtract the £14.6 million from £15½ million the answer does not amount to £2¼ million. But I am a layman. I have only worked this out to the best of my ability, and so far as I can see, the amount will not be an increase of £2¼ million. If I am wrong, perhaps the Chancellor will corect me and show me how that figure is arrived at.

Most of my hon. Friends have rightly said that in this manner we are hitting at the one pleasure of the old-age pensioners. Most of them were brought up in the days long before there was any scare about lung cancer, or any need to save dollars by not buying Virginia tobacco. A good many of us have been influenced, by one consideration or another, to become non-smokers. I happen to be in the fortunate position of being a non-smoker, but most of these old people are accustomed to their cigarette or pipe of tobacco. They cannot afford the things which the average person can afford to do. They cannot afford to go to the theatre or the cinema or to a football match, or to go to the dog race-track or enjoy other pleasures.

These old folk have to sit at home, and a cigarette or a pipe of tobacco is their one pleasure. Here we are denying them opportunity of indulging in it to the full. One old-age pensioner told me that he had another pleasure. which was reading the weekly newspaper. "But as a result of this tax," he said "I shall not be able to buy a newspaper." His means were so frugal that he had to decide either to give up smoking or the newspaper, and apparently he proposed to give up the newspaper.

The Financial Secretary said that the price of cigarettes had gone up less than anything else for some years past. That is not the best way of judging the matter. Even if cigarettes have not gone up, the profits have. The year 1954 was a record profit year for the tobacco manufacturers and distributors, who paid a dividend of 21 per cent. Why? The commodity had not gone up in price that year. It was automation, and the fact that the manufacturers were able to reorganise their industry and produce the goods much better than before, which led to the higher profit.

What the Financial Secretary said may be true of the manufacturers, but none of us here can escape our responsibility for adding to the burden of the old people. Hon. Members who are smokers will recall that a packet of cigarettes Which cost 11½d. some years ago today costs 3s. 10d. Not many other commodities have risen so steeply in price over the years. The argument of the Financial Secretary was equally weak on that point.

In introducing his Budget, the Chancellor of the Exchequer said that tobacco was a mere revenue raiser. It was estimated that last year £680 million would be yielded by the Tobacco Duty. Under the new proposals the estimate is £707 million. If this duty is imposed solely on revenue-producing grounds, the Chancellor could easily afford to give up the £2¼ million. Surely he does not want that money from the old-age pensioners. On that argument he ought to be prepared to meet us and not put the additional tax on the old-age pensioners.

The Financial Secretary said on Second Reading, and he repeated it this afternoon, that he did intend to pass the increased duty on to the old-age pensioners who smoked. He drew an analogy with the time when the tax was raised by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton), who increased the duty by six times. Now the increase was so small that it was necessary to pass it on. Is the conclusion to be drawn that if the increase had been much higher it would not have been passed on? We have not had an answer to that point. If it would have been passed on in a larger amount it should more easily be passed on in a smaller amount.

There was an anomaly, the Financial Secretary went on to say, in that classes of pensioners were not getting the concession. He mentioned railway pensioners, police pensioners, Service pensioners, war widow pensioners, and industrial disability pensioners, who do not benefit from the tax concession. The remedy is simple; let him include them all. If he says that it is impossible to do so. I suggest that my hon. Friend the new Member for Walthamstow, West (Mr. Redhead), who worked in the Customs and Excise Department, would, I have not the least doubt, if he were acting as Chancellor of the Exchequer, soon find a way in which the concession could be given.

I believe that the Chancellor of the Exchequer does not like this tax and that if he had the courage he would do away with it. He is not prepared to do away with it, so he is nibbling at it and hopes in this way to remove the concession in due course for the old-age pensioners. Let him do it, and we will be with him, if at the same time he gives them a pension adequate to meet all their needs.

I make a plea to the Chancellor to do something about this matter. I believe that Tobacco Duty relief is one of the concessions he will make on the Finance Bill. He has enough troubles already and he will have more later. He has enough unpopularity; I ask him not to earn more by incurring the wrath and displeasure of the old-age pensioners and of all fair-minded persons. My strongest plea is that he should give in, on the ground of justice to the old-age pensioners who, at this time, must be the concern of us all.

The Chancellor of the Exchequer (Mr. Harold Macmillan)

The Committee has no reason to regret the time that we have occupied in discussing this important Amendment, or the tone in which the debate has been carried on. It was introduced by the hon. Member for Ince (Mr. T. Brown) in a speech so moderate and persuasive that I found it exceedingly difficult not to be charmed into agreement.

The debate was ended for the Opposition by the right hon. Member for Rochester and Chatham (Mr. Bottomley) in a speech of great moderation and fairness. If one or two hon. Members deviated into an attack on the Budget or a little bit of class warfare, that was not altogether unexpected. Some hon. Members find it difficult to resist those temptations. The hon. Member for Fulham (Mr. M. Stewart) called my Budget "trivial" and "flippant". There is a surplus of £460 million. If I had that surplus proportionately in my private affairs I would not regard it as trivial or flippant.

Broadly speaking. we have all tried to face the problem. The hon. and learned Member for Gloucester (Mr. Turner-Samuels) appealed to me, always in very friendly terms, and so did other hon. Members, including the hon. Member for Birmingham, All Saints (Mr. D. Howell). I do not see him for the moment in his place. His constituency, it seems to me, must throw a very heavy burden of responsibility upon him.

It was the speech of the hon. Member for Bristol, South (Mr. Wilkins) which gave us the picture in the fairest and simplest way. He reminded the Committee of what happened. He told us that in 1947 there was an enormous increase in the Tobacco Duty of about 43 per cent. and that in the following year there was an increase of about 6 per cent. If it had been reversed, if there had been an increase of 5 per cent. in 1947, I feel absolutely certain that there would have been no coupon scheme.

I think the hon. Member for Bristol, South will agree that it was because of the enormous increase of 50 per cent. that practically all the Members of the party opposite and of the party now on this side of the Committee—reversed, as we were then—felt that this was a tremendously heavy burden to put suddenly upon the old-age pensioner who smoked tobacco, without providing for any change or review of the pension. I say honestly that I am certain that in the reversed circumstances the scheme would never have been invented.

It was invented to find a way out of a political difficulty. I am not saying that in the narrow sense. The difficulty was felt by the whole Committee. This scheme was devised to try to maintain the 43 per cent. increase in the Tobacco Duty without creating too much political difficulty. It was devised hurriedly between the Committee and the Report of the Finance Bill. Everyone admits that to give a special remission of tax or special coupons for a particular commodity, which just over half of them claim and just under half of them do not claim, is not a very good scheme or method of helping old people. If hon. Members were considering the best way of dealing with the problems of the old-age pensioner in relation to costs, taxes and prices, no one would think of this particular scheme.

What has come out of this debate is a very valuable agreement that as soon as may be this sort of scheme ought to be considered. I am not saying that the agreement is general, but there was general agreement that there are difficulties in the scheme. As it was very hurriedly put together, it has not been easy to administer. It leaves out large classes of pensioner. Whatever the right hon. Member for Rochester and Chatham may say, I do not think that even his hon. Friend the new hon. Member for Walthamstow, West (Mr. Redhead) would be able to put it right. My Department attempted three times during the period of the Labour Government to put it right; and could not succeed. The scheme is not easy to work and is not satisfactory.

We come down to the point whether I ought, when I was making this 5 per cent. increase in the duty, automatically to have given the additional coupon. Had it been the other way round and had there been the rise in 1947 and 1948 of only about 5 per cent., I am sure that the scheme would never have been born. It was introduced to meet a special political difficulty brought about by the heavy increase of 1947.

6.30 p.m.

We have kept the whole temper of this debate friendly and have tried to consider the matter objectively. Had I thought of saying, "Yes" first of all, it would have been much easier, we would have avoided two hours of this debate and I might have been rather more popular. Of course, I thought of it, but I must say, frankly, that I did not feel it right to fortify and, as it were, almost to perpetuate the scheme automatically by saying, seven years after the last increase, that whenever there is a rise in the duty, even of 5 per cent., there must always be a new coupon value. To fortify and perpetuate the scheme as that would do is not, I think, the right way.

The tone of the statements made today has been very modest. We often say that our own side of the House when we are in office does better than the other side, but the truth is that the story of the treatment of all pensioners as a whole by the country since the war is not a bad story. We have tried to shoulder our responsibilities and each Government, in turn, has had to deal with them.

Only in April, 1955, was the last increase made for the old-age pensioners and there was, of course, the one three years before. I do not rely too much upon the statistical arguments but I am informed—

Mr. Ross

It may be that the increase came into force in April, 1955, but the legislation was introduced towards the end of 1954.

Mr. Macmillan

It came into force in 1955. If we were to ride off on the purely statistical argument, I am informed by the statisticians who serve me that, measured in real terms, even at today's prices of everything, the pensions give a greater value in real terms than at the end of 1951, after the pensions increase of October, 1951. [Interruption.] People mention individual commodities which show a rise and, therefore, I am entitled to reply that, measured in real terms, while I am not satisfied that they are the perfect pensions, the pensions are more satisfactory than when we took over the Government in October, 1951.

Mr. Willis

The right hon. Gentleman must be aware that his right hon. Friend the Minister of National Insurance and Pensions has said in the House that the approximate purchasing power of the pension at the beginning of this year was the same as in 1947.

Mr. Macmillan

That was not the argument I was presenting. Hon. Members opposite have presented their arguments and have no doubt, as all of us do, chosen figures which suit them. I am saying that, measured in real terms, in spite of all the denunciations which fall so easily and loosely from the lips of certain hon. Members opposite, taking into account all the rises in prices, the pensions give a great deal more support to the old-age pensioner than during the Labour Party's tenure of office.

After this valuable discussion, some of the implications of which I will, of course, consider, I ask the Committee to resist the Amendment and not to perpetuate a system, specially devised for this special tax, to give this special type of benefit to a particular type of pensioner, and only to half of them. I do not consider that that is the right way for the House of

Commons to meet its obligations for the old-age pensioner and I hope that for this reason the Committee will reject the Amendment.

Mr. Bottomley

The Chancellor of the Exchequer has had to battle against himself, either to accept the humane appeal of my hon. Friend the Member for Ince (Mr. T. Brown)—he acknowledged that he was nearly convinced by our case— or to give way to the cold, calculating, administrative machine behind him. He chose the latter course. I am quite sure that all of us on this side, as well as the country, deplore his choice and we shall show it by registering our vote.

Question put, That those words be there inserted:—

The Committee divided: Ayes 205. Noes 260.

Division No. 199.]	AYES	[16.35 p.m.
Ainsley, J. W,	Dugdale, Rt. Hn. John (W. Brmwch)	Jones, J. Idwal (Wrexham)
Albu, A. H.	Dye, S.	Jones, T. W. (Merioneth)
Allaun, Frank (Salford, E.)	Ede, Rt. Hon. J. C.	Kenyon, C.
Allen, Arthur (Bosworth)	Edwards, Rt. Hon. Ness (Caerphilly)	Key, Rt. Hon. C. W.
Allen, Soholefield (Crewe)	Edwards, Robert (Bilston)	King, Dr. H. M.
Anderson, Frank	Evans, Albert (Islington, S.W.)	Lawson, G. M.
Awbery, S. S.	Evans, Edward (Lowestoft)	Ledger, R. J.
Bacon, Miss Alice	Fernyhough, E.	Lee, Miss Jennie (Cannock)
Balfour, A.	Finch, H. J.	Lever, Leslie (Ardwick)
Ballenger, Rt. Hon. F. J.	Fletcher, Eric	Lindgren, G. S.
Bence, C. R. (Dunbartonshire, E.)	Forman, J. C.	Logan, D. C.
Benn, Hn. Wedgwood (Bristol, 8.E.)	Fraser, Thomas (Hamilton)	Mabon, Dr. J. Dickson
Benson, G.	Gaitskell, Rt. Hon. H. T. N.	McGhee, H. C.
Beswick, F.	Gibson, C. W.	Mcinnes, J.
Blackburn, F.	Gooch, E. D.	McKay, John (Wallsend)
Blyton, W. R.	Gordon Walker, Rt. Hon. P. C.	McLeavy, Frank
Boardman, H.	Greenwood, Anthony	Mahon, Simon
Bottomley, Rt. Hon. A. C.	Grenfell, Rt. Hon. D. R.	Mallalieu, E. L. (Brigg)
Bowen, E. R. (Cardigan)	Grey, C. F.	Mallalieu, J. P. W. (Huddersfd, E.)
Bowles, F. G.	Griffiths, David (Rother Valley)	Mann, Mrs. Jean
Boyd, T. C.	Griffiths, Rt. Hon. James (Lianelly)	Marquand, Rt. Hon. H. A.
Brockway, A. F.	Griffiths, William (Exchange)	Mason, Roy
Broughton, Dr. A. D. D.	Crimond, J.	Mayhew, C. P.
Brown, Rt. Hon. George (Belper)	Hale, Leslie	Messer, Sir F.
Brown, Thomas (Ince)	Hall, Rt. Hn. Glenvil (Colne Valley)	Mitchison, G. R.
Burke, W. A.	Hamilton, W. W.	Monslow, W.
Burton, Miss F. E.	Hannan, W.	Moody, A. S.
Butler, Herbert (Hackney, C.)	Hastings, S.	Morris, Percy (Swansea, W.)
Butler, Mrs. Joyoe (Wood Green)	Hayman, F. H.	Morrison,Rt.Hn.Herbert(Lewis'm,S.)
Castle, Mrs. B. A.	Healey, Denis	Mort, D. L.
Champion, A. J.	Henderson, Rt. Hn. A. (Rwly Regis)	Moss, R.
Chapman, W. D.	Herbison, Miss M	Moyle, A.
Clunie, J.	Hobson, C. R.	Mulley, F. W.
Coldriok, W.	Holmes, Horace	Neale, Harold (Bolsover)
Collick, P. H. (Birkenhead)	Howell, Charles (Perry Barr)	Noel-Baker, Francis (Swindon)
Collins, V. J.(Shoreditch & Finsbury)	Howell, Denis (All Saints)	Oliver, G. H.
Corbet, Mrs. Freda	Hoy, J. H.	Orbach, M.
Cove, W. C	Hubbard, T. F.	Oswald, T.
Craddock, George (Bradford, S.)	Hughes, Cledwyn (Anglesey)	Owen, W. J.
Cronin, J. D.	Hughes, Emrys (S. Ayrshire)	Paget, R. T.
Grossman, R. H. S.	Irving, S. (Dartford)	Paling, Rt. Hon. W. (Dearne Valley)
Cullen, Mrs. A.	Janner, B.	Paling, Will T. (Dewsbury)
Dalton, Rt. Hon. H.	Jay, Rt. Hon. D. P. T.	Palmer, A. M. F.
Darling, George (Hillsborough)	Jager, George (Goole)	Pargiter, G. A.
Davies,Rt.Hon.Clernent(Montgomery)	Jeger, Mrs.Lena(Holbn & St.Pncs,S.)	Parker, J.
Davies, Ernest (Enfield, E.)	Jenkins, Roy (Steohford)	Paton, John
Davies, Harold (Leek)	Johnson, James (Rugby)	Pearson, A.
Delargy, H. J.	Jones, David (The Hartlepool')	Plummer, Sir Leslie
Dodds, N. N.	Jones, Elwyn (W. Ham, S.)	Price, J. T. (Westhoughton)
Donnelly, D. L.	Jones, Jack (Rotherham)	Price, Philips (Gloucestershire, W.)
Proctor, W. T.	Sparks, J. A.	Wheeldon, W. E.
Pryde, D. J.	Steele, T.	White, Mrs. Eirene (E. Flint)
Randall, H. E.	Stewart, Michael (Fulham)	White, Henry (Derbyshire, N.E.)
Rankin, John	Stones, W. (Consett)	Wilcock, Group Capt. C. A. B.
Reeves, J.	Strachey, Rt. Hon. J.	Wilkins, W. A.
Reid, William	Stross,Dr.Barnett(Stoke-on-Trent,C.)	Willey, Frederick
Robens, Rt. Hon. A.	Summerskill, Rt. Hon. E.	Williams, David (Neath)
Roberts, Goronwy (Caernarvon)	Sylvester, G. 0.	Williams, W. R. (Openshaw)
Rogers, George (Kensington, N.)	Taylor, Bernard (Mansfield)	Williams, W. T. (Barons Court)
Ross, William	Taylor, John (West Lothian)	Willis, Eustace (Edinburgh, E.)
Royle, C.	Thomas, lorwerth (Rhondda, W.)	Wilson, Rt. Hon. Harold (Huyton)
Shurmer, P. L. E.	Thomson, George (Dundee, E.)	W interbottom, Richard
Silverman, Julius (Aston)	Turner-Samuels, NI.	Woodburn, Rt. Hon. A.
Simmons, C. J. (Brierley Hill)	Ungoed-Thomas, Sir Lynn	Woof, R. E.
Skeffington, A. M.	Viant, S. P.	Yates, V. (Ladywood)
Slater, Mrs. H. (Stoke, N.)	Warbey, W. N.	Younger, Rt. Hon. K.
Slater, J. (Sedgefield)	Weitzman, D.	Zilliacus, K.
Smith, Ellis (Stoke, S.)	Wells, Percy (Faversham)
Sorensen, R. W.	West, D. G.	TELLERS FOR THE AYES:
		Mr. Short and Mr. Deer.
NOES
Agnew, Cmdr. P. G.	Eden,Rt.Hn.SirA.(Warwick&L'm'tn)	Iremonger, T. L.
Aitken, W. T.	Elliot, Rt. Hon. W. E.	Irvine, Bryant Godman (Rye)
Allan, R. A. (Paddington, S.)	Emmet, Hon. Mrs. Evelyn	Jenkins, Robert (Dulwich)
Alport, C. J. M.	Errington, Sir Eric	Jennings, J. C. (Burton)
Amery, Julian (Preston, N.)	Farey-Jones, F. W.	Johnson, Dr. Donald (Carlisle)
Amory, Rt. Hn. Heathooat (Tiverton)	Fell, A.	Johnson, Erie (Blackleg)
Anstruther-Gray, Major Sir W. J.	Fisher, Nigel	Jones, Rt. Hon. Aubrey (Hall Green)
Arbuthnot, John	Fleetwood-Hesketh, R. F.	Joseph, Sir Keith
Armstrong, C. W.	Fletcher-Cooke, C.	Joynson-Hicks, Hon. Sir Lancelot
Ashton, H.	Fort, R.	Kaberry, D.
Atkins, H. E.	Fraser, Sir Ian (M'cmbe & Lonsdale)	Keegan, D.
Baldock, Lt.-Cmdr. J. M.	Freeth, D. K.	Kerby, Capt. H. B.
Baldwin, A. E.	Galbraith, Hon. T. G. D.	Kerr, H. W.
Banks, Col. C.	Gammons, Sir David	Kershaw, J. A.
Barlow, Sir John	Garner-Evans, E. H.	Kimball, M.
Barter, John	George, J. C. (Pollok)	Kirk, P. M.
Baxter, Sir Beverley	Gibson-Watt, D.	Lagden, G. W.
Bell, Philip (Bolton, E.)	Glover, D.	Lambert, Hon. C.
Bell, Ronald (Bucks, S.)	Godber, J. B.	Lancaster, Col. C. G.
Bennett, Dr. Reginald	Comme-Duncan, Col. Sir Alan	Langford-Holt, J. A.
Bevins, J. R. (Toxteth)	Gough, C. F. H.	Leather, E. H. C.
Bidgood, J. C.	Gower, H. R.	Leavey, J. A.
Biggs-Davison, J. A.	Grant-Ferris, Wg Cdr. R. (Nantwich)	Leburn, W. G.
Birch, Rt. Hon. Nigel	Green, A.	Legge-Bourke, Maj. E. A. H.
Bishop, F. P.	Gresham Cooke, R.	Legh, Hon. Peter (Petersfield)
Black, C. W.	Grimston, Hon. John (St. Albans)	Lindsay, Hon. James (Devon, N.)
Body, R. F.	Grimston, Sir Robert (Westbury)	Lindsay, Martin (Solihull)
Boothby, Sir Robert	Grosvenor, Lt.-Col. R. G.	Linstead, Sir H. N.
Bossom, Sir A. C.	Gurden, Harold	Lloyd, Maj. Sir Guy (Renfrew, E.)
Boyd-Carpenter, Rt. Hon. J. A.	Hall, John (Wycombe)	Lloyd, Rt. Hon. Selwyn (Wirral)
Boyle, Sir Edward	Hare, Rt. Hon. J. H.	Lloyd-George, Maj. Rt. Hon. G.
Braine, B. R.	Harris, Reader (Heston)	Longden, Gilbert
Braithwaite, Sir Albert (Harrow, W.)	Harrison, A. B. C. (Maldon)	Low, Rt. Hon. A. R. W.
Brooke, Rt. Hon. Henry	Harvey, Air Cdre. A. V. (Macolesfd)	Lucas, Sir Jocelyn (Portsmouth, S.)
Brooman-White, R. C.	Harvey, John (Walthamstow, E.)	Lucas-Tooth, Sir Hugh
Browne, J. Nixon (Craigton)	Harvie-Watt, Sir George	Macdonald, Sir Peter
Bryan, P.	Hay, John	McKibbin, A. J.
Burden, F. F. A.	Head, Rt. Hon. A. H.	Mackie, J. H. (Galloway)
Butcher, Sir Herbert	Heald, Rt. Hon. Sir Lionel	McLaughlin, Mrs. P.
Butler, Rt. Hn.R.A.(Saffron Walden)	Heath, Rt. Hon. E. R. G.	Maclean, Fitzroy (Lancaster)
Campbell, Sir David	Henderson, John (Cathoart)	Macmillan, Rt. Hn. Harold(Bromley)
Cary, Sir Robert	Hicks-Beach, Maj. W. W.	Maddan, Martin
Chichester-Clark, R.	Hill, Rt. Hon. Charles (Luton)	Maitland, Hon. Patrick (Lanark)
Clarke, Brig. Terence (Portsmth, W.)	Hill, Mrs. E. (Wythenshawe)	Markham, Major Sir Frank
Conant, Maj. Sir Roger	Hill, John (S. Norfolk)	Marlowe, A. A. H.
Cooper-Key, E. M.	Hinchingbrooke, Viscount	Marples, A. E.
Cordeaux, Lt.-Col. J. K.	Hirst, Geoffrey	Marshall, Douglas
Corfieid, Capt. F. V.	Holland-Martin, C. J.	Mathew, R.
Crowder, Sir John (Finchley)	Hope, Lord John	Maude, Angus
Crowder, Petre (Ruislip—Northwood)	Hornsby-Smith, Miss M. P.	Maudling, Rt. Hon. R.
Cunningham, Knox	Horobin, Sir Ian	Maydon, Lt.-Comdr. S. L. C.
Currie, G. B. H.	Horsbrugh, Rt. Hon. Dame Florence	Medlicolt, Sir Frank
Dance, J. C. G.	Howard, Hon. Greville (St. Ives)	Milligan, Rt. Hon. W. R.
D'Avigdor-Goldsmid, Sir Henry	Howard, John (Test)	Molson, Rt. Hon. A. H. E.
Deedes, W. F.	Hudson, W. R. A. (Hull, N.)	Moore, Sir Thomas
Dodds-Parker, A. D.	Hughes, Hallett, Vice-Admiral J.	Morrison, John (Salisbury)
Donaldson, Cmdr. C. E. McA.	Hughes-Young, M. H. C.	Mott-Radolyffe, C. E.
Doughty, C. J. A.	Hulbert, Sir Norman	Nabarro, G. D. N.
du Cann, E. D. L.	Hurd, A. R.	Nairn, D. L. S.
Duncan, Capt. J. A. L.	Hutchison, Sir Ian Clark(E'b'gh, W.)	Neave, Airey
Duthie, W. S.	Hyde, Montgomery	Nicholls, Harmar
Eccles, Rt. Hon. Sir David	Hylton-Foster, Sir H. B. H.	Nicolson, N. (B'n'm'th, E. & Chr'oh)

Nield, Basil (Chester)	Robertson, Sir David	Tiley, A. (Bradford, W.)
Noble, Comdr. A. H. P.	Robson-Brown, W.	Tinley, John (Wavertree)
Nugent, G. R. H.	Rodgers, John (Sevenoaks)	Touche, Sir Gordon
Nutting, Rt. Hon. Anthony	Roper, Sir Harold	Turner, H. F. L.
Oakshott, H. D.	Russell, R. S.	Tweedsmuir, Lady
O'Neill, Hn. Phelim (Co. Antrim, N.)	Schofield, Lt.-Col. W.	Vane, W. M. F.
Orr, Capt. L. P. S.	Scott-Miller, Cmdr. R.	Vaughan-Morgan, J. K.
Osborne, C.	Sharpies, R. C.	Vosper, D. F.
Page, R. G.	Shepherd, William	Wakefield, Edward (Derbyshire, W.)
Pannell, N. A. (Kirkdaie)	Smithers, Peter (Winchester)	Walker-Smith, D. C.
Partridge, E.	Spearman, Sir A. O. M.	Wall, Major Patrick
Pilkington, Capt. R. A.	Speir, R. M.	Ward, Hon. George (Worcester)
Pitman, I. J.	Spens, Rt. Hn. Sir P. (Kens'gt'n, 8.)	Ward, Dame Irene (Tynemouth)
Pitt, Miss E. M.	Stevens, Geoffrey	Waterhouse, Capt. Rt. Hon. C.
Pott, H. P.	Steward, Harold (Stockport, S.)	Whitelaw, W.8.1.(Pertrith & Border)
Powell, J. Enoch	Steward, Sir William (Woolwich, W.)	Williams, Paul (Sunderland, S.)
Price, Henry (Lewisham, W.)	Stewart, Henderson (Fife, E.)	Williams, R. Dudley (Exeter)
Prior-Palmer, Brig. 0. L.	Studholme, Sir H. G.	Wills, G. (Bridgwater)
Raikes, Sir Victor	Summers, Sir G. 8. (Aylesbury)	Wilson, Geoffrey (Truro)
Ramsden, J. E.	Taylor, William (Bradford, N.)	Wood, Hon. R.
Redmayne, M.	Teeling, W.	Woollam, John Victor
Rees-Davies, W. R.	Thomas, Leslie (Canterbury)	Yates, William (The Wrekin)
Remnant, Hon. P.	Thomas, P. J. M. (Conway)	TELLERS FOR THE NOES:
Renton, D. L. M.	Thompson, Kenneth (Walton)	Colonel J. H. Harrison and
Rippon, A. G. F.	Thompson, Lt.-Cdr. R. (Croydon, S.)	Mr. Barber.
siobsrt, Sir Peter (Healey)	Thornton-Kemsley, C. N.

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

6.45 p.m.

Mr. Bottomley

We have had an interesting debate on this tax concession to old-age pensioners. We have had a Division the result of which means that they will not enjoy it, so now the tax is passed on and everyone concerned will have to meet a further rise in the cost of living at a time when I would have thought that the Chancellor himself would have wished to prevent that happening.

I belong to a very responsible trade union and I, in common with my colleagues in that movement, realise that claims for increases in wages are not the best way to meet our economic difficulties at present. I put it to the Chancellor that every time he takes action which pushes up the cost of living it makes it impossible for responsible trade union leaders not to recognise that the wage earner must have extra pay to meet the cost of the essentials of life. Some people would put tobacco and cigarettes in that category. It is one of their greatest pleasures. Many men and women would prefer to go without other commodities rather than tobacco and cigarettes.

I do not know whether the Chancellor has taken into account what the additional rise in the index figure will be as a result of this increased tax on tobacco and cigarettes I would still like to press him to consider the whole situation, but there is not much prospect of that after he has been so stone- hearted to the appeals made on behalf of old-age pensioners on the tobacco tax. He said, and he has been supported by the Financial Secretary, that the increased tax is for revenue raising purposes. The Financial Secretary said that it would mean an extra 2d. on a packet of 20 cigarettes.

My right hon. Friend the Member for Huyton (Mr. H. Wilson), on the Second Reading of the Bill, was able to show that the amount going to the Chancellor would, in fact, be lid., which means that the tobacco manufacturers and distributors will get another ¼d. Was the Chancellor aware of that? What advice was given by the tobacco adviser to the Board of Trade? Was there an agreement that the tobacco manufacturers and distributors should have this extra ¼d.? I see no reason why they should have it.

As I have already said, in I954, as a result of the year's working, the tobacco manufacturers made a record profit and were able to pay a dividend of 21 per cent. I believe that the following year the profits and dividend were even greater than that. So there is no need for them to have additional money in this way. I would have thought that if the Chancellor is really concerned about additional revenue he would have seen to it that the whole of the 2d. came to him and that nothing at all went to the manufacturers.

Perhaps the Chancellor of the Exchequer will tell us something more about how the 2d. is reached, whether, in fact, an agreement was made with the tobacco manufacturers and distributors that they should have this extra farthing and how he justifies this further addition to the cost of living when there is no sign that the manufacturers or distributors are lacking in profit or rewards for their services.

If the Chancellor will only look back, as apparently he has done in connection with the relief to old-age pensioners, he will find that Sir Stafford Cripps, when Chancellor of the Exchequer, had to meet a similar proposition in the case of the tax on matches. The manufacturers came to him and said that if they could level up the price it would be easier for them to carry the burden of the additional tax rather than reduce the number of matches. Sir Stafford Cripps, to the best of my recollection, remedied that position by putting on the increased tax, so there is a precedent for this and perhaps the Chancellor will see how it was achieved.

I do not wish to prolong the debate, and I certainly do not want to repeat all that was said earlier about old-age pensioners and the way in which they have suffered. I would merely ask the Chancellor to consider the additional burden put upon the workers and others generally by reason of the increase in the cost of living, adding, at this time of all times, to our economic problems. I hope that even at this late hour the Chancellor will consider whether he can raise the required Revenue by other means than by increasing the Tobacco Duty. I would ask the Financial Secretary to give further consideration to the propositions which I have made.

Mr. Frederick Mulley (Sheffield, Park)

My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) has dealt very fully and adequately with the scandal perpetrated by the Government in respect of old-age pensioners. My right hon. Friend also asked why the Treasury did not recoup itself by the full extent of 2d. instead of giving a present of one-eighth of that amount to the tobacco manufacturers. I hope that we shall have a convincing reply to that.

I wish to touch upon the wider considerations involved. Perhaps I should declare an interest in that I smoke. I believe that the tobacco smoker is called upon to pay an unduly high proportion of our total burden of taxation. The figures are impressive. The Chancellor hopes to obtain from the tax £707 million in the present financial year. Last year, he secured £668 million. This year, the estimate for the total service of the National Debt is also £707 million. That is about one and a half times the cost of the National Health Service. I suggest that any smoker who suffers lung cancer as a result of his indulgence need feel no reluctance about availing himself of the National Health Service, because he will more than have paid for such attention as he may require.

The proposed increase is a bad one. I am against increasing indirect taxation at this time when, in relation to the export field and wages at home and in Government policy, we are generally trying to hold the cost of living. It is no good the Government saying that it is not an item which affects the cost of living. Because I believe indirect taxation to be regressive in character, I regret that the Chancellor should have sought to put an additional impost on people who already bear more than a fair proportion of our taxation.

I feel that the smoker is particularly hard hit I do not think it is possible to put a tax on anything else which hits the non-smoker only and not the smoker. It may be said that the Chancellor might have experimented in other fields, but, generally speaking, it is true that it would be hard to devise a tax which would apply to non-smokers or non-drinkers and would not also affect the smoker and the drinker.

It is time some attention was paid to this section of the community. While, on medical grounds, it might be foolish to smoke, I cannot see any moral vice in smoking. People who drink may derive some benefit even on health grounds. I do not believe it to be moral weakness to have a moderate glass of beer or whisky, or whatever beverage one fancies.

The Chancellor's adoption of the easy way out by pushing the taxation on to this section is to be deplored. It certainly is a simple method. Tobacconists throughout the country are the unpaid agents of the Customs and Excise. Administratively, it is an easy way to raise revenue. It is to be deplored. It is time those who drink or smoke, or in some other way provide the Treasury with vast sums of money, had their views considered. I hope that even at this late stage the Government may give further consideration to these matters.

Mr. H. Brooke

If the hon. Member far Sheffield, Park (Mr. Mulley) is arguing that the Tobacco Duty is rather high, I could not agree with him more. I am sure that my right hon. Friend gained no pleasure whatever from his announcement in his Budget speech that he felt it necessary to make a further increase.

However, I would remind the Committee that the reason for the increase embodied in the Clause is not simply a grasping desire for more revenue at all costs. It is part of a combined operation in the Budget by which the Chancellor had to find means of financing certain savings measures which he announced at the same time. "Savings" was the theme of his Budget, and he judged it to be the moment when, above all, he must offer all-round incentives to people of all kinds to save their money.

My right hon. Friend needed to offer further stimulus. As will be seen when we come to later Clauses, in certain respects, that cost a lot of revenue. The hon. Member may say that the Chancellor could have taken the easy course and said, "We will let that revenue go ", but this is a time when the whole world is watching Britain. In particular, it is watching the Chancellor to see whether he is managing the economic affairs of the country with a firm grip. He is doing something which is obviously unpopular in itself by increasing the Tobacco Duty. Had he let things go, it would have been noted all round the world that he was prepared to see his surplus reduced.

He intended to make it clear above all else that he would safeguard and protect and, indeed, somewhat increase the surplus. That is why he had to find means of increasing somewhat both direct and indirect taxation. He has increased direct taxation by Clause 24. He has increased indirect taxation by this Clause. After very careful consideration, he judged that of all the unpleasant alternatives in the indirect field, the Tobaco Duty was the one which could best bear a further increase.

The right hon. Member for Rochester and Chatham (Mr. Bottomley) asked me about the amount of the increase and the gap between the increase and the retail price. It is incorrect to say that the fraction is going into the pockets of the manufacturers. The manufacturers have announced that the retail distributors' margin needed to be increased and will here gain a small increase. If the right hon. Gentleman will look back over the history of the Tobacco Duty, he will see that successive Chancellors of all parties have judged the precise amount of extra Duty required to achieve a certain result in relation to the circumstances of the day. Where the increase has had a retail effect of 2d. he will find, historically, that the actual amount of additional tax has varied from one Budget to another.

7.0 p.m.

There is a further point on which there may be misapprehension. The right hon. Gentleman the Member for Battersea, North (Mr. Jay) raised it one day when he asked about manufacturers' stocks. I have heard the suggestion made that the increase in the duty will put a wonderful windfall profit into the pockets of the manufacturers. In this case, the manufacturers have given an undertaking to put such profit to reserve, to be used in financing the higher duty. In doing so they are, as the right hon. Gentleman, who takes a great interest in these things will notice, acting strictly in accordance with the recommendations of the Hutton Committee, which the Government have accepted.

The Committee made it clear that in its view, when indirect taxation was increased or reduced, it would not be appropriate to take special legislative action about stocks. Most sincerely do I hope that the tax on tobacco will not remain at this present level for the rest of my natural life. When the tax is reduced the manufacturers will automatically lose any profit which has accrued to them on this occasion.

Mr. Jay

But do not the tobacco manufacturers always put the extra profit to reserve when the tax goes up? And as the tobacco tax, unlike Profits Tax, always goes up and never comes down, does not this reserve get larger and larger?

Mr. Brooke

I greatly hope that we shall see the tobacco tax going down, because I would have thought that that tax was nearly, if not quite, at its fiscal maximum.

I have explained this because I sensed that there was some misapprehension about the precise effect upon the manufacturers of this change in tax. That is why I have been perfectly frank and have attempted to answer as fully as I could the various questions which have been asked. I may not have satisfied the right hon. Member for Rochester and Chatham (Mr. Bottomley) about the tax—he dislikes it; none of us likes it—but I hope I have been able to answer the questions which he put to me.

Mr. Roy Jenkins (Birmingham, Stechford)

In replying to fairly detailed Amendments, the Financial Secretary is developing a most engaging habit of enunciating general fiscal principles. The Committee will well remember his famous fiscal principle about the "yawning gap" and it seems that he has got near to announcing a number of almost equally striking principles in the course of his short speech just now.

He has told us quite clearly that this tax has to be related directly to the Chancellor's savings concessions. Those concessions cost money and have to be paid for in this way. I find that a rather surprising argument to come from the Financial Secretary in this context. We arc all very used to hearing from the other side of the Committee arguments that money saved is just as good as— indeed, in some respects, better than —money paid to the Revenue. It is, therefore, surprising to be told that when we have what is proclaimed to be a great savings Budget we must have an addition to indirect taxation to pay for it.

The right hon. Gentleman also told us that it was essential that we should have the extra 2d. on cigarettes so that the world might know that the Chancellor was keeping a firm grip on the economy. I think it would have been better to have said "taking" rather than "keeping" a firm grip on the economy. I am sure that the Chancellor himself, in view of all, the figures we have had since, and about which I thought he spoke in surprisingly complacent terms this afternoon, would feel that the world has responded to this clarion call for 2d. on tobacco in precisely the way that he would think it ought to.

He appears to have thought that this year world opinion was poised in such a way that it was demanding from the Chancellor an extra 2d. on tobacco to fortify his Budget surplus and thus be convinced that he was keeping—or taking —a firm grip on the economy. Presumably the Financial Secretary, who has been at the Treasury for some time, under different Chancellors, would take the view that the world was expecting something very different last year from the previous Chancellor.

I was also surprised to hear the Financial Secretary justifying the effect of the extra duty on the price of tobacco on the ground that what the manufacturers were now gaining they would lose later, and that we could confidently expect reductions in the duty in future on the ground, as I understood, that the tobacco tax in his view had now reached its fiscal maximum. That was his phrase. That, again, struck me as a peculiar argument. The argument which is being put forward with greater or less justification from the Treasury Bench for this particular increase at present is that tobacco has become relatively very much cheaper over the last few years. Now that we are on the Chancellor's "plateau" it will become relatively very much cheaper in the future. Costs generally are rising at a rate of about 5 per cent. a year, which constitutes the Chancellor's plateau. In those circumstances to claim that the duty had reached its fiscal maximum was, I think, a rash claim for the Financial Secretary to make.

From the point of view of world opinion I should have thought that one of the most important things for the Chancellor to do to get a firm grip on the economy would be to try to introduce a little stability into our price structure. In that connection, any increase in indirect taxation at present is greatly to be deplored. I therefore feel that this is a bad Clause and I shall have no difficulty at all in voting against it.

Mr. Harold Wilson (Huyton)

I do not intend to retain the Committee long, but I must refer to the speech made by the Financial Secretary just now. It was given with all his customary courtesy and plausibility. We have come to know those speeches as Finance Bill succeeds Finance Bill. He gave as the reason for the tax change embodied in Clause 1 that the whole world was looking to the Chancellor for a sign that he was maintaining, as he said, a grip on the situation.

To us on this side that seems very odd. We cannot understand why it is that the whole world was looking to the Chancellor when he formulated his Budget this year, but that for some reason the attention of the world was distracted from the previous Chancellor's activities in 1955. Certainly, nothing that that Chancellor did in 1955 would have given any encouragement or comfort to the world at large. However, if I were to follow that point at any great length, I am sure I should be getting out of order.

It is interesting that we are now finding in one Finance Bill after another the argument that it is necessary to increase some form of indirect taxation on the ground that the world is looking to the Chancellor for a lead. In October last the whole future of the £sterling apparently depended on the Chancellor's not relaxing his grip on coal and cinder sieves and sifters, and pots and pans, pan scrubbers and the rest, and the £ it would seem, was only saved, temporarily, by the Chancellor of that day putting Purchase Tax on those household essentials.

Now we are told that the financial world outside this country will have no confidence in the Chancellor or his actions or his policies or in the future of sterling unless we have this increase of 2d. on a packet of cigarettes, and that is the reason given by the right hon. Gentleman for the action of the Chancellor. Of course, when he talks about the Chancellor taking a grip on the situation, these, at any rate, are words which are to some extent encouraging. Our fear about the situation is that the Chancellor has now divested himself of all responsibility for the economic and financial position of this country. Again, obviously, I could not pursue that point very far and still remain in order.

When the Chancellor makes speeches about his being an alarm clock, it is an extraordinary psychological thing that he has convinced himself. He goes round the country saying that he is an alarm clock, which is not the traditional function of the Chancellor of the Exchequer, and I should like to see some evidence from the Chancellor that he is taking that grip of the economic situation to which the Financial Secretary referred.

The Deputy Chairman (Sir Rhys Hopkin Morris)

Order. The right hon. Gentleman is now skirting the limits of the rules of order.

Mr. Wilson

I was trying to relate that point to the Clause, which deals with tobacco, Sir Rhys. Obviously, the relevance of the increased price of tobacco to the Chancellor's Newcastle speech will have been obvious to the Committee and I do not need to labour it.

If I understand the Chancellor's policy rightly, he believes that we have reached a plateau as far as prices are concerned —a somewhat sloping plateau—or that we shall shortly reach that plateau. [An HON. MEMBER: "Order."] With respect, I prefer to take my rulings of what is in order from the Chair and not from the hon. Gentleman, who does not seem to be following with his usual perspicacity the relevance of the argument. If he had been, he would understand the difficulty of maintaining price stability in the few weeks which follow an increase in indirect taxation, for instance, in such things as tobacco, with which I think the hon. Gentleman is concerned.

As my hon. Friend the Member for Sheffield, Park (Mr. Mulley) reminded us, tobacco is a not unimportant constituent in the cost-of-living index, and, therefore, an increase in the price of tobacco is bound to have some effect on the cost-of-living index. Not only does it have a direct effect, but the psychological effect is out of relation and out of all proportion to the relatively small effect which it has on the cost-of-living index itself. All I would say on that point is that, from the point of view of the cost of living and from that of the stabilisation of wages, on which the Chancellor has made a number of eloquent but very costly and disastrous speeches recently, this Clause is absolutely out of accord with what the Chancellor is after in that direction.

While I am referring to the plateau of the Chancellor's speech, may I say that I was rather surprised to hear the remarks of the Financial Secretary about retailers' margins. He frankly admitted, in answer to my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) that the price of tobacco has gone up more than the tax, and that it has gone up in response to the change in taxation but by a bigger amount. He says that this was to meet an increase in retailers' margins. I only wish that the right hon. Gentleman, or the Chancellor himself, had spent a little more time telling us what is the relation between the increase in retailers' margins, on the one hand, and a plateau of price stabilisation, on the other, and in what way the Chancellor's appeal for wage restraint also applies to retailers in the matter of margins.

The last point—and I can see that the hon. Member for Wokingham (Mr. Remnant) is getting impatient; whether he wants to make a speech or divide with us against this Clause I do not know.

Mr. Peter Remnant (Wokingham)

If the right hon. Gentleman wishes me to interpose in order that I may more clearly understand his argument, would he let me know when he will be referring to the Clause?

Mr. Wilson

If the hon. Gentleman had studied Clause I as fully as some of us on this side of the Committee have done, he would see that I was never very far from the Clause, and that, if I had been, you, Sir Rhys, I am quite sure, would have been the first to have drawn my attention to that fact.

7.15 p.m.

The point is that this Committee, in fulfilment of its traditional duty in assenting to proposed changes in taxation—and it should not be necessary to remind the hon. Member for Wokingham of this Committee's historic duty in that connection—has to decide whether it is or is not reasonable to impose an increase in taxation bringing in a revenue of £30 million, and whether it is desirable or not.

Surely, in this modern age, in this twentieth century, into which we hope the hon. Gentleman will one day enter, it is an important matter to relate the desirability of a particular Clause not merely to the narrow revenue considerations, but to the broader economic considerations, including the Government's economic policy, if any. With respect, and I had to explain this to the hon. Gentleman, I was trying to relate the provisions of Clause 1, which deals with tobacco, to the Government's economic policy.

The last point that I want to make— and I was already on it when the hon. Gentleman interrupted—is that I want to avoid any possible misunderstanding arising from the remarks of my hon. Friend the Member for Sheffield, Park, in his earlier intervention. He pointed out that, by a singular coincidence, the expected yield from the Tobacco Duty under Clause 1 in the current financial year exactly equals, or almost exactly equals, the National Debt charge for the year.

I should like to make it clear, and I am sure that my hon. Friend will agree with this interpretation of what he was saying, that he was not linking the two figures together in the sense that if, as we all hope, there is a reduction in the National Debt charge, it does not mean that automatically the Tobacco Duty should follow it up or down. If there were to be an increase in the National Debt charge, we hope that the Chancellor would not immediately put up the tax on tobacco. I should make it clear on behalf of my hon. Friend that he referred to the National Debt charge purely coincidentally, in drawing attention to the very interesting and singular phenomenon that the two figures given in the financial statement of the Government happened to be the same.

Mr. Mulley

I am rather surprised that my right hon. Friend the Member for Huyton (Mr. H. Wilson) should have sought to make that point, knowing how quickly the Financial Secretary reacts to any suggestions of this sort. I should not like it to be thought that we are to have any further impositions of taxation.

The Deputy-Chairman

This is inserting a speech in another.

Mr. Mulley

I only wanted to make it clear that the only connection between the National Debt charge and the yield from the Tobacco Duty is that both represent money spent for which there is nothing to show afterwards.

Mr. Wilson

That is a very interesting and weighty pronouncement into which I do not propose to enter at this stage, unless it is felt essential in order to relate the point to Clause 1.

We have had, as the Chancellor himself said, a very good and very good-tempered debate on the Amendment in the names of my right hon. and hon. Friends and myself. If the hon. Member for the Isle of Thanet (Mr. Rees-Davies) wishes to intervene, I should be delighted to accommodate him.

Mr. W. R. Rees-Davies (Isle of Thanet)

Does the right hon. Gentleman really think it necessary to spend four hours chewing the cud on tobacco?

Mr. Wilson

I think that the contributions of the hon. Member to the Finance Bill this year have not been such that he was entitled to make that observation. I think he will find that the Chancellor will be the first to agree, as day succeeds day on this Bill, that we on this side of the Committee have been extremely helpful to him in getting his Finance Bill through. I would point out to the hon. Gentleman that the previous Finance Bill took five days and contained only five Clauses, and that, on the same ratio, this one could take 49 days, but probably will not.

1 would, therefore, suggest that the hon. Gentleman's intervention was a little misplaced, and that, if there is any waste of time in this Committee today, it would appear to come from hon. Members opposite, who have put down far more Amendments than we have. Perhaps I may now return to the subject of tobacco, from which I was diverted by the untimely, and if I may say so, contumacious intervention of the hon. Gentleman.

Earlier today we had a debate about old-age pensioners. We have had one or two brief observations on the Question, "That the Clause stand part of the Bill ", to which the Financial Secretary has given a partial answer, but he has not satisfied anyone on this side of the Committee either about the cost of living in relation to the Government's stabilisation policy or about the, to us quite unnecessary increase in retail margins and possibly, manufacturers' margins—there appears to be some dispute about that—arising out of this particular tax change.

It is not principally for those reasons that we intend to divide the Committee against the Clause. Had the Chancellor finally succumbed to the blandishments of my hon. Friend the Member for Ince (Mr. T. Brown), and had he accepted the Amendment which we moved earlier, we should not perhaps have felt moved to vote against this particular Clause tonight; but, in fact, it is this Clause which contains an increase in indirect taxation which we regard as unnecessary in the circumstances, and not tempered by the concession to old-age pensioners for which we have asked.

In these circumstances, we cannot agree that this Clause ought to form part of this Finance Bill, and we shall, therefore, call upon our hon. Friends who vote against the Clause standing part of the Bill.

Mr. F. Beswick (Uxbridge)

I wish to ask just one question of the Chancellor, and, if he cannot answer now, I should appreciate it if he would give me some information later on. Can he tell us whether he has taken into account Commonwealth Preference in agreeing to this continuing increase of the tax upon tobacco? As I understand, the Preference is a fixed one. In the first place, when the tax was very low, the Preference was an important one and it did encourage the Dominion and Colonial grower, but, as the tax has continually increased, the value of the Preference has continually decreased, until today, when, as I understand, it is practically negligible.

I am wondering whether the Chancellor has taken this into account, and, if so, whether he proposes to do anything about it. As we all know, the expenditure of dollars on tobacco is one of our most serious problems. In so far as we increase the tax, it does in some way also lessen the incentive to purchase Commonwealth tobacco, increasing the consumption of United States tobacco. It does seem that the point is worth taking into account, and I should like to know whether the Chancellor has considered it.

Mr. H. Brooke

I would like to assure the hon. Gentleman the Member for Uxbridge (Mr. Beswick) that these changes in the duty will leave the preferential margins for Commonwealth tobacco unchanged.

Mr. Beswick

That is what I am afraid of. The fact is that if one is to give the same degree of Preference, one has to increase the amount. If the amount is left unchanged, the value of that amount, on the higher price of tobacco, becomes proportionately less. Has it been increased in percentage?

Mr. Brooke

The margin, the gap in money, remains unchanged.

Mr. Gordon Walker

The percentage value of that margin has, presumably, been decreased by the Chancellor's action now.

Mr. H. Wilson

I think it ought to be said that my hon. Friend the Member for Uxbridge (Mr. Beswick) has raised a very important point, one to which we might perhaps want to return at a later stage. We have our own views on this matter,

pand about the relative importance of bulk buying and Preference as a means of encouraging Commonwealth tobacco, but I think we might save those observations until we discuss the relevant Schedule.

Unless my hon. Friends have any other important points to raise, we, for our part, would be quite ready to come to a conclusion upon the Question.

Question put: —

The Committee divided: Ayes 255, Noes 199.

Division No. 200.1]	AYES	[7.25 p.m.
Agnew, Cmdr. P. G.	Eccles, Rt. Hon. Sir David	Johnson, Dr. Donald (Carlisle)
Aitken, W. T.	Eden,RtHn.SirA.(Warwick&L'm'tn)	Johnson, Eric (Blackley)
Allan, R. A. (Paddington, S.)	Elliot, Rt. Hon. W. E.	Johnson, Howard (Kemptown)
Alport, C. J. M.	Emmet, Hon. Mrs. Evelyn	Jones, Rt. Hon. Aubrey (Hall Green)
Amery, Julian (Preston, N.)	Errington, Sir Eric	Joseph, Sir Keith
Amory, Rt. Hn. Heathcoat (Tiverton)	Farey-Jones, F. W.	Joynson-Hicks, Hon. Sir Lancelot
Anstruther-Gray, Major Sir W. J.	Fell, A.	Kaberry, D.
Arbuthnot, John	Fisher, N igel	Keegan, D.
Armstrong, C. W.	Fleetwood-Hesketh, R. F.	Kerby, Capt. H. B.
Ashton, H.	Fletcher-Cooke, C.	Kerr, H. W.
Atkins, H, E.	Fort, R.	Kershaw, J. A.
Baldook, Lt.-Cmdr. J. M.	Foster, John	Kimball, M.
Baldwin, A. E.	Fraser, Sir Ian (M'cmbe & Lonsdale)	Kirk, P. M.
Banks, Col. C.	Freeth, D. K.	Lagden, G. W.
Barber, Anthony	Gammans, Sir David	Lambert, Hon. G.
Barlow, Sir John	Garner-Evans, E. H.	Lancaster, Col. C. G.
Barter, John	George, J. C. (Pollok)	Langford-Holt, J. A.
Baxter, Sir Beverley	Gibson-Watt, D.	Leather, E. H. C.
Bell, Philip (Bolton, E.)	Glover, D.	Leavey, J. A.
Bell, Ronald (Bucks, S.)	Gomme-Duncan, Col. Sir Alan	Leburn, W. G.
Bennett, Dr. Reginald	Gough, C. F. H.	Legge-Bourke, Maj. E. A. H.
Bevins, J. R. (Toxteth)	Gower, H. R.	Legh, Hon. Peter (Petersfieid)
Bidgood, J. C.	Grant-Ferris, Wg Cdr. R. (Nantwich)	Lindsay, Hon. James (Devon, N.)
Biggs-Davison, J. A.	Green, A.	Lindsay, Martin (Solihull)
Birch, Rt. Hon. Nigel	Gresham Cooke, R.	Linstead, Sir H. N.
Bishop, F. P.	Grimston, Hon. John (St. Albans)	Lloyd, Maj. Sir Guy (Renfrew, E.)
Black, C. W.	Grimston, Sir Robert (Westbury)	Lloyd, Rt. Hon. Selwyn (Wirral)
Body, R. F.	Gurden, Harold	Lloyd-George, Maj. Rt. Hon. G.
Boothhy, Sir Robert	Hall, John (Wycombe)	Longden, Gilbert
Bossom, Sir A. C.	Hare, Rt. Hon. J. H.	Low, Rt. Hon. A. R. W.
Bowen, E. R. (Cardigan)	Harris, Reader (Heston)	Lucas, Sir Jocelyn (Portsmouth, S.)
Boyd-Carpenter, Rt. Hon. J. A.	Harrison, A. B. C. (Maldon)	Lucas-Tooth, Sir Hugh
Boyle, Sir Edward	Harrison, Col. J. H. (Eye)	Macdonald, Sir Peter
Braine, B. R.	Harvey, Air Cdre. A. V. (Macciestd)	McKibbin, A. J.
Braithwaite, Sir Albert (Harrow, W.)	Harvey, John (Walthamstow, E.)	Mackie, J. H. (Galloway)
Brooke, Rt. Hon. Henry	Harvie-Watt, Sir George	McLaughlin, Mrs. P.
Brooman-White, R. C.	Hay, John	Maclean, Fitzroy (Lancaster)
Browne, J. Nixon (Craigton)	Head, Rt. Hon. A. H.	McLean, Neil (Inverness)
Bryan, P.	Heald, Rt. Hon. Sir Lionel	Macmillan,RtHn.Harold(Bromley)
Burden, F. F. A.	Heath, Rt. Hon. E. R. G.	Maddan, Martin
Butcher, Sir Herbert	Henderson, John (Cathoart)	Maitland, Hon. Patrick (Lanark)
Campbell, Sir David	Hicks-Beach, Maj. W. W.	Markham, Major Sir Frank
Carr, Robert	Hill, Mrs. E. (Wythenshawe)	Marlowe, A. A. H.
Cary, Sir Robert	Hill, John (S. Norfolk)	Marples, A. E.
Chichester-Clark, R.	Hinchingbrooke, Viscount	Marshall, Douglas
Clarke, Brig. Terence (Portsmth, W.)	Hirst, Geoffrey	Mathew, R.
Conant, Maj. Sir Roger	Holland-Martin, C. J.	Maude, Angus
Cooper-Key, E. M.	Hornsby-Smith, Miss M. P.	Maudling, Rt. Hon. R.
Cordeaux, Lt.-Col. J. K.	Horobin, Sir Ian	Maydon, Lt.-Comdr, S. L. C.
Corfield, Capt. F. V.	Horsbrugh, Rt. Hon. Dame Florence	Medlicott, Sir Frank
Craddock, Beresford (Spelthorne)	Howard, Hon. Greville (St. Ives)	Milligan, Rt. Hon. W. R.
Crowder, Sir John (Finchley)	Howard, John (Test)	Molson, Rt. Hon. A. H. E.
Crowder, Petre (Ruislip—Northwood)	Hudson, W. R. A. (Hull, N.)	Moore, Sir Thomas
Cunningham, Knox	Hughes Hallett, Vice-Admiral J.	Morrison, John (Salisbury)
Currie, G. B. H.	Hughes-Young, M. H. C.	Mott-Radclyffe, C. E.
Dance, J. C. G.	Hulbert, Sir Norman	Nabarro, C. D. N.
D'Avigdor-Goldsmid, Sir Henry	Hurd, A. R.	Nairn, D. L. S.
Deedes, W. F.	Hutchison, Sir Ian Clark(E'b'gh, W.)	Neave, Airey
Dodds-Parker, A. D.	Hyde, Montgomery	Nicholls, Harmar
Donaldson, Cmdr. C. E. McA.	Hylton-Foster, Sir H. B. H.	Nicolson, N. (B'n'm'th, E. & Chr'ch)
du Cann, E. D. L.	Irvine, Bryant Godman (Rye)	N ieid, Basil (Chester)
Duncan, Capt. J. A. L.	Jenkins, Robert (Dulwich)	Noble, Comdr, A. H. P.
Duthie, W. S.	Jennings, J. C. (Burton)	Nugent, G. R. H.
Nutting, Rt. Hon. Anthony	Russell, R. 8.	Turner, H. F. L.
O'Neill, Hn. Phelim (Co. Antrim, N	Schofield, Lt.-Col. W.	Tweedsmuir, Lady
Orr, Capt. L. P. S.	Scott-Miller, Cmdr. R.	Vane, W. M. F.
Osborne, C.	Sharpies, R. C.	Vaughan-Morgan, J. K.
Page, R. G.	Shepherd, William	Vosper, D. F.
Pannell, N. A. (Kirkdale)	Smithers, Peter (Winchester)	Wade, D. W.
Partridge, E.	Spearman, Sir A. C. M.	Wakefield, Edward (Derbyshire, W.)
Pilkington, Capt. R. A.	Speir, R. M.	Walker-Smith, D. C.
Pitman, I. J.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Wall, Major Patrick
Pitt, Miss E. M.	Slovens, Geoffrey	Ward, Hon. George (Worcester)
Pott, H. P.	Steward, Harold (Stockport, S.)	Ward, Dame Irene (Tynemotith)
Powell, E. Enoch	Steward, Sir William (Woolwich, W.;	Waterhouse, Capt. Rt. Hon. C.
Price, Henry (Lewisham, W.)	Studholme, Sir H. G.	Whitelaw, W.S.I.(Penrith & Border)
Raikes, Sir Victor	Taylor, William (Bradford, N.)	.Williams, Paul (Sunderland, S.)
Ramsden, J. E.	Teeling, W.	Williams, R. Dudley (Exeter)
Redmayne, M.	Thomas, Leslie (Canterbury)	Wills, G. (Bridgwater)
Rees-Davies, W. R.	Thomas, P. J. M. (Conway)	Wilson, Geoffrey (Truro)
Remnant, Hon. P.	Thompson, Kenneth (Walton)	Wooilam, John Victor
Renton, D. L. M.	Thompson, Lt.-Cdr. R. (Croydon, S.)	Yates, William (The Wrekin)
Robertson, Sir David	Thornton-Kemsley, C. N.	TELLERS FOR THE AYES:
Robson-Brown, W.	Tiley, A. (Bradford, W.)	Mr. Oakshott and Mr. Godber
Rodgers, John (SevenOaks)	Tilney, John (Wavertree)
Roper, Sir Harold	Touche, Sir Gordon
NOES
Ainsley, J. w.	Gordon Walker, Rt. Hon. P. C.	Mayhew, C. P.
Albu, A. H.	Greenwood, Anthony	Messer, Sir F.
Allaun, Frank (Salford, E.)	Grenfell, Rt. Hon. D. R.	Mitchison, C. R.
Allen, Arthur (Bosworth)	Grey, C. F.	Monslow, W.
Allen, Scholefield (Crewe)	Griffiths, David (Rather Valley)	Moody, A. S.
Anderson, Frank	Griffiths, Rt. Hon. James (Llanelly)	Morris, Percy (Swansea, W.)
Awbery, S. S.	Griffiths, William (Exchange)	Morrison,Rt.Hn.Herbert(Lewis'm,S.)
Bacon, Miss Alice	Hale, Leslie	Mort, D. L.
Bence, C. R. (Dunbartonshire, E.)	Hall, Rt. Hn. Glenvil (Colne Valley)	Moss, R.
Benn, Fin. Wedgwood (Bristol, 8.E.)	Hamilton, W. W.	Moyle, A.
Benson, G.	Hannan, W.	Mulley, F. W.
Beswick, F.	Hastings, S.	Neal, Harold (Bolsover)
Blackburn, F.	Hayman, F. H.	Oliver, G. H.
Blyton, W. R.	Healey, Denis	Orbach, M.
Boardman, H.	Henderson, Rt. Hn. A. (Rwly Regis)	Oswald, T.
Bottomley, Rt. Hon. A. G.	Herbison, Miss M.	Owen, W. J.
Bowles, F. G.	Hewitson, Capt. M.	Paling, Rt. Hon. W. (Deame Valley)
Boyd, T. C.	Hobson, C. R.	Paling, Will T. (Dewsbury)
Brockway, A. F.	Howell, Charles (Perry Barr)	Palmer, A. M. F.
Broughton, Dr. A. D. D.	Howell, Denis (All Saints)	Pargiter, C. A.
Brown, Rt. Hon. George (Belper)	Hoy, J. H,	Parker, J.
Brown, Thomas (Inoe)	Hubbard, T. F.	Parkin, B. T.
Burke, W. A.	Hughes, Cledwyn (Anglesey)	Paton, John
Burton, Miss F. E.	Hughes, Emrys (S. Ayrshire)	Pearson, A.
Butler, Herbert (Hackney, C.)	Hunter, A. E.	Price, J. T. (Westhoughton)
Butler, Mrs. Joyce (Wood Green)	Irving, S. (Dartford)	Price, Philips (Gloucestershire, W.)
Castle, Mrs. B. A.	Janner, B.	Proctor, W. T.
Champion, A. J.	Jay, Rt. Hon. D. P. T.	Pryde, D. J.
Chapman, W. D.	Jeger, George (Goole)	Randall, H. E.
Clunie, J.	Jeger, Mrs.Lena(Holbn & St.Pnos,S,) Rankin, John	Rankin, John
Coldrick, W.	Jenkins, Roy (Stechford)	Reid, William
Collick, P. H. (Birkenhead)	Johnson, James (Rugby)	Robens, Rt. Hon. A.
Collins,V. J. (Shoreditch & Finsbury)	Jones, Rt. Hon. A. Creech(Wakefield)	Roberts, Goronwy (Caernarvon)
Cove, W. G.	Jones, David (The Hartlepools)	Rogers, George (Kensington, N.)
Craddock, George (Bradford, S.)	Jones, Elwyn (W. Ham, S.)	Ross, William
Cronin, J. D.	Jones, Jack (Rotherham)	Royle, C.
Crossman, R. H. S.	Jones, J. Idwal (Wrexham)	Short, E. W.
Cullen, Mrs. A.	Jones, T. W. (Merioneth)	Shurmer, P. L. E.
Dalton, Rt. Hon. H.	Kenyon, C.	Silverman, Julius (Aston)
Darling, George (Hillsborough)	Key, Rt. Hon. C. W.	Simmons, C. J. (Brierley Hill)
Davies, Harold (Leek)	King, Dr. H. M.	Skeffington, A. M.
Deer, G.	Lawson, G. M.	Slater, Mrs. H. (Stoke, N.)
Delargy, H. J.	Ledger, R. J.	Slater, J. (Sedgefield)
Dodds, N. N.	Lee, Miss Jennie (Cannock)	Smith, Ellis (Stoke, S.)
Donnelly, D. L.	Lever, Leslie (Ardwick)	Sorensen, R. W.
Dugdale, Rt. Hn. John (W. Brmwch)	Lindgren, G. S.	Sparks, J. A.
Dye, S.	Logan, D. G.	Steele, T.
Ede, Rt. Hon. J. C.	Mabon, Dr. J. Dickson	Stewart, Michael (Fulham)
Edwards, Rt. Hon. Ness (Caerphilly)	McGhee, H. G.	Stones, W. (Consett)
Edwards, Robert (Bilston)	McGovern, J.	Strachey, Rt. Hon. J.
Evans, Albert (Islington, S.W.)	McInnes, J.	Stross,Dr.Barnett(Stoke-on-Tren,t,C.)
Evans, Edward (Lowestoft)	McKay, John (Wallsend)	Summerskill, Rt. Hon. E.
Fernyhough, E.	McLeavy, Frank	Sylvester, G. 0.
Fletcher, Eric	Mahon, Simon	Taylor, Bernard (Mansfield)
Forman, J. C.	Mallalieu, E. L. (Brigg)	Thomas, lorwerth (Rhondda, W.)
Fraser, Thomas (Hamilton)	Mallalieu, J. P. W. (Huddersfd, E.)	Thomson, George (Dundee, E.)
Gaitskell, Rt. Hon. H. T. N.	Mann, Mrs. Jean	Turner-Samuels, M.
Gibson, C. W.	Marquand, Rt. Hon. H. A.	Ungoed-Thomas, Sir Lynn
Gooch, E. G.	Mason, Roy	Usborne, H. C.

Viant, S. P.	White, Henry (Derbyshire, N.E.)	Winterbottom, Richard
Warbey, W. N.	Wilkins, W. A.	Woodburn, Rt. Hon. A.
Weitzman, D.	Willey, Frederick	Woof, R. E.
Wells, Percy (Faversham)	Williams, David (Neath)	Yates, V. (Ladywood)
Wells, William (Walsall, N.)	Williams, W. R. (Openshaw)	Younger, Rt. Hon. K.
West, D. G.	Williams, W. T. (Barons Court)	Zilliacus, K.
Wheeldon, W. E.	Willis, Eustace (Edinburgh, E.)
White, Mrs. Eirene (E. Flint)	Wilson, Rt. Hon. Harold (Huyton)	TELLERS FOR THE NOES:
		Mr. Holmes and Mr. John Taylor.

Clause ordered to stand part of the Bill.

Clause 2.—(EXCISE DUTY ON STRENGTHENED CIDER AND PERRY.)

Mr. Bryant Godman Irvine (Rye)

I beg to move, in page 2, line 8, at the beginning, to insert: unless made exclusively of fruit grown in the United Kingdom". When the Chancellor of the Exchequer first mentioned to the House this duty on perry and cider, he said that the reason he was proposing it was so that he could protect the Revenue and remove unfair competitive advantage. Since the Budget proposals have been made, it has become more and more clear that there will not be many people who will be caught by these proposals. My information is that a great many cider manufacturers are considering reducing the strength of their cider so that it will fall below the 15 degrees proposed in Clause 2. So that although my right hon. Friend said that he was expecting to get £400,000 in a full year as a result of this tax, I wonder whether he still feels that this will be so?

Inquiries that I have been able to make indicate that only three people will be caught by this Clause. One happens to be in my constituency, and that is why I have put forward this Amendment. That manufacturer employs between sixty-five and seventy men, and he uses 3,500 tons of apples in a good year. My first point is that I am wondering whether there will be only three people caught by this tax, and that therefore it will not produce the revenue suggested by my right hon. Friend.

The other side of the story is that on British wines a tax of 10s. 6d. a gallon is being paid, and it might be said that if the production of ciders of this strength is allowed, the result might be that the Revenue would not be getting the money which it would otherwise expect on British wines, because such ciders would be taking the trade away. That would be an extraordinary exercise on the part of the Chancellor, since he comes to this House and suggests that when anything is imported it is something which we ought to try to cut down. We are used to people coming here from the Treasury and telling us that our imports are too high. You will know, Sir Rhys, that British wine is made from imported must, whereas many ciders are made from British apples. There are notable exceptions to that rule, because a lot of other pulp comes into this country from Normandy without paying any duty. It seems to me that there might be a good case for the Chancellor making an exception in respect of ciders produced from apples grown in this country, because they are using home-produced goods which would enable the needs of the country to be met.

The Chancellor will be aware that apple producers have never said that they are getting extremely good returns from their crops, and even a small reduction in the quantity required to make cider would make a real difference to the market for British apples. So the second point which I ask the Financial Secretary to look at is whether there is not a good case for British cider made from British apples being exempted from the provisions of this Clause.

It may well be that the Financial Secretary is not able to go all that way with me, and of course there will be a possibility between now and another stage of the Bill for a proposal which would enable British cider, made in the way I have outlined, to pay a tax which would enable it to compete fairly with British wine and imported wine. At the moment I am told that there are five imported wines which would be sold cheaper than British cider after it has paid the duty required under this Clause. In those circumstances I ask the Committee to accept my Amendment.

Mr. Percy Wells (Faversham)

I support the Amendment.

Although I know very little about the chemistry of cider manufacture, I am informed that the Clause, if it is passed as it stands, may be disastrous to the manufacture of cider in Kent. The largest producer of farmhouse cider in Kent says that at best it will mean a 50 per cent. reduction for him and at worst a complete stoppage of production.

I am concerned not so much with the producer of cider as with the producer of apples. Apple growers will suffer considerably if the Clause is applied to cider such as is produced in Kent, the reason being that it is produced from sub-standard apples, a lower grade of apple, which is normally unsaleable in the ordinary market. If that market is taken from the Kent growers it will mean that certainly the small growers will suffer a minor disaster. They are already suffering considerably as a result of the last Price Review. I am instructed that if the Clause is allowed to stand it will mean a considerable blow to the Kent fruit growers.

There has been an increase in the production of cider in Kent in recent years. The apple and pear producers of Kent have come to look upon the sale of substandard fruit to the cider and perry manufacturers as an outlet for apples which would otherwise be completely unmarketable. Further, an export trade is being built up in the sale of farmhouse cider, and I should have thought that the Chancellor ought at least to be somewhat interested in that aspect. I hope that the Amendment will be accepted, for it will help people who fear that their position, already difficult, will be made much worse.

Major H. Legge-Bourke (Isle of Ely)

Although my constituency is not one of the main cider producing areas, it contains many apple growers.

One of the important features of the cider making industry is that it takes lower-quality apples than are required for dessert purposes. In this country we tend to waste apples to an appalling degree. It is iniquitous that we should import apples from Italy before we are certain that our home crop has been taken up. Clause 2 is somewhat of a mixed blessing. It appears that there ought to be some resistance to imports, and I am glad to hear about that, but at the same time I want to make sure that we do not punish the home apple growers. I do not think that I have ever seen a subsection worded in such a confused manner as subsection (1).

The Deputy-Chairman

It occurs to me that such a comment would be more fitting on the Question, "That the Clause stand part of the Bill."

Major Legge-Bourke

The Amendment will not make sense, Sir Rhys, unless we all understand what it means. The Amendment seeks to insert some words at the beginning of subsection (1). As I understand the meaning of the subsection with the Amendment, it will roughly be that "Unless made exclusively of fruit grown in the United Kingdom, any intoxicating liquor made from apple juice in its natural state at the beginning of that process, containing no ethyl alcohol derived from other materials, and regarded within the meaning of the excise Acts (which includes perry) as cider, though of lower strength, shall, if of fifteen degrees of proof or greater, be deemed for the purposes of those Acts to be sweets and not cider."

My interpretation may be confusing enough to the Committee, but I think it is slightly clearer than the original version. If the Financial Secretary feels that he can accept the Amendment, I hope that he will try to make the wording a little clearer than it is now.

7.45 p.m.

If, by means of the Clause, the Government can restrict the importation of apple pulp, it would be highly desirable that they should agree to add the words suggested by my hon. Friend the Member for Rye (Mr. Godman Irvine). I am sure it is not the Government's intention to damage home apple growers at the same time as they are trying to protect them by applying the duty. I am sure that the Committee would feel that the cider producers whom we want to encourage are those who are prepared to use as much as possible of the home crop rather than rely on cheap imports of inferior quality.

That is why I find some difficulty in knowing exactly what to say about the Amendment and the Clause. I want by all the means in my power to protect the home growers, and ensure that the consumers are not presented with cider which pretends to be made from home-grown apples but is not. I hope that we can eliminate as soon as possible imported pulp from home-made and home-mar keted cider.

Mr. Bottomley

I welcome the Amendment moved by the hon. Member for Rye (Mr. Godman Irvine), and I support what has been said by my hon. Friend the Member for Faversham (Mr. P. Wells).

The hon. Member for Rye asked how much revenue would be obtained as a result of the burden to be placed upon one of our home-producing industries. This is not a new tax. Once before a tax was placed on cider and perry—of 4d. a gallon. I think. It was removed in the only Budget presented to the House by the late Lord Baldwin, and this was done because it was shown that as a result of it the production of cider and perry declined and the revenue was insufficient to justify the tax.

The Government may be repeating what happened then, and they are doing it at a time when it is advisable for us to use all the home-produced commodities that we possibly can. The Amendment is designed to that end recognise that it does not remove the tax. but it encourages the home industry and places a burden upon competitors who are not always careful about the way in which they compete with us. Earlier today the Government said that they are considering introducing an anti-dumping law, but that is some time ahead. At the moment. we have to deal with the problem as it confronts our cider and perry industry.

The general impression is that the industry is in the western parts of the country, but the contributions by hon. Members have shown that other areas are interested. My hon. Friend the Member for Faversham has shown that Kent is very much interested. I am interested in the matter although I do not sit for a rural constituency in Kent. I have received from the National Farmers' Union representations obviously on similar lines to those made to the hon. Member for Rye.

The farmers in Kent have gone further, because they say that they have a particular method of making cider. They claim that it is the best in the world. I do not dispute that, but apparently they are afraid of what will happen under the Clause. They have to add sugar and are afraid that the addition of sugar might be held to be something more than natural fermentation and that for that reason the product will attract the tax, whereas other producers of cider apples and perry will not pay the tax.

Indeed, I begin to wonder why perry is included. I tried to find out something about perry and I am told that it cannot be bought in London and most of the South without a special order, but I suppose there is sufficient justification for its inclusion. I should like to develop one or two points made by the hon. Member for Rye and my hon. Friend the Member for Faversham about the necessity of building up a home trade, but I cannot develop that in view of your last comment, Sir Rhys. Perhaps on the next Amendment, or on the Question, "That the Clause stand part of the Bill," I might have an opportunity of making a further contribution.

Mr. H. Brooke

I hope that I may be able to set a number of fears at rest. In replying to the Amendment so persuasively moved by my hon. Friend the Member for Rye (Mr. Godman Irvine), I must recall to the Committee the original and sole reason why my right hon. Friend proposed this duty. It is not just to rake in another £400,000 of revenue, and most emphatically it is not to injure the cider or cider apple industry. It is simply and solely to protect the Revenue duty on British wines.

It is universally agreed that where there is a Revenue duty on a commodity, it is desirable that that duty shall apply to all competitive products, because otherwise the State is indulging in unfair discrimination against the taxed article and in favour of the competitive untaxed article. There is and has been for a number of years a duty on British wines technically known as sweets. There has grown up a manufacture of specially strengthened ciders and perries which in alcoholic content rival British wines. A number of people may, therefore, have felt that for one purpose they were just as well worth buying and, indeed, for other purposes, perhaps purity, or cheapness or something else, more worth buying than British wines.

The effect of that whenever it happens is inevitably to erode the yield of the duty from the dutiable article, because consumption swings over to the non-dutiable article. We saw signs of that happening, and it is for that reason that a duty similar to the duty on British wines is being imposed by Clause 2 on the artificially strengthened ciders and perries.

The Amendment suggests that there should be omitted from this duty these strong ciders and perries, if they are made exclusively from fruit grown in the United Kingdom. However, so far as I am aware, all the manufacturers of the strong ciders and perries use, or aim to use, exclusively fruit grown in the United Kingdom. They may not be able to do so, if there is a bad harvest here, but certainly it is not their policy to use imported fruit. The effect of the Amendment would be to kill the purpose which the Chancellor is seeking to secure. It would in fact free from duty the very products on which he feels he must impose the duty in order to be fair as between them and the British wines of even greater alcoholic strength.

My hon. Friend the Member for Rye mentioned revenue. I cannot say whether it will be precisely £400,000. I agree with him that a number of the manufacturers seem likely to reduce the strength of their product in order to escape the effects of Clause 2. I made clear in my Second Reading speech that we should certainly not in any way regard that as an evasion of the duty. Everybody is free to 'do that, if he wishes. The product concerned will cease to be of comparable alcoholic strength and therefore will not be strictly competitive with British wines. It will become a weaker drink, and there will no longer be a risk of people turning away from the dutiable article in order to drink an equally strong, but cheaper, because untaxed, drink.

That is what lies behind this proposal. I fully agree with my hon. Friend that if the manufacture of the strengthened ciders and perries were to cease altogether, clearly the direct yield of Clause 2 would be nil, but, on the other hand, we should be protected from the ebbing away of the duty on British wines which will otherwise follow. A number of hon. Members rightly referred to the possible effect that the Clause will have on cider apple growers. I hope that I can satisfy the Committee and still hon. Members' fears.

I know, for instance, that some people have sprung to the false conclusion that this is a pointer to a general tax on cider and perry. They feel that that is what the Chancellor has his eye on. The fact is that products taxed under Clause 2 are being taxed precisely because they are not ordinary cider and perry, and we have made clear that cider and perry made by ordinary processes and farmhouse cider of whatever strength will not be liable to the tax.

Mr. P. Wells

Would the right hon. Gentleman agree that ordinary processes would include a process which included the addition of sugar, because the apples concerned are not grown purely as cider apples, but are apples of a dessert or cooking character.

Mr. Brooke

I think that we have the wording right. If the hon. Member has further suggestions to make, we will certainly examine them. I am not an expert in any of these processes of manufacture. I am advised that the words: …unless it has undergone no other process than a single process of fermentation… and the remaining words of the subsection draw a demarcation line rightly and sensibly between ordinary strong ciders and perries and others.

Mr. Bottomley

Does that mean that to attract tax, brandy, or a spirit of that kind, has to be added? Is that the intention of the wording? If so, would the addition of sugar be regarded as natural fermentation? If the Financial Secretary can assure us that the addition of sugar would not bring the product within the scope of the Clause, we shall be satisfied.

Mr. Brooke

I am in some difficulty in pursuing this.

The Deputy-Chairman

This discussion will be more fitting on the Motion, "That the Clause stand part of the Bill."

8.0 p.m.

Mr. Brooke

At this stage, if I stick to the question of cider apples, which are clearly affected by the Amendment, I think it would be better. The suggestion has been made that this duty will heavily reduce the demand for cider apples in various areas.

Mr. Wells

Not only for cider apples.

Mr. Brooke

So far as we can ascertain, at their peak period these strengthened ciders and perries accounted for no more than 3 per cent. of the total consumption of cider and perry. My hon. Friend the Member for Rye rightly pointed out that some manufacturers are reducing the strength of their product so as to escape this duty. That will mean that the amount of dutiable cider and perry will become considerably less than 3 per cent. of the whole. I should not be at all surprised if it fell to about I per cent. That would mean that 99 per cent. of the whole product would be completely unaffected by the Clause, and the only difference which it could make would be by way of restricting the remaining I per cent. I cannot think that it could seriously be maintained that that would knock cider apple growers out of business.

Within the scope allowed by the Amendment, I have sought to explain the Chancellor's intentions. I fully understand the apprehensions voiced by my hon. Friend the Member for Rye and others, but I must advise the Committee that to accept the Amendment would invalidate the whole purpose which the Chancellor is seeking to secure. I hope that what I have said will convince many people, both in the House and outside, that their apprehensions that the provision would cause the demand for cider apples to fall away are really groundless.

Mr. Sidney Dye (Norfolk, South-West)

I never thought that I should sit here and listen to a Conservative Financial Secretary denouncing an Amendment which seeks to insert in a Clause the words: unless made exclusively of fruit grown in the United Kingdom". I do not think that I have ever heard a Financial Secretary make out a case without any bottom to it—at least. so badly as he did upon this occasion. He has told us that the proposal has been put forward because there has been a movement away from the drinking of British wines and towards this reinforced cider and perry.

What evidence has he that that is the case? Flow can he prove that people who previously drank these British wines have gone over to what is described as a purely home-grown product? Is this merely an assumption, or has the provision been inserted because one set of producers has lobbied at the Treasury against another set? The clearest conclusion that any hon. Member listening to the Financial Secretary's speech can come to is that those who are interested in producing British wines have been able to convince the Treasury that if only a tax can be put upon this type of cider and perry less of it will be produced and drunk, and British wines will be in greater demand.

It might be that if people are discouraged from drinking this type of cider and perry they will begin to drink imported wines of an entirely different character. It therefore appears that it is just as likely that this duty will damp down the production of a purely home-grown product and will encourage British people to drink an imported product. Some anxiety is, therefore, merited, especially in this year, when the indications are that we shall have the heaviest apple crop ever grown in this country. Never before have our apple trees been so full of blossom, and never before has so much of the blossom set. There is an indication that we shall have an extremely heavy crop, and the only outlet for a considerable part of it will be through the manufacture of cider.

It is not the case that exclusively cider apples go into the production of cider To ordinary apple growers cider is the only outlet for a considerable proportion of their product in years of extra heavy crop, as this year inclines to be. It therefore seems that in supporting the Amendment we are endeavouring to safeguard a purely home-grown product, whereas the proposal in the Bill is likely 'to encourage the drinking of imported wines at the expense of the home product.

This recent development is an example of private enterprise by British industry to try to capture some of the trade previously enjoyed by foreigners. Surely that was the purpose which people had in mind in setting out to produce this brand of cider and perry. But at the moment when they have obtained a foothold in the market by a Conservative Administration clamps down on them and says, "You cannot proceed with this kind of enterprise; you cannot support a purely home-grown article. We must obtain a greater Excise duty upon the imported wines." That seems to be an extraordinary case, and the Financial Secretary can hardly expect hon. Members, even on his side of the Committee, 'to support him.

Mr. John Hall (Wycombe)

Having listened to the discussion which has centred round the Amendment, I am puzzled to understand why so much concern should be expressed. As my right hon. Friend has pointed out, the Clause deals with ciders of a particularly high alcoholic content, and it is already known, and appreciated by my right hon. Friend, that many manufacturers of these types of cider and perry have already reduced the strength of their product so that they are no longer within the terms of the Clause and will not be called upon to pay duty.

I venture a guess that the provision will make no difference to the consumption of apples, whether home-produced or imported. The type of drinks to which we are referring sell very largely because of the large-scale advertising indulged in by the companies concerned. They have been able to build successful businesses by their sales promotion, and an alcoholic content of 14.5 instead of 15 degrees will make no difference at all to them. I doubt whether the object which my right hon. Friend has in mind, of protecting and helping British wines which are now suffering from unfair competition, will be achieved by this provision. I do not think that it will make the slightest difference.

If that is the object, and the idea of the Clause is to make it easier for British wine manufacturers to compete with this type of drink, why cannot we have the same protection for beer? If we look at the alcoholic strength of beer, we find, for example, that the average light bottled beer has a strength of about five degrees and the average draught beer a strength of between six and seven degrees. Comparing that with cider, we find that bottled cider is about six or seven degrees and draught cider between eight and nine. There we have a drink of a higher alcoholic strength than beer yet it is completely free of any Excise duty.

I suggest that there is an untapped source of revenue not yet explored by the Treasury. A tax might be imposed on all cider, whether of a higher alcoholic content or the ordinary cider which we know under the names of Whiteways, Gaymers, Bulmers, or whatever it might be. I consider that we are making heavy weather of this Amendment. It is obvious that the whole reason of the Clause is to force manufacturers to reduce the alcoholic strength of specialised cider and perry drinks to a point where the Treasury consider people will be encouraged to go back to drinking British wines. If the Government succeed in that purpose, presumably they will have done a fairly good job.

I do not consider that the hon. Member for Norfolk, South-West, (Mr. Dye) is right in saying that the manufacturers of specialist wines have been trying to capture part of the foreign wine trade. They have been going for the British wine trade, which is a large trade. They have succeeded admirably in capturing a good deal of that trade, and more power to their elbows. I do not think that the growers of apples, whether from Kent, Sussex, Hereford, or Devon, will be affected by this Clause. I speak with some professional experience of cider making and the purchasing of apples for cider making.

If I am not out of order I should like to refer to the question of the addition of sugar. Most cider manufacturers add sugar to their cider. if the Clause were intended to catch them, I think there would be a tremendous outcry by all the cider manufacturers in the country.

Mr. Sydney Irving (Dartford)

The speech made by the hon. Member who has just spoken will aggravate the already existing fears of the Kent fruit growers that this is just a first step and that this duty may be extended in the future, although I do not think there is any chance of the hon. Member himself arriving at the Treasury to do so in the next twelve months, but neither the statement by the Minister nor the comments of the hon. Member for Wycombe will settle the fears of apple growers, particularly those in Kent. In recent times they have suffered considerably. Their fruit is of a poorer quality, prices have been depressed and there has been a considerable wastage of fruit in the county. The growers there feel that any possibility of cider attracting this duty will further depress the market for their fruit and they consider that everything ought to be done to encourage the development of home production.

I am not aware of the intricacies of the manufacture of this product, but it seems that Kent growers are in a peculiar position. The Kent apples are cull apples and, I understand, require even greater fortification than vintage apples. The Kent growers would welcome a much clearer statement from the Minister about the question of fermentation and whether the addition of sugar is regarded as something separate from the ordinary processes of fermentation. I am given to understand that various climatic conditions affect the proof content of cider and it may be possible that in the special case of Kent apples the duty would be attracted. Therefore, we should be grateful for a clearer statement from the Minister on this matter at some stage, and we hope that he will give it further consideration.

8.15 p.m.

Mr. H. Brooke

I am anxious to do everything I can for the Kent farmers. Last Friday, I drove a hundred miles through Kent and I realised afresh what a lovely county it is. I should hate to have it on my conscience that I was doing any harm to the Kent farmers. The figures which I have quoted show that, so far as we can judge, not more than I per cent, of the total quantity of cider consumed in this country will become liable for this duty. I hope that will be a reassurance, in that it shows that so far as 99 per cent. is concerned, this Bill will make no difference whatever.

I appreciate the point about sugar, and I hope that hon. Members will read subsection (1) again. My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) said that the Clause was obscure, but I think that if one reads the subsection slowly the meaning does sink in. Under this Clause nothing is to be taxed unless it is

of fifteen degrees of proof or greater strength. Those who are afraid that the addition of ordinary sugar to cider will render it taxable, will find that the addition of ordinary sugar certainly does not raise its strength above 15 degrees of proof. Unless the cider is of that strength, nothing else matters. It is not taxable.

What follows is a safeguard to ensure that ordinary farmhouse cider, even though it happens to be above 15 degrees of proof, will not be liable for tax, unless it has had a special strengthening treatment. But the fact that apples happen to be rather sour and more sugar is needed to make good cider will not bring the drink within the scope of this Clause. The hon. Member for Dartford (Mr. Sydney Irving) said that some people feared that the Chancellor was casting envious eyes on cider and the hon. Member for Wycombe (Mr. John Hall) almost tempted me.

I cannot anticipate the intention of future Parliaments, nor do I intend to anticipate future Budgets. But I made the intentions of my right hon. Friend as clear as I could when I said that he was proposing to tax these drinks because they were not ordinary ciders. It is for purely fiscal reasons that this Clause is required. I assure the hon. Member for Norfolk, South-West that the fears of the farmers are greatly exaggerated. I am sure that this Clause will not put difficulties in the way of their disposal of a great apple crop. I hope that in the circumstances, and after this elucidation of the matter, my hon. Friend will feel disposed not to press his Amendment.

Mr. Godman Irvine

I am very sorry that the Financial Secretary has not been persuaded by the arguments which have been advanced to him. It is disappointing to me that my right hon. Friend is more interested in protecting the revenue derived from British wines than seeing that British apples are produced and turned into beverages to be used in this country. My right hon. Friend has had the various points put forward to him, but I hope he will disregard the observations of my hon. Friend the Member for Wycombe (Mr. John Hall). Perhaps he will look at the others and, on a future occasion, consider the possibility of allowing British fortified cider to be taxed at a slightly lower rate. In the circumstances, I beg to ask leave to withdraw the Amendment.

Mr. Bottomley

I am disappointed with the hon. Member for Rye (Mr. Godman Irvine). He presented a very strong case, but the Financial Secretary to the Treasury did not answer any of the points that he raised. The Minister answered many other points, some of which I tried to make myself, but your predecessor in the chair, Sir Austin, was a little harsher than you. Perhaps I can stake a claim for leniency later on. I shall advise my hon. and right hon. Friends not to allow withdrawal of the Amendment. In the circumstances, we shall support the Amendment.

Question put, That those words be there inserted:—

The Committee divided: Ayes 190, Noes 236.

Division No. 201.]	AYES	[8.20 p.m.
Ainsley, J. W.	Hale, Leslie	Paling, Rt. Hon. W. (Dearne Valley)
Albu, A. H.	Hall, Rt. Hn. Glenvil (Colne Valley)	Paling, Will T. (Dewsbury)
Allen, Arthur (Bosworth)	Hamilton, W. W.	Palmer, A. M. F.
Allen, Scholefied (Crewe)	Hannan, W.	Parker, J.
Anderson, Frank	Hastings, S.	Parkin, B. T.
Awbery, S. S.	Hayman, F. H.	Paton, John
Bacon, Miss Alice	Henderson, Rt. Hn. A (Rwly Regis)	Pearson, A.
Bence, C. R. (Dunbartonshire, E.)	Herbison, Miss M.	Proctor, W. T.
Benn, Hn. Wedgwood (Bristol, S.E.)	Hewitson, Capt. M.	Pryde, D. J.
Benson, G.	Hobson, C. R.	Randall, H. E.
Beswick, F.	Howell, Charles (Perry Barr)	Rankin, John
Blackburn, F.	Howell, Denis (All Saints)	Reid, William
Blyton, W. R.	Hoy, J. H.	Robens, Rt. Hon. A.
Boardman, H.	Hubbard, T. F.	Roberts, Goronwy (Caernarvon)
Bottomley, Rt. Hon. A. G.	Hughes, Cledwyn (Anglesey)	Rogers, George (Kensington, N.)
Bowles, F. G.	Hughes, Emrys (S. Ayrshire)	Ross, William
Boyd, T. C.	Hunter, A. E.	Royle, C.
Brookway, A. F.	Irving, S. (Dartford)	Short, E. W.
Broughton, Dr. A. D. D.	Janner, B.	Shurmer, P. L. E.
Brown, Rt. Hon. George (Belper)	Jay Rt. Hon. D. P. T.	Silverman, Julius (Aston)
Brown, Thomas (Ince)	Jeger, George (Goole)	Simmons, C. J. (Brierley Hill)
Burke, W. A.	Jeger, Mrs. Lena(Holbn&St.Pnes,S.)	Skeftington, A. M.
Burton, Miss F. E.	Jenkins, Roy (Steohford)	Slater, Mrs. H. (Stoke, N.)
Butler, Herbert (Hackney, C.)	Johnson, James (Rugby)	Slater, J. (Sedgefield)
Butler, Mrs. Joyce (Wood Green)	Jones,Rt.Hon.A.Creech(Wakefield)	Smith, Ellis (Stoke, S.)
Castle, Mrs. B. A.	Jones, David (The Hartlepools)	Sorensen, R. W.
Champion, A. J.	Jones, Jack (Rotherham)	Sparks, J. A.
Chapman, W. D.	Jones, J. Idwal (Wrexham)	Steele, T.
Clunie, J.	Jones, T. W. (Merioneth)	Stewart, Michael (Fulham)
Coldrick, W.	Kenyon, C.	Stones, W. (Consett)
Collick, P. H. (Birkenhead)	Key, Rt. Hon. C. W.	Strachey, Rt. Hon. J.
Collins, V.J. (Shoreditoh & Finsbury)	King, Dr. H. M.	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Cove, W. C.	Lawson, G. M.	Sylvester, G. O.
Craddock, George (Bradford, S.)	Ledger, R. J.	Taylor, Bernard (Mansfield)
Cronin, J. D.	Lee, Miss Jennie (Cannock)	Thomas, lorwerth (Rhondda, W.)
Crossman, R. H. S.	Lever, Leslie (Ardwick)	Thomson, George (Dundee, E.)
Cullen, Mrs. A.	Lindgren, G.S.	Turner-Samuels, M.
Dalton, Rt. Hon. H.	Logan, D. G.	Ungoed-Thomas, Sir Lynn
Darling, George (Hillsborough)	Mabon, Dr. J. Dickson	Usborne, H. C.
Davies, Harold (Leek)	McGhee, H. G.	Viant, S. P.
Deer, G.	McGovern, J.	Warbey, W. N.
Delargy, H. J.	McInnes, J.	Weitzman, D.
Dodds, N. N.	McKay, John (wallsend)	Wells, Percy (Faversham)
Donnelly, D. L.	McLeavy, Frank	Wells, William (Walsall, N.)
Dugdale, Rt. Hn. John (W.Brmwoh)	Mahon, Simon	West, D. G.
Dye, S.	Mallalieu, E. L. (Brigg)	Wheeldon, W. E.
Ede, Rt. Hon. J. C.	Mallalieu, J. P. W. (Huddersfd, E.)	White, Mrs. Eirene (E. Flint)
Edwards, Rt. Hon. Ness (Caerphilly)	Mann, Mrs. Jean	White, Henry (Derbyshire, N.E.)
Edwards, Robert (Bilston)	Marquand, Rt. Hon. H. A.	Wilkins, W. A.
Evans, Albert (Islington, 8.W.)	Mason, Roy	Willey, Frederick
Evans, Edward (Lowestoft)	Messer, Sir F.	Williams, David (Neath)
Fernyhough, E.	Mitchison, G. R.	Williams, W. R. (Openshaw)
Fletcher, Eric	Monslow, W.	Williams, W. T. (Barons Court)
Forman, J. C.	Moody, A. S.	Willis, Eustace (Edinburgh, E.)
Fraser, Thomas (Hamilton)	Morris, Percy (Swansea, W.)	Wilson, Rt. Hon. Harold (Huyton)
Gaitskell, Rt. Hon. H. T. N.	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	W interbottom, Richard
Gibson, C. W.	Mort, D. L.	Woodburn, Rt. Hon. A.
Gooch, E. G.	Moss, R.	Woof, R. E.
Gordon Walker, Rt. Hon. P. C.	Moyle, A.	Yates, V. (Ladywood)
Greenwood, Anthony	Mulley, F. W.	Younger, Rt. Hon. K.
Grey, C. F.	Neal, Harold (Bolsover)	Zilliacus, K.
Griffiths, David (Bother Valley)	Oliver, G. H.	TELLERS FOR THE AYES:
Griffiths, Rt. Hon. James (Llanelly)	Orbach, M.	Mr. Holmes and Mr. J. T. Price.
Griffiths, William (Exchange)	Oswald, T.
	Owen, W. J.

NOES
Agnew, Comdr. P. G.	Baxter, Sir Beverley	Boyd-Carpenter, Rt. Hon. J. A.
Aitken, W. T.	Bell, Philip (Bolton, E.)	Boyle, Sir Edward
Allan, R. A. (Paddington, S.)	Bell. Ronald (Bucks, S.)	Braine, B. R.
Amery, Julian (Preston, N.)	Bennett, Dr. Reginald	Braithwaite, Sir Albert (Harrow, W.)
Amory, Rt. Hn. Heathcoat (Tiverton)	Bevins, J. R. (Toxteth)	Brooke, Rt. Hon. Henry
Arbuthnot, John	Bidgood, J. C.	Brooman-White, R. C.
Armstrong, C. W.	Biggs-Davison, J. A.	Bryan, P.
Ashton, H.	Birch, Rt. Hon. Nigel	Burden, F. F. A.
Atkins, H. E.	Bishop, F. P.	Butcher, Sir Herbert
Baldwin, A. E.	Black, C. W.	Campbell, Sir David
Banks, Col. C.	Body, R. F.	Carr, Robert
Barber, Anthony	Boothby, Sir Robert	Cary, Sir Robert
Barlow, Sir John	Bossom, Sir A. C.	Chichester-Clark, R.
Barter, John	Bowen, E. R. (Cardigan)	Clarke, Brig. Terence (Portsmth, W.)

Conant, Maj. Sir Roger	Howard, Hon. Greville (St. Ives)	Nield, Basil (Chester)
Cooper-Key, E. M.	Howard, John (Test)	Nugent, G. R. H.
Cordeaux, Lt.-Col. J. K.	Hudson, W. R. A. (Hull, N.)	Oakshott, H. D.
Corfield, Capt. F. V.	Hughes Hallet, Vice-Admiral, J.	O'Neill, Hn. Phelim (Co. Antrim, N.)
Craddock, Beresford (Spelthorne)	Hulbert, Sir Norman	Orr, Capt. L. P. S.
Crowder, Sir John (Finchley)	Hurd, A. R.	Osborne, C.
Cunningham, Knox	Hutchison, Sir Ian Clark(E'b'gh, W.)	Page, R. C.
Currie, G. B. H.	Hyde, Montgomery	Pannell, N. A. (Kirkdale)
Dance, J. C. G.	Hylton-Foster, Sir H. B. H.	Partridge, E.
Davies,Rt.Hn.Clement(Montgomery)	Irvine, Bryant Godman (Rye)	Pilkington, Capt. R. A.
D'Avigdor-Goldsmid, Sir Henry	Jenkins, Robert (Dulwich)	Pitman, I. J.
Deedes, W. F.	Jennings, J. C. (Burton)	Pitt, Miss E. M.
Donaldson, Cmdr. C. E. McA.	Johnson, Dr. Donald (Carlisle)	Pott, H. P.
du Cann, E. D. L.	Johnson, Eric (Blackley)	Powell, J. Enoch
Duncan, Capt. J. A. L.	Johnson, Howard (Kemptown)	Price, Henry (Lewisham, W.)
Duthie, W. S.	Jones, Rt. Hon. Aubrey (Hall Green)	Raikes, Sir Victor
Eccles, Rt. Hon. Sir David	Joseph, Sir Keith	Ramsden, J. E.
Eden,Rt.Hn.SirA.(Warwick&L'm'tn)	Joynson-Hioks, Hon. Sir Lancelot	Redmayne, M.
Elliot, Rt. Hon. W. E.	Kaberry, D.	Rees-Davies, W. R.
Emmet, Hon. Mrs. Evelyn	Keegan, D.	Remnant, Hon. P.
Errington, Sir Eric	Kerby, Capt. H. B.	Robson-Brown, W.
Farey-Jones, F. W.	Kerr. H. W.	Rodgers, John (Sevenoaks)
Fell, A.	Kershaw, J. A.	Roper, Sir Harold
Fleetwood-Hesketh, R. F.	Kimball, M.	Russell, R. S.
Fletcher-Cooke, C.	Kirk, P. M.	Schofield, Lt.-Col. W.
Fort, R.	Lagden, G. W.	Scott-Miller, Cmdr. R.
Foster, John	Lambert, Hon. C.	Sharpies, R. C.
Fraser, Sir Ian (M'cmbe&Lonsdale)	Langford-Holt, J. A.	Shepherd, William
Freeth, D. K.	Leather, E. H. C.	Smithers, Peter (Winchester)
Galbraith, Hon. T. G. D.	Leavey, J. A.	Spearman, Sir A. C. M.
Gammans, Sir David	Leburn, W. G.	Speir, R. M.
Garner-Evans, E. H.	Legge-Bourke, Maj. E. A. H.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
George, J. C. (Pollok)	Legh, Hon. Peter (Petersfield)	Stevens, Geoffrey
Gibson-Watt, D.	Lindsay, Hon. James (Devon, N.)	Steward, Harold (Stockport, S.)
Glover, D.	Lindsay, Martin (Solihull)	Steward, Sir William (Woolwich, W.)
Godber, J. B.	Linstead, Sir H. N.	Studholme, Sir H. C.
Gomme-Duncan, Col. Sir Alan	Lloyd, Maj. Sir Guy (Renfrew, E.)	Taylor, William (Bradford, N.)
Gough, C. F. H.	Lloyd, Rt. Hon. Selwyn (Wirral)	Teeling, W.
Gower, H. R.	Lloyd-George, Maj. Rt. Hon. G.	Thomas, Leslie (Canterbury)
Grant-Ferris, Wg Cdr. R,(Nantwich)	Longden, Gilbert	Thomas, P. J. M. (Conway)
Green, A.	Low, Rt. Hon. A. R. W.	Thompson, Kenneth (Walton)
Gresham Cooke, R.	Lucas-Tooth, Sir Hugh	Thompson, Lt.-Cdr. R. (Croydon, S.)
Grimond, J.	Macdonald, Sir Peter	Thornton-Kemsley, C. N.
Grimston, Hon. John (St. Albans)	MoKibbin, A. J.	Tiley, A. (Bradford, W.)
Grimston, Sir Robert (Westbury)	Mackie, J. H. (Galloway)	Tilney, John (Wavertree)
Gurden, Harold	McLaughlin, Mrs. P.	Touche, Sir Gordon
Hall, John (Wycombe)	Maclean, Fitzroy (Lancaster)	Turner, H. F. L.
Hare, Rt. Hon. J. H.	Maomillan,Rt.Hn.Harold(Bromley)	Tweedsmuir, Lady
Harris, Reader (Heston)	Maddan, Martin	Vane, W. M. F.
Harrison, A. B. C. (Maldon)	Maitland, Hon. Patrick (Lanark)	Vaughan-Morgan, J. K.
Harrison, Col. J. H. (Eye)	Markham, Major Sir Frank	Vosper, D. F.
Harvey, Air Cdre. A. V. (Macolsfd)	Marpies, A. E.	Wade, D. W.
Harvie-Watt, Sir George	Marshall, Douglas	Walker-Smith, D. C.
Hay, John	Mathew, R.	Ward, Dame Irene (Tynemouth)
Head, Rt. Hon. A. H.	Maude, Angus	Waterhouse, Capt. Rt. Hon. C.
Heald, Rt. Hon. Sir Lionel	Maudling, Rt. Hon. R.	Whitelaw, W.S.I.(Penrith & Border)
Heath, Rt. Hon. E. R. G.	Maydon, Lt.-Comdr. S. L. C.	Williams, Paul (Sunderland, S.)
Hicks-Beach, Maj. W. W.	Medlicott, Sir Frank	Williams, R. Dudley (Exeter)
Hill, Rt. Hon. Charles (Luton)	Milligan, Rt. Hon. W. R.	Wills, G. (Bridgwater)
Hill, Mrs. E. (Wythenshawc)	Molson, Rt. Hon. A. H. E.	Wilson, Geoffrey (Truro)
Hill, John (S. Norfolk)	Morrison, John (Salisbury)	Wood, Hon. R.
Hirst, Geoffrey	Nabarro, G. D. N.	Wooilam, John Victor
Holland-Martin, C. J.	Nairn, D. L. S.	TELLERS FOR THE NOES
Hornsby-Smith, Miss M. P.	Heave, Airey	Mr. Hughes-Young and
Horohin, Sir Ian	Nicholls, Harmar	Mr. E. Wakefield.
Horsbrugh, Rt. Hon. Dame Florence	Nicolson, N. (B'n'm'th, E. & Chetah)

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

8.30 p.m.

Mr. G. R. Mitchison (Kettering)

Unaccustomed as I am to public drinking, I find the Clause rather puzzling. I agree in that respect with the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke). It is probably about the only thing which he and I have agreed about for a long time.

I should like to ask the Financial Secretary one or two questions. I hope I am right in asking him. I rather understand that some Customs Paris, choosing between the Chancellor of the Exchequer and his right hon. colleagues, has handed him the apple. It is a matter for nice argument whether it was rightly done, but the right hon. Gentleman in due course will tell us.

My first question is a simple one. I have always regarded cider as something that the brewer sold for occasions when one did not want beer or was too poor to buy it. I have always considered that the brewers regarded cider as a rather shamefaced substitute for beer, and were a little sorry when the public appeared to show quite a liking for it. I confess that I think it is quite a good drink.

When we get to strong cider—fortified cider, over 15 degrees proof spirit—it suddenly becomes taxed as sweets; that is to say, it becomes taxed as wine. Why does the right hon. Gentleman have a tax for strong cider different from the tax for strong beer? I have just been consulting the "Brewers' Almanac," and I find that 15 degrees is about the point at which one gets to strong beer. I do not know why cider, having remained cider up to 15 degrees, and having been, by some Treasury hypothesis, turned into something else, elects to become wine. misnamed sweets, instead of becoming beer. Clearly, it is not either. It is rather like the little joke about the tortoise which was being accepted for carriage on the railway.

If I may add a small further point, I would ask if I am right in thinking— assuming a cider of just over 15 degrees— that if it were taxed as strong ale, it would bear less tax as strong ale than it bears as sweets? I have been making the most careful calculations but the methods of levying tax on beer are hideously complicated, although the brewer understands them—shades of Mr. Geoffrey Bing, whose absence from the House many of us deeply regret. There appear to be good reasons why brewers should have a singularly perfect understanding of the taxation of beer. That is my first set of questions to our Aphrodite of the night.

Next, I should like to know a little more of what the Clause means. I find it difficult to follow. That is clearly because I do not know about fermentation and matters of that sort. Does the part that begins

unless it has undergone no other process than a single process of fermentation … mean that it cannot be fermented twice? Perhaps we can be told. Does

was made from apple or pear juice which at the beginning of that process was in its natural state … mean that one can add the sugar, but not before beginning the fermentation, and that it must be put in during the fermentation? My researches into cider making led me to the conclusion, doubtless erroneous, that cider became rather stronger if the sugar was put in during the fermentation instead of before; and my insight into the Treasury mind, always a somewhat dark and mysterious place, is not sufficiently deep to understand whether this is an objection to sugar generally or to sugar before one begins the fermentation.

Next I come to ethyl alcohol. These people who make cider and who drink cider are simple souls, and I rather regret that they should be confused by references to ethyl alcohol. They probably know no more about the lady than I did until quite a short time ago. I went and looked her up in the Library, and at last I began to have some inkling of what I might call the spiritual reason for this somewhat odd Clause. What is she? She is, I understand, the hypothetical radical of the dicarbon series.

It is not so long ago since the Chancellor was the hypothetical radical of the Tory Party. Indeed, at one period, he made some very pointed references to his right hon. Friends—if indeed they were his friends—then occupying the Treasury Bench and described them as a series of extinct volcanoes. The point at which a volcano becomes extinct is almost a matter of opinion, but certainly at least he was a hypothetical radical. Is this ethyl alcohol being brought in simply as some curious reference to the right hon. Gentleman's past, and, if not, would the right hon. Gentleman, who is to reply, be good enough to tell us a little more about the lady and her origins?

What I should like to know about her origins is nothing in any way scandalous at all. I merely want to know if one can get her out of sugar, because that is rather material. I listened to what the right hon. Gentleman had to say about this, and I was a little uncertain about his attitude to sugar. It seemed to me—again, I say, without much practical experience of these matters—that ethyl alcohol had something to do with what we call the "kick in it" or something of that sort, and that it was augmented, increased and enlivened by the addition of sugar at some stage or another.

Of course, one can put more and more sugar in, but if sugar is within the scope of the Clause, then I suppose that we get our ethyl alcohol that way. Either this single process of fermentation includes the addition of sugar or it does not; and if it does include the addition of sugar, how much can be put in? Is sugar, in fact, "other materials "? feel certain that the right hon. Gentleman must find difficulty in hiding his contempt for someone who knows so remarkably little about cider making, and at the picture of a miserable lawyer trying to interpret a Clause about a duty. I hope that he will restrain himself from any violence in his criticism and just answer three questions, which I will repeat now quite briefly.

First, why does cider become wine and not beer when it gets beyond a certain strength? Second, would it pay more duty or less duty if it- were beer? is this in fact another brewers' plot? There have been so many of them in connection with the Tory Party that we never know where we are. Thirdly, what about ethyl alcohol dear lady—and sugar? Does ethyl alcohol come entirely from sugar if nothing else is added? Has the addition of sugar no result in producing ethyl alcohol and, if so, is there any limit to the amount of sugar that can be put in. in the single process of fermentation?

There we are—a number of puzzling questions; and all these are put before the simple farmer making his cider in some Kentish farmhouse. It is not a very good introduction to a Clause to find a lot of simple farmers writing to their Members of Parliament, apprehensive whether this unintelligible bit of legislation will, or will not, affect them.

Mr. Remnant

I think you would agree, Sir Austin, that this is hardly the place, even if I had the knowledge, for a discourse on fermentation or the lady friends which the hon. and learned Member for Kettering (Mr. Mitchison) finds in the Clause, but I can assure him on one point—as far as I am aware there is no brewers' plot in this, except in so far as the brewers have apparently provided a peg on which the hon. and learned Member could make a quite irrelevant speech. [HON. MEMBERS: "Withdraw."] I am sorry if I have offended the hon. and learned Gentleman or his hon. Friends. If I have, I willingly apologise.

Mr. Chapman

The hon. Member has offended the Chair. He should withdraw.

Mr. Remnant

If I have caused any offence I will withdraw what I said. I will say that I do not think the speech was pertinent.

Mr. Mitchison

I do not mind what the hon. Member says.

Mr. Remnant

There seems to be a licensing point in the Clause which requires attention. It is true, as the hon. and learned Member said, that sweets are included in a wine licence, but there are a number of beer-on and beer-off licensees who have been selling cider up to now. I am not clear, and I have no definite information, whether they have been selling cider of the category which comes within the Clause, although I would say that they probably have. Whereas a dealer with a similar licence can acquire a sweets licence at any time, a beer-on or beer-off licence holder can apply for alterations to that licence only at the annual brewster sessions.

Mr. Ross

This is quite irrelevant.

Mr. Remnant

As I understand the Clause, it means that from 18th July until the next brewster sessions he will not be allowed to sell fortified cider as covered by the Clause and will then be in the hands of the generous treatment afforded by the licensing justices. I have no doubt that on a reasonable request the licensing justices will allow him to alter his licence or will give him a fresh licence enabling him to sell cider, but in the meantime, as I understand, customers of that house will be debarred by the Clause from enjoying in that house the drink which they like. I suggest to my right hon. Friend that that is not intended and that, if I am correct, he should take steps to see that it is altered.

Mr. Rees-Davies

The hon. and learned Member for Kettering (Mr. Mitchison), who opened the debate with a most interesting definition, asked whether ethyl was a sugar baby or a brewers' doll. The answer is that in this Clause she is a "Baby Cham "; and it is a "Baby Cham" ith which this Clause is designed to deal.

I did not speak on the Amendment because I took the view, after I had heard the Financial Secretary speak, that everything which he said about the Kent industry was undoubtedly correct. I do not believe for one moment that the Kent growers will be affected by the Clause— at least, not when it is considered carefully. None the less, for reasons which he gave, I think that this is a very bad Clause indeed. It is a Civil Service Clause. It is full of good morals, but good morals and good drink seldom, if ever, go hand in hand. Wherever one tries to improve morals in this regard one will invariably ruin a good drink.

8.45 p.m.

What I do not like about the Clause is that, beyond any doubt, it will ruin a most excellent drink and one which I myself have enjoyed for many years. I do not want to mention names of firms, but one is a "Merry" firm and there is also one which deals in "Baby Cham." Those are the drinks which I have in mind.

There are some of us who like drinking cider with 15 per cent. alcohol in it, and who think that these particular ciders are an admirable drink. The effect of this Clause will, in fact, be precisely what the Financial Secretary intends. It is not a fiscal maneouvre at all but one of good morals and principle. I do not favour a Conservative Chancellor pursuing the path of good morals and principle at the expense of good drink. I think it is a bad principle to follow.

What has happened? My right hon. Friend the Financial Secretary thought 'that there might be £400,000 for the Treasury, but he was very careful to point out that he would not guarantee that estimate, and I am quite sure that there is not a single person at the Treasury Box who has the slightest belief that it will bring in £400,000 next year or the year after. It will bring in nothing at all, for the one reason that those who make this type of cider at the moment will now make it with 14½ per cent. and not with 15 per cent. alcohol. They will, as my hon. Friend the Member for Wycombe (Mr. John Hall) said, seek to rely on their public relations campaign to profess to the public that they are still making the same product as they were making before, but the more observing members of the public will realise that they are not getting the same good drink as before, and its manufacture will be killed.

The big cider-growing firms with the well-known names are all in favour of this Clause. I wonder why? I say that they are in favour of it because they make their ciders with 8, 9 and 10 per cent. alcohol. The makers of British wines are in favour of it because they are making wines with just about 15 to 20 per cent. alcohol. British wines are not made from a British product at all but from must which comes mainly from the Commonwealth. They make those wines, and they want to compete with and to push out of the way the three companies which make the cider which comes under the provisions of Clause 2. So the plot is not a brewers' plot—but there is a plot.

Mr. Ross

It is coming.

Mr. Rees-Davies

It is an "ethyl" plot —a "Baby Cham ": it is the "Baby Cham" plot. Probably there is something to be said for my right hon. Friend's case from the point of view of morals, but from the point of view of drink there is nothing to be said for it at all. It will ruin and terminate this particular industry and this particular drink. It will stop the industry making the drink with over 15 per cent. alcohol, and there will, in fact, be less than 15 per cent. alcoholic content in it. I have for some years past been enjoying this stage in which we have been gradually getting back to stronger beer; and I was also very happy when I found I could buy this particular cider which I enjoy in the summer, and which, if a little gin is added to it, makes a most excellent drink.

Therefore, if one finds that there is a demand in the country for this class of drink, is it really right—and this is the real point of these remarks, where I am saying something which for the moment is quite serious—for the Chancellor to use fiscal taxation to achieve a purpose which money does not lie at the root of at all? That is what I am asking the Financial Secretary to deal with. This Clause is not designed to bring in money, and I can assure him that it certainly is not going to assist British wines to get any more money through the removal of unfair competition.

If these facts are correct, my right hon. Friend is using this Clause merely to get rid of a particular class of liquor to which a wide number of the community take objection, and, in particular, to which the industry takes objection; that is to say, parts of the cider industry and parts of the British wine industry. To put it in another way, are we to be faced with the principle of lobbying by British wines and certain of the cider groups against the others, because, if that is to be the background, I would submit that it is taking far too much of the time of the Committee to discuss for two hours a question of this kind in our consideration of a Finance Bill which is heavily overloaded.

The right hon. Member for Huyton (Mr. H. Wilson) referred to the 36 Clauses of this Bill and the time its consideration might take. It could take many days. I made the observation, which I still think is right, that four hours is too long to discuss a small matter about tobacco therefore, and I make the point against myself, it seems to me that to spend over two hours on a matter of this kind ma) very well also be too long. I ask the Financial Secretary, though not necessarily at this stage, to look carefully at this question of cider and consider whether he is not going into a matter of principle in respect of this tax without the closest consideration of that principle.

Mr. H. Brooke

First, I will refer to the speech of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). He delivered himself of a statement, which I sincerely trust the Committee does not accept, to the effect that good morals and good drink never go together. Never have I heard such a shocking aphorism. What the Chancellor is interested in here primarily is good money, and I have to revert to that all the time, because we are not here seeking to warp the conditions of British agriculture or to pervert the means of manufacture of various attractive drinks.

My right hon. Friend is simply doing one thing and one thing only, and that is to remove from the tax system what at present acts as an unfair discrimination against one product, and, conversely, a subsidy to another. It is entirely wrong that this Committee should approve of any Revenue duty which operates like that. It cannot be defended. My hon. Friend the Member for the Isle of Thanet sought to suggest at one time that this was a Civil Service Clause. I would not say that it was any the worse for that, but I can assure him that it is the Chancellor of the Exchequer's Clause. It is the Government's decision and the Government take full responsibility for it.

At another moment, and, I thought, cutting right across his former allegation that this was a Civil Service Clause, my hon. Friend said it was a cider producers' Clause. He made certain allegations that nobody would have thought of this if the manufacturers of ordinary cider and of British wines had not been frightened of competition and had not sought to see whether they could, somehow or other, get the Government to knock it on the head.

We are knocking nothing on the head. If my hon. Friend says that these strengthened ciders and perries can no longer be sold. he must maintain that they could no longer be sold without a subsidy, because if they are good drinks, and I myself believe that they are, then they should be able to compete with those liquors of similar alcoholic strength and bear the equivalent taxation.

My hon. Friend the Member for Wokingham (Mr. Remnant) raised an important point about the Brewster Sessions. He suggested to the Committee that, three months after Budget day, those who were selling by retail these strengthened ciders and perries would no longer be able to do so, and they would not have an opportunity, until the Brewster Sessions at the beginning of next year, to make an application for a licence.

Mr. Remnant

I was referring to the holders of beer on- and beer off-licences, whose position is quite different from the position of those holding full licences for beer and wine, who would be able to continue.

Mr. Brooke

Those who hold wine licences will have no difficulty. I appreciate the point that my hon. Friend is making. We did give this three months' grace because we thought it right that those who had, in good faith, acquired stocks and were free to sell them should not find themselves suddenly debarred, by not possessing a licence, from disposing of their stocks.

I can assure my hon. Friend that we have had no representations from associations of either on-licence or off-licence holders on this matter. I appreciate the point which he has made —

Mr. F. Blackburn (Stalybridge and Hyde)

There is a problem, is there not?

Mr. Brooke

I appreciate the point that my hon. Friend has made. That is what I am trying to say. Some hon. Gentlemen will appreciate another point, that this Committee should not lightly do anything which seems to interfere with the discretion of the licensing justices. If we were to do what I think my hon. Friend was suggesting—

Mr. Blackburn

No.

Mr. Brooke

I am just developing my point—it might be that we would be, as it were, granting licences, admittedly temporary licences, which the licensing justices might not themselves wish to see given.

This is not just a Treasury point. It is a Home Office point. If my hon. Friend wishes it, I will certainly consult my right hon. and gallant Friend the Home Secretary and see whether this is a serious difficulty or not. I think it is fair to say that up to the present we have had no representations on behalf of the organised trades, who would, one would think, be the first to be affected by that.

Mr. Ede (South Shields)

Surely the hon. Member for Wokingham (Mr. Remnant) is a good spokesman for the organised trade.

Mr. Brooke

My hon. Friend is a good spokesman for all excellent causes in his constituency.

The hon. and learned Member for Kettering (Mr. Mitchison) put several questions to me. He asked why we were treating this strong cider as wine and not as strong beer. The answer is that the manufacturers of these strong ciders and perries wish them to be regarded as wines and not as beers. They are quite definitely sold in competition with wine rather than with beer, and it is natural that that, therefore, should be the way in which we approached them.

The hon. and learned Gentleman asked whether these beverages would pay less as strong ales than as sweets. The answer is that they would pay just about the same either way. There would be nothing in it to speak of.

9.0 p.m.

Mr. Mitchison

Surely, if it is just over 15 per cent., then it is just at that percentage that they would pay distinctly less as beer than they are being made to pay as sweets, would they not?

Mr. Brooke

I am advised that is not so: The hon. and learned Gentleman puts this question to me, but he has given me very little opportunity to follow up what was a rather technical, and, I may say, an extremely successful speech. I will certainly examine his point further, but, in so far as I can give an answer across the Floor, it is that there would be very little in it.

The hon. and learned Gentleman then asked me about "Miss Ethyl Alcohol."

Mr. H. Wilson

Before the right hon. Gentleman comes to that very important and fascinating subject, are we to understand that one of the reasons why the Chancellor—because, as the right hon. Gentleman has told us, this is the Chancellor's Clause—has put the Clause into the Bill, and which has taken up the time of the Committee for about 1½ hours is that it suits the convenience of the manufacturers who want to sell this strengthened cider or strengthened perry under the guise of wine? Are we to understand from the right hon. Gentleman that there is really a certain amount of deception of the public by the manufacturers? If so, is it not the right hon. Gentleman's duty not only as a responsible Minister, but as a responsible member of this Committee, to inform his right hon. Friend the President of the Board of Trade accordingly so that proceedings can be taken against such manufacturers under the Merchandise Marks Act?

Mr. Barnett Janner (Leicester, North West)

Under the Food and Drugs Act.

Mr. Wilson

My hon. Friend says, "Under the Food and Drugs Act." That would involve a different Government Department. If the facts are as stated by the right hon. Gentleman, would he not agree that there is a case for an examination rather than for easing the position by a Clause in the Finance Bill?

Mr. Brooke

I do not think that the right hon. Gentleman has quite grasped the point which I made at the beginning of my speech. All this arises from the fiscal necessity of taxing equally articles sold in competition with one another. These strengthened ciders and perms are sold in competition with British wines. They are not sold in competition with beer, and it is there that one needs to get the level of tax equal.

Mr. Chapman

I have been agreeing with the right hon. Gentleman so far, but he is now taking away my basis of agreement. Is it not rather that the tax has to be equal to that of wine not because these liquors are sold in competition, but because they are alike in alcoholic strength?

Mr. Brooke

I was not seeking to depart from that at all, but the hon. and learned Member for Kettering had been raising the question of equally strong beers, and it was that question which I was seeking to answer.

Now, if we may, we will return to this young lady, "Ethyl Alcohol." I hoped that the hon. and learned Member was going to put his question in the form of asking me whether "Ethyl Alcohol" had a "sugar daddy." Ethyl alcohol has, in fact, or can have, varied percentage. She can be born of sugar or of apples, pears or malt. She is known familiarly as spirits or sometimes as "kick." That is what ethyl alcohol is and what she does when she gets into this liquid.

I do not wish to challenge the hon. and learned Member on his obviously extensive technical knowledge of these matters, but my right hon. Friend the Chancellor and I have sought to ensure that subsection (1) of this Clause shall be meaningful for those concerned both with the manufacture of these products and with the administration of the law if the Clause becomes law. I hope that I have succeeded in answering the main questions that have been asked.

Mr. Mitchison

May we have a little strip tease with "Miss Ethyl" for a minute? Can the cider maker put as much sugar as he likes into the cider before and during fermentation without incurring the risk of extra duty?

Mr. Brooke

The cider maker can do anything he likes provided that he does not bring the strength up to 15 degrees of proof. If he brings the strength above that level then, if he wishes to escape duty, he will have to prove that it has undergone no other process than a single process of fermentation and that it satisfies the other two conditions here.

Mr. Mitchison

I am very sorry to ask again, but does fermentation include, or does it not include, adding sugar? I thought sugar had to be added often as part of the process of fermentation.

Mr. Brooke

Yes, the sugar is often required for the process of fermentation, but the hon. and learned Gentleman is making this more difficult. The last statement I made was perfectly clear. [HON. MEMBERS: "No."] I explained that all this cider and perry was free from duty if it was under 15 degrees of proof. It was dutiable if it was over 15 degrees, unless the manufacturer could show that it satisfied the three conditions laid down here. Nothing could be clearer than that.

Question put and agreed to.

Clause ordered to stand part of the Bill.