HC Deb 26 June 1956 vol 555 cc295-304

In subsection (6) of section one hundred and forty-nine of the Customs and Excise Act, 1952, (which relates to retailers' licences for the sale of intoxicating liquors), paragraphs (c) and (d) and the proviso thereto shall no longer have effect.—[Licut.-Colonel Lipton.]

Brought up, and read the First time.

4.30 p.m.

Lieut.-Colonel Marcus Lipton (Brixton)

I beg to move, That the Clause be read a Second time.

Dame Irene Ward (Tynemouth)

On a point of order, Sir Charles. Is my new Clause, "Age relief in respect of small incomes", not being called?

The Chairman

It is not selected.

Dame Irene Ward

Thank you, Sir Charles.

Lieut.-Colonel Lipton

The object of the new Clause, which is supported by hon. Members on both sides of the Committee—

Mr. Harold Wilson (Huyton)

On a point of order, Sir Gordon. Were we not to take this new Clause with one or two others to save time?

The Temporary Chairman (Sir Gordon Touche)

Yes. I understand that we are taking, at the same time, the Clause, "Reduction of duty on publicans' licences", also in the name of the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton).

Lieut.-Colonel Lipton

The object of the new Clause is to enable off-licences to sell what are known as miniature bottles of wines and spirits. A miniature bottle, I understand, is any bottle smaller in size than half a whole bottle. The interesting thing about the present crazy situation is that there is no restriction on the minimum quantity of beer that is sold. An off-licence holder can sell beer by the thimbleful if he wishes.

With wines, however, an off-licence may not sell smaller than a half bottle of imported wine, whereas in the case of British wine no minimum is imposed. For this reason, it is possible for an off-licence holder to sell a quarter bottle of British sherry, but the existing law does not permit him to sell a quarter bottle of South African sherry. In the case of spirits, an off-licence holder can sell a quarter bottle or miniature bottle of spirit only if a whole bottle is sold to the purchaser at the same time. That is one circumstance in which he can sell a miniature bottle of brandy or whisky.

Under the 1933 Finance Act, an off-licence holder was permitted to sell single half bottles of spirit for the very first time. It is of interest to note that a half bottle which now costs 18s. 3d. costs more than the whole bottle in 1933, when the whole bottle cost only 12s. 6d. Indeed, the state of affairs at the present time is chaotic. As I have indicated, one can sell a miniature if a whole bottle is sold at the same time. It is also possible and legal to sell a number of miniatures if the total quantity of those miniatures equals a bottle of the same denomination.

It is an offence if the off-licence holder sells an assortment of miniatures of liqueurs and includes, in the assortment making up the equivalent of a whole bottle, a miniature bottle of brandy, because brandy comes under a different denomination. It is possible for an off-licence holder to sell four quarter bottles of whisky and a miniature bottle of brandy, but if he sells two quarter bottles of whisky and two quarter bottles of gin and adds a brandy miniature then he is breaking the law, because the qualifying quantity of the whole bottle would include whisky and gin which are of different denominations.

I shall not take more than a few moments of the time of the Committee, but it is my submission that the time has come to wipe this nonsense off the Statute Book. We are faced with a crazy jumble of bottle anomalies, and it is time that this crazy jumble was wiped out.

The second of the two new Clauses that we are discussing provides for the position of on-licence holders. The argument which has been advanced in the past is that if we make this concession to the off-licence holder, enabling him to sell miniatures which at present only the on-licence holder can sell, we thereby prejudice the position of the on-licence holder. We have been asked to believe that there is a violent difference of opinion in the drink trade between the on-licence holder and the off-licence holder on the subject of miniatures. That, I believe, is not the case, because the main consideration, after all, is the convenience of the consumer, and it is the convenience of the consumer we have to consider.

There are people who, rightly or wrongly, because of age or timidity or some other reason, do not wish to go to a public house to buy a miniature bottle of spirit, and they are prevented from doing so in their local off-licence. Another fact we have to recognise is that the advent of television has affected the public houses, because people are drinking more at home. To that extent, too, the off-licence holder renders a useful public service.

The on-licence holder, it is true, pays a higher duty. We can measure the value of the wine and spirit aspect of the matter when we examine these figures. In respect of a public house which sells beer only the duty the publican has to pay is one-third of the Schedule A valuation of the premises. If he also sells wines and spirits the duty he has to pay is one-half of the Schedule A valuation. The difference of one-sixth of the Schedule A valuation represents the duty payable by the on-licence holder for the right to sell wines and spirits in addition to beer, and I think that is the measure of the financial significance and importance, from the point of view of the on-licence holder, of the right to sell wines and spirits, or beer only.

4.45 p.m.

The second of the new Clauses asks for a concession for on-licences. I can best put the case by quoting an actual example. Take, for example, a public house with a Schedule A assessment of £200. The publican pays duty of £100 less, under the present law, under Section 13 of the Finance Act, 1942, a reduction of 5 per cent., so that in this case he pays £95. Under the new Clause the publican would pay £100 less a 25 per cent. reduction, leaving a net amount payable by him of £75.

There are some 73,000 on-licences in the country. I quite agree that, unlike the concession I have asked the Government to make about the small bottles, which would not cost the Government anything at all, this concession would cost the Government some money. On the best available advice, I understand that the concession I am asking for in the case of on-licence holders might amount to about £600,000, or one-fifth of 1 per cent. of the revenue derived by the Government from the sale of alcoholic drinks.

It is time, in addition to a concession affecting small miniatures, that a concession should be made to on-licence holders, whose trade is undoubtedly falling. In 1955, 11 million gallons less beer was drunk than 10 years ago. There is more drinking at home. The overheads of public houses have gone up, through rising wages, increased costs of maintenance, and the recent imposition of Purchase Tax on the utensils public houses have to use; and now the higher valuation and rating under the 1953 Act is an additional burden, and it is possible that at some time or another the Government may decide that the Schedule A assessment shall coincide with the rateable value, in which case the duty will go up as well.

When the present duties on public houses were evolved, there were in this country 90,000 public houses and 7,500 clubs. There are now 73,000 public houses and 23,000 clubs. This represents very formidable competition which, to a large extent, destroys the monopoly value of the on-licence public houses.

I know that this matter has cropped up from time to time. There are no party politics in it, because Governments of both parties have turned this proposal down on previous occasions. However, I can say that, whatever Government have been in power, I have advocated this same thing, and I hope that on this occasion the Financial Secretary will be able at least to remove this very stupid anomaly in the sale of miniature bottles by off-licence holders, and, if, possible, at the same time do something on the lines I have suggested in the new Clause for on-licence holders.

Mr. Stephen McAdden (Southend, East)

I very much want to support the new Clause and urge the Financial Secretary to give some very serious consideration to it, as I think that the case for it is crystal clear. As the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) very clearly said, this change has been urged from both sides of the Committee for a very long while. It will not be out of place if I remind the Committee of the many speeches made on this subject by our late colleague, Sir Herbert Williams. It has been consistently urged that something should be done about this matter. I am sorry to say that, so far, we have not met with much success.

I remember that the right hon. Gentleman the Member for Battersea, North (Mr. Jay) said there were no strong feelings on this subject but that differences existed. There are some strong feelings among the off-licence holders, who have had a raw deal for a very long while. I am delighted to hear the hon. and gallant Gentleman urging what is perhaps an almost revolutionary doctrine in these days—that some consideration should be given to the consumers' interests, and especially the interests of those customers who are anxious to be able to purchase miniature bottles. I hope that the Chancellor will give earnest consideration to that important matter.

I would also remind the Committee that some of these miniature bottles, especially those containing brandy, are regarded by many people as medicine rather than as drink, and if people wish to purchase them without going into a public house that is something which should not be denied them. I would also remind my right hon. Friend that Lord Crookshank, when he was Leader of the House, said that the case for this proposal was overwhelming. I hope that it is now recognised, even at this late stage, that the case is overwhelming, and that the many representations which have been made by my hon. and right hon. Friends on this issue will not fall upon deaf ears this afternoon.

Mr. H. Brooke

As has been said, this is a matter which has frequently been discussed before in debates during the Committee stage of previous Finance Bills. I was glad that my hon. Friend the Member for Southend, East (Mr. McAdden) referred to Sir Herbert Williams, because I often think, in connection with this new Clause, of that great fighter and friend of many of us, who moved a similar new Clause in 1951, when it was opposed, on behalf of the then Government, by the right hon. Member for Battersea, North (Mr. Jay). I remember that Sir Herbert Williams pursued the question during the consideration of subsequent Finance Bills, and we had later debates on it.

This is one of the matters on which it may be embarrassing for quite a number of us on the Front Benches to speak, lest we find that we are contradicting something we said when we sat on the side of the Chamber other than that which we now occupy. May I first address myself to the second new Clause which we are discussing with that which the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) has moved, and which refers to the reduction in the licence duty? The position is that at present all concerned will enjoy the relief which was introduced in 1942 on account of the diminution, attributable to war circumstances, in supplies of wines and spirits.

Continually, since 1942, there has been a reduction of 5 per cent. in the basic liability to duty. It was continued by the Finance Act of 1946 until the introduction of the new Schedule A values. Supplies are now surely as normal as most people could wish them to be, and it is certainly difficult to maintain that a 5 per cent, reduction in the basic duty should be continued on the grounds that, so far as supplies are concerned, we are still in the same restricted conditions as we were in war time.

I must advise the Committee that there seems to be no justification for the further reduction which the second new Clause will bring about. The hon. and gallant Gentleman said that it would cost £600,000 a year. My calculation is that the Clause, if it were enacted, would cost £700,000 a year. This is a year in which the Chancellor of the Exchequer has made perfectly clear that he is not proposing any tax reductions, except in so far as they are connected with savings. It would be entirely out of line with the Budget if he were to advise the Committee to accept a reduction in this licence duty—a reduction which would accrue, of course, in small amounts, to very large numbers of on-licence holders.

To revert to the first new Clause, the position has been—and successive Governments have stated it—that there exists this long-standing restriction on the sale of quarter bottles and miniatures by off-licence holders. I think it was my right hon. Friend the present Minister of Supply, who was then Economic Secretary to the Treasury, who, when this matter was last debated—I fancy some three or four years ago—made the offer that if an agreement between the on-licence and off-licence holders could be arrived at which would not involve a loss of revenue, the Government might be prepared to accept any changes in the law which would be consequent on it. Three or four years have passed, and I am bound to tell the Committee that we do not seem to be any nearer to that agreement.

Let us examine for a moment the effect of the restrictions. I thought that the hon. and gallant Gentleman put very fairly the complexity which is involved in it. I want to admit quite frankly that many people who go into an off-licence and want to buy a miniature, or indeed want to buy assorted bottles in the collection which the hon. and gallant Gentleman indicated, and who are told that they are not allowed to do that, get the impression either that the law is an ass, or, possibly, that the man behind the counter is trying to impose a condition of sale himself, and seeking to compel them to buy more than they really want to buy. Indeed, I do not defend this restriction on grounds of comprehensibility or convenience in the least. I think that the restrictions, long-standing though they are, are both inconvenient and incomprehensible to the general public.

I realise also that the law has been supported from time to time by temperance interests, which feel that if any relaxation were to be made, it would be rendered easier to get drink, because people could pop into an off-licence and buy a miniature and so forth. Frankly, I do not put much weight on the temperance argument, because it strikes me that the person who wants something to drink, and finds that he cannot get a miniature, is likely to buy a half-bottle instead, or, alternatively, to go into a public house. I should have thought that temperance people would not wish to drive people into public houses. In that respect, the objection of which I have heard and of which I think hon. Members will have heard, is that elderly people, who like to have a little brandy in the house, would not want to go to a public house which they do not normally frequent, and yet they find that they cannot satisfy their needs elsewhere.

We also have to examine the position as between England and Scotland. In Scotland, this restriction does not exist, and here I am helping the hon. and gallant Gentleman in the case which he put forward. So far as I am aware, it is not argued by those who think that the law should remain unchanged that there are social evils in Scotland that arise from the absence of this restriction. It may be that the Scots can hold their liquor better, or there may be some other reason. It is certainly difficult for a Government spokesman defending the present condition of the law to argue that grave evil arises in Scotland from the absence of any such restriction.

5.0 p.m.

What is the right thing for us to do about this matter? The on-licence holders are very strongly opposed to any change in the situation, unless the Government are at the same time prepared to make this substantial reduction in the licence duty which they pay, and I have already explained that the Government could not contemplate that kind of reduction in the amount. Indeed, I have given reasons for thinking that the present 5 per cent. reduction is no longer justified by the conditions which originally brought it into existence. I have seen representations from the National Consultative Council of the Retail Trade re-emphasising very strong and sincere objection to the law being relaxed for the off-licence holders unless there is a reduction in the licence duty of the on-licence holders, which I have said we should not accept.

Nobody is a more sincere upholder of personal freedom than my right hon. Friend the Chancellor of the Exchequer and nobody is more anxious than he to remove all grounds for alleging the absurdities of bureaucracy. If one wished to point to an absurdity of bureaucracy, one could find substantial material here because, as I have said, the results of the law are complex and incomprehensible.

I regret to say that there appears to be no chance whatever of a wholly agreed solution to this problem. At the same time, so far as we can ascertain, the amount of trade that would be liable to be switched if the first of the new Clauses were to be accepted is not so great as to make any real, substantial difference to anybody concerned. In the circumstances, unless the Committee feels strongly in the other direction, and I have sensed that it does not, I suggest that we should debate this matter for the last time by accepting the new Clause.

Mr. Mitchison

I am rather sorry from one point of view that the right hon. Gentleman has removed this matter which has always been a safe game for any Opposition, whether of hon. Members opposite or of my hon. Friends on this side of the Committee. Whenever hon. Members found themselves in opposition they ridiculed the complete absurdities of the position which my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) has explained. It has long been indefensible. The reason why the anomaly has not been removed before may have been the obstinacy of Governments or the obstinacy of the brewers, and I was very glad to hear the right hon. Gentleman say a very, very gentle "Boo" to the brewers, almost the first one that I have ever heard from that side of the Committee.

It is true that the right hon. Gentleman explained that it will not really make much difference. I do not think that it will, but I do not think that my hon. and gallant Friend the Member for Brixton would have found the same measure of support from this side of the Committee for his second Clause as undoubtedly he has found for the first Clause. I am not quite certain what the relation of this Clause is to savings. I can only conclude that, as between possible views of the effect of the Clause, the right hon. Gentleman has come to the conclusion that there is a saving here, because otherwise the Government would have bought the half-bottle.

Mr. H. Brooke

There is a saving in shoe leather by not having to walk to the public house.

Mr. Albert Evans (Islington, South-West)

I agree with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that the Financial Secretary deserves thanks for the faint "Boo" that he has uttered to the brewers. Although the thanks come from this side of the Committee, they are none the less genuine. This situation has been dragging on for far too long. This has been an anomaly and a restriction which has fallen rather heavily on aged and sick people, and I am glad that some Government, at any rate, have plucked up enough courage to make a decision.

Clause read a Second time and added to the Bill.

Mr. Gerald Nabarro (Kidderminster)

All very stimulating.