§ Section four of the Finance Act, 1949 (which imposes duties of customs on wines), shall have effect as if the second schedule of the Act were amended by the substitution of "£1 6s 0d."and" £0 16s. 0d."for"£2 10s. 0d."and"£2 0s. 0d."respectively as the rates of customs duty for wines other than light wines. being still and not in bottle of non-Empire production and of Empire production respectively.—[Mr. Snow.]
§ Brought up, and read the First time.
§ Mr. Julian Snow (Lichfield and Tamworth)
I beg to move, That the Clause be read a Second time. Even if the absence of those other hon. Members who put their names to this new Clause means that they no longer have faith in port, I feel that a word should be said in its favour from this side. I see that the hon. and gallant Member far Knutsford (Lieut.-Colonel Bromley-Davenport) has now arrived, and will no doubt, be adding his voice to the discussion.
It is a curious quirk of the minds of romantic lady historical novelists that port is a drink solely consumed by the past and present aristocracy. This is, of course, not true at all. Port is a working-class drink. It is generally consumed by many of my lady constituents—and very properly so. if I might say so with great respect. it is a drink preferable in many ways to the hard liquor which they might otherwise consume. Why it should be penalised in this way, I do not know, for it has many civilised attributes and, generally, there is good reason for encouraging its production.
1023 As hon. Members know perfectly well, port is produced in the great country of Portugal, a country to which there was a State visit during the past year. Although it is perhaps a little flippant to say that we should not set too much store by the fact that Portugal is our oldest ally, and while I do not myself regard Dr. Salazar's régime as deserving of very much encouragement, port is, I imagine, the major export of Portugal, and something should be said about encouraging the economies of small countries. The better and the more healthy the economy, the greater the possibility of there being a better political régime.
The fact is that exports of port have gone down very severely and the trade has been lost, to a great extent, to the sherry trade. I am told, though I cannot vouch for it, obviously, that the Government feel that they could not reduce the duty on port because they would, more or less, be compelled to reduce the duty on sherry. I have always found the drinking of sherry to be one of the more tiresome characteristics of middle-class society and, therefore, I should not be sorry to see it discouraged. If we could stimulate the consumption of port at the expense of sherry, I should be very pleased.
I was, quite by chance, in Lisbon the other day, and a very distinguished Englishman told me there that the port producers had now succeeded in developing an apéritif port, which will, they hope, appeal to the English people, and possibly reduce this inordinate and deplorable consumption of sherry. Although I do not myself go in for much apéritif drinking—I think that it usually spoils a good meal—nevertheless, I think that we may take it that the Portuguese producers are trying to do their duty in producing an alternative to the other drink. In short, there is a strong case for regarding port as a good drink which is deserving of encouragement by the Government.
§ Dr. Reginald Bennett (Gosport and Fareham)
I beg to second the Motion.
I apologise for not being in my place to move the Motion. Perhaps I may add that I was not consuming the product which is the subject of the new Clause.
The main argument on this matter, which I adduced in an Adjournment debate some time ago, is that the trade between this country and Portugal has 1024 been very largely damaged by the fact that we have imposed a specific duty on a wine which comes from Portugal, of which this country is almost the only consumer. There is more to it than that. We are damaging a good deal of our trade with the Dominions by continuing to tax fortified wines at this sort of rate, because the tax on fortified wines has gone up to a degree absolutely disproportionate to the increase in tax on ordinary light wines or table wines since the war. The addition on fortified wines has been an extra 525 per cent. for foreign wines and no less than an extra 900 per cent. for Dominion or Commonwealth wines. This has been enough to break the whole trade and to ruin anybody who was attempting to produce these wines for export to this country.
The difficulty lies in the fact that the increased duty on light wines was found to be excessive in 1949, and the late Sir Stafford Cripps then reduced the duty because he found that he was destroying the consumption of wines in this country; but the duty on heavy wines remained at the same level, out of all proportion to any reasonable rate. As a result, a racket has arisen which I hope my right hon. Friends will not support. That is the importation of certain kinds of light wines, which are then spiced with heavier products, heavy wines or spirits, and sold as heavy wines, although in fact they are not but are only blends or amalgams.
The duty paid on such wines to the Treasury is only 20s. per gallon, whereas the duty paid on the genuine port or sherry is 50s. a gallon. The duty on these apéritifs, or whatever they may be called, these "phoney" concoctions, is only two-fifths of the rate on heavy wines although they have the same alcoholic content. They are not good products whereas, I suggest to the Committee, port and sherry and Empire port and Empire sherry are good and truthful products. That is why I am asking that the duty on heavy wines should be reduced to a reasonable level and a reasonable proportion to that on light wines.
§ Mr. Godfrey Nicholson (Farnham)
I must declare my interest, for I am a distiller and a wine and spirit merchant and I suppose I have some interest in the subject under discussion.
1025 I do not want to weary the Committee with technicalities about the different rates of duty, for the situation can be stated perfectly simply. Owing to the fiscal policy of the Government and to taxation, the port industry has suffered very heavy blows and is declining. That industry is based on British firms, many of which have been in Portugal for upwards of 200 years.
It is the oldest British industrial outpost, and through no fault of these firms but simply and solely due to the fiscal policy of successive Governments, that historic British industrial outpost, if I may so describe it, is in danger of almost complete extinction. It seems to me that there is something wrong when an honest industry, a most historic industry, a well-conducted industry is squeezed out of existence because of fiscal policy. I cannot believe that that is the intention of this or any previous Government, but it is happening.
I can guess the reply which the Economic Secretary will give. I expect that he will say that the consumption of sherry is increasing and that it is just too bad that public taste has veered away from port. That is not quite an accurate picture. The point is that sweet red wines, heavy red wines, can be made in this country and, owing to the penal rate of taxation—I think I can quite legitimately call it penal—people have been seduced away from the genuine article by these cheap substitutes. I am not running down or abusing these cheap substitutes, which offer very good value for money, but they have been able to eat into the public taste in port only because of the penal rate of taxation.
The port trade flourished, and it was not vintage port drunk by gouty old colonels but good port drunk in public houses. It was not the beverage of the rich but of the ordinary common or garden citizens of the country who go into public houses, as we all do. Whatever arguments the Economic Secretary may use, he cannot get away from the fact that the main cause of the decline in the port industry and trade is the rate of taxation. As my hon. Friend the Member for Gosport and Fareham (Dr. Bennett) has said, relief was given to the light table wines. It was always understood in the past that the variation in the rates of duty between light and heavy 1026 wines should be as two to one, but now it is as four to one.
The Government are acting foolishly from the economic point of view in stamping out this ancient and historic industrial outpost. I may be a sentimentalist but it is tragic that such an historic link should be broken. It is bad for our trade and for our relationship with Portugal, our oldest ally, with whom we have a considerable trade. It is bad that fiscal policy should stamp out this trade. I hope that that argument will weigh with a materialist House of Commons in a materialist age. I hope also that the argument will weigh that an injustice has been done to an honourable branch of British trade. From the point of view of economic advantage, even more than from the point of view of plain fiscal justice, I hope that my right hon. Friend—if he cannot grant some concession this year—will show that the Government have not completely closed their mind on the subject. The present position is wrong and ought to be brought to an end.
§ Sir Victor Raikes (Liverpool, Garston)
I support the new Clause, perhaps from an aspect slightly different from that of my hon. Friend the Member for Farnham (Mr. Godfrey Nicholson). I do not support it so much for sentimental reasons. I am fond of port, for one thing, and although port is a cool-weather drink I propose to have a glass of it when this discussion is over. It has the advantage that though it may send people to sleep, at least they do not fight after drinking it. I am aware that my hon. Friend the Member for Farnham has an interest in the gin trade.
The Economic Secretary may very well start to quote a number of statistics, but I warn him to be careful, because statistics are almost invariably wrong. It may be that the Committee will be told that habits of drinking have changed today and that in spite of the fact that the pre-war duty on light wines has been doubled, the drinking of port has diminished whilst the drinking of sherry, nevertheless, has kept up—and I am inclined to agree with the hon. Member for Lichfield and Tamworth (Mr. Snow) about sherry. Quite apart from that, the-Economic Secretary will find that although sherry drinking has been maintained, the people who drink sherry are 1027 not the people in the pubs. Sherry is very popular at a certain form of cocktail party where the person who gives the party thinks that it will be cheaper to give sherry than to give gin—and people drink a great deal more gin than sherry at cocktail parties if both are on offer.
Anyhow, it is not at all a bad thing for what might be described as a private cocktail party, because it is much better for the girls at six o'clock than spirits are. Nevertheless, I challenge the Economic Secretary, if he produces any figures, to prove that sherry drinking in the ordinary public house has kept up since the increase of duty. It is drunk much more in other forms of society, particularly at vicars' parties. I have noticed it on a number of occasions—[An HON. MEMBER: "Does the hon. Gentleman attend them?"] Yes, I attend vicars' parties and bishops' parties sometimes. At one time 90 per cent. of port used to be drunk in the public houses. It was very good. A large glass could be bought for about 9d. Today it would cost 3s. 6d. to 4s., which is a fantastic price.
The ordinary person in the pub does not rush in and say, "I will drink sherry at the same price." Not a bit of it. More spirits are drunk in pubs late at night. It does not affect beer drinking. If people stuck to beer and to port there would be less trouble in the country. If we continue this heavy duty, still more spirits will be drunk late at night, which is not good, particularly for young people. The consumption of port will continue to go down, which will be a pity.
If there were an alternative to spirits in the ordinary "pub," if the price of a dock glass were reduced to ls. 6d. or 2s., a good deal of port would be drunk. It is a perfect drink except at this time of the year. What a pity it is that on such an unusual kind of evening we should be discussing the question of port. If it were a cold night, I should receive far more sympathy from my right hon. Friend, although I rather doubt whether he is a judge of port. Perhaps he will tell us. That would be one of those human touches which would undoubtedly enliven the debate.
Finally, I re-emphasise that it cannot be said that the consumption of sherry has gone up. Tastes have changed, and 1028 unless the figures of consumption are divided between the high income groups—a phrase I particularly dislike—
§ Sir V. Raikes
Did my hon. and gallant Friend think I had finished? I have almost finished. I challenge the Economic Secretary to say that sherry is being drunk to a greater extent than port in the public houses. I do not believe that is the case. I ask him to show humanity towards the heavier wine and to give an opportunity for the man who enjoys ordinary light port in the evenings to have it at a reasonable price. Justice is overdue.
§ Lieut - Colonel Bromley - Davenport
Little did I think, Sir William, that I should be fortunate enough to catch your eye on this occasion. These few notes, hastily scribbled, which I hold in my hand are the terms of my short speech, which must be short because, otherwise, I shall incur the displeasure of the Whips.
I congratulate the hon. Member for Lichfield and Tamworth (Mr. Snow) on a first-class speech, with the terms of which we are delighted. I want to take up a most important point which the hon. Gentleman made, which is that in the old days port was one of the most popular drinks of the poorer classes and there was a heavy consumption of it in this country. They drink hardly any of it now for the simple reason that they cannot afford to do so as taxes are so heavy.
We very often spoil our case when we put forward a proposal like this to the Chancellor because we treat it rather lightly and everybody laughs, and then the Chancellor gets up and, before one can say "Bob's your uncle", he turns the whole thing down. However, I should like to ask my right hon. Friend if he can tell me the object of the exercise if he is not going to grant our request. Is the object, first, to stop the public drinking what they want; secondly, is it that he thinks it is bad for them; or, thirdly, is it because my right hon. Friend does not require the revenue? He is certainly not getting the revenue from port drinking now because it is too expensive for people to drink.
1029 My penultimate point is that it is grossly unfair and unjust that this one wine should be singled out to be penalized, and my final point is that it is grossly unfair that port should be treated today as a rich man's drink.
§ Mr. Birch
It is very fortunate that the hon. Member for Lichfield and Tamworth (Mr. Snow) was in his place at the critical moment, because we might otherwise have missed this very remarkable debate. I thought he cast considerable doubts on the social qualities of sherry. He is right in saying that to this day 85 to 90 per cent. of the port drunk in this country is still drunk in public houses.
In approaching this subject one has to look at what the Treasury's attitude is bound to be. It is very nice to talk about the bouquet of port, and its colour, and the excellent vintage port which my hon. Friend the Member for Garston (Sir V. Raikes) once offered me—the true worth of which I hope I appreciated—and to think of those things, but necessarily, from the Treasury's point of view, wine is interesting only in relation to its alcoholic content. One cannot very well measure wine according to its qualities or social assets; it has to be measured according to its alcoholic content, and the only difference in this respect is in the case of the preference on Commonwealth wines.
I think that is recognised in the proposed Clause, because it does not seek to discriminate in favour of port but is designed to reduce the tax on all heavy wines. I think the hon. Member for Lichfield and Tamworth recognised that it would be impracticable to draw a distinction between the two, even though we should all on general principles like to do so because Portugal is our oldest ally and port is a very distinguished and noble wine.
There has certainly been a considerable reduction in the consumption of heavy wines since before the war. In 1938–39 11.6 million gallons of heavy wine were drunk in this country. In 1948–49 the figure had been reduced to 5.72 million gallons, but since then it has risen, and in 1955–56 the consumption was 6.76 million gallons. In fact, after a considerable reduction during the war, the consumption of heavy wines is tending to increase substantially, price or no price.
1030 As hon. Members have recognised, there is a very considerable difference between the consumption of sherry, that is to say, sherry coming from Spain and South Africa, and the consumption of port, that is to say, port coming from Portugal and port type wines coming from Australia. The figures show that 6.6 million gallons of port and port type wines were drunk in 1938–39, falling to less than 2 million gallons in 1955–56—certainly a very big reduction; whereas in the same years the change in consumption of sherry was very small, from slightly more than 4 million gallons before the war, to slightly less than 4 million gallons last year.
On the question of who drinks the sherry, I think there must be some doubt whether all the 4 million gallons can go down the throats of the vicars whom my hon. Friend the Member for Garston, patronises. I should have thought that sherry was a widely consumed drink and was not confined to the middle classes, but drunk by the upper, middle and lower classes.
Another significant point which should not be left out of account in discussing who can afford to drink what is the enormous rise in the consumption of gin and gin mixture drinks. In 1938–39, 1.8 million gallons of gin were consumed and in the last accounting year the figure was 4.2 million gallons. There has been an enormous increase in the consumption of gin, despite the fact that it is far more heavily taxed than heavy wines. Again, I very much doubt whether all the 4.2 million gallons of gin were drunk either by the clergy or by the upper classes. There is no doubt that the consumption of spirits in this country has very much increased as opposed to the consumption of port.
It may well be true that these developments are regrettable and certainly for our ally Portugal they are highly regrettable. Consumption of port has declined, but the Treasury cannot distinguish for taxation purposes between types of wine. The matter has to he decided on the alcoholic content. Accepting the new Clause would cost a considerable sum, £6.5 million. We are not convinced that the elasticity of demand is such that we should catch that up.
When the duty on light wines was reduced, consumption of light wines was suffering a very sharp fall. At present, 1031 the consumption of heavy wines is tending to increase and we do not believe that the revenue would be recouped if the tax were lowered. I am afraid that for this year's Budget we must refuse to accept the new Clause. What may happen in future years I cannot say. It depends on our position and what taxation we can afford to remit. For this year, I am afraid that the Government cannot do as hon. Members have asked.
§ Mr. G. A. Pargiter (Southall)
It is unfair to take the figures for 1946. Restrictions on what could be imported were then in force and it was virtually impossible to get heavy wines, because there were so many other things which it was essential to import that things like heavy wines were not imported. The Economic Secretary should compare 1955 not with 1946, but with the pre-war years. If he does that, he will see that, for the producers, the fall in consumption has been catastrophic.
I am not arguing the case for or against consumption, but I should have thought that the obvious thing for the Treasury to try, as between one form of alcohol and another—in this case between light and heavy wines—is to maintain a balance and proportion, so that those who prefer to drink heavy instead of light wines can do so without suffering from the penal taxation which the Treasury now imposes upon them.
§ Mr. Nicholson
I would remind my right hon. Friend that he is quite off the beam when mentioning spirit drinking and failing to mention whisky. As a result of this policy, which I can only describe as rather mean on the part of the Treasury, an honest branch of British traders is being squeezed out of existence. I suppose it is inevitable that this debate should be treated with a certain degree of levity. There is always something funny about people being squeezed out of business, I suppose—but I feel that it is a tragedy, and that it is very wrong. It is not merely a big joke about red noses and sherry parties; it is something serious for an honest group of British traders, and I hope that the Treasury will take note of that fact.
§ Mr. W. A. Wilkins (Bristol, South)
As one who is more or less disinterested in the consumption of any of these wines 1032 or spirits, I believe that all hon. Members who have spoken have missed the boat. The truth is that the public has become more discerning in its taste, and now appreciates the virtue—if any—of such drinks as Bristol Milk and Bristol Cream.
§ Question put and negatived.