§ Turning now to indirect taxation, the first change which I propose relates to the wine duties. Hon. Members who are 67 interested in such matters will remember that when a reduction was made in the duties on imported wines, in 1949, the change related only to light wines imported in cask. The duty on these wines was reduced by about a half, from 25s. to 13s. a gallon for foreign wines and from 23s. to 11s. for Commonwealth wines. There were good reasons for giving special relief at that time to light wines imported in cask, consumption of which had fallen to a low level.
§ But this change in the structure of the wine duties has been accompanied over the years by a considerable change—perhaps distortion is not too strong a word—in the pattern of wine consumption. Consumption of light wines has expanded rapidly and is now twice the pre-war level. Consumption of heavy wines, on the other hand—that is port, sherry and other high strength wines—is still at little more than half the pre-war level. This is not necessarily a direct consequence of the structure of the duty. In wine, I am advised, tastes and fashions change. But it cannot be disputed that the duties on light and heavy wines are now further out of alignment than is reasonable.
§ The trade has represented to me that the duties on heavy wines should be reduced by 24s. a gallon. I am afraid that in the present circumstances I cannot go as far as this, but I propose to reduce the duties on heavy wines by 12s. a gallon, equivalent to 2s. a bottle. The basic duty on foreign heavy wine imported in cask will accordingly be reduced from 50s. to 38s. a gallon, while the corresponding rate for Commonwealth wine will come down from 40s. to 28s. a gallon, thus maintaining the existing Preference margin of 10s. a gallon. There will be a similar reduction of 12s. a gallon in the rates for heavy wines, whether still or sparkling, imported in bottle. The Excise duty on still wines of comparable alcoholic strength produced in this country will be reduced by 12s. a gallon.
§ The increase in trade to be expected from these reductions of duty will benefit the Commonwealth, especially Australia and South Africa as well as those European countries, mainly Portugal and Spain, which supply us with heavy wines. These changes will operate from tomorrow, so hon. Members will, I fear, 68 have to postpone their celebrations for a few hours. I estimate the cost at £2¾ million this year and £3 million in a full year.