HC Deb 03 July 1961 vol 643 cc1053-73

Paragraph (f) of subsection (1) of section one hundred and forty of the Customs and Excise Act, 1952 (which provides for the relief of certain sweets from duty), shall have effect as if there were inserted, at the end thereof, the words "or sweets delivered to any person licensed under section two hundred and twenty-five of this Act for the purpose of manufacturing wine vinegar for sale".)—[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.

This is a modest new Clause, the intention of which is to facilitate the manufacture of wine vinegar. At present, vinegar in this country is exclusively vinegar made from malt, spirits, cider and distillation. Wine vinegar, though not so well known, is, of course, the more normal type of vinegar used in countries which, perhaps, have a better gastronomic reputation than ours. However, in view of the increasing foreign travel and the development of taste in other foods, it is considered that there is a profitable market in wine vinegar, not only in the domestic market, but in exports and in the prevention of needless imports. Hon. Members may not have realised that this vinegar stems from the original form of vinegar, which came from grapes or wine. There is little doubt that the rather more sophisticated type of vinegar is now enjoying an increasing demand.

The Clause is submitted with a view to reducing the duty payable on the so-called "sweets" that are employed in the manufacture of this product. Perhaps the House will permit me to quote the definition of the term "sweets" from the Customs and Excise Act, 1952: 'Sweets' means any liquor which is made from fruit and sugar or from fruit and sugar mixed with any other material and which has undergone a process of fermentation in the manufacture thereof, At present, the manufacturers of vinegar are entitled to have in their factories 95 per cent. proof spirit, and they can use cider up to but not exceeding 15 per cent. proof, if I understand correctly a letter which the Economic Secretary sent me earlier in the year. We suggest that the facility which is given in respect to cider, which costs the Government very little, should be extended to wine employed for this purpose. Under their existing licences vinegar manufacturers can buy their own grape concentrate, ferment it, and use it for this purpose. What they want to do to save that production stage is to buy the wine duty-free up to 90 per cent. proof and employ it for this purpose.

Countries make vinegar according to the material closest at hand. America normally uses cider; Scandinavian countries and ourselves use malt, and Latin countries use wine. Although it is argued that the facility extended in respect of the 95 per cent. proof spirit is given because that same spirit is used in other manufactures and only coincidentally for vinegar manufacture, it is felt that that in itself is no excuse for not granting this slight extension. It would not cost the Government very much and it would stimulate a manufacture which deserves to be encouraged.

I have three reasons for putting the Clause forward. First, in my constituency there is a growing industry in the parish of Burntwood. I mention that because during the last few years we have had the sorry experience of having to close a pit, and the need for diversifying our local industry has been pointed out to us very strongly. This factory does not absorb much labour, but it all helps in the diversification process.

Secondly, all wine vinegar is now imported. The Economic Secretary will know more than one reason why it might be a good thing to have our own production. It would prevent imports, and we should be able to enter a potential export field. Thirdly, it is a very civilised form of improving dishes. For that reason, civilising as it is, the Government ought to feel able to agree to this small concession.

Mrs. Eirene White (Flint, East)

I support my hon. Friend the Member for Lichfield and Tamworth (Mr. Snow). He has referred to what seems to be an incomprehensible and illogical anomaly, even if it is a minor one. I do not pretend that there are as many votes in vinegar as there are in horticulture, but we now have an opportunity to clear up this anomaly. I understand that the purpose of the Clause is to enable manufacturers of wine vinegar to use wine which has been processed by other people. If they process it themselves they are exempt from duty, but if they purchase it after it has been processed by other people they have to pay duty. It seems stupid to make them pay duty if the processing is done by somebody else. I hope that the anomaly will be cleared up.

I entirely support the Clause on culinary grounds. I am a reasonably good cook, and I would not dream of using malt vinegar to make sauces. It may go very well with chips, for persons with that kind of taste, and it is reasonably good for pickling herrings, but I would never dream of using it to make the more delicate sauces which some of us like to make as a hobby at weekends. I hope that we shall be able to have wine vinegar manufactured at home more cheaply.

5.45 p.m.

Mr. Laurence Pavitt (Willesden, West)

I, too, support the Clause, and I hope that the Government will be able to accept it. I hope that we shall have no acid comments from hon. Members opposite after the sweetness and light that have come from this side of the Committee. The fact that an anomaly exists has been mentioned by both my hon. Friends, and that is the kind of point which the Chancellor should take into consideration. Material with a high degree of alcoholic content is duty-free, but that with a lower alcoholic content has to pay duty.

We are influenced in this matter not only by the epicurean point of view, or the view of those who, like my hon. Friend the Member for Flint, East (Mrs. White), delight in making sauces. We also have to consider the manufacturing aspect, and here I stress the point made by my hon. Friend the Member for. Lichfield and Tamworth (Mr. Snow) about imports and exports. In my constituency there is a large manufacturing concern which makes 57 varieties of well-known commodities, including the kind of baked beans with which we are regularly served, day in and day out, at the cafeteria downstairs. The 57 varieties have grown. They now total well over 160, and one of the newest is wine vinegar.

In our previous debates on the Bill the Chancellor has made a great deal of play about the need to encourage exports; indeed, we have had £83 million worth of incentives for exporters. Last week, as a result of the excellent efforts of the Heinz factory, I was concerned in going along there to congratulate its board on raising the firm's exports. In 1950, those exports amounted to £400,000; in ten years they have risen to £1,600,000. We all went along at the request of the President of the Board of Trade to congratulate the firm on its efforts, and we were told not only that it was very anxious to export wine vinegar, but, also, that at the moment everybody using wine vinegar has to import it.

If the new Clause were accepted we should not only increase our exports, but should save some of the costs which arise as a result of the import of this vinegar, which is on an increasing scale as a result of the demand by people with a civilised taste. In view of the modesty of the Clause I hope that the Chancellor will be able to accept it.

Mr. Barber

The hon. Member for Lichfield and Tamworth (Mr. Snow) described this as a modest Clause. He moved it with his customary modesty and courtesy, and other hon. Members who have spoken on it have also done so with moderation. Its effect would be to authorise licensed vinegar makers to receive British wine known as sweets free of duty for the purpose of manufacturing wine vinegar. In February of this year the hon. Member for Lichfield and Tamworth wrote to my hon. Friend the Financial Secretary on behalf of the licensed vinegar maker in his constituency, asking that that company should be allowed to receive British wine duty free in the same way as it receives spirits free of duty for the purpose of manufacturing vinegar.

As far as we can ascertain this was the first time such a request had been made, either to a Treasury Minister or to Her Majesty's Board of Customs and Excise. As the hon. Member pointed out, the law makes provision for the use of spirits duty free for industrial purposes, and it is under this more general provision that licensed vinegar makers are allowed to receive spirits. This legal provision concerning spirits is absolutely essential, because spirits are widely used in industry for a great variety of purposes.

I was surprised to learn that the duty-free use of spirits in industry exceeds their use as beverage spirits. About 32 million proof gallon of spirits passed into industrial use in 1959–60.

As the hon. Member pointed out, there is no similar provision in respect of British wine. I think he will agree that there is no general demand—I say no general demand—for such a provision, whatever may be the feelings of the vinegar manufacturer on whose behalf he spoke, or of the other company to which the hon. Member for Willesden, West (Mr. Pavitt) referred. The provision dealing with spirits is of a very wide and general application throughout industry. British wine, whatever its strength, can be received at present duty free only by licensed makers of British wine if they wish to receive it for bottling and ultimate payment of duty, or for subsequent exportation.

As the hon. Member for Lichfield and Tamworth pointed out, cider other than that exceeding 15 degrees proof, which is treated as British wine, is not chargeable with any duty and can be used freely for making vinegar. Vinegar makers who want to use British wines in their pro- cesses can make it themselves—I have looked into this with care—with very little trouble. Grape juice or grape must needs only to be fermented by the addition of sugar, and in some cases of yeast. They do not need a wine maker's licence. It can be made into vinegar without the payment of duty, because the duty is not chargeable unless the wine is sent out for sale by a maker of British wine. Furthermore, they can obtain spoilt wine duty free for the manufacture of vinegar.

I quite appreciate what the hon. Member has been saying and what vinegar manufacturers may say, that it may be that they can manufacture vinegar by these other methods involving very little additional trouble, but nevertheless they wish to manufacture their own vinegar in this particular way. They may say that they are precluded from doing so because of the law as it stands at present, but I must ask the House to consider this aspect. In view of the facilities which I have mentioned and of the very limited demand for British wine for use in industrial processes, should we be justified in setting up not only a special provision in the Finance Act, which is not a matter of great importance, but also new machinery which would be necessary to administer what is required in this new Clause, machinery which would be comparable, if not in size at any rate in the way it would work, to that necessary for dealing with duty-free spirits?

I am bound to advise the House that I do not think, at any rate at this stage, that we should be justified in doing that. I think that there will be general agreement in the House that we should not make detailed provisions and set up new machinery to cover every particular circumstance where taxable commodities are concerned. In this case I think it is clear that at present there is no significant detriment to vinegar makers arising from the law as it stands because, for reasons I have given, alternative methods of manufacture are open to them. Until February this year when the hon. Member got in touch with us, there was no similar request. We looked into the matter and the Customs and Excise made careful inquiries as a result of the approach made by the hon. Member, but I cannot advise the House that we should be justified in making this special provision in these circumstances.

Mrs. White

Will the hon. Gentleman explain what new machinery would be necessary? I understand that the vinegar manufacturers are already subject to full inspection by the officers of Customs and Excis.

Mr. Barber

I used the word "machinery", but there would have to be new control extended to British wines which has not been the case hitherto. There is no general demand at present, although I appreciate that these particular manufacturers would like to see machinery of this kind set up which undoubtedly would be of some limited assistance to them. If they were precluded by the law as it stands from manufacturing wine vinegar without the payment of duty on British wines there would be an entirely different situation, but, because they have the alternative methods of manufacture open to them, although they do not consider them to be 100 per cent. as good as the system they wish to adopt, I do not think we should be justified in accepting this new Clause.

Mr. Redhead

I listened with amazement to the Economic Secretary making terribly heavy weather of a subject which I thought was amenable to a simple concession. The approach revealed an obvious anomaly which I think has been clearly demonstrated by my hon. Friends who have spoken on this new Clause and which could be coped with without great administrative difficulty.

The Economic Secretary has not denied that mere is an anomaly in the situation. Everything he has said has reinforced the case on those grounds. He admitted that vinegar manufacturers can obtain spirits for the purpose of manufacture duty free, but they cannot obtain these sweets. The only argument I heard the hon. Gentleman adduce—and it is a terribly Weak one—was that, while acknowledging that there is an anomaly, nevertheless we should not do much about it because there is no general demand that we should do so. That was the weakest possible argument. I have not noticed a tendency in other quarters and in other respects to dismiss a case because there was no general demand for it. The test should be, is it equitable to do this?

I submit that the case has been made and that there is reasonable ground for making what after all would be a minor concession. It is not good enough to say that the manufacturers need not pay duty because they can do what they want to do in another way by manufacturing the wines themselves and so escaping the duty. Manufacturers are perfectly entitled to say that they do not care to do it in that way. There might be a good reason why they do not want to do it in that way. There is no reason why they should be compelled to do it in the way the hon. Gentleman suggests because the Government refuse to make a reasonable modification.

I am not impressed by the statement that this would mean setting up cumbersome administrative machinery. One has only to look at Customs codes and Excise regulations to realise that one little addition of this character would not break the back of the Board of Customs and Excise. This alteration could be done without much worry over a simple requirement and a modest concession.

I ask the Economic Secretary to consider this matter again and to offer a better reason than he has given so far for resisting the proposal.

6.0 p.m.

Mr. H. Wilson

I thought that after the appeal made by my hon. Friend the Member for Walthamstow, West (Mr. Redhead) the Economic Secretary would have given some reason why the Clause cannot be accepted, because so far he has not done that.

I have listened over the past few weeks to some strange speeches made from the Government Front Bench and I have heard some feeble reasons for failing to accept Clauses moved from either side of the House, but, although this is a very minor matter, I think that the Economic Secretary reached an all-time low in his answer. One thing in his speech was plain—the only reason why this perfectly fair proposal, which he accepts as being fair and reasonable, cannot be accepted is bureaucracy. This is a bureaucratic rejection of a simple, small Clause which would cost the Revenue nothing but which would remove an anomaly which the Economic Secretary has admitted exists. I do not know what his inspectors think about this. It is clear that the Minister thinks that the proposal ought to go through, and obviously he had a long tussle with Customs and Excise over it.

We had better have it clearly understood just who the Ministers are. Are the Ministers sitting on the Front Bench there, or are they in Customs and Excise? If a Minister feels that there is a clear case in equity for the acceptance of an Amendment then, unless the officials can produce absolutely paralysing reasons based on matters of machinery and the like, the Minister's view should prevail. If the Economic Secretary will say that there is no anomaly here and, therefore, that there is no necessity to clear it up, that is one thing, but for him to say, "Of course there is an anomaly but, even so, we cannot do anything" is not good enough, and I still hope that he will think again.

What is the argument? It is admitted that there is no desire on the part of the Customs and Excise as such to get revenue from this process of making vinegar. After all, if the Department wanted to get revenue it would get it when spirits were used, so we can dismiss that. Here, the manufacturer wants to use a different raw material. He is told that he cannot use it or, at any rate, that the Treasury will not make the very minor change necessary in its procedure to enable him to do so.

Here is the Board of Customs and Excise telling a vinegar manufacturer the best way for him to make his vinegar. We have heard from hon. Members opposite about free enterprise. Admittedly, this is a small case but it does not affect the principle, and for the Government to tell a free-enterprise manufacturer that just because they will not take the trouble to amend their own stupid, bureaucratic regulations he must manufacture his product in some way other than that which he thinks is the best is intolerable, and I am surprised that the Economic Secretary does not realise this, or admit it. It is admitted that if the manufacturer uses spirits, the spirits are duty free, but this manufacturer wants to use British-made wine, and we have been given no reason why he should not do so.

What is the next argument? It is that there is no general demand for it; that this is the only case. Does it reduce the justice of the case because only one person suffers from the injustice? Is the hon. Gentleman really trying to say that although he admits that there is an anomaly the thing has not been heard enough of in the Treasury; that if the F.B.I. had backed it, or had given orders to the Treasury, there might have been a different approach; or if a trade association had put it forward, or if three manufacturers had wanted to use British wines the Treasury might have conceded the case?

Is it a crime for a manufacturer to ask, through his Member of Parliament, for the removal of an obvious anomaly? That is the argument that the Economic Secretary puts forward, but this House, even in so small and, by every other test, insignificant case as this is concerned with equity and justice, and this present position is patently inequitable and unjust. I do not want to overstress the case. I know that only one manufacturer and a small amount of material—perhaps only a small amount of money—is involved, but this House, when dealing with the Report stage of the Finance Bill, is concerned with equity and justice, and this we are not getting.

What is the next argument? The manufacturer wants to use this wine for his product and, apparently, the hon. Gentleman is not exactly saying that he must not, but that he must distil the wine himself, or make it himself. Why should the hon. Gentleman tell the manufacturer that? If the man had thought it desirable to do that he would have done it long before now. The Economic Secretary has only one reason for saying that. He wants the manufacturer to go to all the trouble of making this material himself, to set up the plant and to learn the "know-how" and technique instead of buying from his own perfectly regular suppliers, for one reason only—because the hon. Gentleman will not spend a ha'porth of trouble to put it right.

My hon. Friend the Member for Walthamstow, West (Mr. Redhead) has had a great deal of experience of Customs and Excise operation, and knows a very great deal more, not just than I know but than the Economic Secretary knows about these things. He is probably the only individual Member of the House with the necessary knowledge, and he tells us that he thinks that acceptance of this principle would not require any fundamental change in the code of the Customs and Excise.

This, after all, is chicken-feed when compared with the volumes of changes we need when we are discussing Purchase Tax, uplift and so on, as we have done in previous Finance Bills. As my hon. Friend the Member for Flint, East (Mrs. White) has pointed out, inspectors of the Customs and Excise regularly visit this firm. What kind of bureaucracy is it that cannot show a little elasticity, alter the rules and deal with this wine as if it were spirits? What is the problem in this?

The Economic Secretary has given no justification for his case whatsoever. It is quite clear that there is some bumble-dom in the Board of Customs and Excise. I am sorry to say this, because most of us have very high regard for that Department as an operational unit, but, somewhere down the line in the Board of Customs and Excise, there is this bumbling bureaucracy which, on this occasion, and despite his acceptance of the fact that there is an anomaly here, has convinced the hon. Gentleman that this change cannot he made.

He then comes gaily and airily to the Dispatch Box—if I might use those words to describe his demeanour—and says, "No, the Customs and Excise will not make this change and the Ministers will not tell the Department to make the change. Let the manufacturer make all the changes." I can only say that if anyone from this side had made such a suggestion hon. Members opposite would have been in uproar—

Lieut.-Colonel Sir Walter Bromley-Davenport (Knutsford)

Hear, hear.

Mr. Wilson

—and none more uproarious, I am sure, than the hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport), whom we are always glad to see helping us out with the Finance Bill.

I am sure that by this time hon. Members opposite will have seen the strength of my hon. Friends' argument, and I hope that the Economic Secretary will now either say that he will accept the new Clause, which costs him nothing, or will give us a very much better reason than we have had so far. I know that the on. Gentleman has already exhausted his right to speak but I am sure that the whole House would wish to give him a second opportunity for either of the purposes I have mentioned.

I am sure that the first purpose would be more acceptable to hon. Members in all parts of the House. There must be many hon. Members opposite who feel that here is a small case involving a point of principle, and who are as sick to death as we are of hearing arguments from the Treasury Bench that have no inspiration except a bureaucratic inspiration. I am sure that those hon. Gentlemen will not find it exactly in accordance with their wishes to have to tramp through the Division Lobby in support of the speech that we have just heard from the Economic Secretary.

It is not an argument to say that there is only one manufacturer involved. It is not an argument to say that this is the only case that has been heard of. We have seen whole Finance Bills turned inside out because of the opposition of one manufacturer or interest, and that in recent years. I am sure that my hon. Friends would be able to think of quite a number of examples—[Interruption.] Yes, the House was kept up for two hours listening to complaints about Rolls-Royce. I do not complain—that is what the House exists for when discussing a Finance Bill.

Here, because it concerns a small manufacturer, perhaps a remote manufacturer, who may not have an office in London or have expensive dining arrangements for the purpose of influencing a trade association or the F.B.I. or anyone else, we are told, however strong the case, that it cannot be done, simply because the Board of Customs and Excise cannot bestir itself.

I am quite convinced that in the time that I have been speaking—about ten minutes—the export officials who are no doubt able to consider these matters—I will not say where they are to be found because to do so would be out of order on my part—could have drafted the necessary changes in the Regulations, and could have passed a slip to the Economic Secretary enabling him to accept the new Clause. I am quite sure that if the hon. Gentleman were to say, "I will not have this attitude" the officials could put the matter right in their Regulations.

I would remind him that when Lord Dalton was Chancellor and the Tobacco Duty was increased by 1s., strong feeling was expressed in the Budget debate that this would create very great anomalies for the old-age pensioners. Lord Dalton was told by the Board of Customs and Excise that it was not possible to make any special concession for old-age pensioners. Heaven know that was a very difficult procedure to work out. It created problems and difficulties for the Customs and Excise all over the country, affecting every tobacconist's shop, requiring vouchers, and so on. Lord Dalton said, "Either you do this or we shall not go on with this change in the tax" The Customs and Excise went away sorrowing, but they came back with a scheme.

That is what the Economic Secretary should have done in this case. He should not tell us that it is only a small, remote case. Let him stand up now and say that he accepts these arguments, as I am sure that most of his hon. Friends do. Let him say that he accepts the Clause. He can fight it out with the Customs and Excise tomorrow. Let us hear who really is the Minister.

Mr. Barber

With the permission of the House, perhaps I may say a few brief words. First, I should like to say without any disrespect to the right hon. Member for Huyton (Mr. H. Wilson) that it is perfectly obvious that the relationship between the Customs and Excise and Treasury Ministers has greatly changed since the days when Dr. Dalton was in charge. I am sure that my hon. Friend the Financial Secretary will bear me out in saying that in dealing with both the Customs and Excise and the Inland Revenue we do not proceed on the basis to which the right hon. Gentleman referred.

This is not a case of saying, "This is a small concern. Because it is a small concern we shall not do something which otherwise we consider to be equitable". That is a travesty of what I said. The position is that British wine is liable to duty. Anybody who purchases British wine purchases it duty paid. Consequently, the duty is taken into account in the purchase price. What these one or two companies—I have heard only of this one company, but there may well be others and I want to be fair—are saying is that they would like a concession. They would like to purchase wine duty free. In other words, they are asking for an exception.

It may be that they are right, considered in isolation, in making that request. I am not at the moment concerned with merits, because I tried to deal with them in explaining to the House that there were other methods of manufacturing wine vinegar. But the House should be under no illusion that what these people are asking for is a concession. They want a concession of the same nature as the concession applied in respect of spirits.

The right hon. Gentleman referred to the Customs and Excise bumbling along and convincing the Treasury that this was administratively impossible. This is not true. I have never suggested for one moment that this is administratively impossible. I ask the House to consider whether in a case of this kind, on the information we have before us, we should make a concession which will mean nothing in terms of money—I do not doubt that—but will involve some additional work. It is no good passing this off as mere bureaucracy. It will involve some additional work. I ask the House to bear in mind that none of us had heard of this until February of this year. What is being asked is that we should make specific provision so that British wines used for industrial purposes would be duty free, just as spirits used for industrial purposes, which involve about 32 million proof gallons of spirit a year, are duty free.

Mr. Snow

The Economic Secretary keeps on mentioning spirits. That is right, but what about cyder? That is allowed up to 15 per cent.

Mr. Barber

This is because cyder up to 15 per cent. is not dutiable at all. It is only strengthened cyder which bears duty. Therefore, no special provision is made for vinegar manufacturers who use cyder as their raw material.

Mr. Snow

It is 4 per cent.

Mr. Barber

The hon. Member for Lichfield and Tamworth (Mr. Snow) says that the difference is 4 per cent. proof. That is quite irrelevant to the question I have posed to the House, which is whether we ought to set up the new method of control which would be necessary if we were to allow British wines to be used duty free for these purposes. Cyder is not dutiable anyway, and, therefore, this question does not arise.

6.15 p.m.

I must make one further point clear, in view of something which has been said. In the hon. Gentleman's letter to the Financial Secretary he said: I am given to understand that the Customs and Excise have expressed the view that this is probably an anomaly which would justify examination by you and only requires a departmental authority to regularise the position. I made inquiries about that only this morning and I can only say that the hon. Gentleman has completely misunderstood the situation. There is no anomaly here. What we have to decide is whether we would be justified in making an exception, which would have to be a general exception for British wines analogous to the exception which is made for spirits used for industrial purposes.

Mr. H. Wilson

The Economic Secretary is now putting it in terms of a concession which would have to be a general one. We see that point. There is a general concession for spirits used for industrial purposes. There is no concession for wines. Since this is the only case which has come to his attention regarding vinegar, will he tell us in how many other cases there are proposals—how many other industries; how many other types of manufacturer—to use British wine as raw material? In other words, would this concession, as far as he knows, start off a large number of demands for similar concessions in other industries? Will he say in any case whether that would be serious? If the concession is granted for spirits, why should it not be granted for wines? Would it create precedents?

Mr. Barber

I said earlier on that, on the information I had, I did not think that this would involve any significant cost to the Exchequer. I hoped that it was clear by implication from that that this would be widely used. I have given my reasons to the House for believing that we would not be wise to accept the Clause at this stage. I want to say this in all sincerity to the House. I am sure that my right hon. and learned Friend would be prepared to look at this again during the course of the year. [Laughter.] The hon. Lady the Member for Flint, East (Mrs. White) laughs. I hope I have made it clear that these are not meaningless words. My right hon. and learned Friend would be prepared to look at this again to see whether we should be justified in making similar provisions in respect of British wines as those which are made in respect of duty free spirits.

I hope that the House will accept what I said earlier on. We should not make detailed provisions to cover every circumstance where taxable commodities are concerned. It is entirely different when we are considering the case of an individual small taxpayer—be it a company or group of individuals—if there is something inequitable about it—in other words, if somebody is paying tax by virtue of an anomaly but his fellow men are not paying it. Then, even if it concerns only one person, it is worth including a Clause in the Finance Bill to put it right. That is not the position in this case. I thought the right hon. Gentleman suggested that this was so. I must make it clear that it is not so.

Mr. Snow

The Economic Secretary is saying that he, a representative of the Conservative Party, is just not prepared to help in the prevention of unnecessary imports or the stimulation of British exports. This is a small company and, typically, the Government are not prepared to make an exception.

Mr. Barber

That is not so. If the hon. Gentleman will read what I said earlier, he will see that I stated that, while I certainly had no intention of dictating to this company or any other vinegar manufacturer how it should manufacture its products, it is admitted in the trade that it is perfectly possible to make wine vinegar by other means, which I mentioned. I am not suggesting for one moment that the company would not prefer to manufacture its wine vinegar by using British wine in its finished state. I am merely saying to the House that it cannot be right in every case where an industry asks for a concession to be made, as is being sought in this case, that it should get this concession given to it merely because it prefers to manufacture in a particular way. We must consider whether the general demand is warranted.

I repeat—it is important that this should be appreciated—that this is not a case of an anomaly in which a small company is being unduly penalised compared with other companies in a somewhat similar position. A concession is being sought which as far as I know—I may be wrong—would not cost a significant amount of revenue.

I hope that the House considers that I have been forthcoming in saying that my right hon. and learned Friend will see whether we should be justified in adopting for British wines a system such as exists for spirits which are used for industrial purposes, but I am afraid that I cannot go further than that.

Mr. H. Wilson

Is the hon. Member saying that the Chancellor is prepared to look at the matter between now and the next Budget? The Government have had this proposal before them for five months. Does he say that it is such a complicated subject that they could not handle it in five months but that there

is a chance that in twelve months we shall be given a decision? Or does he intend to stick now and next year to the proposition that the gentleman in Whitehall knows best? The hon. Member's answer will influence whether we shall vote on this new Clause.

Mr. Barber

The right hon. Gentleman well knows that we have reached a conclusion as a result of the inquiries which we have made following the hon. Member's letter of five months ago. We have looked into the matter in the meantime. As a result of our inquiries we have reached a conclusion that on the information now before us we should not be justified in accepting the new Clause. I repeat—and as this is for the third time I hope that I have made it clear—that my right hon. Friend is prepared to look at this during the year to see whether there are new facts or new developments which justify us in doing what is asked.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 150, Noes 220.

Division No. 235.] AYES 16.22 p.m.
Ainsley, William Hale, Leslie (Oldham, W.) McLeavy, Frank
Albu, Austen Hall, Rt. Hn. Glenvil (Come valley) Manuel, A. C.
Allen, Scholefield (Crewe) Hamilton. William (West Fife) Mapp, Charles
Awbery, Stan Hannan, William Marsh, Richard
Bacon, Miss Alice Hayman, F. H. Mellish, R. J.
Benson, Sir George Henderson, Rt. Hn. Arthur (Rwly Regis) Mendeison, J. J.
Bryton, William Hilton, A V. Milne, Edward J.
Boardman, H. Holman, Percy Mitchison, G. R.
Bowles, Frank Houghton, Douglas Monslow, Walter
Boyden, James Howell, Charles A. (Perry Barr) Moody, A. S.
Braddock, Mrs. E. M. Howell, Denis (Small Heath) Mort, D. L.
Brockway, A. Fenner Hoy, James H. Moyle, Arthur
Brown, Rt. Hon. George (Belper) Hughes, Emrys (S. Ayrshire) Mulley, Frederick
Butler, Herbert (Hackney, C.) Hughes, Hector (Aberdeen, N.) Neal, Harold
Callaghan, James Hunter, A. E. Noel-Baker, Francis (Swindon)
Castle, Mrs. Barbara Hynd, H. (Accorington) Noel-Baker, Rt. Hn. Philip (Derby, S.)
Chapman, Donald Hynd, John (Atteroliffe) Oliver, G. H.
Chetwynd, George Irving, Sydney (Dartford) Oram, A. E.
Cllffe, Michael Janner, Sir Barnett Owen, Will
Corbet, Mrs. Freda Jay, Rt. Hon. Douglas Paget, R. T.
Crossman, R. H. S, Jeger, George Pannell, Charles (Leeds, W.)
Culler), Mrs. Alice Jenkins, Roy (Stechford) Pavitt, Laurence
Darling, George Johnson, Carol (Lewisham, S.) Pearson, Arthur (Pontypridd)
Davies, G. Elfed (Rnondda, E.) Jones, Rt. Hn. A. Creech(Wakefield) Peart, Frederick
Deer, George Jones, Elwyn (West Ham, s.) Pentland, Norman
de Freitas, Geoffrey Jones, J. Idwal (Wrexham) Popplewell, Ernest
Diamond, John Jones, T. W. (Merioneth) Price, J. T. (Westhoughton)
Dodds, Norman Kelley. Richard Probert, Arthur
Driberg, Tom Key, Rt. Hon, C. W. Pursey, Cmdr. Harry
Dugdale, Rt. Hon. John Lawson, George Randall, Harry
Ede, Rt. Hon. C. Lee, Frederick (Newton) Redhead, E, C.
Edelman, Maurice Lewis, Arthur (West Ham, N.) Reynolds, G. W.
Edwards, Robert (Bilston) Lipton, Marcus Robertson, John (Paisley)
Edwards, Walter (Stepney) Loughlin, Charles Robinson, Kenneth (St. Pancras, N.)
Evans, Albert Mabon, Dr. J, Dickson Rogers G. H. R. (Kensington, N.)
Foot, Michael (Ebbw Vale) McCann, John Ross, William
Ginsburg, David MacColl, James Seymour, Leslie
Gourlay, Harry Mclnnes, James Shinwell, Rt. Hon. E.
Grey, Charles McKay, John (Wall-send) Short, Edward
Griffiths, W. (Exchange) Mackie, John (Enfield, East) Silverman, Julius (Aston)
Silverman, Sydney (Nelson) Swain, Thomas Whitlock, William
Slater, Mrs. Harriet (Stoke, N.) Swingler, Stephen Wilcock, Group Capt. C. A. B.
Slater, Joseph (Sedgefield) Taylor, John (West Lothian) Wilkins, W. A.
Smith, Ellis (Stoke, S.) Thompson, Dr. Alan (Dunfermllne) Willey, Frederick
Snow, Julian Thornton, Ernest Williams, W. T. (Warrington)
Sorensen, R. W. Tomney, Frank Willis, E. G. (Edinburgh, E.)
Soskice, Bt. Hon. Sir Frank Ungoed-Thomas, Sir Lynn Wilson, Rt. Hon. Harold (Huyton)
Spriggs, Leslie Wainwright, Edwin Woof, Robert
Stewart, Michael (Fulham) Warbey, William
Stones, William Weitzman, David TELLERS FOR THE AYES:
Strachey, Rt. Hon. John White, Mrs. Eirene Dr. Broughton and Mr. Cronin.
NOES
Aitken, W. T. Glover, Sir Douglas More, Jasper (Ludlow)
Allason, James Glyn, Dr. Alan (Clapham) Morrison, John
Atkins, Humphrey Glyn, Sir Richard (Dorset, N.) Mott-Radclyffe, Sir Charles
Barber, Anthony Goodhart, Philip Nabarro, Gerald
Barlow, sir John Goodhew, Victor Noble, Michael
Barter, John Gower, Raymond Nugent, Sir Richard
Baxter, Sir Beverley (Southgate) Grant, Rt. Hon. William Oakshott, Sir Hendrie
Beamish, Col. Sir Tufton Green, Alan Orr-Ewing, c. Ian
Bell, Ronald Gresham Cooke, R. Page, John (Harrow, West)
Bennett, F. M. (Torquay) Grimston, Sir Robert Pannel, Norman (Kirkdale)
Berkeley, Humphry Gurden, Harold Partridge, E.
Bevine, Rt. Hon. Reginald Hall, John (Wycombe) Pearson, Frank (Clitheroe)
Bidgood, John C. Hamilton, Michael (Welling-borough) Peel, John
Bingham, R. M. Harris, Frederic (Croydon, N.w.) Pickthorn, Sir Kenneth
Birch, Rt. Hon. Nigel Harrison, Brian (Maldon) Pilklngton, Sir Richard
Bishop, F. P. Harrison, Col. Sir Harwood (Eye) Pitman, Sir James
Black, Sir Cyril Harvey, John (Walthamstow, E.) Pitt, Mist Edith
Bossom, Clive Harvie Anderson, Miss Price, David (Eastleigh)
Bourne-Arton, A. Hay, John Prior, J. M. L.
Box, Donald Heald, Rt. Hon. Sir Lionel Proudfoot, Wilfred
Boyle, Sir Edward Hicks Beach, Maj. W. Quennell, Miss J. M.
Braine, Bernard Hill, Dr. Rt. Hon. Charles (Luton) Rawlinson, Peter
Brewis, John Hill, Mrs. Eveline (Wythenshawe) Rees-Davies, W. R.
Bromley-Davenport, Lt.-Col. Sir Walter Hirst, Geoffrey Renton, David
Brown, Alan (Tottenham) Hocking, Philip N. Ridsdale, Julian
Browne, Percy (Torrington) Holland, Philip Rippon, Geoffrey
Bullus, Wing Commander Eric Hopkins, Alan Robinson, Sir Roland (Blackpool, S.)
Burden, F. A. Hornsby-Smith, Rt. Hon. Patricia Roots, William
Butcher, Sir Herbert Howard, Hon. G. R. (St. Ives) Ropner, Col. Sir Leonard
Campbell, Gordon (Moray & Nairn) Howard, John (Southampton, Test) Royle, Anthony (Richmond, Surrey)
Carr, Robert (Mitcham) Hughes-Young, Michael Russell, Ronald
Channon, H. P. G. Hutchison, Michael Clark Scott-Hopkins, James
Chataway, Christopher Iremonger, T. L. Sharples, Richard
Chichester-Clark, R. Irvine, Bryant Godman (Rye) Shaw, M.
Clark, William (Nottingham, S.) Jackson, John Skeet, T. H. H.
Clarke, Brig. Terence (Portsmth, W.) James, David Spearman, Sir Alexander
Cole, Norman Johnson, Dr. Donald (Carlisle) Speir, Rupert
Cooke, Robert Johnson, Eric (Blackley) Stanley, Hon. Richard
Cooper-Key, Sir Neill Kerans. Cdr. J. S. Stevens, Geoffrey
Cordeaux, Lt-Col. J. K. Kerby, Capt. Henry Storey, Sir Samuel
Costain, A. P. Kershaw, Anthony Studholme, Sir Henry
Courtney, Cdr. Anthony Lancaster, Col. C. G. Summers, Sir Spencer (Aylesbury)
Craddock, Sir Beresford Leavey, J. A. Sumner, Donald (Orpington)
Critchley, Julian Leburn, Gilmour Tapsell, Peter
Crowder, F. P. Legge-Bourke, Sir Harry Taylor, Edwin (Bolton, E.)
Cunningham, Knox Lewis, Kenneth (Rutland) Temple, John M.
Curran, Charles Lindsay, Martin Thatcher, Mrs. Margaret
Dalkeith, Earl of Linstead, Sir Hugh Thomas, Leslie (Canterbury)
Dance, James Litchfield, Capt. John Thompson, Kenneth (Walton)
Davies, Rt. Hn. Clement (Montgomery) Longden, Gilbert Thompson, Richard (Croydon, S.)
d'Avigdor-Goldsmid, Sir Henry Loveys, Walter H. Thornton-Kemsley, Sir Colin
Deedes, W. F. Low, Rt. Hon. Sir Toby Thorpe, Jeremy
de Ferranti, Basil Lucas, Sir Jocelyn Tiley, Arthur (Bradford, W.)
Digby, Simon Wing-field Lucas-Tooth, Sir Hugh Turner, Colin
Donaldson, Cmdr. C. E. M. McAdden, Stephen Turton, Rt. Hon. R. H.
Doughty, Charles MacArthur, Ian van Straubenzee, W. R.
Duncan, Sir James McLaren, Martin Vane, W. M. F.
Elliot, Capt. Walter (Carshalton) McLaughlin, Mrs. Patricia Vaughan-Morgan, Rt. Hon. Sir John
Elliott, R. W. (Nwcstle-upon-Tyne, N.) Maclean, Sir Fitzroy(Bute & N. Ayrs.) Vickers, Miss Joan
Emery, Peter McMaster, Stanley R. Vosper, Rt. Hon. Dennis
Errirrgton, Sir Eric Maddan, Martin Wakefield, Edward (Derbyshire, W.)
Erroll, Rt. Hon. F. J. Maitland, Sir John Walder, David
Farey-Jones, F. W. Marshall, Douglas Walker, Peter
Farr, John Marten, Nell Walker-Smith, Rt. Hon. Sir Derek
Fell, Anthony Mathew, Robert (Honiton) Ward, Dame Irene
Finlay, Graeme Matthews, Gordon (Meriden) Wells, John (Maidstone)
Fletcher-Cooke, Charies Mawby, Ray Whitelaw, William
Forrest, George Maxwell-Hyslop, R. J. Williams, Dudley (Exeter)
Fraser, Ian (Plymouth, Sutton) Maydon, Lt.-Cmdr. S. L. C. Williams, Paul (Sunderland, S.)
Gammans, Lady Mills, Stratton Wills, Sir Gerald (Bridgwater)
Gardner, Edward Montgomery. Fergus Wilson. Geoffrey (Truro)
Wise, A. R. Woodnutt, Mark
Wolrige-Gordon, Patrick Wooliam, John TELLERS FOR THE NOES:
Wood, Rt. Hon. Richard Worsley, Marcus Mr. Gibson-Watt and
Woodhouse, C. M. Mr. J. E. B. Hill.

6.30 p m.