§ Question proposed, That the Clause stand part of the Bill.
§ 4.45 p.m.
§ Mr. Callaghan
I offer myself again. In view of what has been said, I might follow up on this Clause the remarks made earlier. The Chief Secretary to the Treasury is, of course, quite right. The Beer Duty is not at a record level. That distinction belonged to the last and not the present Conservative Government, but it is at its highest level since this Parliament began its 948 life. According to the Report of the Customs and Excise the duty on beer was £5 11s. 9½d. per barrel. Now, under the Bill, it will become £7 7s. per barrel. The revenue, again taking the two comparative years, was £218 million when we started this Parliament and it is estimated that it will be £291 million for 1964–65.
Again, therefore, I say that this is the highest rate of duty in the lifetime of this Parliament. The Government have twice managed to raise the duty on beer since 1959–60. It is true that they lowered it in 1958 and 1959 for the purpose of helping them to win the General Election. Presumably they are now raising it for the same purpose.
It should be taken into account that the increased tax enters into the retail price index. I have constantly made the point about various actions of the Government in this connection. By their own acts they make their own incomes policy more difficult. The cost of wine, beer, and spirits enters into the retail price index. I have looked up the weightings, which are constructed on the basis of 1,000 points. Food is highest at 314 points, but beer is by no means low. In the alcohol content of the index it comes out at 63 points. It is nearly as high as fuel and light, surprisingly enough, and they are placed at 66 points. It is higher than household goods, at 62 points, and it is higher than the miscellaneous group of services, on which I thought people were spending more money, at 56 points.
The Chancellor, therefore, by means of this Clause, is helping to raise the cost of living. Every pint of beer drunk in clubs and "pubs" will affect the cost of living. Only yesterday Mr. Frank Cousins pointed out in a speech the difficulty which he and his executive will find, because of the increased cost of living, in moderating wage claims. Here the Government, as they have done with rents and general interest rates, are operating against them. The Government's left hand does not know what its right hand is doing.
The Government will make life more difficult for themselves during the summer. The increased Beer Duty will be reflected in due course in the retail price index. It is true that 2 million or 3 million workers have their wages automatically adjusted up or down according 949 to the state of the index. In my young days it always operated downwards. There was a period of four successive years when the increment of £5 which I received was obliterated by the fall in the cost-of-living index. The Government, by this and similar actions, are helping to precipitate a rise in wages and earnings over the next few months.
There is another point in this connection which I made in the Budget debate. The Chancellor of the Exchequer says that he must have his revenue. I take the Chief Secretary's point that we cannot deny it to him in these circumstances and that this may be one of the least offensive ways of raising it, but this affects quite sharply a comparatively small group of elderly people, the old men and women who like a pint of beer. We all know the kind of man who comes into the club. He is the first one there in the evening and he sits over a pint for an hour. He then has two or three more pints and makes them last for four or five hours while he sits there talking. This duty affects him adversely.
This is a point which has been put to me more than once. I very much regret that the Chancellor has done nothing to offset in some way or another—I cannot, on this Clause, suggest how he can do it—this hardship, which affects a relatively small group, but, nevertheless, a group who can least afford any increase of this sort. I regret that the Chancellor is asking the Committee to agree to raise this duty in this way, at this time.
When the Government are proclaiming their record and saying, "Why trust the Socialists? You can be quite sure you ought to vote Conservative", they ought to state, "Once again, we are getting more revenue and a higher rate of duty than we have had, and in the lifetime of this Parliament we have managed to put the Beer Duty up twice during the last four years."
§ Mr. Boyd-Carpenter
As the hon. Member for Cardiff, South-East (Mr. Callaghan) said, the effect of this Clause will be that the Beer Duty will have been put up twice in the last few years, but it is material to point out that the effect of so doing will be to put it at the identical level at which hon. 950 Members opposite left it in 1951–8½d. on the pint.
The Committee will appreciate that, although nobody underrates the dislike that many people feel at any extra imposition in this direction, all sections of the community are in a very much better position to pay this rate of duty today than they were in 1951. It represents a very much smaller proportion either of earnings or of social benefits. I mentioned on the last Clause the fact that since 1951 industrial earnings had risen by 99 per cent. Therefore, this burden, obviously represents for those in industry a great deal less than precisely the same rate of duty represented in 1951.
§ Mr. R. J. Mellish (Bermondsey)
That is not the whole argument. Since 1951, apart from the increased tax which the present Government imposed, the price of beer has been increased by the brewers themselves. If we are to argue about the price of beer in 1951 and what it is today, we might get a more realistic figure. Even in London, only yesterday, it was announced that the price of beer is going up even further to make more profit for the brewers.
§ Mr. Boyd-Carpenter
That is a perfectly reasonable point, but it does not bear on the point made by the hon. Member for Cardiff, South-East, to which I was replying, which was the effect of these duties on the citizen, for which, of course, the Government and this Committee are directly responsible. The fact remains that set against the far higher money incomes and substantially higher real incomes of today, this rate of duty—the same as that of 1951—must represent a very much smaller burden on the citizen than it did.
The hon. Gentleman referred to the example with which perhaps the Committee has most sympathy of all—the old gentleman who likes his pint of beer. But if one is to get the matter in proportion the fact remains, as the Committee knows, that the general level of the National Insurance retirement pension is now in money terms 125 per cent. more than what it was in 1951, when we had the same rate of duty.
§ Mr. Boyd-Carpenter
Therefore, for 951 them this duty represents a much smaller proportion of their income than when it was thought right to impose it in 1951. I hope that the Committee will get this into proportion.
The hon. Gentleman also referred to the fact that as beer appears in the retail price index the effect of increasing the duty is to affect the index. That is perfectly true, but I think, again, that we must get it into proportion. The effect of increasing the beer duty is one-fifth of a point—a variation which quite a minor fluctuation in the price of vegetables can produce. It is a valid point, but I think that it is a mistake to exaggerate it. The hon. Gentleman has accepted that it is necessary in the circumstances of this year to obtain some increased revenue, and I suggest to the Committee that this is not an unreasonable way of obtaining, as this Clause will obtain for us, £25½ million this year and £29 million in a full year.
§ Mr. Mellish
The right hon. Gentleman really does not know what is going on outside. He has said that this tiny little tax makes not the slightest difference. To the vast majority of the people of whom my right hon. Friend the Member for Cardiff, South-East, (Mr. Callaghan) was talking, it is a tremendous hardship. To the dock worker who is in work it of course makes very little difference. He can absorb the extra tax; it may be only a fraction of some overtime he has earned. But in a constituency such as I represent, where one in every five is an old-age pensioner, every one of whom to the best of my knowledge is in receipt of the National Assistance, the main pleasure of the men, is to have a smoke and a drink. As for the old ladies, certainly most of the pleasure they can get is in visiting the local "pub" of an evening.
When the right hon. Gentleman talks about this being an infinitesimal tax and says what nonsense it is to suggest that this is creating a difficulty, I assure him that in areas where I come from they say, "Why is it that when a Government are in power for as long as this one has been and impose new taxes they always seem to be put on those who can least afford them? "To impose this as a form of indirect taxation is grossly unfair. Some of the dock workers going into a local 952 public house may not even know that the price of beer has gone up, but the vast majority of old people certainly would and on them it would be a hardship. I ask the right hon. Gentleman to accept that the arguments put up by my hon. Friend are quite realistic and not to be scorned at.
§ Mr. A. Lewis
I support my hon. Friend's argument, which is a statement of fact. I interjected while the Minister was speaking when he made reference to the fact that pensions had gone up by 121 per cent. since 1951.
§ Mr. Lewis
Whatever the figure, it is immaterial. My interjection was: what about the price of beef? Some hon. Members opposite sniggered at that, but my object was to make the point that old-age pensioners, whether the pension has gone up by 125 per cent. or not, have long since lost the opportunity of ever affording beef, not only because of this last doubling and trebling of the price. They know that everything they touch is increasing in price, directly attributable to the actions of the Government.
The Minister made an attack upon my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) on what the next Labour Government were going to do about taxation. I would remind him that this Government in the last election and in each election since 1951 said that they were going to reduce taxation, make the £ worth something, and reduce the cost of food. It is true that old-age pensioners in my constituency and in most of the industrial constituencies are in the position that possibly the only pleasure they get out of life is their pint of beer and packet of cigarettes. The Government have consistently increased direct and indirect taxation and what I would term the type of taxation that the old age pensioners cannot avoid as in fact others do. I am referring to the way in which rents have been doubled, trebled and quadrupled. I am referring to the way in which the Government have brought about the increase in rates. In fact, every action of the Government—. There is no need for the right hon. Gentleman to look at you, Sir Samuel. I am only mentioning these things in passing. The fact is that this is another 953 example of the Government not attempting to keep taxation down but deliberately increasing it. I hope that, when the election comes, it will be remembered that this Government have gone out of their way to increase taxation, and to increase it particularly against those least able to afford it.
§ 5.0 p.m.
§ Mr. Boyd-Carpenter
I shall not attempt to emulate the adroitness of the hon. Member for West Ham, North (Mr. A. Lewis) in opening up general questions of taxation policy, but perhaps I should say a word or two in reply to the two hon. Members who have addressed the Committee since I did.
First, in reply to his reference to pensioners, I ask the hon. Member for Bermondsey (Mr. Mellish) to reflect on what I said in my earlier remarks in response to the hon. Member for Cardiff, South-East (Mr. Callaghan) on the point that a beer duty at the same rate as it was in 1951 must represent less of a burden to someone on the pension today than it represented then. It must represent a considerably smaller burden. It is certainly not to suggest that it is trivial or unimportant—nothing of the sort—to point out that it is a smaller burden, and I think that this is an argument to which the Committee might feel disposed to give some weight.
The hon. Member for Bermondsey went rather far in describing generally the increased duties on tobacco and alcohol as being imposed on those least able to afford them. However much we may argue on this Clause about who is the consumer of beer, it is surely a sound general proposition that taxes on alcohol and tobacco are pretty fairly borne throughout the population. They are not the kind of tax upon basic necessities of life against which the sort of charge which the hon. Gentleman made could, perhaps, properly be levied.
As I say, I shall not enter upon the general issues of taxation which the hon. Member for West Ham, North raised. I say only that faced, as my right hon. Friend was, with the necessity, which, on the whole, the Committee accepts, of obtaining a moderate increase in revenue this year, it seems right that alcohol and tobacco should be the commodities to bear the increase. The position of those 954 who like their pint of beer and would feel a deprivation if they lost it is one which most hon. Members, at least, fully understand and sympathise with, but, as I said before, one must keep this in proportion. It is a proportionately smaller burden in this direction than was previously thought right to put upon people, and, all things being considered, I put it to the Committee that this is a reasonable and sensible imposition.
§ Mr. Callaghan
I would not have risen again except that I take exception to the right hon. Gentleman's remarks about putting this increase in proportion and about everyone paying very much less than he did in 1951. This is absolute rubbish. I do not know whether the right hon. Gentleman has referred to his own tables. I referred to mine as he was speaking. According to the Report of Customs and Excise, the duty for all years up to 1958–59 was 155s. 4½d. on a barrel of 36 gallons. There was then a very substantial reduction for the period of the General Election. It was introduced in April, 1959, and the duty on beer went down substantially to 111s. 9½d. The Chancellor has now by instalments put it back to 147s. per barrel of 36 gallons. Although the right hon. Gentleman talks about a substantial saving, in fact, the saving amounts to 8s. on 36 gallons. That is the substantial saving, and he has steadily climbed back to the present figure which he suggests was wrong all the way up to 1958–59. This is putting the matter in proportion, I suggest. It is not a substantial saving at all; it is only 8s. on 36 gallons.
As my hon. Friends have pointed out, when one takes into account the other burdens put upon the pensioner, it means that there is a further small burden put on the shoulders of those who can least afford it. Living in an affluent society as we are, if the Chancellor thought it right, for whatever reasons, to put the duty down substantially by about 40s. early in 1959, it is not a very good defence now to tell us that he has put it back to just under what it was in 1958–59 and no one need worry very much.
I agree that it is small in relation to the total amount and it is small in relation to what a man at work and earning good wages might spend. On the other hand, it is a significant figure, 955 as my correspondence shows and as the right hon. Gentleman's correspondence must show, among old people, and I think it right that a voice should be raised on their behalf in this Committee today.
§ Mr. John Rankin (Glasgow, Govan)
The right hon. Gentleman compels me to say a word because he has made two statements which are not quite correct. The first was that the tax on beer and spirits is more easily borne today than it was years ago due to higher wages. As my hon. Friends have pointed out, this is not strictly correct. They cited examples to show that the tax is not, in fact, more easily borne.
The right hon. Gentleman said also that the tax on beer, dealing with that particularly, was pretty fairly borne. I dispute this. I doubt that the tax is more fairly borne. Its incidence is unjust because the amount of tax which is paid in different parts of the United Kingdom is not necessarily the same because of the different methods of dealing out the commodity. In the case of spirits particularly, measures are used which have no statutory endorsement whatever, and they vary according to the whim of the retailer. In language which is not uncommon, one of the results of asking for a measure of spirits is simply to get a "dirty" glass. I believe that one distinguished person who used that expression is now a member of the Government in another place, and, if the right hon. Gentleman wishes to follow the point a little further, he will find out who that noble Lord is.
The tax is not fairly borne. I remind the right hon. Gentleman of a practice which is very common in Scotland but not, I think, so common in England. In Scotland, the glass of whisky is always accompanied by a chaser.
§ Mr. Rankin
I do not mind my hon. Friend interrupting me, but I think he may take it that I am not wrong in what I say about Scotland. I said that this example might well not apply in England.
In Scotland there is the feeling that before one has a glass of beer one wants 956 something to go down in front of it. So the phrase "a glass and a chaser" has become accepted parlance in certain parts of Scotland. That means that the tax is not just the penny on the beer but also the penny on the whisky. So it becomes a double tax.
§ The Temporary Chairman (Sir Samuel Storey)
The Clause deals only with beer and not whisky. This is the "chaser" to which the hon. Member refers.
§ Mr. Rankin
I realise that, Sir Samuel, but owing to an engagement which detained me a little longer than I expected, I missed the opportunity of joining with the Chancellor on the first Clause, and now I am trying to link the two. I always felt that in debate it was useful to establish a link between the past and the present. Whatever I may do to try to avoid your Ruling, Sir Samuel, there is nothing I can do to separate the "glass" from the "chaser"; that will still continue because the two are linked. As a result of this link, the Chancellor is doing double the damage to my Govan constituents who like a drink. This is another reason for taxing what I refer to as "the sins of the community" because then the Government know that a great many good people will support them in saying that we do not want others to drink or smoke or do things which they regard as not being very good.
The right hon. Gentleman should realise that he is doing a little more harm than he realises and that in some cases he will be doubling the tax—unless he tells Scotland that it has to stop this ancient practice of having "a glass and a chaser", and if he does that he will be in terrible trouble when October comes along.
§ Mr. Boyd-Carpenter
I will not attempt to join the hon. Member for Glasgow, Govan (Mr. Rankin) in the "chaser". I will stick to the beer, which is probably wise advice in general terms but is also what the Clause provides for. As to what he said about "the dirty glass", I recall the observation in another place with some interest. But that is plainly relevant only to the question of the duty on spirits, and I am sure that the hon. Member would not argue that it had anything to do with beer, unless the public houses in his constituency are very unusual ones indeed.
957 I am afraid that I must bring the Committee back to beer. I do not want to detain the Committee into licensed hours on the subject but I must make a further reference to what was said by the hon. Member for Cardiff, South-East (Mr. Callaghan). The hon. Gentleman missed the point. He does not often do so, but he did on this occasion. I was not talking about savings at all. All I was saying—I must leave the hon. Member with this thought—was that the rate of Beer Duty as it now is in the Budget is the same as was thought right in 1951, although the resources of all sections of the community obviously make this rate of duty much less significant and much less burdensome now than it was then.
§ Question put and agreed to.
§ Clause ordered to stand part of the Bill.
§ Schedule 2 agreed to.