The Earl of Wicklow
said, he had no objection to offer to this bill. On the contrary, he approved of the principle of a high duty on spirits as far as that could be effected without risking the chance of an increase of an illicit distillation; but when he recollected the demoralising effects which had resulted from an extensive prevalence of illicit distillation, he owned that he looked with some alarm at any measure which had a tendency to produce it. He should, therefore, have felt it his duty to oppose the present measure on that ground, if he were not convinced that the Government, before introducing it to the Legislature, had examined the subject in all its bearings, and were satisfied that it would not be attended with the effects to which he alluded.
§ Lord Monteagle
was of opinion that this measure would prove a complete failure as to revenue, and that its operation must be attended with the most mischievous consequences. It was the last objection that could be fairly urged against the present Government, that their financial plan would bear hardly on Ireland; but he thought he could show, from facts which had come within the knowledge of noble Lords whom he addressed, that this part of the financial scheme of the Government Would not answer any of the purposes for which it had been proposed. In 1823, under Lord Liverpool's Government, a commission, at the head of which was Lord Wallace, was appointed to in quire into the probable effects of a reduce- 461 tion of duty upon Irish spirits. Those Commissioners stated that if a higher duty than from 2s. 4d. to 3s. was levied upon whiskey, fraud and illicit distillation would ensue. The commission, in its 5th report stated:—Our inquiries have satisfied us, and we think experience has fully proved, that in the remote parts of Ireland and Scotland it is impracticable to levy the high rate of duty at present charged on spirits. On carefully comparing the mass of information we have received, we are, after much reflection, led to conclude that if a higher duty than 2s. 6d. to 3s. is charged upon spirits, the licensed distiller cannot enter into successful competition with the illicit distiller, and we cannot therefore hesitate to recommend a reduction to that amount. We hope that the reduction will not be attended with loss, but that an augmentation may be expected.Lord Liverpool's Government acted on the information just received, and in 1823 a reduction in the duty was made of from 5s. 6d. per Irish gallon to 2s. per English gallon. The increase in the quantity brought to charge consequent upon the reduction of duty was upwards of 3,342,000 gallons; the consumption in 1823, being 3,348,000 gallons, and in 1824, 6,690,000 gallons. But in 1826 an opposite course was adopted by the Government; the duties on spirits were increased to 2s. 10d.. per imperial gallon. The effect was felt in the reduction which immediately followed in the quantity consumed; in 1825 the quantity consumed being 9,262,000 gallons, and in 1826 the quantity having fallen to 8,260,000 gallons. In 1830 an additional duty of 1s. per gallon was imposed by Mr. Goulburn, which was the increase of duty which was now proposed to be laid on. In 1834 a commission was again appointed which examined and reported on the spirit duties. Sir Henry Parnell was chairman. He would, with their Lord ships' permission, read extracts from the report furnished by that second commission relative to the effect which had been found to follow from the increase and reduction in the duties on spirits. The commission stated:—From the numerous examinations [of distillers and excise officers, it will be seen that there is> with very few exceptions, a complete concurrence of evidence that the practice of illicit distillation has almost uniformly kept pace with the advance of duty; that in 1823, When the great reduction of duty took place, the habits of the smugglers were nearly annihilated, and that the revival and subsequent increase of these practices have been nearly 462 contemporaneous with the consecutive increase of duty in 1826 and 1830.And again at page 90,—It seems unnecessary that we should enter into any further description of the grounds on which we consider a reduction of the duty to the amount at which it stood under the recommendation of the former commissioners, as the only remedy for the evasions of duty which can be proposed with any prospect of success. A firm conviction induces us to urge the necessity of retracing the steps taken in increasing the spirit duty. From a repeal of the additional duty, we confidently expect a general suppression of illicit distillation and a full compensation to the revenue.In consequence of these reports, his noble Friend the Chancellor of the Exchequer (Earl Spencer) proposed to reduce the duty from 3s. Ad. to 2s. Ad. per gallon. His noble Friend stated that,—The Government had felt it their duty to consider the subject of the Irish spirit duties with a view of ascertaining whether it might not be advisable, by a diminution of the duty, to prevent illicit distillation, and, at the same time, not to expose the revenue to much loss. He felt confident that by reducing the duty from 3s. 4d. to 2s. 1d., very advantageous results would be obtained, and that the amount of spirits brought to charge would rise, from 8,000,000 gallons, to 10,000,000, and that in future years the revenue would suffer no loss whatever.The consequence of this reduction as regarded the increase in the quantity consumed was even greater than had been anticipated. In 1834 the quantity consumed had been 8,136,000 gallons. In 1836 the quantity became 11,634,000 gallons. In 1840 Mr. Baring, the then Chancellor of the Exchequer, imposed an additional duty of 4d. upon Irish spirits. To this imposition Mr. Goulburn strenuously objected, stating that he thought,—The result would be a loss of revenue, and that in his opinion the Government, in imposing the additional duty, had not profited by the experience which his own measure, in 1830, had furnished them with. He believed that it had been established that, in proportion to the reductions which had taken place in the duty on Irish spirits, the revenue had been augmented, and that the effect of increasing the duty had always been to diminish the consumption, and consequently the revenue.The result fully confirmed this anticipation. The case, however, was even more serious at present than it had been at former periods when an increase in the amount of duty had been laid on. If illicit distillation should again be revived, the noble Duke opposite knew what would be 463 its probable effects on the troops who might be called out for the purpose of its suppression. The military force applicable for that purpose, was now on a very different scale from what it was formerly. It was formerly upwards of 20,000 men. It is now scarcely half that number. It would be borne in mind, that the service of suppressing illicit distillation had been found most destructive to the organization and discipline of the troops who had been engaged in it. He believed that a renewal of illicit distillation would have the effect of endangering the peace of the country, and that it would tend greatly to the encouragement of crime. Out of 16,000 commitments which had taken place in Ireland during one period, he found that upwards of 4,000 had proceeded from illicit distillation. The military power possessed by Government for checking illicit distillation was less than it had been, while the inducement to commit the offence was greater. Without wishing in any degree to anticipate the discussion of a question which would come in due course before the House, he could not doubt that there was less protection to be placed by the new tariff on barley and oats, relatively to wheat, than the protection given by the old scale. The effect, then, of the proposed additional duty would be, that crime would be increased, and that the military employed to suppress illicit traffic would suffer in organisation and discipline. A criminal connivance would, as in former times, spring up between those who violated the law and those who profited by that violation, alike irresistible and indefensible. Farmers, and those in the ranks of life immediately above farmers, would find that their best profit lay in joining in, or conniving at the practice of illicit distillation, A witness examined before Lord Wallace's commission in 1822 was asked where the smugglers found the best mart for their article? The reply was, that their best customers were the magistrates, the officers of the King's army, and the dignitaries of the church. He did not make the statement as a fact coming within his own knowledge; he merely gave the reply of the witness. The notion of deriving an increase of revenue to the extent of 250,000l. from the proposed duty was the most delusive expectation that had ever entered into the mind of man. He had thought it his duty to make these observations with the view of showing the danger which would attend any increase 464 of duty on spirits in Ireland. He believed that the result of such a measure being carried into effect would be a great increase of illicit distillation, and consequently of crime; if, therefore a division should take place, he would be compelled to say, "not content" to this bill.
§ The Duke of Wellington
could assure his noble Friend near him (the Earl of Wicklow) that Government had made every inquiry as to the probable result of the proposed additional duty on Irish spirits. The result of these inquiries bad been, that the Government believed that the measure would not occasion that increase in illicit distillation which had been anticipated. Every security would be taken in order to prevent it, and he believed that the arrangements which would be put in effect would accomplish that result. He would take the opportunity of mentioning that the consumption of spirits in Ireland had increased in the face of the duty imposed by the late Chancellor of the Exchequer.
§ The Earl of Ripon
wished to notice one point of the subject, the inequality of duty upon Scotch and Irish spirits, the duty upon the former being 1s. higher than upon the latter, while the propositions before the House were intended to equalise the duties in both countries. The greatest inconvenience had been felt to result from the difference in duty at present subsisting, and it had been found necessary to establish the most inconvenient regulations with respect to the transmission of spirits between Scotland and Ireland, and it was most desirable that these inconveniences should be removed by the introduction of a measure equalising the duties. It would not be desirable that with this view the duties on Scotch spirits should be lowered to the rate of that on Irish spirits, and, therefore, unless it could be clearly shown, that the proposed increase of duty would be attended with those injurious effects of which his noble Friend seemed to be apprehensive; the best course to get rid of the inconvenience of the inequality of duty was that which the Government proposed. The noble Lord had drawn a comparison between the quantities of spirits consumed before the great reduction had taken place and after that period. But it would be recollected, that the duty from which that reduction was made, was higher than the point to which it was now proposed to raise it. The reduction in question was a bold attempt to put an end to the system of illicit distillation—a system which had 465 been the object of so many, and so very unsuccessful attacks, that it was deemed necessary either to give up the attempt at suppression in despair, or to make it effectual by a reduction of one-half the duty. He did not think, that in itself the measure was a desirable one, and so he said at the time. He adopted it, as it seemed to be the only mode by which it appeared possible to put an end to the evils of illicit distillation. But it did not follow, that when that system had been destroyed, and better means of preventing its renewal had been organised, it did not follow that they were not at liberty to attempt to raise the amount of duty to as high a pitch as it would bear. Indeed, the only grounds on which they could limit the amount of duty, was the risk of some quantity being consumed without having been brought to charge, and thereby not only was the revenue defrauded, but the consumer, in this instance, the unfortunate consumer, had the opportunity of easily obtaining large quantities of ardent spirits. But after consulting men of practical experience in the excise department in Ireland, well conversant with the working of the system, the Government had come to the resolution that it could safely propose the additional duty.
The Bill passed through committee.