§ EARL GRANVILLEmoved the Third Reading of this Bill, the principal object of which, he explained, was to increase the duties of Excise on spirits in Scotland to the extent of 1s., and in Ireland to the extent of 8d.
§ LORD MONTEAGLEsaid, that he viewed this Bill, both in its principle and application, with the greatest alarm, as to the effect it was likely to produce on public morals, on the peace of the country, and on the revenue. There could be no dispute as to the general principle that the Legislature was warranted in imposing the highest amount of duty upon spirits that could with safety and certainty he collected; but he doubted extremely whether, from the peculiar circumstances of Ireland, the Excise Department would be able to collect the increased duty now proposed. He thought he should be able to show their Lordships, on the contrary, that the effect of the Bill would be to lessen revenue, and not to increase it. He begged the House to bear in mind the amount of revenue they were risking by this experiment. The spirit duties of the United Kingdom amounted to nearly 4,000,000l per annum, and constituted a burden of which nobody complained with justice. The fact was, that in Ireland the spirit duties constituted considerably more than one-fourth of the entire revenue collected in the country. The present Bill was founded upon an utter oblivion of every principle laid down by the highest authority, and established by the experience of all past legislation on this subject. In England there were very few distillers—the firms were large, they had extensive and costly premises, and contributed tens and hundreds of thousands a year each to the revenue. In Ireland, however, the case was totally different. There was no analogy between these establishments and an illicit distillery in Ireland. There, a man could obtain a small still at an expense of 3l.; he could get his fuel for the mere labour of procuring it, and his grain might be of his own growing. Two stone of oats, at 10d. per stone, a little malt, would produce for him one gallon of spirits, which would sell at the lowest at from 4s. to 5s. 1162 per gallon. He maintained, then, that with such a temptation to fraud upon the revenue as increased duties on spirits presented, no machinery they could devise, and no force they could employ, would be able to collect the duty. This was proved abundantly by experience. The history of the Irish spirit duties was instructive. In 1822 there was a high duty upon spirits; and the Government of Lord Liverpool being exceedingly anxious to consider all questions of Customs and Excise, and, above all, whether any loss to the revenue resulted from these duties, appointed a Commission, of which Lord Wallace was the head. In 1823 the Commissioners reported—
Our inquiries have satisfied us, and we think experience has fully proved, that in the remote parts of Scotland and Ireland it is impracticable to levy the high rate of duty at present charged on spirits. On evidence, and after much reflection, we are led to conclude that, if a higher rate of duty than 2s. 6d. to 3s. is put upon spirits, the licensed distiller cannot enter into competition successfully 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.A reduction of duty was then made to 2s. 4d. per gallon, being an amount lower by 1s. than what was now contemplated by the Government to levy; and the effect was, that the consumption, which, in 1823, had been 3,342,000 gallons, rose, in 1824, to 6,690,000 gallons. In 1830 the Government of the day repealed the window tax in Ireland, upon the ground that it cost more to collect the tax than it yielded to the Exchequer. That might have been a very satisfactory fiscal reason for the repeal of that tax, but it was not a remarkably logical reason for imposing a new tax in its place. At that time, however, an additional 1s. per gallon was added to the spirit duties, which brought them exactly to the level now proposed by the Government, namely, to 3s. 4d. This addition immediately led to a falling off in the receipts; and Lord Grey, like his predecessor, appointed a Commission of inquiry, of which Sir H. Parnell was the head. The Report made in 1833 was in those terms:—There is a complete concurrence of opinion 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 smuggler were nearly annihilated, and that the revival and subsequent increase of these practices have nearly been 1163 contemporaneous with the consecutive increases of duty in 1820, 5½d, and in 1830, 1s. It seems unnecessary that we should enter into 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. We confidently expect a general suppression of illicit distillation, and a full compensation to the revenue.In the following year, 1834, Lord Althorp introduced a measure with the view of putting down illicit distillation, and restoring the revenue by a reduction of the duty from 3s. 4d. to 2s. 4d.; and his Lordship then said—That the Government had felt it their duty to consider the subject of the Irish spirit duties, with the view of ascertaining whether it might not be advisable by a diminution of duty to prevent illicit distillation, and at the same time not to expose the revenue to much loss. He felt confident that by repealing the increased duty of 1s. very advantageous results would be obtained, and that the amount of spirits brought to charge would rise from 8,000,000 to 10,000,000 gallons, and that in future years the revenue would suffer no loss whatever.Immediately upon that alteration taking place, the amount produced rose not merely from 8,000,000 to 10,000,000 gallons, as Lord Althorp had anticipated, hut to 12,296,000 gallons, and by this means the revenue was replaced in the position in which it had stood previous to the inconsiderate increase of the spirit duties in 1830. From that period until 1840 no alteration of the spirit duties took place; but in that year his right hon. Friend Mr. Baring added to them 4d.—a sum less by one half than was now contemplated. Such was the sensitive nature of the spirit duties, however, that the quicksilver did not respond more certainly to the heat of the hand applied to the bulb of the barometer, than did smuggling follow upon any augmentation of their amount. Accordingly, the addition of the small sum of 4d. per gallon at once increased illicit distillation, as Mr. Goulburn, who had the experience of 1830 before his eyes, had warned Mr. Baring would be the consequence of imposing that additional sum. Thus matters stood until 1842, when the Government of Sir Robert Peel, undismayed by the difficulties which had before occurred, proposed the addition of 1s. a gallon on spirits. Exactly the same results again ensued; and in the very next year Mr. Goulburn in the other House, and the Duke of Wellington in their 1164 Lordships' House, proposed the repeal of that additional duty. These were facts which could not be mistaken or controverted, and they clearly proved that illicit distillation had increased, and the revenue decreased, on every addition made to the duty. There was one other portion of the subject to which he wished to call attention, and that was the effect of illicit distillation upon crime. This was not a mere question between the distiller and the Treasury. He had shown that every rise in the duty had been attended with loss to the revenue, and every fall in the duty with an increase to the revenue. He would now show how it acted upon crime. He would take, for example, the returns from the gaol of Carrick-on-Shannon, as affording a fair illustration of this. In 1834, when the duty was 3s. 4d. per gallon, 52 persons charged with illicit distillation were confined in that prison, which only contained accommodation for 79. In 1840, when the duty was reduced to 2s. 4d., the 52 prisoners had dwindled down to 2. In 1843 came the increase of duty to 3s. 8d., and the 2 instantly mounted up to 26. In 1847 Mr. Goulburn's 1s. was removed, and the duty brought down to 2s. 8d.; immediately people ceased to distil, and the 26 declined to 3. He had similar returns from Lifford, Castlebar, and elsewhere, showing the same results. In the whole of Ireland there were in 1842 368 persons imprisoned, charged with the offence of illicit distillation; and in 1833–34, when the duty was 3s. 4d., the number of prisoners was augmented to between 400 and 500. He thought it impossible to carry demonstration further of the ill effects of any measure. It might be asked, if the increased duty yielded nothing additional to the revenue, and the people of Ireland paid nothing more than before, where was the grievance? The question was childish, though, to his surprise, it had been put. To remit taxation was one thing; but to put a country in the position of evading and cheating the revenue, was not to be considered as a relief from taxation, nor yet, on other grounds, as a very desirable course to pursue. Certainly that was not the way in which he, for one, wished to profit by the financial arrangements of the Government. His noble Friend was trying a duty now which had failed before; but he was trying it under circumstances which must occasion it to fail at this time, even if it had succeeded on former occasions, because the prices of agricultural produce 1165 were now so much lower than they were then, that there was now a much greater temptation for a man to convert his grain into spirits than to sell it in the market, and many persons, therefore, would be induced to smuggle, who in other circumstances might not have attempted it. He must say, if this experiment were tried under circumstances which were calculated to deprive it of the small chance it would otherwise have of success, it would not be likely to gain the slightest fragment of popularity which could by possibility attach to it. When it had been proposed on former occasions, it had been to permit the repeal of other taxes. In 1832 the tax was proposed to compensate for the removal of the window duties from Ireland; and in 1842 as an equivalent for not extending the property tax to Ireland. On the present occasion it was just the reverse, and Ireland had got an increased duty on spirits, and the income tax and other onerous taxes into the bargain. Indeed, no one could consider the present Budget without seeing that, however it acted upon other parts of: the Empire, it operated with a most unjust pressure upon Ireland. By the repeal of the soap duties, the assessed taxes, and post horses, and by the extension of the income tax to incomes of 100l. a year, there was remitted altogether to Great Britain 1,040,000l. a year. In Ireland, on the other hand, while the total remitted was only 245,000l. of consolidated annuities, there were imposed, the income tax, 460,000,000l., and spirit duties, 198,000l.—total, 658,000l.; or, in other words, there was additional taxation imposed upon Ireland to the extent of 413,000l. a year, while in Great Britain there was a remission of above one million. From 1800 to 1815, Chancellor of the Exchequer after Chancellor of the Exchequer had, in search of revenue, imposed new taxes upon Ireland year after year, until in 1815 the Minister was obliged to admit in Committee that, having imposed taxes to the amount of 3,000,000l. sterling, the result had been a loss of 10,000l. a year. He had felt the Bill to be so important to the interests of Ireland, that he deemed he should not have been doing his duty had he not trespassed upon them to the extent he had, even at a time which was, no doubt, inconvenient for the discussion of a question of this nature.
§ The EARL of DERBYdid not rise to make any observations on the speech of his noble Friend who had just sat down 1166 He would only say that, omitting, perhaps, the latter portion of his speech, in which he alluded to the relative relief from taxation afforded by the recent Budget to England and Ireland, and which, perhaps, was not necessary to the illustration of the question, he was bound to say that, with regard to the whole of his remaining arguments, with regard to the authorities which he had brought to bear upon the subject with respect to the practical effect found to result from previous corresponding increases of the duty, and to the anticipations for the future, he entirely concurred with his noble Friend. He was satisfied that this was an impolitic addition to the duty, which would not increase the revenue; but in the then state of the House, considering that the Bill was one to which the Government attached importance, and from which they anticipated to derive an increased revenue of 400,000l., a deprivation of which would convert their present imaginary surplus into a deficiency, he should be unwilling to do more than to express his entire concurrence in the views and opinions of his noble Friend. He should be sorry to see a Bill which had passed the House of Commons rejected by so small a number of their Lordships as were present at that time. That consideration alone—a consideration of the small numbers by which if the Bill should be rejected it would be rejected, and the consequent absence of weight which such a decision would carry with it—that consideration alone it was, and not any doubt of the mischievous character of the measure before them, which prevented his taking the sense of those Members present with regard to the passing of the Bill. He was disposed to leave this case in the hands of the Government. He believed that as former Governments had found it necessary to retrace their steps, so the present Government also would see the evil consequences that would flow from this proposition, and would have the unpleasant duty of confessing that they had been altogether mistaken in the effects which they had anticipated.
§ EARL GRANVILLEsaid, that of course he was perfectly aware, from the high character of the noble Earl opposite, that there was no chance of his trying to defeat this Bill at that particular stage. It was not necessary for him to go further into the discussion of the subject than to say that he entirely concurred with the noble Earl as to the amount of ability and 1167 knowledge which had been shown by the noble Lord near him (Lord Monteagle), in the speech which he had just made; and he certainly should not follow the noble Lord into that which he had admitted to be irrelevant—namely, the whole question of the Budget. He might, however, say that having lately been in Ireland himself, nothing had struck him more than the general concurrence, not of political partisans merely, but of that class most connected with commercial undertakings, and most interested in the general welfare of Ireland, in the opinion that there was a general return of prosperity to that country, and in an entire disclaimer of anything like a disapproval of the Government proposition as affecting them. He would simply observe, with reference to the loss to the revenue when the shilling duty was imposed, that it took place just at a period when a great change took place in the consumption of spirits, owing to the exertion of Father Mathew.
§ On Question,Resolved in the Affirmative.
§ Bill read 3a accordingly, and passed.
§ House adjourned till To-morrow.