SECOND READING. (Hansard, 15 March 1864)

§ LORD STANLEY OF ALDERLEY
, in the absence of the noble Lord the President of the Council, moved that it be read a second time pro formâ, with the understanding that the discussion should be taken on Thursday next.

§ LORD BERNERS
said, that some provisions ought to be introduced into the Bill which would render it more acceptable to the agricultural classes, and prevent it from becoming a dead letter. He must be allowed to say that he did not believe the farmers were likely to avail themselves of its provisions, and he would, therefore, suggest that some modification should be made in the clauses which would render the measure more beneficial to the farmers whilst it would not materially injure the revenue. He would suggest an addition to Clause 2 to the following effect:— That every such maltster, on application in writing from any feeder of animals, that on a certain day he shall require a given quantity (not less than —— quarters) for the feeding of animals, shall give notice to the Excise officers to attend at the day and hour named, and see that such quantity of malt is duly mixed in his presence with the quantity of linseed meal, or other substance, as is required by this Act; and the exciseman shall there and then deliver to the said feeder of animals, or his servant, a certificate permitting the removal of such malt, to be used for feeding purposes only (subject to such fines or penalties as may be fixed by this Act); and shall deliver to such maltster a certificate allowing the drawback of the duty so sold and delivered.

§ LORD STANLEY OF ALDERLEY
said, he really knew nothing of the details of the Bill, and therefore was unable to state the views of the Government. But the existing clauses had been carefully drawn, and alterations such as those contemplated by the noble Lord would scarcely be consistent with the precautions indispensable to be observed. The best course for the noble Lord would be to give notice of Amendments, which should be carefully considered.

§ EARL GREY
felt bound to express his regret that the Bill had been introduced. With all the regulations that could be adopted, he believed it would be impossible to make the malt revenues under the new-system as safe as they now were. He was sorry that Her Majesty's Government, with a view to the protection of those revenues from the agitation that was being raised against them, had brought in the Bill; and with still greater surprise and regret he should see that agitation countenanced by any gentleman calling himself a friend to the landed interests; for he was persuaded that no measure more injurious to the landed interests than the repeal of the malt duties could possibly be adopted by Parliament. What were the malt duties? It was altogether a delusion to suppose that they were paid by the farmer or the 5 landed proprietor; they were paid neither by the one nor the other, but by the consumer of beer. At this moment, according to the relative prices of different kinds of corn, barley was the most remunerative crop that a farmer could grow; there was a market for any quantity the farmer could deliver, and he did not believe that the repeal of the malt duties would improve his position in that respect—on the contrary, any difference that resulted would probably consist in the importation of a greater quantity from abroad. But if the duties Were repealed it was perfectly clear that a heavier charge would be thrown upon the landed interest in the shape of increased income tax—an impost falling most unfairly, land being the only interest which paid on the gross income instead of upon the net. No doubt it would be impossible to repair that injustice without giving room for evasion and destroying the efficiency of the law, but practically the proprietor of land contributed more largely to the income tax than the owner of any other income of equal amount. There could be no doubt that the repeal of the malt duty must necessarily lead to an increase of that impost. Of all the indirect taxes there was probably none so unobjectionable as the malt tax; for though it was an Excise duty it was not like the duty on bricks, or glass, or articles of that description, for it interfered with no manufacture capable of being carried on or susceptible of improvement upon a great scale. The production of malt was a very simple process—it was used only in connection with beer, and if the duty were taken off to-morrow he doubted whether any corresponding stimulus would be given to the trade. Then as to its effect upon the consumer. The duty fell upon an article of luxury; and though, no doubt, it would be very desirable to make beer cheap for the working man, there were many other articles—such as tea and sugar—that it would be still more desirable to cheapen. And if, under the name of facilitating the feeding of cattle with malt, we were to sweep away the whole of this revenue of £6,000,000, we should be driven irresistibly to make further reductions upon other articles, and a further increase of direct taxation. Our army and navy had to be maintained at great cost; any very large reductions of public income were, therefore, impossible. Therefore, those who were agitating against the malt duties were virtually agitating for 6 the increase of the income tax. He hoped that this would be understood by those who took a real interest in the welfare of the owners and occupiers of land, and that no man who called himself a real friend to them would encourage this agitation, fie thought it right, as one who had had some experience in the other House of Parliament of the mode in which taxes were discussed, to express his opinion upon this subject; but it would be a great satisfaction to him if the advice which he had ventured to give to the landed interest could be enforced by the far more powerful authority of the noble Earl who sat On the opposite side of the House (the Earl of Derby.)

THE DUKE OF ARGYLL
said, he was glad that the noble Earl had taken the opportunity of expressing the opinion he entertained, which was no doubt shared by a great majority of the House, with respect to the retention of the malt duty. The noble Earl said that the Government, in order to meet some of the objections urged against the malt duty, had brought in a Bill which would prove dangerous to a large portion of the public revenue. He could assure his noble Friend that the Chancellor of the Exchequer would not have introduced the Bill had he not been assured by the highest practical authorities that he could do so without endangering an important source of revenue. But while we retain the tax it was desirable to give to the farmer every possible advantage which was consistent with the maintenance of the revenue. He (the Duke of Argyll) was himself connected with a large barley growing district in Scotland; and it often happened that in wet seasons barley was rendered useless for the higher purpose of malting; and in many such cases of damaged barley the farmers might take advantage of the permission given by this Bill to malt it for cattle. AH the clauses of the Bill were specially directed to the protection of the revenue. The noble Lord opposite (Lord Berners) had given notice of his intention to move an Amendment; but he hoped their Lordships would not agree to any step which would diminish the securities provided for by the Bill.

§ THE EARL OF HARDWICKE
said, that as the Bill was only to remain in force for five years it would, unless some such Amendment as that suggested by his noble Friend behind him was introduced into it, be entirely inoperative. Neither 7 landlords nor tenants would construct malt houses for barley under this Bill, which could not be considered worth more than fire years' purchase; and he therefore hoped that the Government would consider the Amendment before the House went into Committee.

§ LORD REDESDALE
said, that the argument of the noble Earl on the cross benches (Earl Grey) would not hold, because we had of late years seen indirect taxes equal in amount to the malt duty taken off without their abolition necessarily leading to any increase of the income tax. Nor was it necessary that the malt tax should be totally abolished at once. If the surplus was not large enough, to admit of the adoption of such a step, part of it might be remitted, and such partial remission would, he believed, lead to an increase of consumption, which would make up some of the loss to the revenue. If, therefore, the noble Earl's argument to the contrary was to be taken as valid, it was good against all reductions of taxation whatever. Both theoretically and practically the malt tax was the most unjust duty that could be levied. It was a duty levied upon one of the commonest productions of this country with regard to one of the commonest manufactures. It tended most seriously to prevent the brewing of good beer by the poor, who were thus prevented from obtaining the most nutritious and wholesome beverage which they could enjoy. There was no duty upon cider, nor upon any other of our home manufactures except spirits. He believed that it was most desirable to encourage the use of beer rather than spirits. The argument that the duty was paid by the consumer and not by the producer applied to almost every other tax. Was not the duty on printed cottons paid by the consumer? And yet it was the producers who procured its abolition. Was not the duty on beer paid by the consumer? And yet it was the brewers who got it taken off. The malt duty was indefensible both in principle and in practice, and some portion of revenue might desirably be sacrificed in order to effect its reduction. There was no reason why the duty should be dealt with as a whole. It ought to be treated in the manner most likely to contribute to the benefit of the people and to the ultimate abolition of what he must consider a most unjust tax.

LORD WODEHOUSE
said, he did not join in the regret which had been expressed 8 by the noble Earl (Earl Grey), that the Bill should have been introduced at all; but he was disposed to think that if it was not amended so as to extend its operation beyond five years it would be inoperative. It was only fair to the farmers that the experiment should be tried, whether it was possible, while retaining the malt duties, to allow them to use malt for the feeding of cattle. He himself lived in a part of England where barley was an important agricultural produce. He did not understand his noble Friend on the cross benches, as the noble Lord the Chairman of Committees appeared to have done, to argue that because this tax was paid by the consumer they ought never to look to its abolition. His noble Friend pointed out that the tax fell principally upon the consumers, and was not of serious injury to the producers. He also called attention to the fact—and it was a most important one—that an important portion of the public revenue was raised from this duty, and that if it was swept away recourse must be had to an increase of the income tax. He was himself far from denying that the farmers might derive some benefit from the abolition of this tax; but there were several considerations which must limit that advantage. In the first place, there was no doubt that there would be a largely increased importation of barley, and probably also of malt. There was also the still more serious consideration that, although he would not go so far as to say that no more barley could be grown, he believed that on the best soils in the country, and with the best system of cultivation, it was doubtful whether you could get more barley than was now produced. These were considerations which the farmers ought to bear in mind. But there was another which was even still more important. If the malt tax was repealed, several other important branches of revenue would be affected. The spirit duties, the wine duties, and the malt duties were so intimately connected that you could not meddle with one without affecting the others. In his opinion it was exceedingly undesirable that an agitation should be got up against the malt tax, as if by repealing it great benefits would be obtained, without bearing in mind that its repeal must seriously injure the revenue of the country, and probably lead to the increase of the income tax—a tax which pressed more heavily than any other upon the farmer, and which it was not desirable to raise to a high pitch in time of peace, because 9 by that means you would anticipate the use of a most powerful instrument for the raising of a large revenue in time of war.