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Annual Duties Bill—Foreign Brandies

Volume 10: debated on Friday 12 March 1824

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The House having resolved itself into a committee on the Annual Duties bill,

said, that it might be convenient, if he brought forward his amendment, to alter the duty on Foreign Brandy and Spirits, in the first instance. It affected a large portion of the population, and he felt satisfied, that if the imposts were considerably lowered, the revenue arising from them would be so augmented by the increased consumption, that the chancellor of the Exchequer would find himself in a condition to repeal taxes pressing heavily upon the lower orders. The whole system of our fiscal regulations was abominable, since they afforded the strongest temptations to crimes of every kind, fraud, perjury, treachery, and even murder. To alter them at once might not be easy, but they ought, at least, to be changed by degrees, and he was bound to do ministers the justice to say, that he believed it was only necessary to point out the evils to produce a disposition, if possible, to remedy them. All that the chancellor of the Exchequer had said upon this part of the subject, when he so eloquently brought forward his plan of finance, was worthy of a wise minister of an enlightened country. The great mass of smuggling was not in the light articles from which the prohibition had been removed, but on wine and brandies. If the chancellor of the Exchequer would reduce the duties on wines and brandies, not only would more money be brought into the Exchequer by the increased consumption, but the expense of collection would be diminished, and a permanently beneficial influence would be produced upon the lower orders. The extravagantly high duties on foreign spirits and other articles of daily consumption, induced many persons to embark large capitals in the contraband trade. By the very high profits they made when they succeeded in securing a cargo, they were enabled to give high wages to all those who assisted them in landing it. The consequence was, that whenever a ship so laden appeared oft the coast, the whole of the peasantry were ready to assist in landing and secreting her cargo, confident that they were to be well paid for the risks they ran. The demoralizing effects of such a trade upon the manners and habits of a people were too well known and admitted to render it necessary for him to describe them. It had been truly said on this subject, on a former occasion, by the hon. member for Taunton, that one consequence of our high duties on foreign spirits and other articles, was to place nearly the whole of the southern coast in a state of civil war. The effect of a discovery on some of the individuals themselves was most ruinous. If a man were detected carrying a keg of contraband spirits, he was taken before a magistrate, fined 100l., and in default of payment was impressed on board one of his Majesty's tenders. Was it, he would ask, wise or politic thus on the one hand to punish with such severity crimes to which so many temptations were held out on the other? The revenue laws, he contended, were calculated in man respects to defeat their own object. Such exorbitant rewards were given for the discovery of, smuggled spirits, that persons engaged in the contraband trade were even known to cause information to be given against themselves, in order to come in for a share of the reward, which was sufficiently large to cover the expenses they had gone to, and leave a handsome profit on his adventure. This was not merely a supposed case; for it was not long ago that two officers were convicted of a collusive seizure, having planned with the smuggler that he should land his goods on a certain spot, in order that he might have them seized, and share in the reward on the seizure. Even in a financial point of view, these high taxes on foreign articles of daily consumption were most impolitic. He could show that since the duty on foreign brandies had been increased, the consumption had become less, and the revenue proportionably diminished. In 1806, when the duty was 12s. 6d, a gallon on foreign spirits, the produce of the duty was 1,463,000l. In 1810 it was increased to 15s. 1½d., and the quantity imported was greatly reduced, but the produce increased to about 1,500,000l. This increase, though small, encouraged the chancellor of the Exchequer, who thought a still further increase would be a ready way of increasing the revenue. In 1811, the duty was raised to 19s. 1½d. and the produce fell off to 177,000l. In 1815, it was reduced to 17s. 9d. and the produce increased; but it was only 815,000l. being even yet not much more than half the produce in 1810, when the duty was lower. The same result of an increase of duties was seen in wines. In 1806, the produce of the duties was 1,267,000l.; the rate of duty had since been increased 30l. a pipe on French, and 20l. on other wines, and the produce had decreased to 1,020,000l.—a loss of nearly 200,000l. to the revenue and a reduction of a third of the quantity consumed. Before the committee on Foreign trade, one of the most eminent merchants had stated, that he had been formerly in the habit of importing a great quantity of French wines to prepare for the colonial market; but he had found the Increased Excise and Custom duties on the foreign brandies necessary to prepare the wines for re-exportation so heavy, that he had transferred his establishment to Holland; so that all the employment thus given to industry in this country by the manufacture was lost, and there could be no doubt that the same motive was continually operating in a multitude of instances. What he proposed at present was, merely to bring back the duties now to the scale at which they stood in 1810, with a view subsequently speedily as was practicable, to bring them down to a still lower rate, probably to the rate of 1806. But the way in which this proposition was particularly worthy of attention in a financial point of view was, from the effect it would have on the expense of collection. For as the temptation to smuggling had increased with the increased duties, so had the expense of collection increased. In 1806, the rate of the expense of thee collection of the Custom duties, was 5l. 4s. 1d. per cent. In 1822, it was 8l. 7s. 8d. per cent. The expense of collection in the Excise was, in the former year, 3l. 0s. 1d. per cent; in the latter, 3l. 15s. 5d. percent. In Ireland the expense, percent, in 1806, on the collection of both duties, was 10l.; in the year 1822 it had risen to 17l. If the expense of collection could be reduced to the rate per cent, at which it stood in 1806, there would be a saving of no less than 986,000l. He admitted that in war, when the intercourse between this and the countries of the continent was more limited, and when the large naval force, in the Channel, acted as a guard against smugglers as well as against the enemy, there were less facilities for smuggling, and he therefore did not calculate that a reduction of duties would reduce the expense of collection by the whole sum of 986,000l.; but it no doubt would to a great extent. They might, for instance, reduce nearly the whole expense of the preventive service, which had not been thought of, and had not been necessary, at a former period. He would conclude by proposing, as an amendment, a reduction of 1s. 10½d. per gallon in the duty on foreign brandy, and he would do this with a view to progressive reduction. He felt satisfied, that so far from diminishing the revenue of the country, this reduction would be found to increase it; and if that should prove to be the case, the House might afterwards consider of a further reduction.

After a few words from the chairman as to the form of the amendment,

said, it seemed to him, that the hon. member did not clearly understand the nature of the bill before the House. It was a bill to renew an act which would expire on the 24th of March, which act was a continuation of another, granting certain duties for one year. The duties now in question were increased in 1807, as war duties. They had been modified in 1815, and since then had been continued from year to year. The present bill did not specific the amount of the duties; it only went to continue the original act, in which they were detailed. He did not see, therefore, how the hon. member's object could be answered, by moving for the reduction of a specific duty, when the amount of that duty was not mentioned in the body of the bill to which his motion was to be an amendment. The best way in which the hon. member could shape his motion would be, to call upon the House for the repeal of so much of the duty permanently. It was this feeling which, on a former evening had made him suggest that a similar mode should be pursued with respect to the duties on rum. It appeared to him, that it would be very difficult for the hon. member to accomplish his object in the way he proposed; and he did not see how he could assist hiin.—He would now say a word or two on the motion itself. He admitted that the duty on foreign spirits was very high; but he thought the present time was not the proper one for making any deduction in them, for such reduction must operate to the prejudice of the manufacturers of British spirit. It might, perhaps, be said, that it would be well to make a reduction in the duties on British spirits also. Perhaps it might be so; but that, it would not be denied, was a great question: and it would not be wise to go into it now, until we had seen the effect of the reductions which had been made in the duty on spirits in Ireland and Scotland. No man, he thought, would deny that it was desirable to have the duties on ardent spirits as high as they could be safely collected. In a moral point of view, there were questions connected with it, into which he would not then enter, but the discussion of which would show the dangerous effects of too free an access to the use of ardent spirits among the people. Besides, the loss to the revenue, from both reductions, would be more than could at present be spared. The hon. member had said, that the reduction would tend to check smuggling. He would admit, that if the duties were reduced to the standard, of 1806 or 1810, the reduction would very much diminish the temptation to smuggling; but then, the hon. member's motion would have no such effect. The reduction of 1s. 10½d. per gallon would be only putting so much money into the hands of the manufacturers, without any sensible advantage to the consumer, and certainly without any chance of checking the exertions of the smuggler. He therefore could not consent to the motion. It was not the proper time for the consideration of such a question. He would admit the principle, that it would be good to remove all high duties as far as practicable; but then they could not be reduced all at once. Besides, if the revenue could afford it, there were other articles which might be said to be the luxuries of the poor, of which he would prefer reducing the duties, rather than that to which the hon. member's amendment referred. The tax on Tobacco, for instance, was very heavy; so was that on tea; and if he thought he could go further than he had done in the way of reduction, he should be more ready to reduce the duties on them, than on the article which the hon. member had suggested.

said, that on the chancellor of the Exchequer's own principle, he ought to go further than he now professed himself willing to go. He had already made a reduction of three shillings per gallon on Scotch spirits, and a reduction also upon Irish spirits; and, as far as the result of that measure was already ascertained, it was found to be most favourable to the revenue. The amount of revenue derived from it was, in the last quarter, 50,000l. more than in the corresponding quarter, when the duty was three shillings higher. There was no branch of our internal industry, which was so mismanaged as the distillation of spirits. It was a complete monopoly, and the profits arising out of it had never perhaps been greater than they were at this moment. He understood that the reduction of the price in Scotland had so increased the demand, that the distillers in that country were unable to supply it; one half of the spirits distilled in Scotland came into this country. The system of smuggling had taken a new direction; it was now as active from Scotland to England, as it had ever been before from Holland to this country. He had taken occasion last session to deprecate the absurdity of preventing the importation of whiskey into England. He had stated at that time, that he had whiskey in his house: he avowed that he had smuggled whiskey in his house then, and he avowed it still; for if such foolish laws were made, they ought to be broken. He would continue to break such a law; and let them find him out if they could [a laugh]. He had refused last year to be a party to the absurdities which were sanctioned by the right hon. gentleman opposite. The hon. member went on to observe, that the partial repeal of the duties in Scotland, had done away with smuggling between that country and Holland, but had increased the smuggling between Scotland and England. Let the chancellor of the Exchequer lower the English duties, and he would put an end to English smuggling on that side. Let him not be afraid of the great distillers. They had always fastened themselves like a night-mare on chancellors of the Exchequer. He was credibly informed that there were several large distilleries about to be established within ten miles of the English border, from which, no doubt, Scotch whiskey was to be poured into this country by wholesale. Let the duties be equally-reduced in the two countries, and a stop would be put to the practice of smuggling, and the revenue would be considerably increased. They had already seen the effect of a reduction of duties in the increase of revenue; but this did not proceed from more whiskey being drunk than before, for the actual consumption would be found to be pretty nearly the same. The chancellor of the Exchequer, by his half measures, was the prime agent and mover of smugglers. He was not the principal smuggler, but it was his mode of proceeding which held out so many inducements to that class. He (Mr. Hume) could by no means consent to the proposition that ardent spirits should be taxed highly. He did not see why every poor man should not have whiskey within his reach, as well as the rich man was allowed to have wine, when he could pay for it. It was, he believed, the difficulty of coming at the spirits, by the high duties which were placed on them, which caused the temporary excesses of many persons when they got it within their reach. Let the duties be abolished, and the spirits placed within the reach of all, and he was satisfied there would be an end of the occasional excesses which we now witnessed. He thought his hon. friend had done right in bringing forward this subject; but he certainty had not gone half far enough. If the chancellor of the Exchequer would bring in a bill similar to that of last year, to reduce the duty on British and Foreign spirits, he was persuaded that it would put an end to smuggling, and that the quantity of spirits drunk would not be increased, but that all which was consumed would pay the duty. The more important this subject was, the more immediate was the necessity of bringing it under the consideration of parliament. It would, perhaps, be scarcely worth while for his hon. friend to press his motion, as the chancellor of the Exchequer had acknowledged that he was right in principle; he hoped, however, that the right hon. gentleman would shortly act upon that principle.

denied that the British distillers would be endangered by the moderate reduction which he had proposed on foreign spirits. The question, as it regarded the morals of the people, had been ably argued by his hon. friend. He did not believe that one gallon more of spirits would be drunk in consequence of the reduction of duties. As to the observation of the chancellor of the Exchequer, that his proposition did not go far enough, he should be perfectly ready to agree to any further reduction to which the right hon. gentleman might be disposed to consent. As his object in bringing forward this motion was to promote the discussion of the question, and that object had, to a certain extent, been attained, he should not press his amendment to a division.

trusted, that ere long the right hon. gentleman would remove the evils arising from the anomaly of one system of laws being acted upon in Scotland and Ireland, and another in this country. With respect to the moral effect of the measure, he was satisfied that taxation was a principal cause of the abuse of ardent spirits. In wine countries it was generally observed, that there was no abuse in the consumption of wine; but, in those countries where the governments, by a system of taxation, rendered wine or spirits difficult to be obtained by the consumer, abuses of these commodities universally arose. He denied, in toto, that the reduction of the duties was likely to have an injurious effect on the morals of the people.

bore testimony to the value of the measure which had been acceded to last session by the chancellor of the Exchequer, and expressed a hope that the right hon. gentleman would, as soon as possible, extend its benefits to the whole empire. He wished to say a few words with respect to the monopoly of distillation in Scotland. There were only five distilleries at work in Scotland for the whole English market. This was a monopoly of a most injurious kind. He would state a single fact to show the inordinate extent to which it was carried. One large set of works was now idle, and the owners of those works had received 15,000l. to abstain from working for the English market. The extension of a free trade in distillation could not fail to promote the agriculture of the whole empire. A large quantity of barley had been sent from England to Scotland in the last year for the purpose of distillation; and the agriculture of England would no doubt derive great benefit from the extension of the system.

The bill then passed the committee.