I do not think that we can let this Clause go without explanation. The Committee will recollect that under our new procedure, and because of the way that the Resolutions on the Budget have to be passed by the House without any discussion, this is the first opportunity on any Clause to amplify in any way the obviously brief statement which the Chancellor of the Exchequer deems it his duty to make on Budget day. While I understand the purpose of the Clause—I hope that I am not misrepresenting anything that the Chancellor said, because that is the last thing I want to do—to be simply a book-keeping entry, that explanation does not take us very far. I hope that we may get some explanation of what is to be the effect of it.

As I read the Clause, its effect is that the duty upon Empire tea is entirely abolished, whereas the duty on foreign tea remains. To that extent, therefore, the principle of Empire preference is, I take it, still enshrined in our taxation system. That point is, of course, very important. My hon. Friends and I would like a little further information as to what sort of money is involved in this transaction, because of the difficulty that we all have in dealing with the finances of anything to do with food. In this context, tea comes under the heading of food. With the food subsidy arrangements and the buying arrangements of the Minister of Food, and all the rest of it, we are not where we were in the old days when it was a perfectly clear proposition: so much was the duty, so much was the Imperial preference rate, and that was all there was to it. The position is now, I will not say confused, but complicated, owing to the issue of subsidies on foodstuffs and the difficulty that we have of knowing what they amount to. I hope that one or other of the Treasury Ministers will not mind taking notice of the fact that I am asking for a further explanation on this Clause.

I should like to back up what has been said by my right hon. and gallant Friend the Member for Gainsborough (Captain Crook-shank) and to ask what the real point is of what we are told is a book-keeping transaction. I could understand our doing something of this sort if it had one of two effects, either eliminating the duties altogether and therefore taking away administrative work, or eliminating the subsidy altogether and, presumably, taking away other administrative work. As far as I can see, this Clause does neither. As my right hon. and gallant Friend has said, there is apparently still to be a duty on foreign tea.

As I understand the Clause, its effect will be to reduce the subsidy by £11 million. The subsidy last year was a total of £70 million. We cannot tell what will happen under the new tea contracts but it does not appear likely that the subsidy will be eliminated. Therefore, all that we are doing by the book-keeping transaction is artificially to cut down on both sides of the Budget. Frankly, I cannot see any good reason for doing so. We appear to be reducing the food subsidies, but we are not actually doing so. That appears to cause more confusion than it ends. In addition, there is the great difficulty, if we eliminate or largely reduce the duty on imported tea, of what happens if and when the price of imported tea goes down and we want to get the old revenue from tea without raising the price. That seems an additional reason for not doing what is now proposed. The main point is: What is the point of going a long way round to do something which makes no real change in the economic position of the country?

As my right hon. and learned Friend has said, this Clause contains a perfectly straight-forward and simple book-keeping operation. The duty on tea was 8d. per lb. on foreign tea, and 6d. on Empire tea. What we are doing is to remove as far as possible the duty on tea without abolishing the preference. The situation now will be that the duty of foreign tea is reduced to 2d. and the duty on Empire tea is removed altogether. The effect is that we lose £10.8 million in the present financial year on the tea duty, and that we save that amount on the subsidy. In a full year the book-keeping transfer amounts to £11 million.

I was asked by the hon. Member for Flint (Mr. Birch) the purpose of making this transfer. The answer is that there is no point in raising money on the one hand and paying it away on the other. That seems to us a needless operation, and therefore, providing that we can maintain the preference for Empire tea, it seems better to make this change.

I may be rather slow on this, but perhaps the Economic Secretary could be a bit clearer in giving the figures and say how much he now expects to collect on foreign tea and how much was collected in the past. This appears to the producers to be a Crippso-Schachtian economy. With export taxes in some of the producing territories and import subsidies in this country, it is increasingly difficult for the producers to see the real value of some of their products. It would be of great assistance to all concerned if the Economic Secretary could give us the figures for which I have asked.

Over 99 per cent. of the revenue collected in the past has come from Empire tea. In future on the small remaining duty we expect to collect a small amount of about £250,000.

The Economic Secretary is being disingenuous when he calls this a simple book-keeping transaction. It certainly is not a simple book-keeping transaction. What is happening is that we are witnessing a permanent loss of revenue to the Treasury by the abolition of the duty. Subsidies are related to the current price of tea, and, as most commodities are now falling in price, one would have expected that the subsidies would be required to be reduced as the months went past. However, we are seeing the total extinction of the duty on Empire tea when it may not really be necessary so far to reduce the price of it.

It would be much fairer to say that the Government were contemplating a permanent reduction in the cost of tea to the consumer by removing the Tea Duty, except for 2d. per lb. on foreign teas, than to call this merely a book-keeping transaction when the amount required for subsidies is a transit matter. It is fallacious to imagine that tea prices will remain for ever at their present level and that tea will always necessarily require the same amount of subsidy to maintain the same price to the consumer in this country. It is easy to appreciate, and perhaps to sympathise with, the motives which have animated the Treasury, but surely it is unsound to call this simply a book-keeping transaction. It may well lead to a certain amount of difficulty in the future when it is wished to recoup revenue in times of stringency and when one would very much like to have the duty still in being.

I am sure that the hon. Gentleman will pardon us for being a little suspicious and wishing to know whether there is anything more in this than the simple bookkeeping transaction to which we have been referred. If that is all and if this was so obviously an unnecessary complication which is now being removed, we are tempted to ask why it has not been done before. Year after year in the Finance Bill we have passed arrangements of this kind. Why is it that it is only this year that it has suddenly been discovered that the method we have been adopting has been clumsy and unnecessary and ought to be changed?

I do not hold anything against the Economic Secretary—he is a comparatively new arrival—but there is the Financial Secretary to the Treasury who has sat through all the Budgets of this Parliament. Therefore, year after year he has been persuading us that in what we were doing we were adopting the proper financial course. If I might distract his attention from what appears by the look on the Chancellor's face to be one of his rare jokes which he is whispering in his right hon. Friend's ear, may I say that I am sure that the right hon. Gentleman himself would never have advised the House to adopt this form unless he had believed that it was the proper form.

Could not we be told what has suddenly brought light to the Treasury Bench and what has suddenly brought home to the Government that—I admit that there is some cogency in it—this is an otiose procedure? Until that is ex- plained we shall be tempted to think that there is something more in this than a pure book-keeping transaction. As my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) said, if at some future time, owing to the state of our finances, the Chancellor of the Exchequer feels that the revenue needs still further strengthening, he will find that this change has been far from a simple bookkeeping transaction and that it has weakened the revenue at this moment and may force him at a most unpopular time and a difficult moment to reimpose the duty which he is now removing. I hope that one of the—I was about to say, one of the three representatives of the Treasury on the Front Bench, but I shall say "One of the two" because the Chancellor has not been listening and therefore I would not ask him to reply—could tell us what has suddenly made this change a necessity.

Perhaps I can forestall speeches which might otherwise be made if I indicate what this Clause does. The pre-Budget Excise Duty on beer was £8 18s. 10½d. per 36-gallon barrel plus a surcharge of 6s. 7½d. for every degree above 1,027 degrees. The basic rate has been reduced by 21s., and that will show itself in a reduction in the price of the pint of beer. Part of the reduction of 1d. per pint which has now taken effect will be borne by the brewers out of their profits. It is expected that the brewers will provide something like £4 million during the coming year out of profits which would otherwise accrue to them.

I want to raise one or two points on this reduction in taxation. What I really want to ask is what the Government's anticipations are. The taxation of beer is a melancholy tale. In 1914 it was 2½d. a pint, and the tax now ranges between 6½d. and 10¼d. a pint, depending on the specific gravity. When the Chancellor was introducing this he said that there had been a marked falling off in consumption and the conclusion he drew was that a remission of duty was practicable. I should have thought that it showed that we were reaching the limits of disinflation by direct taxation. What the Chancellor really meant was that it was not practicable to hold the duty at its old level if the revenue was to be maintained.

In the first quarter of this year the production of beer was down by 18 per cent., and it was down a great deal more compared with 1946. The 1947 figures were disturbed by the fuel shortage. In March there was a very steep fall indeed, from 2,300,000 barrels the year before to only 1,900,000 barrels. In April, the month in which the Budget was introduced, there was a fairly sharp revival in consumption, though it was still not up to the level of the previous year. Whether that revival was caused by people drinking the Chancellor's health in order to celebrate his Budget or whether it was caused by the hot weather at Easter, I do not know, but evidently the Government's anticipation is not only that consumption will stay at its revived level—something like what it was last year—but that it will actually increase. It is difficult to work this out, but the Chancellor assumed that there would be a loss of £20 million in revenue as a result of the change in tax. I have calculated that, if consumption stayed the same, there would be a loss in revenue of £29 million. Therefore, I think we can assume that the Chancellor is thinking that there will be an increase in the consumption of beer, and I should like to know if I am correct in that assumption.

4.0 p.m.

When we are talking about beer we should not think too much about intoxicating liquors. I see the hon. Member for West Ealing (Mr. J. Hudson) looking as if he is about to let off a broadside. In the old days one saw notices outside the pubs, "Drunk for one penny, dead drunk for twopence, straw for nothing." Those days are over. It would take a great deal of money and cubic capacity to get drunk on beer. It might be interesting if the Chancellor himself tried; he might draw some useful lessons from it. Last year, when the hon. Member for Southampton (Mr. Morley) was protesting against an increase in the beer duty, he said:

"There was some excuse for placing the extra duty on tobacco. The excuse was that it was necessary to diminish smoking in order to save dollars. But we do not spend dollars on the manufacture of beer. Beer is now mainly composed of water and we do not import water, so that excuse in regard to tobacco cannot hold in regard to beer."—OFFICIAL REPORT, 1st June, 1948; Vol. 451, c. 855.]

Of course, when it is nationalised we may, but it is still true that we do not do so.

The question I want to put to the Government is, do they think that their estimate of consumption will be fulfilled by the present trend? It seems to me that at the moment, overwhelmingly, the interest of this country is that we should raise the maximum tax from beer, and if beer is taxed at what the Chancellor described as an impracticable level, we shall not do so. I am not at all certain that even with this reduction of 1d. a pint it is not still at the impracticable level which will cause a net reduction in the revenue being raised. I end by emphasising once again that this is proving that we are reaching the limits of disinflation by taxation, and that will be the theme of our speeches on this subject.

The right hon. Gentleman the Financial Secretary addressed the Committee with an air of sweet reasonableness when he endeavoured to excuse the tax we are now discussing by reminding us that £4 million would be extracted from the pockets of the brewers by the proposal now being made. One would have felt more satisfied about that if one were sure that that was about the limit which the brewers' profits might have borne. However, as the profits of brewers have been in the neighbourhood of £30 million to £40 million during the last few years, and, indeed, have mounted considerably in the last eight or 10 years, there was a case—if it is a question of a taxation of brewers' profits—for proceeding much more vigorously than this proposal has done and in some other way than that which it has taken.

I do not pursue that any further because I want to draw attention to another aspect of this matter. I agree with what has been suggested on the other side of the Committee that it is probably the case that the Chancellor has allowed himself to be persuaded by the Treasury officials to take off this tax on beer because he believes that as a result there will be a considerable increase in consumption and, in consequence, a considerable increase in revenue. That might be satisfactory from the point of view of the Revenue, but from the larger point of view, with which I should think he is concerned as Minister of Economic Reconstruction, to persuade the people to engage in a greater consumption of beer is bad, both from the point of view of the effect which the beer has on the persons who consume it and——

The speech of the hon. Gentleman is going rather wide. This is a financial Bill, not a moral Bill or an economic reconstruction Bill. The hon. Gentleman must realise that this is a substitution of a certain number of figures for those in an earlier Act of Parliament, and the discussion is, therefore, rather restricted.

May I raise a point of Order, Mr. Bowles? Surely we are entitled to discuss whether the object of this reduction is to increase the consumption of beer, and whether that is a worthy object, which is what I understood the hon. Gentleman was doing?

I am not sure that the hon. Gentleman is allowed to go too far in discussing how worthy is the object.

Are we to understand, Mr. Bowles, that if we are told, or if we assume that a financial change has a certain object, we are then not to consider in some detail whether that object is a worthy one? Surely that goes to the root of whether the taxation change proposed is a good one or not?

I will see how wide the Debate goes, but I would point out to the right hon. Gentleman that this is really not a Clause on which we can pin a Debate on whether teetotalism, prohibition and so on would be desirable. So far, I think the hon. Gentleman is just about within the Rules of Order. Mr. Hudson.

rose—

Mr. Hudson.

On that point of Order, Mr. Bowles, I submit to you earnestly that I was not really engaged in giving a moral lecture when you interrupted me. I was dealing with the economic consequences of a tax, and I felt that the Chancellor had made a great mistake from that point of view. I am anxious to preserve that position, and I hope you will permit me to proceed because I want to get away now from the point that was raised—and which you did not contest when it came up from the other side of the Committee—to the following further point. If it be true that this tax leads to greater consumption, which I believe was the intention of the Treasury when the Chancellor was advised to take this step, the consequences on our economic arrangements in many other ways are likely to be extremely serious.

At this time there is no justification for the diversion of raw materials into the brewing trade when they are so much needed elsewhere. For example, there is the issue of the cereals. If it is a question of increased beer, there will be an increased use of cereals and a diversion of them from livestock feeding. That is an issue which we have been discussing recently in the House. The Chancellor seems to have disregarded entirely his duty with regard to that matter in order to meet the Treasury view that the only concern he need have is to raise the amount of revenue whatever the consequences. I will not discuss that any further, Mr. Bowles, since you have been nervous about the matter.

Whatever the consequences to the moral condition of the country, I say that the consequences economically, from the point of view of the rebuilding of our economic structure, are thoroughly disastrous. I believe that most people understand this. I am in the happy position on this Finance Bill of being able to argue the question of beer, and the taxation upon it, without being charged with pushing my own fad, as people like to think it is. I am speaking now for what I am quite certain is the point of view of drinkers as much as it is the point of view of teetotallers.

The resentment expressed about the Budget generally was engendered more by the Chancellor's willingness to lose revenue on beer and to take the risks I have referred to than by anything else in the Budget. I am not proceeding any further with the general criticism I have already voiced about the Budget, but I say that this proposal was from the beginning a very dangerous one. Nothing has been said by any of the representatives on the Treasury Bench to justify it. I wish that the matter could have been reconsidered, but I am afraid that it is too late now.

From time immemorial the Committee stage of the Finance Bill has included a Debate on this subject, certainly for all the time I have been in the House of Commons. Invariably there is a discussion on the merits and demerits of beer, both from the moral and from the financial standpoint. No one would complain for a moment of the remarks just uttered by the hon. Member for Ealing, West (Mr. J. Hudson) who has put forward a very important point of view, but I would make one comment upon his opening sentences which dealt with the contribution being made to this problem through the medium of the brewers' profits. The hon. Gentleman told us that in recent years the industry as a whole had made a profit of between £30 and £40 million. For once he rather under-stated his case, because I find that in the financial year 1947–48 the profit was, in fact, £49 million.

One aspect of this matter is apt to be overlooked: namely, that the brewers receive no allowance for the depreciation of their public houses and other buildings which they can set off against their taxable income. They are, of course, already bearing a very considerable burden, because those depreciation allowances would, in fact, be very heavy indeed. I believe I am correct in saying that compared with pre-war figures—the hon. Member for West Ealing is probably also well aware of this comparison—the total of brewery profits after taxation are up by some 33 per cent., which, of course, is a considerable increase; but at the same time the cost of renewing and maintaining their property—public houses in particular—is up by something like 50 or 75 per cent. This aspect, therefore, must be borne in mind when we are discussing that particular contribution to the problem.

It is natural that the hon. Gentleman should take exception to this proposal—we all know his views. Clauses 2, 3 and 4, of course, are all designed to benefit those who consume alcoholic liquor—if beer can still be described as coming within that category; it certainly cannot any longer be described as intoxicating. Here we are up against a very old problem, as to how far revenue is to take precedence over social habits. Beer has become such a strong supporter of the Revenue over a number of years—it has beaten a number of records since the war—that not even the present Chancellor of the Exchequer, with all his ascetic and austere outlook, can be expected to withdraw such a prop. What we are discussing, therefore, is whether, from the revenue point of view, the reduction of 1d. per pint in the duty will be an efficient instrument with which to stem the decline in consumption. It is my opinion that it will do very little, if anything, in that direction. I say that in support of the observations of my hon. Friend the Member for Flint (Mr. Birch), who pointed out what is happening.

4.15 p.m.

With beer at its present price it is very unlikely that a man will be attracted to it by the reduction of 1d. per pint. Before 1939 a reduction of 1d. was a considerable item—indeed, it affected the price of a pint of beer very considerably—but at the present price of a pint of beer I am very doubtful whether the reduction of 1d. will stimulate consumption in the way that the right hon. and learned Gentleman evidently hopes that it will. We shall see as we go along, but so far—the new financial year is nearly three months on its course—there is very little indication that this proposal will have the effect desired. The right hon. and learned Gentleman has fallen between two stools, one of which is occupied by the consumer of this beverage and the other by the hon. Member for West Ealing and his friends. The Chancellor has got the worst of both worlds and, even at this stage, he might do well to reconsider the whole question.

Can my right hon. and learned Friend assure us that there is no possibility of any evasion on the part of the brewers of the payment of the £4 million for which he has budgeted? Is it not within the bounds of probability that the brewers may, even now, reduce still further the specific gravity of the beer that is made available? Many of us may doubt altogether whether the term "specific gravity" is correctly applicable to the present type of beer that is sold and whether the term "specific levity" might not, perhaps, be more appropriate. Is not this an obvious opportunity for evasion on the part of the brewers by still further lowering the specific gravity of the beer available for consumption?

I should like to deal partially with the point raised by the hon. Member for Preston (Dr. Segal). It seems a very unfortunate form of taxation whereby brewers' profits alone of companies' profits are singled out for a special and extra tax in this oblique manner. It has been claimed that the reduction in duty will be met partly out of brewers' profits to the extent of £4 million. That is really an additional form of tax on profits.

indicated dissent.

The Chancellor may shake his head but it has been introduced with that very purpose in mind.

indicated dissent.

It is surely a very bad type of fiscal device to employ, to insist on the draining away of £4 million worth of profits by means of a duty on beer. If profits are to be taxed more, then all company profits should be taxed and not just the brewers' profits.

If there is scope for evasion by altering the specific gravity, that, of course, will alter the yield from the tax itself. What we have to do is, surely, to find out from the Treasury the purpose of the reduction. Is it to maintain approximately the same sort of yield from the consumption of beer, or to get an increased yield, which seems unlikely in present circumstances; or was it designed to stave off a steep falling away in the yield from this tax?

What is wrong with beer today is the present gravity which is permitted. I am glad to see that the Parliamentary Secretary to the Ministry of Food is here, because I understand that the Ministry of Food have a good deal of control over the permitted gravities of beers which may be produced. We might, in fact, get a greater yield from the tax if beers of a heavier gravity were now permitted to be brewed and sold, because people would rather have one pint of a really good, strong beer than two pints of a lighter beer. Brewers, however, are prohibited from producing the really strong pre-war beer. If stronger beer could be made available, not only might sales be higher but the yield in duty per pint would be greater, and the Chancellor might thereby be able to secure the revenue which it is his purpose to try to obtain.

The manner of presentation of the case was singularly inept on the part of the Chancellor. To reduce the subsidies on food and at the same time to cheapen beer was certainly not a way to give the country the impression that taxation was intended to be fair. If the purpose of reducing the duty on beer was to secure revenue to maintain the food subsidies, it was an accounting transaction. The hon. Member for West Ealing (Mr. J. Hudson) might perhaps have gone to the people who complained to him and pointed out that it was merely an accounting transaction such as we have been told the tea duties were an accounting transaction, and they might have been satisfied. That is hardly likely and there is no doubt that the presentation of the case has been inept and has made a poor impression on the country.

I think the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) was probably right when he said that there is yet no indication that the tax reduction is likely to lead to increased beer consumption and thereby fortify the revenue, but he should not overlook the fact that the former decline in consumption has been arrested. I find evidence of that in my constituency, where I am in the habit of getting it at first hand.

I wish to correct one wrong impression which may have been made on the Committee by my hon. Friend the Member for Ealing West (Mr. J. Hudson) about the effect of beer taxation on production. My hon. Friend seemed to think that to increase beer consumption would reduce industrial production, but the expectation of being able to consume beer in the near future is an important factor in the morale of workers in factories and other places of production. I wish the Chancellor could have seen his way to go a little further in the reduction.

I am not sure, but I think £40 million-odd brewery profits, if averaged over pints, would run to between one eighth of a penny and one farthing per pint profit. If so, it is quite clear that the scope for taking profits is limited. I suspect that brewery charges have gone up very much during the last few years. Their costs of all kinds, like other costs, have gone up and the very large profits, which I fully agree they earned in the peak of the boom, really represent that maximum turnover which they are not having any more. The run down in brewery profits, which we shall see over the next two years may be severe. One or two balance sheets have already come out reflecting this big change. Even a 10 per cent. or 15 per cent. drop in the amount of beer consumed might have the effect of wiping out half or more of the profits of a brewery. I have no objection to making arrangements whereby the profit charged for any article like beer is a reasonable profit. If we can make arrangements of that kind it is all right. The whole principle of the Monopoly Commission is right, but I do not think that applies in the case of an article where the profit has been between an eighth of a penny and one farthing per pint. If those figures are not right, no doubt the Government will say so.

What is more interesting is the argument of the hon. Member for Ealing, West (Mr. J. Hudson) about the principal reason for which we are asked to vote this reduction in the duty on beer. We must know from the Government whether their only object is to maintain the expenditure of money on beer, because the pattern of spending in the British household is already very distorted. I can imagine the housewife saying that she does not want so much money to go on beer every week. Here is the Chancellor of the Exchequer, with all the attributes of sanctity, using the revenue to maintain the amount taken out of the weekly wage packet to be spent in the pub. I wonder if that is not topsy turvy and whether it would not be better spent on food, or, for that matter, on rents.

This is a very important question because, owing to food subsidies and the social policy which Governments have built up over the last 10 or 15 years, the way in which a British family lays out money every week is far different from that in any other country. We spend far more on alcohol and tobacco than any other nation. What is clear is that the habit of smoking tobacco is much more difficult to break than that of drinking beer. Tobacco revenue keeps up and the Chancellor does not have to reduce the Tobacco Duty, but he is worried about the revenue from beer. What has brought about the reduced consumption of beer? Is it recent high taxes, or the general decline in earnings? Is it a disinflationery policy that has caused it? If so, what is the good of the penny per pint reduction?

Does the Chancellor seriously think that the penny reduction will maintain his revenue? Is it wise at this moment to do that? Would it not be better, if the general interests of the country are that we should reduce costs of production and maintain as far as possible a disinflationery financing, to see that the amount of money spent on secondary necessities was somewhat restricted? This method may keep up the consumption and, if not, I cannot see what is the purpose for reducing the duty. We should have from the Chancellor a more fundamental explanation of what is his social policy in regard to beer drinking at this moment in the trade cycle.

There may be another reason why the amount of beer consumed is falling. It may be that the amount was artificially increased during the excitement of the war and that we are now naturally quietening down and the amount is decreasing. It would be appalling if the Chancellor endeavoured fiscally to try to get us back to the artificially excitable state there was—[Laughter.]—certainly, during the war and just after the war. I ask the Chancellor on what basis he calculates that the brewers will contribute £4 million out of their profits? Has there been some agreement by which £4 million will definitely be set aside, or has that figure been reached by calculating on the basis of the pre-Budget consumption and maintaining that sale at a penny a pint less than the pre-Budget rate? If that is the case, I do not follow my right hon. and learned Friend's argument that by reducing taxation he hopes to maintain the income to the Revenue.

I understand that in 1948 the brewers made a profit of £49 million as compared with £29 million in 1938. When some criticism was made in the country of that excessive rate of profit, it was stated in the monthly bulletin of the brewers which I and, I suppose, most hon. Members receive, that the increased £20 million was, "after readjusting the profits for taxation." In other words, the whole of the increased tax on profits had been paid for by the consumer and the shareholders had not contributed anything to the general revenue of the country. In my view they should have made the reduction of one penny a pint entirely out of their inflated profits. I can see that the brewers may have an interest in stimulating consumption by reducing the price of beer, but I think it quite wrong for the Chancellor of the Exchequer of this Government to endeavour to increase consumption by reduction of taxation.

I wish first to answer the argument of the hon. Member for Uxbridge (Mr. Beswick) about brewers' profits. The principal benefactor from brewers' profits is the Chancellor. He gets 10s. 1d. in the £ out of undistributed profits and 11s. 9d. in the £ out of distributed profits. He also receives Surtax from certain people. Therefore, it is probable that of this £49 million which has been mentioned the Chancellor receives £25 million, probably more. When there is this sort of talk of grossly inflated profits it should be borne in mind that the principal benefactor is the Exchequer; the Chancellor is a partner as to more than half the profits made.

I seek to extract from whoever is to reply to this Debate a definite statement as to whether the purpose of this reduction is to seek to increase the yield of the tax or to maintain its yield. That is a simple question to answer. The Chancellor did not exactly say that in his Budget speech. I hope that the Financial Secretary will do so quite frankly because it will constitute a very important precedent for other Debates which we shall have in the course of our consideration of the Finance Bill.

I only intervene to reinforce one point which the hon. Member for Uxbridge (Mr. Beswick) raised, about which I should like to be clear. Before I come to that, I must, in passing, comment on the most extraordinary charge which I have heard levelled against the Chancellor that his purpose is to create artificial excitement. What did the hon. Member mean exactly by artificial consumption during the war? I am not quite clear as to what is the precise distinction between the natural and artificial consumption of a glass of beer.

I do not think that I need delay the Committee longer about brewers' profits. Several of my hon. Friends have adequately answered what has been said on that subject. What is forgotten in these charges is that the brewers receive no allowance for depreciation of their public houses, and therefore the mere quotation of figures does not get us very far. What is the basis on which this figure of £4 million as the cost to the brewers is calculated? It must be calculated upon a certain assumption about consumption. Is it calculated on present consumption, or on the assumption that there will be such an increase in consumption that the same revenue will come to the Exchequer despite the tax reduction, or on what assumption is the calculation made? It seems to me that it is an arbitrary guess at a figure rather than an exact estimate, unless it is based on a much more definite criterion than has so far been revealed to the Committee.

We have had an interesting discussion. Not the least interesting point was the Ruling which you gave earlier, Mr. Bowles, when you pointed out that this was a financial and not a moral Bill. I take it, therefore, that you meant that this is an immoral Bill; I could not agree with you more. Most of the Government supporters appear to take the same view. The Debate on this Clause opened with a very neat, elegant little speech by the Financial Secretary, which was purely factual. It told us this and that about the money but nothing about the reasons for the Clause, and it is those reasons which are material to our consideration of the Bill as a whole and of the financial policy of the Government in that regard.

It is clear, in spite of the desires and hopes of the hon. Member for Ealing West (Mr. J. Hudson), that throughout the history of the beer duties, they have never been put on by any Chancellor of the Exchequer in the form of a punitive duty directed against those who like to drink beer; in other words, it has never been a temperance tax. It has been an unfailing and bountiful source of revenue. I imagine—never having been Chancellor—that all Chancellors have, when the time has come to discuss their proposals before producing them in this House and placing them before the country, looked at the Beer Duty and said, "Today it is so much; I wonder what will happen if I increase it by 1d. or 2d. a pint? Shall I still get the same revenue, increased revenue or will a rise in the price be a deterrent, and therefore mean a loss to the Revenue?"

That seems to me to have been the viewpoint of Chancellors, setting aside the period of artificial excitement to which the hon. Member for Uxbridge (Mr. Beswick) referred. I think that the period of artificial excitement to which he was referring was those few brief fleeting weeks just after the last General Election, when right hon. and hon. Gentlemen opposite were so elated, just as they are deflated today. That was when the artificial excitement was most noticeable. Setting aside that possible consideration, Chancellors have had to weigh up what was likely to be the effect, in terms of pounds, shillings and pence coming into the Treasury, as a result of any change in the duties on beer.

This year we have had this reduction. I understand that it is expected in the long run to mean a reduction in gross beer revenue of £20 million. The Financial Secretary agrees that that is what it will cost the Treasury; it will get that amount less in a full year as a result of this reduction. The question arises, why is the Chancellor doing it? It is a question which I imagine has been asked particularly by those behind the Chancellor. At a time when he has checked the rising cost of food subsidies, people have asked, "Is it not rather strange that that should happen at the same time as the cost of beer is to go down?" That was the case of the hon. Member for West Ealing.

That particular aspect of the argument has nothing whatever to do with the financial or budgetary aspect, which is that it is not worth maintaining a heavy rate of tax if as a result, the Exchequer will not get the money it wishes to receive. In spite of Socialist economics there is still such a thing as the law of diminishing returns, and a rate of tax can be kept high while less and less gross tax is obtained as a result. Is that what has moved the Chancellor in this case? If that is the reason, it has, as my hon. Friend the Member for Flint (Mr. Birch) pointed out, a great bearing on the whole of our financial position, if we have reached the stage in which the disinflation has had such an effect. Or is there an entirely different reason? I have not thought of a third reason; there may be others. Is the reason the fact that the right hon. Gentleman, contrary to all his apparent traditions, has thought that he would like to make a gesture to those who like a pint, and that it would be nice to reduce the cost of their favourite beverage—a little less austerity in the public house or elsewhere? Is that the argument?

I hope that we shall be told whether the reason is the first which I mentioned, the law of diminishing returns, whether the tax has reached too high a figure, whether the Chancellor feels that it is the effect of the disinflationary policy which is responsible for the reduction in the consumption of beer. I should like the Financial Secretary to address himself to the question of whether he is quite satisfied from that point of view that the 1d. is any good. Ought not the reduction to have been 2d. for it really to have had some effect? The hon. Member for South Nottingham (Mr. Norman Smith) is more knowledgeable on this matter than I am; perhaps he could have told us whether he thinks this drop has caused any increased consumption in the circles in which he tells us he is accustomed to move. I have no personal evidence, but from what I have been told this reduction does not seem to have made much difference.

If the Chancellor is trying to bolster up the Revenue from this duty he has a very difficult problem before him, because the figures I have been given show that in the first quarter of this year compared with the same period last year the drop in consumption was as much as 18 per cent. Has there been any change in that trend? Some little time has elapsed since the Budget, and it might have been possible for the Treasury to have got some figures to show what has happened in the meantime. We should all be grateful to receive such figures from the Financial Secretary, because, while all of us who have been engaged in these financial Debates for a long time know that the subject of beer is apt to be one of the topics frivolously treated, it still remains one of the great pillars of the Revenue. It is not one of the things about which the Chancellor or the Treasury can afford to make any mistakes, because they rely so enormously upon the consumption of beer for the money which is required for their grandiose and somewhat stupid plans.

If this penny drop in the price of beer has had any effect in checking the drop on consumption already setting in, it would possibly be some justification for it. even at the cost of 20 millions in a full year, but if it has had no effect it seems to me that it is a comparatively stupid proposal, because it has not gone far enough in satisfying those who require, desire and are entitled to enjoy their drink of beer from time to time; nor does it satisfy the West Ealing brigade who want to prevent anyone drinking anything at all: nor does it satisfy the needs of the Revenue. Therefore, it is not only a question of falling between two stools but of three stools or as many stools as one can think of and then double the number.

I hope the right hon. Gentleman will tell us—he did not do so in his opening speech, but perhaps he wanted to hear what we had to say on the subject—exactly what is the purpose of this reduction. Perhaps he will tell us, whether it has had any effect whatsoever upon consumption, because that is a very material consideration to the whole financial position and the plans enshrined in this immoral Bill.

Apart from my hon. Friend the Member for West Ealing (Mr. J. Hudson), many members have changed their point of view since we discussed this matter last year. When my right hon. and learned Friend the Chancellor of the Exchequer put an extra penny on the pint, I remember the speeches that were made from almost every quarter of the House, and certainly from the Benches opposite. They would have led a listener to believe, that he had done an extraordinary thing. If I understood some of the speeches made today, they mean that by taking the penny off he has done something which will have no effect whatever, either on the working man, his pocket or in any other direction. The reasons why my right hon. and learned Friend has reduced the excise rate on beer were very simple—he wanted to reduce the price of beer as beer itself enters into the cost-of-living index, and it would help to keep the cost of living steady, and because, according to the view expressed last year from the benches opposite, it was much too high.

I was asked whether in the figures that have been given my right hon. and learned Friend was banking on an increase in consumption. If nothing had been done to change the rate it was expected that consumption would continue to fall. During the last six months it began to fall, but I am told that now, due to the fact of the action of my right hon. and learned Friend, that fall has stopped. Whether it will mean that consumption will begin to go up, it is too early to say, but what does appear to be plain is that the drop which was certainly beginning to show itself has now been stopped.

4.45 p.m.

In 1948–49 the revenue from this duty was £307¼ million, and the pre-Budget expectation for the current year was £297 million. This figure will now, we expect, because of the reduced rate in operation, come to about £279 million, making the cost to the Exchequer during the current year £18 million, and in a full year, as the right hon. and gallant Gentleman the member for Gainsborough (Captain Crookshank) said, £20 million.

The only other point of any substance which was made was whether it would not have been possible for the brewers out of their profits to make a reduction of 1d. a pint, with my right hon. and learned Friend making no change at this time. The hon. Member for Chippenham (Mr. Eccles) dealt with this point in particular. Although I cannot off-hand check the figure he gave, I can say from all the information at my disposal that it would have been impossible for the brewers to make a reduction of a penny in the pint out of their profits. Therefore, it was necessary, if this reduction was to be made, that my right hon. and learned Friend should make some change in the incidence of excise duty so that the Exchequer and the brewers between them could give to the consumer this relief of a penny on the pint. That is the story and nothing more. On reflection hon. Gentlemen will agree that this concession will mean money in the pocket of the working man who will be grateful to my right hon. and learned Friend for it. I also hope that with other things it will help to keep the cost of living steady.

We have listened to the Financial Secretary give an explanation of this change which is quite staggering. Let me recall to him exactly what it is that he has said. He has told the Committee that the purpose of the reduction in the Beer Duty at the cost of £20 million is to cheapen beer, because beer enters into the cost-of-living index, and, therefore, the Chancellor feels that by giving this concession he is doing something to keep the cost of living steady. When that is combined with the fact that at the same time the Chancellor, in dealing with the food subsidies, is making a rise in the cost of living, is this not an extraordinary explanation?

If the Chancellor wanted to spend £20 million on keeping the cost of living steady, would it not have been much better and much more direct to allow an extra £20 million for the levelling out of the food subsidies which are to be cut than to use this money to reduce the duty on beer? I see the Parliamentary Secretary to the Ministry of Food sitting there. Let her advise us as to the food content which might be obtained for this £20 million. Does she think that there is a greater food content in the extra amount of beer which people will be able to drink because of this £20 million a year, or does she not see that the normal man and the housewife would much prefer to have some of the articles of foodstuffs whose prices have had to be increased owing to the decrease in food subsidies?

Is the right hon. Gentleman advocating that the food subsidies should be increased by £20 million in contradiction to everything which has been said by hon. and right hon. Gentlemen opposite?

I am saying that if I had to set out to keep the cost of living steady I would prefer to do it by putting £20 million more on the food subsidies than by taking £20 million off the cost of beer.

I have not the slightest doubt that when the right hon. Gentleman makes an assertion of that sort he has himself investigated the figures and seen just how various items in the cost-of-living index weight the figure. Perhaps he will tell the Committee how he would apportion this £20 million so that it would have a quarter of the effect on the cost-of-living figures?

Does the right hon. Gentleman think that the increases which have had to take place in the prices of certain articles of consumption because of the stabilisation of the food subsidies, are of less importance to the housewife than a fall in the cost of beer? That is the argument which he has put to the Committee.

I started by saying that this was staggering because it is an argument which has never before been advanced in favour of this proposal, and I think that after the right hon. Gentleman has resumed his seat it will never be advanced again. Surely, it is nonsense. No one really believes that the Chancellor of the Exchequer embarked upon this reduction of the Beer Duty because he thought that it was the best way of keeping the cost of living steady.

If it be that an expenditure of £20 million on the food subsidies would have kept the cost of living down, would the right hon. Gentleman say what would have been the effect on the index figure if the food subsidies had been reduced to negligible proportions?

That is wholly irrelevant. I think that the hon. Gentleman must still be living in that era of artificial excitement to which he referred earlier.

This is a serious subject and I wish to ask whether some member of the Front Bench cannot give us what I believe to be the right explanation. I hope that the Economic Secretary to the Treasury will give us what I think is the explanation of this change in taxation. As far as I can see, there can be only one explanation. It is the one that we have always assumed. This has not been done to benefit the beer drinker; it has not been done as a gift to the housewife, nor has it been done, as the Financial Secretary in his closing remarks movingly told us, to earn the gratitude of the worker. It has been done because unless this reduction was made there would be a further progressive fall in the revenue obtained from the Beer Duty. To me that is a logical argument. Regarding this purely as a question of revenue, I can see that it is the sensible thing to do. Although all appearances are against it, I still prefer to assume that in this matter the Government have done what is the sensible thing.

But assuming that that is the real explanation, it presents to the Committee and to the country certain anxieties for the future. It means that one of the chief sources of revenue is beginning to fail; that desperate steps must be taken to maintain it, and that other equally important sources may go the same way. We may be faced in subsequent Budgets with further reductions in the duties on certain articles not because they bear particularly hardly on the individual, not because those reductions are necessary for some branch of the national economy, but because without them, it will be impossible to sustain a falling revenue. When hon. Gentlemen combine that fear—a fear brought vividly to our minds by the Clause we are now discussing—with the fact that when we are entering into an era of falling revenue we are going on with the process of an automatic increase in expenditure, we can see full well where the country is heading if it remains under the financial guidance and control of the Financial Secretary to the Treasury for very much longer.

I congratulate the Financial Secretary on something quite new and original. But I wonder what the thousands of good teetotallers in Northern Cornwall who returned a Liberal who now supports the Socialist Government, will think of this reduction in the price of beer and the argument that to reduce the duty on beer helps to reduce the cost of living.

I allowed the right hon. Gentleman the Member for West Bristol (Mr. Stanley) to get away with that, but I do not think that I should allow the hon. Member. That was not my principal point. It was incidental.

No.

Yes, it was incidental.

If it was not the right hon. Gentleman's point, all I can say is that his remarks were almost meaningless. I assumed that he had a point because I saw that he read his speech. It must be right to assume that somehow or other between reading what was handed to him and the delivery of his speech he made a mistake. At any rate, in some way or other the cost-of-living index is a point which weighs in the reduction of this beer duty. I think I have the right hon. Gentleman's assent to that. It is a most extraordinary position that when the Government propose to reduce the duty on alcoholic liquor they must consider whether it will affect the cost-of-living index.

I have always taken the point of view that the duty on beer was too high. In consequence, I agree with this Clause, but there are large numbers of teetotallers who think that beer drinking is extremely wrong. I entirely disagree with them. They are wrong in their idea. However, many of them supported Socialists at the last election. For instance, Plymouth returned three Socialists. Had any one of the teetotallers who voted for them the least idea that the Socialist Government would reduce the duty on beer because it had something to do with a reduction in the cost of living? This is a most remarkable position. I really am extremely sorry for some of the hon. Gentlemen opposite when they have to go back to their good constituents and explain the position to housewives and people of that kind.

5.0 p.m.

There is a further point, and it is that I assume that this reduction was made on this high moral basis of reducing the index figure of the cost of living, and that it was done as a sort of preliminary—nothing to do with electioneering purposes, of course—for that high moral standard which was produced at Blackpool the other day. It really is a new one on me and on the Committee that this high moral outlook is ultimately based on the reduction of the price of beer in order to bring down the cost of living. That is something on which the hon. Member for Ealing, West (Mr. J. Hudson) will now be able to make an entirely new speech, in which he will be able to tell his astonished constituents in future that we are now starting upon a new Socialist campaign based upon cheaper beer—not better beer, but cheaper beer—as part of a plan for a new high moral standard based, as someone once said of the Socialist Party, on the type of speech made by certain Nonconformists.

That is the new outlook of the Socialist Party, and the largest plank in its platform is cheaper beer to produce a lower cost of living. That aim is still not quite clear in the mind of the Financial Secretary, though it is in our minds. I notice that the right hon. Gentleman the Member for Dumbarton Burghs (Mr. Kirkwood) is listening to me with great attention, and I am wondering whether he could not make a wonderful speech on the subject of the Spirits Duty, asking the Government to reduce the taxation on whisky as part of their movement for higher moral standards, because it would definitely help to reduce the cost of living in Scotland.

We have had a remarkable speech from the Financial Secretary. Every time the right hon. Gentleman speaks, he makes me think of "Alice in Wonderland," and I assure him that he has not in any way departed from the position which he has taken up or from the character with which I have always associated him—the Mad Hatter.

The right hon. Gentleman the Financial Secretary intervened just now and used the word "incidental," and I thought that that intervention went very far towards muddling what he previously said. If it did not make it more muddled, it went some way towards inspissating the blackness. I think it went so far that the Committee is now really entitled to ask him to explain what "incidental" means.

The Committee will permit me to remind the right hon. Gentleman that he was asked what was the reason why the Treasury, or the Ministers responsible for the Treasury, wish to reduce the Excise Duty upon beer. That was the question put to the right hon. Gentleman—what was the reason? We have now been given two reasons: (a) to reduce the price of beer, and (b) to lower the cost of living, that is, the official formal index figure of the cost of living. If these words mean anything at all, they mean that, in the language used by persons other than himself, he wants to regard the desire to do something as a reason for having the desire to do it. These words can convey nothing else than that the reason was to reduce the formal cost-of-living index figure. That was all, and that was the only reason he gave.

But now, he gets up in the middle of somebody else's speech and says that he only meant to say that it was incidental. Surely, he ought now to tell the Committee what he means by "incidental," and, if it was incidental, what is the reason for the reduction? If the reason for the reduction is not what he told us before, that is, to cut down the official cost-of-living index figure—if that is not the reason, but is merely incidental in the ordinary sense of the word—what is the reason? We have had so far no answer at all, and it really is due to the Committee that we should be told what it is.

On the other hand, if what the right hon. Gentleman first said is right, that is to say, that the reason is that it is worth spending £20 million in order to lower the paper figure of cost of living, then, is it to go on being done in this way? It does not, on the face of it, seem to be what the ordinary common sense of the community would take for granted that the best way of keeping down the cost of living is to make sure that people do not spend less on beer. If that is the reason, does he mean to go on doing it? Does the Chancellor mean to go on, I will not say staggering, but pottering round after the pub crawler, reducing the duty by a farthing or a penny every time the pub crawler looks as if he is going to stop crawling? Is it really the best possible way to keep down the cost of living to spend £20 million on keeping up the consumption of beer, because that is really what the Financial Secretary told us? If that is not the best possible way of keeping down the official figure of the cost of living, then surely we are still entitled to some explanation from the Treasury Bench.

This is a rather important Clause, which covers a rather large field. I feel sure that the Chancellor of the Exchequer, now that he is back after having refreshed himself with a cup of tea—having missed the speech of the afternoon, which was made by the assistant master in the absence of the schoolmaster, and caused no little excitement among his back benchers—will explain to us what it means. I am glad to see that the right hon. and learned Gentleman is taking notice of that memorable speech, which no doubt added enormously to the high moral standards of the Socialist Party. Will the Chancellor undertake to explain to me what Clause 3 means, because I really do not know what is meant by it?

This Clause continues for another four years from 16th August next the Customs Duty of £4 per ton in respect of imported hops. This duty was first imposed in 1925 and it comes up, as I think hon. Members will remember, every four years. The present duty ends on the 16th August next, and unless the Committee gives its assent to this Clause, the duty will then lapse. There is a preferential duty of two-thirds of the full rate on Empire hops.

I must thank the right hon. Gentleman for his explanation, which I can assure him is quite right. I know that this particular duty goes back to 1925, and the only quarrel which I have about it is not that it was done in 1925, because that was one of the thousands of good things done by the Conservative Party between the two wars, but that it might be better now, when every hon. Member on both sides of the Committee is agreed about the value of this duty, to renew it for a period of 10 years so that it is not necessary to do it quite so often. Can he give us an assurance that after the next Election we shall not find the Socialist Party in Opposition and opposing this duty? I just put that point of view because they said some very naughty things about us, and I want to congratulate them on being converted to this commonsense Conservative point of view on this particular duty.

I do not think it will be possible for the Financial Secretary to make such a big gaffe on this Clause as he made on the last one, because, as far as I know, the cost of wine does not appear in the cost-of-living index, although some of the same considerations which apply to this duty apply also to the Beer Duty. I think that part of the Chancellor's Budget speech which dealt with the taxation of wine was clearer than the part which dealt with the taxation of beer. When he was talking about wine, he used these words:

"The receipts from the duties on the cheaper kinds of table wines, those taxed as 'light wines imported in cask,' have fallen off very sharply in the last few months. I propose to make a substantial reduction in these duties, and I hope that this will, in due course, bring about an increase in consumption. …"

Therefore, it was perfectly clear that his object was, first, not to pull down the cost-of-living index, but to get more revenue by lowering the price, and, secondly, as he pointed out, to do something to help Western Union. At the end of his remarks on wines, he added:

"I cannot extend the scope of this concession to any wines other than those falling within the definition."—[OFFCIAL REPORT. 6th April, 1949; Vol. 463, c. 2100.]

That is to say, that heavier types of wines and wines imported in bottle were not affected in any way by these reductions.

The history of the Wine Duty is as follows. Before the war, it was 4s. a gallon on light wine and 8s. a gallon on heavy wine. Before the reduction imposed by this Budget, the duty on light wine was 25s. and on heavy wine 50s. a gallon, showing an enormous increase over pre-war. On top of that, there was an extra duty of 2s. 6d. a gallon on wine imported in bottle. The effect of this taxation has been that the consumption of all wines is running, I believe, somewhere between 50 and 60 per cent. of what it was before the war, and that of heavy wines is running at something like 30 per cent. of the pre-war figure, that is to say, less than one-third. Therefore, I think the Chancellor was clearly wise to reduce taxation which was killing its own object.

But again, as on beer, we should like to ask a few questions. The first is, is the duty fall likely to be enough to stem the reduction in consumption? The Chancellor thinks it is, and we should like to hear something about what has happened to the consumption of light wine since the duty was reduced. I should also like to know why no reduction has been made in the duty on heavy wines. The Chancellor said:

"I cannot extend the scope of this concession to any wines other than those falling within the definition,"

and he gave no reason why he could not. As the consumption has gone down more heavily than in the case of light wines, one would have thought, on the face of it, that a reduction of taxation was necessary in order to preserve the revenue. Again, why is there this prejudice against the jug and bottle department? Why do not wines imported in bottle, quite regardless of their strength, get the benefit of the reduced duty? I cannot think of any reason at all except one, and that is that the whole of this business is really a "Strachey Relief Fund," to get rid, in some way or other. of all that Algerian wine sitting in bond which was bought at the wrong price and about which we can hear so little because whenever we raise the subject we are told that it is against the public interest to disclose the facts. There is no doubt that, in buying this wine, the right hon. Gentleman out-kitchened the Kitchen Committee.

5.15 p.m.

It seems to me that there are three considerations which should prompt us to look very carefully at what the Chancellor is doing. The first is the one I have touched on, the question of revenue. Will the reduction, substantial as it is, in the duty on light wines be enough to keep up the consumption? Secondly, on the revenue question, if we tax heavy wines and bottle wines at this rate, will the consumption not continue to decrease very heavily, and, therefore, will not the revenue go down? That is the first revenue consideration.

The second consideration which we should bear very much in mind is one which the Chancellor himself mentioned, the question of trade within Western Union. There is no doubt that all the countries in Western Union, including Portugal, and particularly France and Italy, attach very great importance to their exports of wine which are extremely important for their economy. This is one of the ways in which we can stimulate freer trade within Western Union, and, therefore, there is an obligation upon us to do it. It would hardly be felt that we sincerely believed in Western Union if we did not arrange our taxation policy, as far as we could, to help our friends and Allies in those countries.

The third consideration, which particularly applies to France, is this. Under little Marshall Aid, as I understand it, owing to the deficit in the French balance of payments, we are, in fact, financing them for nothing. If we buy more wine from them we, in fact, reduce France's adverse balance, and thereby reduce some of the credits we have to extend to her in view of her difficult position. If, therefore, we refuse to import wine from France, and if we say, as the Chancellor once said, that they have nothing we require, all we are doing is to give them money for nothing and to reduce our own revenue over here. That does not seem to me to be a very sensible thing to do.

Before leaving this Clause, we should also like to have some explanation of Subsection (2), on the question of the Ottawa Agreements. It says:

"If at any time the Treasury are satisfied that an increase … would not contravene any of the Ottawa Agreements …"

I should like to know on whose representations the Treasury act. How do the Treasury become satisfied that these agreements are all right if they are not already satisfied by their study of these agreements? There may be some special reason, but I should like to know what it is.

I cannot leave this subject without a brief reference to the Liberal Party's attitude on this matter. Its members are ready on their benches, keen to make their contribution, but it will be within the recollection of the House that on the Report stage of the Budget Resolution they voted against the reduction on the Wine Duties. Gladstone very much hoped to make this a wine-drinking country, and Cobden's French Treaty of 1860 was a classic triumph which reduced duties on wines and stimulated our exports to France. Tariff reductions these days are very rare things. We had a statesmanlike action in the last Budget when the duty on prunes was reduced, but I can think of no other case except this, where a tariff has been reduced.

What did the Liberals do on this great occasion? For the first time in history all nine of them went into the same Lobby to vote against the reduction in the duty and for the cause of trade restriction. I do not know why they did that. They might give as their reason that they objected to wine prices going down while food prices went up, but that cannot be the reason of their leader the right hon. and learned Member for Montgomery (Mr. C. Davies) because the whole theme of his speech was that subsidies ought to be reduced and food made more expensive. Therefore, they are attempting to punish the French because the price of food has not been further increased.

The Liberals are always dilating on their special virtues, and I very much hope that next time they make their usual peroration on free trade they will add that on one of the few occasions when a step towards freer trade was being taken, they solidly voted against it. Returning to the main question, I hope that we may have answers to the financial points on the stimulation of trade, the Western Union point, and the Marshall aid point that, in fact, we should not have to pay for these wines anyway.

I should like to add to what my hon. Friend the Member for Flint (Mr. Birch) has said about the intention to stimulate a certain amount of trade between this country and Western Union, and in particular with the Empire. Before the war there was a differential between Empire wines and wines from France, which gave such an advantage to the Empire wines that they could find a ready market. I think hon. Members on both sides of the Committee will agree that throughout the war the Empire played the greatest part in producing wines which we in this country consumed, because the Empire was the only place where we could get wines, and therefore they built up a considerable output. When the Chancellor or his predecessor decided to raise these duties, it was done without increasing the differential on the Imperial preferential rate.

The hon. Gentleman is quite inaccurate. We increased it last year to a differential of 10s. on Empire wines.

On heavy wines, but I think the Chancellor will agree that on light wines——

The vast majority of Empire wines come within the heavy category.

We happen to be discussing light wines. I hope the Chancellor will not draw one of his red herrings across the subject under discussion. We are discussing light wines on which the Imperial preference has remained the same as it was before the war, I believe. In spite of increases in duty, that differential remains the same, but the cost to the consumer is such that, the taste being what it is, the Empire wine is prejudiced. I cannot see how under the present system there is likely to be any encouragement to the wine-producing industries which have grown up in the Empire and which had considerable encouragement during the last 10 years or so. I ask the Chancellor, when considering these rates, to see whether it would be possible to increase the preferential rates and thus once more give the Imperial wines sufficient differential so that they can have a better market in this country.

It is necessary to ask a few questions about this Clause because on this occasion we have had no introductory remarks from the Financial Secretary. We assume that the object of this proposal is not to steady the cost of living or to earn the gratitude of the working man. It seems to deal with rather another aspect of the revenue than that. I feel that my hon. Friend the Member for Flint (Mr. Birch) is probably right when he describes it as an "Algerian Clause." I am sorry that the Parliamentary Secretary to the Ministry of Food is no longer present, because I think she could have been helpful. We understand that the Minister of Food is still what is known in other trade circles as a "stale bull" of very large quantities of Algerian wine which have been bought at the wrong price for which the taxpayer has had to "carry the can" back.

Carry the cask back.

I am obliged to the hon. Member. However, as opposed to Clause 2, let us move from the practical to the theoretical. There is all the difference in the world between the cost of beer and of wine, which in these days and at these prices has become largely a matter for epicures who, of course, eschew the Algerian imports of the Minister of Food. But if we come to the other aspect of the matter, surely we are dealing here with the same problem as that which we were discussing on the beer duty a few minutes ago—namely the problem of revenue. When the Chancellor of the Exchequer introduced his Budget in April we understood that he had two main reasons for reducing the duty on light wines imported in cask: that consumption had been falling off very sharply as in the case of beer and he hoped a reduction in duty would benefit the Exchequer, and that he hoped to assist our trade with France and with the wine producing countries in the Empire. Those were his main reasons as we understood them.

So far as the first objective is concerned, the right hon. and learned Gentleman does not seem unduly hopeful, because he used these words:

"If there were no counter-balancing rise in consumption, the initial effect of these reductions would be to reduce the revenue by £1 million a year, but I expect that the eventual loss will be much less than this."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2100.]

But does he anticipate any gain? That did not appear to be the case when he addressed us on that occasion. It is worthy of remark how sharply these duties have risen since before the war when duties on foreign wines were 4s. a gallon for light wines and 8s. a gallon for heavy. These duties now stand at 25s. for light and 50s. for heavy, and one must also take into account 2s. 6d. a gallon additional for wines imported in bottle. The right hon. and learned Gentleman now seeks to reduce the duty on light wines imported in cask from 25s. to 13s., which obviously leaves a very wide margin between the light wines im- ported in cask and any other kind. It is interesting to note that at present the consumption of heavy wines has fallen far more than the consumption of the others. For instance, port is as low as 30 per cent. of pre-war consumption, while the average for wines of all types is between 50 and 60 per cent.

I do not think there is any doubt that this new concession is desirable. It will encourage trade with France and indeed with the Commonwealth. Although the amount of Commonwealth light wines imported is relatively small, I understand that some 90 per cent. of their export to us is imported in cask, and it would also help to build up the home bottling trade. Those seem to us on this side of the Committee to be the main advantages of the proposal. Before we pass this Clause, we should like to hear from the Government whether any gain is anticipated in the revenue from the steps which the Government are now taking.

I should like to say a few words on the subject of wine from the point of view of the arguments which were advanced by the Financial Secretary on the last Clause we discussed. I do not know whether he will say anything about the cost of living. The general belief of hon. Members opposite seems to be that this question cannot be related to the cost of living. Yet, if wine-drinking is justifiable, I do not know why it should not be related to the cost of living. I should like to know whether the Government assume that wine-drinking will always remain the privilege of the few—that is, on the assumption that wine-drinking is necessary.

5.30 p.m.

I have listened on more than one occasion to my hon. Friend the Member for Bilston (Mr. Nally)—not that I agree with him—who has said that he looks forward to the time when the working-classes will be connoisseurs of wine in the same way as the privileged classes whom hon. Members opposite represent. By State policy we are deliberately reducing the cost of wine in order to help France. How do we suppose we shall help France unless a lot more people drink wine? Or are we to assume that the small number of people who are drinking the wine will be the same num- ber but that they will drink a great deal more? What justification could there be for a Labour Government to support that result of this action?

If it were necessary for the right hon. and learned Gentleman to argue that there should be this cheapening of beer because the cost of living required it, then it is just as necessary that the same argument should be applied to wines. In fact, I do not know where the Front Bench are to stop now that they have let loose this cost-of-living argument. In view of the fact that there are so many people engaged in football pools, in a little while we shall be backing up the football pools in reducing or raising the tax—I do not know how their argument will run—on the basis of the cost of living. I want to tell the Chancellor of the Exchequer the sort of hole he is left in by the argument his Financial Secretary has been advancing.

I sympathise with the Financial Secretary because he had nothing else to call in aid in view of his position, but I feel he has landed the Government in an even worse hole; and, as I have said all along, they have been in a hole from the beginning on the question of these taxes on alcoholic beverages. They have been in a hole all along through an attempt to associate what people can well do without, whether it be wine, beer or any other alcoholic beverage, with an argument concerning the cost of living. That argument is too sacred for Members on these benches to play with. We have built most of our great cases on the cost-of-living argument and on the necessity for a better standard to be provided for the people, because there was something involved in that argument, but to associate it with this question of alcoholic beverages is, in my opinion, a most deplorable mistake. I hope the Treasury will think again before they provide arguments of the sort to which we have had to listen.

I think the telling logic of the hon. Member for Ealing, West (Mr. J. Hudson), will be almost as effective as the admirable speech of my hon. Friend the Member for Flint (Mr. Birch). My hon. Friend made a plea to the Chancellor of the Exchequer, although perhaps the word "plea" is not one which one associates with my hon. Friend's expressions, for they are always more of a robust than a gentle nature; he made a plea to the Chancellor that he should encourage the consumption of wines of the better qualities as well as of the cheaper qualities in this country because, after all, we are not paying for these imports from France with fresh exchange, as my hon. Friend said, but are Using up credits that otherwise we should have to give them. If that is the case, surely by encouraging wine in this country not only do we give pleasure, as my hon. Friend said—because, unlike the hon. Member for West Ealing, I consider it harmless and indeed admirable—but we also are increasing the revenue of the country.

Thirdly—and this is a fresh point which I wish to make in support of my hon. Friend—we are surely mopping up purchasing power in this country; and "mopping up" is a very appropriate phrase. I would remind the Chancellor that it is not very long ago that he told the House that inflation was still an evil. He said:

"Inflation is not an evil that, once checked, disappears: the threat remains, and we must be on our guard against it."—[OFFICIAL REPORT, 6th April, 1949: Vol. 463, c. 2077.]

The Bulletin for Industry, published by the Economic Unit of the Treasury in June, 1949, states:

"Consumer demand shows little sign of falling away. Total personal expenditure rose quarter by quarter last year to a record high level."

If we can use up some of that purchasing power which is putting a strain on the economy of the country by threatening an inflationary situation; if we can use that up by buying goods from abroad without expenditure of further exchange, then surely we are doing these three things: giving pleasure to the people of the country, increasing the revenue of the country and diminishing the fear of inflation. On all accounts it would appear to be an admirable course to take to encourage the consumption of wine in this country.

I do not want to keep the Committee from the Financial Secretary for one minute, but I think he would like to know that we do not propose to divide the Committee against this Clause, because we voted with the Government on the subject at the Report stage. I think it is worth pointing out, however, that when we had the Resolutions of the Committee to consider the other day there were Divisions, initiated by the Liberal Party, both on the proposed changes about beer and those about wine, but that none of the Liberals has been present during the whole of these Debates. Therefore, we have no idea why they put both us and the Government to the inconvenience of Divisions on that night, and I hope it will be noted as an act of irresponsibility on the part of one of the groups in this House.

If, as I take it, we are dealing with the Clause from the purely budgetary point of view, the point is, as I understand it, that the present rate of tax has been so high that consumption has fallen and, therefore, the tax is defeating its own ends. So far as that purpose is concerned, I imagine that the figures produced by the Treasury show that the change is justifiable. I think it is of interest to the social student to note that it was a Socialist Chancellor of the Exchequer who made use of the words:

"I hope that this will, in due course, bring about an increase in consumption.—-[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2092.]

I put aside the arguments advanced by the hon. Member for West Ealing (Mr. J. Hudson), because his point of view is somewhat different from that of most hon. Members. It is interesting to find the point of view which I have mentioned put forward from those benches because it goes to destroy the theory that to drink wine is somehow the sin of wealth. It is not. In most countries, or at any rate in a great number of countries in the world, particularly in Europe, wine drinking is an ordinary custom of the country. It is a custom which has not been introduced here, although in point of fact the Romans produced wine a very long time ago and we still have relics of the places where they did it, but in modern times the drinking of wine, except, of course, the port and sherry trade in the public house, has been rather limited—and there are sweets, although nobody could call that wine. Perhaps I had better not describe it; it is not what, in his less austere days, the right hon. and learned Gentleman would have considered a nice glass of wine.

If the custom of wine drinking spreads to any extent I think it will help to bring our people somewhat more into line with those with whom they will be very much concerned in the Western Union of the future. In so far as this will help to increase trade, particularly if it comes to us as imports without our having to pay exports—and I understand a good deal of this is being charged up against old debts—then to that extent, as my hon. Friend the Member for Flint (Mr. Birch) pointed out, we shall be receiving something from a lot of countries from whom otherwise we might not receive anything.

I agree, however, that I should have liked some explanation why the change has been made only in light wine. Why have we forgotten our oldest ally of all, Portugal, who will get nothing whatever from this Clause? I hope it is not because of the political prejudice of hon. Members opposite, because sherry comes from Spain, and no concession is being made to heavy wines. They must bear in mind that, of course, wines of that type have been very much developed during the war in our Dominions overseas. I am perfectly certain that very few gatherings in this Palace could have functioned in recent years had it not been for South African sherry. I should like to know why that difference has been made, particularly in view of the budgetary argument that, because there has been a great falling off in consumption there has been a falling off in revenue. The fall in consumption, down to 30 per cent. of the pre-war rate, has been greatest of all in heavy wines, and nothing has been done to rectify that. I hope that is not because of any form of prejudice. I do not see why it should be.

However, to go back to the class of wines consumed in public houses, it is that type of wine rather than the light wines that are consumed at ordinary bars. I hope that the right hon. Gentleman has some explanation of that point. On the whole, it seems to us that, in view of the drop in revenue, and in view of the desire to help our European friends, he has acted on this occasion quite sensibly. There are many other things he might have done, but so far as he has gone he has, at any rate, not incurred our displeasure. For that reason we shall not divide the Committee. We live in hopes that we may have the reason given us by some member of the Liberal Party why they felt the way they did on the other occasion.

I am sure that the right hon. and gallant Gentleman will not expect me to deputise for the Liberal Party.

The right hon. Gentleman does it admirably.

I can only deal with the reasons why my right hon. and learned Friend has inserted this Clause in this Bill. Perhaps, before I come to say briefly why a reduction is proposed I may clear out of the way a question put to me by the hon. Member for Flint (Mr. Birch), I think it was, who asked if I would explain why subsection (2) is where it is. All that subsection does is to recapitulate the provision of—I think it is Section 3—of the Ottawa Agreement of 1932, under which the preference for light wines amounting to 2s. per gallon, at present enjoyed by South Africa and Australia, would revert to one shilling if by any chance the Ottawa Agreement duties ceased to apply. That is the sole reason why that is here.

Let me deal with why my right hon. and learned Friend has decided to ask the Committee to approve this reduction on light wines imported in cask. The reason—one of the main reasons—is that there has been a very substantial drop in the consumption of light wines since the middle of 1948. In the first half of 1948, 975,000 gallons were consumed, and in the second half of 1948 the number of gallons consumed was 430,000.

Withdrawn from bond.

Yes, but it went for consumption. How much was drunk it is impossible to say, but I understand that this type of wine does not keep very long, in any case; and I suppose that those who withdrew it from bond would not have withdrawn more than they felt would be consumed in an appreciable time. As a result, of course, our revenue fell accordingly, and, as my right hon. and learned Friend explained when he opened his Budget, in order to help South Africa, Australia, and our trade with France, this reduction has been made, and it is hoped that, as a result, there will be a revival of consumption.

5.45 p.m.

One hon. Gentleman opposite asked me why nothing had been done to assist the heavier wines in order to help the Empire products. As my right hon. and learned Friend in an interjection reminded him, we did in our last Finance Act increase the preference margin from 4s. to 10s. a gallon, and, thereby, gave effect to the Geneva Agreement. The right hon. and gallant Gentleman asked me why we were doing nothing for heavy wines to help our old ally, Portugal. As a matter of fact, we have got an agreement with Portugal under which we do take a certain amount of her product, but it has to be limited, because it is quite impossible—and I am sure that the Committee will agree with me here when I say this—that we should pay gold for an unlimited supply of port; and, therefore, any change in the incidence of taxation would make no difference to the amount of port which does come in from Portugal at the present time. I think that covers the points that have been made.

What about bottled wine?

Bottled wines are, of course, different. The wine that comes in, sparkling and still, in bottle is small indeed.

No.

If the hon. Gentleman is speaking particularly of the lighter wines, and asking why they must come under this arrangement in cask, the short answer is that it surely makes no difference to the importer. They can come in; but it does help the British bottling industry to bottle the wines here. That is the situation. The more expensive wines can come in bottle, and they do come, I repeat, into a separate category. That being so, I believe that what my right hon. and learned Friend is doing here is reasonable in the circumstances, and that it will help, as has been said, Western Union and the Dominions. I am delighted to hear that the suggestion now being put forward is acceptable to the Opposition and that they are in agreement with my right hon. and learned Friend that this reduction should be made.

I should like to add that already the trade has begun to implement the under- taking it gave, namely, to sell wines of some grades at no more than 8s. I understand that the Civil Service Stores, for instance, have introduced a new wine, white Bordeaux, at 6s. 6d. a bottle, and there is one red Bordeaux, claret, available at 7s.; and Empire wines too, in some cases, have been reduced by 2s. 6d. a bottle. From the figures that I am thus able to give it does appear that the trade is playing its part and that wines are being reduced in price and made more available, and we hope that, as a result, those who previously felt that the price asked was too much will now be able to afford wine and help trade not only with South Africa and Australia but also with France.

Would the right hon. Gentleman allow me one question? Before he adopts this policy based on the fact, as he said, that it does not matter whether wine is imported in a barrel or bottle into this country, or whether or not it is bottled in France, will he take a little expert opinion on the subject? He will find that it makes a huge difference. A wine of the same chateau in the same year varies enormously in quality according to whether it is bottled one month or another. It appears that the right hon. Gentleman is advocating a policy based on extreme ignorance of the facts. I do ask if he will have the whole matter reconsidered in view of that.

I do not intend to stand for very long between the Committee and the representative of the Liberal Party who has now hastened in to explain the attitude of his party towards the Resolution, but I think I ought to remark in passing that the Financial Secretary's contribution has been in line with his contribution on the previous Clause, on beer, in that he has given a number of financial explanations but has not really got down to the economic and social reasons behind the change the Chancellor is making. He has not made it clear why the Government have singled out light wines imported in cask, and why he has neglected bottled wines and the heavier wines from Spain and Portugal.

The right hon. Gentleman said not a word about Spain. I suppose that is much too dangerous a subject for the Labour Party to touch. But ought we not to restore and bring back to normal in peacetime our wine trade with Spain? Is there not some hope of getting a more liberal attitude on the part of Spain, so that we could agree to take their products in good and fair quantity? I should have thought that there was. I should like to know whether the Chancellor has had any consultation with the Foreign Office on the question of what could be done to help forward a liberal democratic régime, even in this light matter of taking one of Spain's principal exports. I do not believe any thought has been given to that subject.

Why have bottled wines of the light variety been excluded from this concession? I should have thought that some members of the Government and of the party opposite, and some representatives of nationalised industries, would have been rather upset to find that in these days, when there is so much entertainment of foreigners, and one thing and another, by the Socialist Government and its representatives all over the country, that some concessions were not made in the importation of bottled wines. Of course, the French are just as anxious to send us their bottled wines as they are to send their cheap wines in cask. The Financial Secretary gave us no figures to show what has been the effect in the last few years of the Duty upon bottled wines. He has given us the figures for wines in cask and the fall that took place in 1948. He must also have a large array of figures for the importation of bottled wines, but those he has not given us.

I suspect that there has been a very heavy drop in bottled wines, too. I also suspect that the proportion of cask to bottled wines sent by France to this country is very high in favour of the bottled wines. If so, that is further argument why, in order to bring the Western Union idea to fruition, we should pay attention to the claims of France in that respect. I therefore hope that the Chancellor will himself intervene, which he was unable to do on the previous Clause on beer because of the necessity to have a cup of tea, and tell us to what extent prejudice or politics enters into the giving of the minor concessions which he has sought to make to this great trade.

I had not intended intervening in this Debate, but I have received so many cordial invitations to do so that I cannot resist them. No doubt the hon. Member for West Ealing (Mr. J. Hudson) would take the view that a Government should play the part of temperance advocate. I do not take that view. But I certainly do not think that any Government should take it upon themselves to be intemperance advocates; and I certainly do not think that any Government should take upon themselves as part of their deliberate policy the encouragement of the consumption of beer and of wines. I think that in that respect individual judgment is far better than Government guidance, and I feel that a deliberate policy which has as its background the desire that there should be an increase in the consumption of wine as a contribution towards the solution of our economic difficulties is not a healthy approach. If we really want to make a contribution towards solving our economic problems and towards the general happiness of our people, it will not be done by saying that among, particularly, the limited income groups there should be a greater absorption of income through the medium of greater expenditure on wine and beer. The Chancellor would be furthering the welfare of the country far better if he were ensuring that we had a wider variety of goods on which to spend money and more money to spend in that way. That is my reason for having no enthusiasm for this fresh development in Government policy, which is directed towards the deliberate encouragement of wine and beer consumption as part of our fiscal policy.

I should like to address myself to the difference between wines imported in cask and wines imported in bottles. The question of quality enters very considerably into this, and if the Chancellor is looking to increase revenue in future he must be certain that the wines imported under the new arrangement are of very good quality. After tasting some of the original Government imports I was reminded of the old Latin saying, in vino sanitas. Possibly, now that the choice is passing out of Government hands into that of private enterprise, we shall avoid that danger. But what of those classes of wines such as the Alsatian wines, and even the German Moselle and Rhine wines which traditionally come into this country in bottles and are greatly appre- ciated? Will the Chancellor look again and make quite certain that he is not loading the dice against himself by giving too much of a concession to the light wines, which we all appreciate and like very much; will he make certain that he is not loading the dice somewhat heavily against the very good, sound and not expensive wines in bottles which used to come from an area with which we are trying to encourage trade with this country—the Palatinate wines, the Moselle, Rhine and Alsatian?

I thought that the Financial Secretary spoke much better about wines than he did about beer, because he did lay down a good sound principle. He said that the Government wanted to expand the consumption of wine, and that they wanted to get as much revenue as they could from wine. Very well then. On that principle have they gone far enough, and is this the right sort of arrangement of duties? I doubt that very much. I think that the preference shown for one kind of wine as against another is probably bad for the revenue, bad from the point of view of increasing the consumption of wine.

All through our history Governments have interfered with the drinking habits of the people. My right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out how in Caesar's time some good wine was made in this country. The other day on looking at a catalogue I saw these words:

"If William of Malmesbury is to be believed, Englishmen of the Middle Ages drank the wine of Gloucestershire as greatly as that of Burgundy and Bordeaux."

Well, of course we can believe William of Malmesbury. I represent Malmesbury; they are very truthful people, and our William is always right. But we have changed our habits of drinking wine, and what we are now doing is reversing the Methuen Treaty of 1703, in which we gave a very big preference to port wine and put a very heavy duty on French wine. We are now reversing that, and we seem to be doing it as a by-product of the Minister of Food's foolish purchase of Algerian wine. I do not think that that is a sensible reason to upset the commercial relations between ourselves and a country like Portugal, or for that matter—and I stress this still more—with the Empire producers of heavy wines. The Financial Secretary said the reason that the duty was being lowered on light wines was because consumption was going down. But the figures show that consumption of heavy wines is going down still more, and so that is not a good argument at all. My information is that the consumption of port is lower compared with pre-war than the consumption of light wine. I may be wrong, but that is my information.

6.0 p.m.

I was very interested when the Financial Secretary said that we should have to pay gold to Portugal for port wine. That would have been true earlier, but does he assert that it is true now? Is it not a fact that the Portuguese balance of trade has changed and it is now rather difficult to find sufficient means to provide her with current sterling? We ought to know the answer to that, because my Lisbon friends tell me the position is very different now. These people in Portugal who supplied us with port wine behaved very well during the war. I was there, and there was great pressure put on them by the Germans to sell them port wine because they wanted it on the Eastern front to keep warm their troops fighting the Russians. They did not sell the wine to Germany when they could have made a lot of money, and we ought to do something for them now.

If the principle of the Government is to expand consumption of wines in order to get revenue, then why do not they do it over the whole field? It can only be because of class prejudice. It can only be that they do not like bottled wines because they think that the "swells" drink bottled wines. They have some idea that if the Civil Service Stores offer us some Bordeaux, it is all right. I think that is a very narrow point of view, especially in relation to France.

I was in Paris last week, and business men were tumbling over each other to buy anything in sterling because the sterling trading rights scheme which we have with the French expires on 30th June. They were buying anything they could to use up the money we have given to the French until the end of the month. Why should we not have wine instead? It would be very much better for all the reasons put forward by my hon. Friend the Member for Flint (Mr. Birch). This is really a topsy-turvy affair. This whole question of getting goods like wines from the Marshall countries, with whom we hope to draw much closer, as well as from Empire countries, should be thought out again. This is just tinkering with the matter in order to get the Minister of Food out of a difficulty.

I have been literally dragged to my feet by the acting leader of the Liberal Party. I should like to ask why the Government of this country should not encourage the drinking of wine. I suggest that it would contribute both to the happiness of our people and to their industrial efficiency if they could drink more wines.

I apologise if I did not make my point clear. To my mind, in the case of large numbers of people in this country, their surplus income, if they have any, could be far better spent than on wines and beer, and it is a mistaken policy on the part of the Government to encourage people with their present income problems to spend their money in these two directions.

I always thought that the Liberal Party meant what its name implied. I am very strongly in favour of letting people spend what money is left to them—and there is not much left to them these days—in any way they choose. If they choose to buy wines I do not see why they should not do so, or why the Liberal Party should tell them on what they are to spend their money.

The reason for this reduction was given by the Financial Secretary. It is to increase the revenue. The law of diminishing returns has applied; the consumption of wine has gone down. The result is that the Chancellor of the Exchequer is not getting his revenue, and so he wants to get more, and the only way is to encourage a little more wine drinking in the country, from which everyone benefits. Scotland used to be a great claret drinking country, but that has ceased now to a marked extent. I think it is an unmitigated disaster, and it is a very bad thing from Scotland's point of view. I cannot understand why the Government have deliberately excluded wine in bottles. As my hon. Friend the Member for Chippenham (Mr. Eccles) has said, it is not only the "swells" who drink wine in bottles. The working and middle classes, in the old days when we were living a more or less tolerable life, used to drink a good deal of wine. They used to buy wine cheaply and keep it. There was a day when there was hardly a farmhouse in Scotland where you could not get a good bottle of claret which had been bought cheaply and kept for 10 to 15 years. I think it is a great mistake for the Chancellor of the Exchequer to have reduced the duty on wines in casks only instead of applying it also to wines in bottles. I am sure that if he had done that it would have been a good thing for the people of the country and would have substantially increased the revenue.

The hon. Member for Chippenham (Mr. Eccles) pointed out that this country was a wine-drinking country prior to 1703. That is a very important fact to remember, because the taxation on wine has always followed our relationship with foreign countries, except in the case of Mr. Gladstone who reduced the taxation in order to encourage the country to be a wine-drinking country once more.

That was the real Liberal Party.

The duty was imposed in 1703. We had been at war with France and wanted to punish France by keeping out her wines.

Shame.

I am surprised that a Scottish Member should say that; because it was then that the Scottish whisky distilleries for the first time became a great trade. There is another more famous case if we go back a little earlier. It can be claimed that the British Navy itself rests upon the wine trade. If we had not imported wine in British bottoms from Spain in the reign of Edward III, the British Navy would never have been built. The interesting thing is that although duties are often imposed because of our relationship with foreign countries, they produce very unexpected results, which is what will happen now.

Let us take the free trade position. When Bentham in 1830 advocated free trade, the Whig Party accepted the argument and asked why the duty on beer should not be abolished; why, it was argued, should not a free run be given to the licensee to carry on his trade like a butcher and baker or any other tradesman? Parliament accepted the argument and passed an Act which became known as the "Free Beer Bill." In principle it was right, if the principle were only the principle of free trade. But the result was that in less than a year Parliament was compelled to repeal the Act because of what was happening in all the big towns in the country.

The hon. Member for Ealing, West (Mr. J. Hudson) was quite right in his argument. Parliament has experimented in all kinds of ways in relation to this trade over the past century. There is no case for the reduction of the tax on wine. We may say that there is a case for it historically, and quote the British Navy, the defence of the country, and the opportunity to punish France; but what I wish to point out is that, from a commonsense point of view, we should not tax merely on the consideration of our feelings towards one country or another. We should not discriminate in this way. If we lower or raise a tax purely on a revenue basis, be it so. That is a revenue consideration.

I agree with the argument of the hon. Member for Cardigan (Mr. Bowen). When the Government are controlling household expenditure, and planning us to a degree to which no Government have done hitherto, except in time of war, to make this discrimination now in favour of beer and wines is wrong. Leaving out the moral argument, the reduction should not be given in the case of these commodities. These are luxury things, and any discrimination in favour of them is wrong.

I wish to say a couple of words prompted by the remarks of the hon. Member for East Aberdeen (Mr. Boothby). He said—and it is typical of the hypocrisy adopted on this question—that he thought that the Liberals, like himself, believed that the people should have the right——

The hon. Member should not have used that word "hypocrisy." It is unparliamentary to accuse another hon. Member of hypocrisy, and he must withdraw the word.

Further to that point, Major Milner——

I have requested the hon. Member to withdraw that expression. It is unparliamentary, and should not be used. It is not a question for any other hon. Member.

If you ask me to withdraw the expression "hypocrisy," I withdraw it; but it is the first time I knew that it was an unparliamentary expression. I always thought that the truth was acceptable in this House.

I do not intervene because the hon. Member for West Fife (Mr. Gallacher) used that expression, which he has naturally withdrawn at your request, Major Milner; but I think the Committee as a whole would like to know the exact limit of your Ruling. Am I never to say that the arguments adduced by hon. and right hon. Gentlemen opposite are hypocritical? And if that is all right, cannot I proceed further, and say that their whole policy is hypocrisy? If I am allowed to do neither, what can I say either about them or their policy?

The right hon. Gentleman knows that there is a difference between an accusation against an individual and one addressed to a party. I understood that the hon. Member for West Fife had accused another hon. Member of being guilty of hypocrisy. If I was wrong, I am sorry, but I think I ought to say that it is not the custom of the House, nor is it Parliamentary, to make personal imputations as from one hon. Member to another. I agree they may be largely a question of degree and it must be left to the Chair to decide, but such imputations are objectionable in any case and unparliamentary in most cases according to our practice.

I would not wish to make any personal imputation against the hon. Member for East Aberdeen, but I deplore the company he keeps. I said that the remark was typical of the kind of hypocrisy that is common to hon. Members on the other side of the Committee. At any rate, to get back to the point, what he said was that he always thought the Liberals believed, as he believed, that the people should have the right to spend whatever money is left to them in any way they liked. Does he believe that? No, he does not, nor do hon. Members on the other side of the Committee. On this question of liquor, the hon. Member for West Ealing (Mr. J. Hudson) and myself consider it a form of dope. Can people spend their money on opium, another form of dope? Can they spend their money on cocaine, another form of dope? Let us come to something more practical. The ordinary workman can, if he wishes to drink, spend his money on a teapot or a coffee pot. But can he spend his money on a still? No—there is too much profit in that for hon. Members on the other side of the Committee. So he is not allowed to spend his money in any way he likes.

I intervene only for a moment, and I regret that I must bring the discussion down from the high moral level it has reached under the advocacy of the hon. Member for West Fife (Mr. Gallacher) of freedom of choice of narcotics of all kinds, and the explanation of the Liberal Party of why they now differ from Mr. Gladstone. I wish to bring the discussion down to what I think is one point of difference between the great majority of hon. Members in this Committee. We have already expressed, on behalf of my hon. and right hon. Friends, our general approval of the step which has been taken, but it is not explained to me why it has been necessary in the circumstances under which this reduction has been introduced, to confine it to wines imported in casks and exclude the bottled wines. We have not been told that cheap wine figures in the cost-of-living index. There has been no attempt to show that this concession is made as a concession to hard-hit people to enable them to bear the trials of life rather more easily. It has been put, and rightly put, on a purely financial basis.

Here we have an article the consumption of which is falling and the revenue from which is therefore decreasing; and where a decrease of the revenue will, it is hoped, lead to an increase of consumption and to an increase of revenue. Added to that is the very cogent argument that here we have a product which, in terms of balance of payments, we can, so far as I can see, import free. It is not a question that because we increase our imports of wine we have to increase our exports pro tanto. We get wine or nothing at all. Therefore, to be able to import something free to use up surplus purchasing power is an obvious economic asset.

If that is the situation, then why is any price limit drawn at all, because that is what, in fact, is the object of excluding bottled wines? The revenue there can be made just as big. The only difference is that, on the whole, bottled wines are not only better, but more expensive than wines imported in casks. It is quite true that, on the whole, they are likely to be drunk more by the richer section of the population than by the poorer. But this reduction is not to give undue benefit to the poorer section of the community. If that was being looked for, it would be easy to find a number of objects which they would appreciate very much. The object is purely financial. Wine in bottle, sold to the rich man, will add just as much to the revenue, and mop up just as much purchasing power, as wine sold in a cask, which will be within the grasp of those within the smaller income group.

I cannot understand the logic of excluding from this concession these more expensive types of wine, which would help the Government to achieve the economic aim they have in view. No explanation has been given. The assumption is, "We can only give this concession on the cheaper sort," but that is no use if it is based entirely on the question of a financial return. I hope the Chancellor will reconsider the possibility of extending this concession to wines in bottle as well as in casks. If, between now and Report, he is unable to make up his mind, I hope that on the next stage my hon. Friends will be able to give him an opportunity of coming to what I am sure will be a wise decision.

The right hon. Gentleman the Member for West Bristol (Mr. Stanley) has reinforced the argument of his hon. Friend the Member for Chippenham (Mr. Eccles) who, apparently, is quite unaware that powerful and palatable wines are still made in his own constituency, although not for the market. The omission of bottled wines from this Clause is another example of the remarkably good and wise statesmanship of this beneficent Labour Government, to which the country owes so much. We have to consider the matter from the point of view of those who reap benefits. We want to promote good relations with France, and especially to keep her out of the Cominform. I am sure we can help France substantially in this way, and the Chancellor, from whose views I often dissent, is to be congratulated on excluding bottled wines.

I find it rather difficult to follow the logic of some of the arguments which have been advanced today. I can understand the position of the hon. Member for West Ealing (Mr. J. Hudson). For many years he has been a strong and very effective attacker of the evils of drink, and he holds his point of view with such passionate sincerity that we always listen to him with great respect; but I should have thought that the logic of his position today would be that he desired to see the drink traffic prohibited altogether. If it were, we should neither be increasing nor diminishing taxes on beer or wine, or even leaving them as they are.

As to the Government's position in this matter, I accept straight away the argument that their proposal is necessary in order to improve trade relations with countries we desire to help. I thought that argument was powerful and adequate in itself, and that no further argument was needed for the proposal, although I agree that if that argument be sound it applies with just as much force to heavy as well as light wines and anything else. The Chancellor has still to answer that particular point.

I am concerned about the other argument used by the Government—that they propose a reduction deliberately in order to increase the consumption of wine. We ought to look at the considerations which are involved in this argument. The Chancellor says, "I shall reduce the tax on wine in this Budget so that you should drink more. "Suppose we do drink more—and here I shall not be able to count on support from the hon. Member for West Ealing. Suppose we fall short of requirements in this respect and, despite all the effort we can command in drinking wine, the revenue still falls short of its present point. The logic of that is that in the next Budget the Chancellor will say that there must be a still further reduction in the duty on wine, and that wine drinkers must embark on the task of drinking still more wine so that the revenue may be increased.

This has only to proceed long enough for wine drinkers to become incapable of assisting the Government any further. It looks as if the Chancellor is inviting us to copy the labours of Sisyphus. As fast as we push the ball up the hill it rolls down again, so that there is no hope whatever of achieving finality. If we are to apply this principle will the Government apply it elsewhere? If we have also to smoke as hard as we can to sustain the Government it seems that a quite intolerable burden is being put upon us; neither our pockets nor our constitutions can sustain the task which is implicit in the argument advanced by the Government today. What applies to wine and tobacco applies just as well to half a dozen other things.

I disagree with the Liberal Party in this matter. The free trade argument is a dead as mutton, for the time being at any rate. That being so, we have to ask ourselves, not whether the proposal is in line with free trade theory, but whether it is a practical and wise step in the present disposition of world affairs. I think it is; I think it is enough for the Government to take their stand on that point, but if they withdraw from us the task which is to be imposed on us, I think they should find some justification for distinguishing between light and heavy wines.

I wonder whether I might ask advice from the Treasury Bench on a matter of fact. There has been a good deal of argument dependent upon a comparison between French wines and, for instance, Portuguese wines. I am not quite sure what the present position is; does somebody on the Treasury Bench know? Is it a fact that you could not, until recently, buy port in Portugal and bring it to England; not because the duty was prohibitive on it but because there was an actual physical prohibition? You were actually forbidden to import wine from Portugal. Is it a fact that now that prohibition has been lifted and, if so, for how long or by what maximum number of pipes of port has it been lifted? I think the whole comparison is meaningless.

I am not asking the Financial Secretary to give the answer out of his head, so to speak, but the general point is clear enough, and we ought to have an answer to it. If the fact is that what controls the amount of port brought to this country is not the duty but a physical control, I think we ought not to part with this Clause until we have been told what are the Treasury's ukases in that matter at the moment and, secondly, what are the Chancellor's intentions. Until we know these things all the arguments about a comparison between France and Portugal in this matter are without meaning.

While I am on my feet, and perhaps to enable the Financial Secretary to find an answer to that, unless he already knows it, may I put another point? If you wish to drink the best wine of any sort, you do not always necessarily go to the place where the wine is grown. Perhaps Burgundy is as good a place as any other for drinking burgundy, but it is at least arguable that Belgium is better. For historical reasons, into which I need not go now, it is easier to find the best burgundies in Belgium than in Burgundy. So, similarly, it has always been easier to find the best port in this country. Port is a highly artificial wine which has been only very gradually developed and evolved in order to suit the palates of East Anglian farmers and doctors. We find better port in this country than anywhere else in the world.

6.30 p.m.

We have been debating the subject of encouraging tourists to come to this country, and almost everyone who took part in the Debates has suggested that the most important factor consists in our improving our hotels and restaurants. I do not believe that a great State ought to encourage tourism. It ought to take tourism as a by-product and as a matter of course. I believe that we are making a mistake in going directly out for it, but this House has decided over and over again, and almost unanimously, to do that.

What is the chance of having a large influx of visitors to this country so long as the drinking of the best wines is regarded as one of the gross forms of immorality, comparable only to the capacity for distinguishing between one kind of cheese and another? So long as that remains the official and legislatively enforced view of this country, there cannot be any improvement in our cuisine or in our hotels, and there cannot be any successful tourism. I think that is a fair point to make and I hope that it may be considered.

The point I rose to make. was to ask what controls the importation of wines from Portugal, and how it will be affected by the changes in the duties on heavy wines, whether or not they are bottled.

I can briefly answer the point put to me by the hon. Member for Cambridge University (Mr. Pick-thorn). As I understand the position, we have been making an annual agreement with Portugal. It is an overall agreement, within which we agree that so much of various commodities shall come to this country, including, of course, Portuguese wines.

Not "including, of course."

I say "of course" because that is part of the agreement, and because people here want to drink Portuguese wines.

The right hon. Gentleman said "of course." I am not trying to catch him out, but it is not of course that every year a part of the imports allocated from Portugal is in the form of wine. I do not think that is a matter of course. I inquired how it had been done in practice during the last year, and how it would be done in the future.

That depends upon the people who negotiate the agreement on the one side and what the Portuguese want to send us on the other. It depends also upon what the markets here think they can use. An agreement is made, and, so far as the Treasury are concerned, it is a global agreement because, unfortunately, exchange enters into it. Up to now gold has had to enter into the transaction, in spite of what was said by the hon. Member for Chippenham (Mr. Eccles).

And there has been no port.

Within the first four months of this year we have consumed 240,000 gallons of Portuguese wine.

For the first time.

I do not know, but I could go over the figures if the hon. Gentleman is interested in them. Naturally, I have not all the figures here. I think I have said enough to answer all the questions that the hon. Gentleman has put to me. What my right hon. and learned Friend has done here is to balance a number of factors. For revenue reasons it was impossible for him to extend this concession over the whole field of light as well as heavy wines. What he has done, and I think rightly, is to give relief where, in his view, and I hope in the view of the Committee, the greatest benefit will accrue to all concerned: to the Revenue, to the French and to South Africa and Australia. At the moment, the bottled wines, the light chateau-bottled kinds, are not showing any real diminution, as have other wines that have been imported in cask. The Committee will remember that I gave figures in an earlier speech on this matter. If the import of these brands of bottled wine, both light and heavy, is still keeping up and fortifying the revenue, there is every reason why my right hon. and learned Friend should concentrate upon wines coming in in cask. I think that statement answers some of the speeches which were made after I had made my earlier contribution to the Debate.

I should like to ask the right hon. Gentleman one question. He has raised the very important matter of our trade with Portugal. It is essential, as my right hon. Friend who is leading the Opposition today is aware, for a place like Bristol to have an interest in trade with Portugal. I would not expect the Chancellor of the Exchequer, who also represents Bristol, to come sufficiently down to earth to know anything about the trade of Bristol. I ask for some information on this question of increasing the global amount of our trade with Portugal. That matter should be given very careful consideration during the next 12 months. It is essential for us to encourage that trade. Consultations of a very exciting character are going on between the Treasury and the Parliamentary Secretary to the Ministry of Food. I can only hope that they will spread to the Treasury officials and persuade them to give us a ruling on this Clause and to withdraw the tax as far as possible. I see that the Chancellor of the Exchequer is beginning to smile. I am sure that all of us want him to get up and say that he will yield to the Opposition and make a concession in this matter.

I beg to move, in page 3, line 38, after "charged," to insert:

"in respect of sweets other than mead."

It may be for the convenience of the Committee that the next Amendment, in the name of the hon. Member for Thirsk and Malton (Mr. Turton), in page 3, line 39, after "Act," to insert:

"and in respect of mead at the rate of one shilling for every gallon,"

should be discussed at the same time. Perhaps we might also include the proposed new Clause standing in the name of the same hon. Member and dealing with exemption of mead from Excise liquor licences.

In the last Debate, my hon. Friend the Member for Chippenham (Mr. Eccles) talked about our being a wine-drinking country at a certain stage in our history. If we go back further into our history, we shall find that England was a mead-drinking country. The transformation about which the Financial Secretary to the Treasury spoke has now become complete. Owing to the very heavy duty on mead imposed by the Socialist Government, the commercial production of mead has, I am informed, completely stopped. The original duty was put on by Mr. Lloyd George in the famous Budget of 1910. It was a duty of 1s. per gallon, which was placed on mead and other sweets. That duty was raised to 1s. 6d. per gallon in 1928. The Socialist Government raised that duty from 1s. 6d. to 22s. 6d. per gallon, thereby completely killing that part of the agricultural industry that was producing the drink called mead.

Now the Chancellor of the Exchequer is proposing to reduce the duty from 22s. 6d. to 10s. 6d. per gallon. I am told that that will not allow this industry to revive. It is quite impracticable for the bee keepers of this country to sell mead commercially if they have to pay a duty of 10s. 6d. a gallon and in addition take out a licence of five guineas for the production of mead.

It is true that, unlike many years ago, there is not a great desire to drink mead. I do not know what would be the views of the hon. Member for West Ealing (Mr. J. Hudson) on this point, whether he would agree that it would be better for people to drink mead, which is certainly not intoxicating, than to drink cider or some other drink which is regarded as teetotal. In my part of the country mead has been regarded more as a medicine than as a drink. It is used as a cure for rheumatism and gout.

Guinness is regarded as a medicine.

It is likely that Scotland has that regard for Guinness, but I cannot think that the hon. Member for Tradeston (Mr. Rankin) has ever drunk mead if he compares it with Guinness, which is a very different drink.

I have drunk neither.

The last time this matter was raised in the House of Commons was in 1937 when we were asking that the duty of 1s. 6d. should be removed. At that time Lord Simon was Chancellor of the Exchequer, and he gave an undertaking that he would reconsider it before his next Budget, but, unfortunately, by that time he was not Chancellor of the Exchequer but Lord Chancellor, and the matter was not pursued. I was asked to put down this Amendment by my county association of bee-keepers. Most hon. Members will find that they have a county association of bee-keepers who are very interested in the production of mead. My county association has some 5,000 members and I believe that there are 10,000 bee-keepers in Yorkshire, and all of them are anxious that bee-keeping shall be given this encouragement and that they shall not be prevented from producing mead. This is a small rural industry which I cannot believe the Chancellor wishes to discourage in this way.

The real difficulty arises because mead is not like the other sweets referred to in the Clause, which are the rather noxious cordials which are composed of fruit and some slightly intoxicating fruit drinks. This is something quite different. It is the old English drink made from honey, and it is really only a liquid form of honey which has undergone a pro- cess of fermentation. I was in some difficulty, Major Milner, as to whether I should produce a bottle for your inspection in the Chamber. I felt that it might be regarded as a missile and would therefore be out of Order, but I have provided myself with a bottle of mead outside the precincts of the Chamber so that the Chancellor of the Exchequer can either in the course of this Debate or after this Debate, partake of mead and satisfy himself whether it is a medicine or whether it is some form of intoxicating liquor.

After the next Adjournment Debate.

I cannot believe that the balance of the Budget will be unduly upset if the Chancellor accepts this Amendment. I hope that he will consider this matter and see whether he can relieve the bee-keepers of what they regard as an unjust imposition. The first time this matter was raised in the House of Commons it had a startling effect on the Chancellor of the Exchequer. When we first raised it, the Chancellor of the Exchequer gave an undertaking that he would reconsider the matter, and that Chancellor became Prime Minister in the course of the year. On the next occasion, which I mentioned earlier, the Chancellor of the Exchequer became the Lord Chancellor. I wonder what will happen to the present Chancellor of the Exchequer now that this Amendment has been raised, and whether he will be so sweetened by the mead or the mead argument that he will take some other office of profit under the Crown.

I hope that the Chancellor will reconsider the matter of the taxation of mead, regarding it as a branch of agriculture which is being unfairly taxed. At my county show there were a few bottles of mead which the producers wished to sell commercially, but they could not do so. I believe that the Financial Secretary is trying to find out how many liquor licences have been taken out. However, at present the producers cannot sell it commercially because the taxation is so high; all they can do is to produce it for exhibition at these shows where it must not be sold but is merely drunk by the exhibitors. I want that to be changed. I do not believe that England would be harmed at all if we had more mead drinkers in the country.

I believe that the Financial Secretary will be the first to agree that this Amendment will neither steady nor stagger the cost of living index. The Committee will have noticed that the Minister of Agriculture is here and has taken an interest in this short Debate, no doubt fully realising the importance of the bee population in the countryside. The bee population plays a very important part in horticulture, and besides, from time to time it is necessary to see whether it is possible to build up certain light industries in different rural districts, and in this direction there may be a possibility.

On the Second Reading of the Finance Bill, the Chancellor stated that he had removed certain forms of taxation because such very small amounts were involved that they were not worth while. I should like to know what revenue this tax has brought in during the last few years or even during the last 10 years. I believe we should find that the amount is negligible. If that is the case and the amount plays no part at all in the Budget, surely that makes the case of my hon. Friend the Member for Thirsk and Malton (Mr. Turton), because the taxation levied on this industry, as shown by the diminishing returns, has exterminated commercial practice. For those reasons, and primarily so that we may do what we can to raise the bee population, I trust that the Chancellor will approve the Amendment.

My reason for entering into the argument is that, unfortunately, the hon. and learned Member for St. Ives (Mr. Beechman) is prevented by illness from being here, and I felt that the Treasury and the Minister of Agriculture would wish to know that at present a very interesting development is going on down by Penzance, in my hon. and learned Friend's constituency, where an effort is being made to establish a mead factory. Those who are running that factory are setting up an enormous number of beehives over the area. They wish to develop the beekeeping industry. That is a point which ought to be considered. As my hon. Friend the Member for Bodmin (Mr. D. Marshall) said, there can be little revenue in this. If the Government would remove this tax in order to encourage bee- keeping, they would be doing something equivalent to earning dollars, because it would encourage the production of food in this country.

Now may I ask the Minister of Agriculture to give us his help? Last Saturday I had the honour of entertaining a large and representative body of people who, on his behalf, are running in Cornwall a society whose purpose is to try to encourage cottage gardening industries and general garden produce. They had the most interesting sections in connection with honey and the keeping of bees, and I understand that the Ministry of Agriculture were responsible for that excellent work. Surely, if the right hon. Gentleman is expending money rightly in that way, it is only right that the Government should go a step further and encourage this industry which comes directly from honey production?

I know that this is only a small matter and that it may not be one which appeals to the lofty brain of the Chancellor of the Exchequer. However, most of us in this country, who often work with our hands and have to deal with people who work with their hands, realise that in an industry such as this one it is the humble people who start such an industry who eventually make it into a large one. Whether it is shipping, mining or whatever it is, it is the small people who begin an industry which is built up later by other people to provide great schemes of employment—I see that there is a conference going on between the Leader of the House, the Patronage Secretary and the Minister of Agriculture. If I may have the courtesy of the attention of the Leader of the House for one moment, I would ask him for once to do something for the small man. I would also ask him to support his Minister of Agriculture in what the right hon. Gentleman is doing for honey production in this country and encourage that Minister to say, "I appeal to the Chancellor." If the Chancellor would make such a concession, everyone with a garden in this country would say, "Thank goodness that at last the Government have done something for rural England."

I must ask the Committee to reject this Amendment. [HON. MEMBERS: "Shame."] There is no reason why we should give this suggested prefer- ence to mead over ordinary British wines. The proposal of my right hon. and learned Friend in the Clause is that the Excise Duties should be dropped from 22s. 6d. to 10s. 6d., which is a reduction of 12s. a gallon. That is a considerable reduction and, of itself, should help this infant industry which has been referred to with such eloquence by three hon. Members opposite this afternoon.

The hon. Member for Thirsk and Malton (Mr. Turton) suggested that it was one way of helping the bee-keeper. That may be so, but the honey produced by bees can be used for purposes other than the making of mead, and there is an excellent market for all the honey which bee-keepers can produce. Therefore, on that ground there is no reason why we should give a special preference to this firm—Mead Makers, Limited—in order that the honey which bee-keepers are producing should be used properly. It is my information that the honey will be put to a good use as honey—possibly in the minds of many to a much better use—rather than that it should be made into a drink, either as mead or as sack or, as what I understand they propose to make also, mead-brandy.

Will the right hon. Gentleman make it clear that this Amendment was put down at the request of the bee-keepers' association of Yorkshire? It has nothing to do with a firm.

That may well be, and nothing I have said would deny that fact which I and others heard the hon. Gentleman mention. I am only saying that there is at present, and so far as I know always will be, an outlet for the honey which is produced by the bees of the bee-keepers in the area represented by the hon. Gentleman. I agree that the loss of revenue is infinitesimal. At present little is produced. The amount actually manufactured by this firm is very small indeed. That being so, and as there is a use for the ingredients which they use, and as they are now getting in this Budget a reduction of 12s. a gallon, that in itself should be sufficient for them, and I ask the Committee to reject the Amendment.

Before the right hon. Gentleman sits down, will he say to what firm he keeps referring? Where is it? Is it in the North Country? I think the interest is wider than one firm.

I speak subject to correction, but my information is that there is one firm in Cornwall which is beginning to make mead of the type referred to, and that at the moment its output is extremely small.

In other words, that firm is new and struggling. It is being helped in one way, but it is being attacked by the Chancellor as he so often attacks small people.

I regret that the Financial Secretary is not more forthcoming with regard to this Amendment. When I saw the Chancellor discussing the matter with the Minister of Agriculture, I felt there was some hope that he would entertain the Amendment. Bee-keeping is much neglected in this country, and the Minister of Agriculture might well do everything he can to see that encouragement is given to cottage bee-keepers. If the cottagers would keep bees, they would have the whole range of the countryside from which to gather their harvest and for which they would pay no rent. In a small thing like this, it would assist if they were encouraged in making mead.

With regard to what the Financial Secretary said about all the honey available being saleable in the form of honey, I once tried to make some mead, and I think I am right in saying that much of the honey which goes to its making is the unsealed honey which is not sufficiently ripened to be kept for the season. I hope, therefore, that the Chancellor will think again and will give some small concession in order to help a deserving industry.

Up to the present we have not had a satisfactory answer to the rather powerful arguments advanced from this side of the Committee. First, we ought to know what is the amount involved. I understood from the Financial Secretary that the amount involved is infinitesimal. Before the Government ask for this burden to be continued on this particular section of the community——

rose——

I have several other questions to ask yet—we ought to know what is the total amount involved. The next thing the right hon. Gentleman said was that only one small firm is engaged in the production of mead. That may be so, but why? Simply because this duty is placed upon the mead. I have no doubt that if my hon. Friend's suggestion were adopted, much more mead would be produced. It is true that many people prefer to eat honey as honey—I hope I do not incur the wrath of my hon. Friends by saying I should prefer to eat honey rather than to drink mead—but that does not apply to everybody. Beekeepers are entitled to make what products they can and to try to popularise them.

There is nothing to stop them.

Of course, there is something to stop them. Whatever else we may disagree about it, it is common ground that the duty has in effect, for all practical purposes, killed the consumption of mead.

There never was any.

Of all the remarks that the right hon. and learned Gentleman has made, to say that nobody in this country ever drank mead is the most monstrous distortion of all.

What I said was that the duty could not have killed it because at the time when the duty was imposed nobody drank it.

To say that there was never any consumption of mead in Britain indicates an absence of that study of the history of the British people which I commend to the right hon. and learned Gentleman.

I ask the Financial Secretary—who, after all, is trying to reply to the points which have been made—to tell us, before we pass to a Division or adopt whatever other course my hon. Friend advises, precisely what is the total amount involved. If it is infinitesimal, then for Heaven's sake do not let us kill this industry, but rather allow the people to produce the mead.

As the Financial Secretary does not appear to be replying, I should like to put one further point to him. It is rather unlikely, one would assume, that during the Committee stage of the Bill the Chancellor will be over-reasonable on many of the matters placed before him. The Financial Secretary, however, has admitted that the amount of taxes collected in this industry is, to use his own word, "infinitesimal." In those circumstances, in order to try to prosper a light industry, is it not possible for the Financial Secretary to consult with the Chancellor at this very moment and to say that he will reconsider this matter between now and Report stage? That would be at least a reasonable way of treating the Amendment.

Before the Financial Secretary replies, there is only one point I wish to make. The argument of the Government is that only one firm has taken out the five-guinea licence and is producing mead commercially. The evidence I put before the Committee is that the county bee-keepers' associations have asked that this duty shall be taken off so that they can all produce mead commercially. I confirm what was said by my hon. Friend the Member for Leominster (Mr. Baldwin) that honey used for mead is honey which is not saleable in other forms. In addition, some 10 years ago Women's Institutes throughout the country were making mead and asking me to raise this matter in the House of Commons so that they could be enabled to sell it commercially. That is the evidence I put before the Committee. I should have thought that the Chancellor of the Exchequer would not have been quite so careless of rural interests as he has shown himself to be this afternoon in not accepting the Amendment, and I very much regret his attitude.

The Chancellor of the Exchequer must give an answer to this matter. The Financial Secretary tried to give it just now. I very much doubt whether the amount of duty comes to £100 or even anywhere near that figure. If the Financial Secretary knows the amount, I will give way to him, but he shakes his head one way or another or up and down, and does not seem to know. This is an absolute scandal, especially when Government money is being paid, very rightly, in developing bee-keeping. There is no doubt whatever that there is a demand for honey. The Government are being very hard to the industry and we cannot expect, on the one hand, people to encourage the Minister of Agriculture in his righteous desire to stimulate rural production when, on the other hand, the Chancellor absolutely refuses to make a small concession which I do not think anyone could say amounts to £100.

It is sheer, deliberate—I was about to say spite, but we can hardly accuse the Chancellor, who is always telling us how holy he is, of being spiteful—it is sheer lack of consideration from the Chancellor on a matter which certainly should be pressed to a Division. I hope that we shall go into the Division Lobby. If the Minister of Agriculture is honest, he is bound to come, as I know he will, into the Opposition Lobby in support of the Amendment and against the Government, who are trying in an underhand way to destroy their own work.

During the speech of my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) the Financial Secretary kept nodding his head when my hon. Friend said that the Committee ought to know what was the yield of this duty. The right hon. Gentleman actually rose to his feet intending to intervene and give this vital piece of information to the Committee. Apparently he now has cold feet and has thought better of it or, possibly, has been restrained by his right hon. and learned Friend the Chancellor. I implore the right hon. Gentleman, who is the soul of courtesy in our Debates, to give this vital piece of information to the Committee to enable it to come to a reasonable decision upon its attitude to the Amendment.

As in the case of tea, this Clause simply provides for a straightforward bookkeeping operation by which we cancel out the duty, on the one hand, and the subsidy, on the other. The Clause gets rid of the duty on imported refined sugar wherever it comes from, by 11s. 8d. per cwt., which is equivalent to 1¼d. a lb., and it reduces the duty on unrefined sugar, molasses and glucose by the corresponding amounts. It also introduces corresponding reductions in the rates of duty on home-produced beet sugar, molasses and glucose. As in the case of tea, the preferential margins remain unchanged.

The effect of the reductions on the Revenue is as follows: the duties on sugar, molasses, glucose and saccharin would, in 1949–50, have yielded, on the pre-Budget basis of calculation, a revenue of £39 million. The cost of the reduction in this year will be £22 million, which therefore brings the net revenue which we shall receive down to £17 million. In the case of tea duties it was suggested that this was not just a straightforward bookkeeping operation, as I suggested, but that there was something sinister behind it. I was asked, as I may be asked in the case of these duties, why we have chosen to do this in this year if there was no argument for doing it.

It was a Government of which the right hon. Gentleman the Member for West Bristol (Mr. Stanley) was a Member which introduced the food subsidies, and which continued them year by year simultaneously with the retention of these duties. The longer that retention went on the stronger the argument became for clearing up the matter by a bookkeeping operation, and bringing to an end a situation in which money was given out with one hand and raised with the other. It could perhaps have been argued in the war years that if we waited for a short period prices would fall and there would no longer be any need for the subsidies, and the rates of duty would again become operative. The Committee will agree that, with every year that went by, that argument became more academic. If we are asked why this has not been done before, the answer is that if one does something one must do it at some time, and whenever one does it it can be asked why it was not done previously. In all the circumstances we thought that this was the right year in which to do it. The only effect is that the subsidies are cancelled out, on the one hand, the duties disappear, on the other, and the preference margin remains the same.

The Economic Secretary has explained to us the mind of the Government on this matter. He appeared to rest himself with some confidence on the fact that food subsidies were introduced by a previous Administration. It was the Budget introduced by the present Lord Simon in 1940 which first introduced food subsidies in the modified form in which they then operated. Their cost in that financial year was, I believe, £52 million—I speak from memory. That was during the war, and hon. Members who served in the war-time Parliament will remember how, during that period, in concentrating on matters very different from financial niceties, we sought, when Budgets and Finance Bills came before us, to dispose of them as rapidly as possible in order to free Ministers for more important tasks. That is why no effort was made to get a tidier arrangement.

In 1945, the present Administration achieved power, and it has taken them four years to come to this book-keeping arrangement, as it has been called. I ask the Economic Secretary whether, if the time has now come for these adjustments, the time has not come for a much wider and more sweeping adjustment even than this. Does it not really make nonsense to tax and subsidise a commodity at one and the same time? Surely anyone who wants to have a workable and operative system must realise that to tax the consumer of sugar on his consumption and then subsidise the price to him of the sugar to try to relieve him of his troubles can hardly be called straightforward bookkeeping or straightforward common sense.

The Clause would have been discussed with more advantage by the Committee had we had the advantage of the presence of some hon. Members of the Liberal Party. I am sorry to see that their benches have again been evacuated because it was they who always sought to prevent home-grown sugar production by their violent opposition to anything that was done for the sugar beet industry. The Committee would proceed with much greater smoothness were those hon. Members to return, if only temporarily, to their seats of duty. Just as in the case of the last Amendment, when the Chancellor was resisting with such sternness an attempt to remove a very small duty from mead, we should have welcomed the presence and guidance of the Liberals, as it was the late Mr. David Lloyd George as he then was who imposed that duty, so we should like it even more now. Their absence throughout our proceedings, except for seven rather irrelevant minutes, has been lamentable.

To return to the main contention, I ask whether it would not be simpler, at this time of day, if we are going into bookkeeping entries, to do it in a proper manner? Are we to go into the future taxing this commodity and then subsidising it at almost the same moment? That seems to me to make no kind of sense whatever. It is only the sort of operation that can be expected of a dying and damned Government.

I was glad to hear the explanation of the Economic Secretary because it gave us an opportunity of hearing his views on the difference between the subsidy and the duty. The point made in the case of the tea duty is equally applicable in the case of the sugar duty. The duty was intended to be a permanent feature, raising a certain amount for the Treasury each year; on the other hand, the subsidy in the case of sugar, as in the case of tea, was originally intended merely as a temporary measure to stabilise the price of sugar or the price of tea. The book-keeping transaction, as it has been described, seeks to equate the temporary charge—the subsidy—with what should be a permanent aspect of the Revenue. It is a thoroughly false argument to say that it is merely a book-keeping transaction to waive what was a permanent device for collecting revenue merely because at the moment that revenue or some other revenue is used to keep down the price of sugar from its present temporary high level.

The Economic Secretary went on to say that if something had to be done there had to be a time for doing it and that it might as well be done now as at any other time. I query whether it is appropriate to do it at all. If it is only a book-keeping transaction at present why not continue that book-keeping? We may very well see a return to the old low prices of sugar, when we shall be glad that we have the sugar duty as a source of revenue. Book-keeping for another year or two years would surely be a small effort in return for the value of retaining a duty which will not be onerous when sugar returns to its old prices. There is at the present time ample evidence to show that sugar prices are falling along with other commodity prices.

There may have been some case for removing the duty two or three years ago when world prices seemed to be advancing indefinitely, but now that the tide is turning surely that is the one time when we should not start to make changes. Now is not the time to do a job which could be pretty well left undone altogether. I submit that it is quite disingenuous of the Economic Secretary to regard this as a simple book-keeping transaction, and it may well be a source of some embarrassment to some future administration, which having to collect revenue by all the means in its power, would find that this useful source of revenue, because it did not inflict hardship on anyone, has been thrown on one side as a mere book-keeping transaction.

The Economic Secretary justified this Clause by an argument, which I should think was only worthy of the Financial Secretary when he said that if we had to do anything we would have to do it at some time. That is one of those profound remarks with which we all agree, but the fact is that if we have to do it at some time, it does not necessarily mean that it is the right thing to do. If one has to commit murder one has to commit it at some time, but it does not necessarily follow that murder is a particularly good thing to do. We were left in some doubt when we were discussing the subject of tea what the real reason for these provisions were. In spite of the speech of the Economic Secretary, I am bound to say that I am still in some considerable doubt.

The Economic Secretary said that it was absurd to raise revenue with one hand and pay it out with the other, and that it was being done to no purpose. He particularly said that what the Government had done was to cut down the duty to the largest possible extent consistent with maintaining Imperial preference. I can see an argument there, but I understand in the case of sugar the duty on the Colonial commodity is not eliminated. There is the duty on both foreign and Colonial sugar, and, therefore, in this case the argument of meeting so much duty does not apply in this case. We are still collecting with one hand and paying out with the other, which the hon. Gentleman said was a very foolish thing to do. I cannot see that that argument really applies here in any way.

Secondly, I should like to raise the question of the savings of subsidies under this Clause. The Economic Secretary said that the saving would be £22 million. I think that I am correct in saying that an answer was given last Autumn to the effect that the sugar subsidy was then running at the rate of £22 million per annum, which indicates either that we are going to buy more sugar now, or under bulk purchase we are paying higher prices for it, because as I understand it, the world price of sugar has fallen. While we are on the question of prices, it is worth recording the Economic Secretary's remark on that when he abandoned hope that prices in this country would ever fall substantially at all. That is what I understood him to mean. If the hon. Gentleman reads tomorrow what he himself said, that is the conclusion to which he will come.

The Committee would be interested to hear upon what is the figure of £22 million savings based. The question of how much sugar is imported into this country is a very burning one, particularly now that hon. Gentlemen opposite are discussing the propriety of the action of the Minister of Food in derationing sweets. Clearly if there were more sugar imported, more molasses, more glucose and more beet sugar produced, his problems would be solved. Therefore, I think the country would be interested to know how that figure of £22 million is arrived at.

Sugar has always been a great trouble in politics. It was Disraeli who remarked in one of his books that it seemed strange that a manufacture that charmed infancy and soothed old age should so frequently occasion political disaster. It may well be that if the Government do not import enough sugar they will produce a political disaster for themselves. I would end by saying that the Economic Secretary has not answered the point put to him by my right hon. Friend the Member for West Bristol (Mr. Stanley), because we are still paying out with the one hand and taking in with the other. I cannot help feeling it is rather a hypocritical—I understand that we can use that term as a general term—effort to reduce simply both sides of the Budget by a stroke of the pen without anything really happening at all, and thereby to represent to the country that expenditure is going down when nothing of the sort has occurred.

I was hoping for an answer to some of the points made in my remarks, especially as one of those points was so inadequately dealt with by the Economic Secretary himself. It would be disappointing if the Clause were to be passed without anything further being said.

May I offer a few observations on this Clause before we part from it? The Committee would be very disappointed if we did not have a reply to the points which have been put. As I understand it, the proposal here is part of the general policy of the Chancellor of the Exchequer in dealing with the food subsidies. The object, which the right hon. and learned Gentleman has in mind and of which this Clause forms a part, was to call a halt in the steady rise of the cost of these food subsidies. I my- self suggested from time to time that that was a very proper policy to pursue. I have always understood that food subsidies were part of the great social plan of the party opposite. Then they came to the conclusion that some halt ought to be called, and that if they did nothing about it, the total increase would be somewhere in the neighbourhood of £80 million. In order to meet the position they met two-thirds of the cost by increasing the price of food and one-third by what I now understand are called bookkeeping entries on tea and sugar.

I have never quite understood how this change-over from taxation and the revision of taxation, on the one hand, and the scaling down of subsidies, on the other, really affects the position. It may tidy the ends, but it does not seem to make much difference to the general level of expenditure. The point to which we are entitled to have some answer is, what is the amount and what are the costs involved? I gather the figure is £22 million. Could we have some explanation as to how what appears to be an increase of £2 million has taken place? I dare say there is a perfectly good explanation. It may be we are going to import more sugar or that the costs of sugar are mounting. We ought to have an explanation from the Economic Secretary. It is a fair and proper point to put and one which is within the knowledge of the hon. Gentleman.

The only other thing I wish to say is in regard to the remark of the Economic Secretary that one must dismiss the idea of any diminution in the general cost of sugar as something purely academic. That was rather a startling statement, which he perhaps might care to justify. If we are to regard all reductions in imported commodities of that kind as purely academic, the outlook would appear to be a little bleak. We ought not to come to a decision upon this Clause until we have had some specific answer on the material and substantial point put to the hon. Gentleman about the increased cost of £2 million.

I will try to answer the questions that have been asked. First, I was asked why the cost has risen from £20 million, which I think was the figure given some time ago, to £22 million, which is the estimated figure for this year. The answer is that consumption of sugar has risen this year as compared with last year. In the estimates on which we were working, it was expected to run at a higher rate this year. The hon. Member for Flint (Mr. Birch) asked whether we had reduced the duty to the greatest extent compatible with retaining the preference margin. That is substantially true——

But the Government have not eliminated the duty on Colonial sugar.

I am aware of that, but the Sugar Duty is more complicated than the duty on tea. It comprises a whole scale. Broadly, the reduction by 11s. 8d. a cwt. is the largest convenient round sum by which we can reduce the duty without affecting the preference margin. The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) asked why we continued in any respect to levy taxes on the one hand and to pay subsidies on the other. He asked whether that was not a foolish procedure. I thought that largely he was answered by the hon. Member for Altrincham and Sale (Mr. Erroll), who objected to our performing this book-keeping or tidying-up operation. His criticism was that we ought to have continued this double operation on the ground that we might wish to raise revenue later on. On the other hand, I do not agree with his statement that because these duties were originally imposed as revenue duties, therefore there can be no case for reducing them. It may be that at some future date one would wish to raise revenue. Of course, it would be possible to raise the duty again if that were so. We do not wish to do that now because we do not wish to raise the cost of living.

To show that that is perfectly possible, I might remind the hon. Member that it was his right hon. Friend the Leader of the Opposition who, in the case of tea, repealed the duty altogether in April,1929, no doubt in expectation of winning the General Election which followed a month later which expectation was disappointed. It was the Tory Government of 1932 which after a later General Election, reimposed that duty. That shows, amongst other things, that it is possible to remove the duty and impose it if one wishes.

We now come to a Clause which is of very great importance. It concerns a matter which the Chancellor of the Exchequer dealt with in a cursory and cavalier fashion during his Budget Speech on 6th April. I refer to the very steep, heavy and onerous increase which the Chancellor proposes in the Matches Duty. The increase in the rate of duty is no less than 65 per cent. We shall have to have from the Economic Secretary a much fuller explanation of this action than that which the Chancellor gave when he introduced his Budget. On that occasion the right hon. and learned Gentleman told the House:

"Next I come to matches, where some increase in price is, in any event, necessary to meet the increased costs of production. The last rise in price was in 1940, since when, of course, there has been a very considerable increase in costs. The smallest practicable rise in price is ½d. a box, and this would be a good deal more than is required to cover these increased costs. I propose, therefore, to help and to absorb the difference in tax. The tax will be raised by 5s. 5d. a gross in the case of the ordinary box of 50 matches, with corresponding rates for other containers."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463. c. 2102.]

When the right hon. and learned Gentleman said that the smallest practicable increase in the price of a box of matches was ½d., he was saying that the smallest practicable increase per gross of boxes was 6s. The Chancellor is taking an extra 5s. 5d. per gross in duty and leaving 7d. only for the manufacturers, and maybe the distributors, to cover the increased costs to which the Chancellor referred. Precisely the same effect of providing an extra 7d. a gross for the manufacturers would have been reached by reducing both the Excise and the Customs duties by 7d. per gross of boxes. The present rate of Customs on the ordinary box of matches is at the rate of 9s. per gross. That is to be increased to 14s. 5d. The Excise Duty is slightly lower, and that is to be increased from its present rate of 8s. 4d. to 13s. 9d.

Exactly the same effect could have been produced, if all the Chancellor wished to do was to permit the manufacturers and distributors to obtain an additional 7d. per gross, by reducing the present rate of Customs duty from 9s. to 8s. 5d. and the Excise duty from 8s. 4d. to 7s. 9d. That concession would have cost the Chancellor something of the order of £500,000. But instead of that, the Chancellor is increasing the price of the ordinary box of matches from 1½d. to 2d., and in the course of a full year he will get an additional £5 million by the taxation of matches.

It may be said that this is a small matter, that the ordinary housewife probably uses only one box of matches a week if she is economical and therefore, all that this will cost her is 52 halfpennies or 2s. 2d. a year; but, of course, there are many people who consume matches at a far higher rate. I am not a pipe smoker myself, but I am told that a pipe smoker can easily get through one, and sometimes two, boxes of matches in a day. It seems rather ridiculous to give special preference to old age pensioners with regard to the Tobacco Duty—to give the aged and poor people tobacco at what, in effect, are subsidised rates—if the Government take back a great part of the benefit by increasing the price of the matches upon which they depend for keeping their pipes burning.

I therefore suggest that we ought to have some much fuller explanation from the Economic Secretary before the necessity of increasing by no less than 33 per cent. the price of this common and essential article, which has to be purchased week in and week out by every housewife and every person in the country, however small their means may be. It rather seems as if the Chancellor is determined to impose some additional burden upon everybody, and that he has only to see some simple necessity which the smallest people in the country are compelled to purchase week by week to come forward and place an additional duty upon it. I therefore hope that the Economic Secretary will give us much better reasons than we have had hitherto for adopting the method of taking an extra £5 million of taxation in this way, when he could have achieved precisely the same object of giving some additional return to the producers of matches by a very small concession in his Budget.

This question of matches, like that of whisky, may be described as a burning question, but there is another aspect of the matches question which has to be noted. The Economic Secretary, the Chancellor and the Government do not like matches, because good matches, like good workers, will strike when the occasion so demands, and, in the eyes of the Government at the present time, anybody or anything that strikes is very unpopular. That reminds me of the fact that there have been many references to the Liberal Party, but it should be noted that the Liberal Party is now working to rule since the refusal to take them on the Tory-Labour combination that is going to Europe.

This duty on matches hits at the housewife lower-pain at the worker, and particularly the lower-paid worker. The housewife uses matches almost more than anybody else, and the pipe smoker uses matches, as the right hon. Gentleman opposite said, in considerable abundance. I myself am a pipe smoker, and I know the amount of matches I go through, and I also know the amount of duty which my friends have to pay on that account. I cannot understand why the Chancellor is making this duty bear so heavily on pipe smokers because the pipe has always been associated with peace and peaceful pursuits. It is entirely different from cigarettes, whisky and wild, wild women. Peace has always been the character of the pipe and of the pipe smoker.

I smoke a pipe, and when I consider this tax and hear some of the things said about it, my mind goes away back nearly 40 years. In fact, when I listened to one of our earlier discussions, my mind went back 50 years to an old music-hall house which used to exist in Paisley. A couple of chaps came on and one said to the other "I haven't seen you for a long time; where have you been?" The other answered, "I have been to the North Pole." The first then asked him, "How are food prices up there?" and he got the reply, "Just the same as here; 3d. a pint." Threepence a pint reminds me that forty years ago I got an ounce of tobacco for 3d. with a box of matches thrown in.

Tory misrule.

Oh, yes, and the match workers were getting nearly as much as they are getting now. [An HON. MEMBER: "Phossy jaw."] I remember quite well reading all the stories about phossy jaw, but that was a still earlier period.

Now the price of a box of matches jumps up from 1½d. to 2d., and an hon. Member has already said that the Chancellor may think that this is only a very small matter—a halfpenny on a box. For a housewife using a box of matches a week, it is only a halfpenny per week and does not come to very much over the year, but I have had occasion in a previous discussion on these matters to draw attention to the old and very apt Scots saying that, many a mickle makes a muckle. A halfpenny here and there, 6d. in another place or 1s. on something else—they all add up and accumulate into what becomes a very heavy burden. In this particular matter of matches, as a pipe smoker and as one who uses a very considerable amount of matches, I ask the Economic Secretary to discuss the matter again with the Chancellor and see whether they cannot find some other way of assisting the manufacturers to meet the costs of production rather than by way of making an increase of this kind. I ask him very sincerely to withdraw this proposal.

The first question I want to ask the Economic Secretary is this: do matches enter into the index figure of the cost of living?

indicated assent.

They do? I think that is very extraordinary. The Financial Secretary told us that the price of beer is being diminished in order to keep down the cost-of-living index figure, and yet, when we come to a later part of the Bill, we find this duty which raises the cost-of-living index figure. What is the common factor between these two? It is perfectly clear that both the diminution in the Beer Duty and the increase in the tax on matches are made solely for Treasury reasons. In the one case, the revenue was going to fall off because the price of beer was too high, and in the other, the Treasury said to the Chancellor, "Here is an article which is a necessity of life for every housewife, who has got to buy one or two boxes per week, so why not impose an extra halfpenny per box? We can get another £5 million this way," and, with that, they put on the duty.

It needs a good quality match to enable one to see the beer.

Well, perhaps the hon. Gentleman knows more about matches alongside beer than I do.

Why do they want this £5 million at this particular time, when the cost of living has become a very serious question, and when it is of the greatest importance that anything which may give even the smallest push towards higher industrial costs should be avoided? It really seems that the Revenue is in a bad way. It must mean that the expenditure of the Government is so great that, even now, at the end of the boom, the Chancellor is scratching round so that, wherever he can find that any change in taxation can be made that promises to bring in very little more or will result in a very small drop in the source of revenue, a change has to be made. It is very fine Socialist planning; it is the first time we have had anything like it. This is a bad duty, and should not be put on at this time. There is no excuse at this particular moment in the trade cycle for raising the prices of the necessities of life. If it was absolutely necessary to get £5 million, it could have been got in another way.

Personally, I think the whole thing is quite unnecessary. After all, the Minister of Food lost £9 million in trading in potatoes. The Government are only getting back 50 or 60 per cent. of the loss which the right hon. Gentleman made in one series of transactions, and they are getting it out of the people by putting up the price of matches. It is certain that with more careful administration they could have saved £5 million over and over again. For all these reasons, I consider this to be a bad duty, and I hope that we shall go into the Division Lobby against it.