Skip to main content

Clause7—(Reduction Of Licence Duty In Respect Of The Restriction On The Output And Delivery Of Intoxicating Liquor)

Volume 95: debated on Monday 2 July 1917

The text on this page has been created from Hansard archive content, it may contain typographical errors.

(1) In order to give relief in respect of the restriction of business caused by the Intoxicating Liquor (Output and Delivery) Order, 1917, the holder of an Excise liquor licence, being one of the licences specified in the Second Schedule to this Act, shall be entitled to obtain on the expiration of the licence repayment in respect of the duty paid by him for the licence at the rate of one-sixteenth part of the duty for every month or part of a month during which the said Order has been in force and the licence has been current.

(2) The provisions of this Section shall have effect as from and after the thirty-first day of March, nineteen hundred and seventeen,, and as regards any Excise liquor licence to which this Section applies, but subject always to the right of the holder of any such licence to a proportionate repayment or rebate in respect of the period ending on the said thirty-first day of March, the provisions of Section nine of the Finance Act, 1914 (Session 2), Section six of the Finance Act, 1915, and Section seventeen of the Finance (No. 2) Act, 1915, shall cease to have effect.

The Amendment which appears on the Paper in the name of the Chancellor of the Exchequer—[" to add at the end the words (3) If at any time an Order is made amending the Intoxicating Liquor (Output and Delivery) Order, 1917, the Food Controller may, subject to the approval of the Treasury, provide by the Amending Order for such modifications of the relief granted by this Section as appear necessary having regard to the effect of the Amending Order on the restriction of business. Provided that nothing hereinbefore contained shall authorise the Food Controller to provide by any Amending Order for an increase of the rate of relief granted by this Section ' "]—is in a form which I do not think I can pass. It would allow an authority other than the Committee of Ways and Means to impose taxation. As Chairman of Ways and Means, I do not think I ought to countenance such a departure.

I beg to move, in Sub-section (1), to leave out the words 'repayment in respect of the duty paid by him for the licence at the rate of one-sixteenth part of the duty for every month or part of a month during which the said Order has been in force and the licence has been current," and to insert instead thereof the words "such part of the duty as may be proportionate to any reduction of the licence holder's profits as compared with his profits in the preceding year, provided that no such reduction shall be allowed unless the reduction of profit exceeds ten per cent."

The object of this Clause is to give a rebate to the licensing trade of about £1,000.000 in respect of its liquor licence duties. I think that, for reasons which I will submit to the Committee, is an abatement which is gratuitous and uncalled for. I am suggesting that a very much lesser abatement would meet the case. May I say that in answering the Chancellor of the Exchequer on a previous occasion I referred to this Clause, and the right hon. Gentleman commented, apparently with feeling, on the reprehensible levity I displayed. I can assure him that I was completely in earnest, but that faint, approach to humour of which I was guilty shall not be repeated. I regret that it seems to have given him. pain. Meanwhile, I really do not see in the least why the licensed trade should be given this very considerable abatement. The facts are that before the War the Liquor Licensing Duties paid by the trade amounted to £4,430,000. In the present year they have dropped to £3,487,000. It is now proposed to drop them to £2,100,000. Only to-day I heard the Chancellor of the Exchequer say every million that we can get is needed. He went on to say that he could not give away anything except what was demanded by fairness and equity. No doubt he claims that it is fairness and equity that demand this abatement. I do not think so, for reasons which I shall explain. Meanwhile I do think it is quite a serious point that this very large abatement should be proposed. On his invitation that I should draw attention to the matter at an early stage I draw attention to it on the Finance Bill. I think the matter is entirely in order. I have submitted the point to the Chairman of the Committee and he encouraged me by the thought that I might object to this abatement which the Chancellor of the Exchequer proposes. The point that, in the first place, I submit, is this: that during the course of this War—

On a point of Order, Mr. Whitley. On the Amendment which has been submitted to you, do I gather that the matter is settled? I should have thought that an objection to an abatement proposed by the Government was precisely the same thing as suggesting an increase of taxation. If so, I should have thought it would not be in order?

On a point of Order May I submit that, if I cannot object to an abatement, then whenever the Chancellor of the Exchequer makes an abatement, however unjustifiable it may be, it will be impossible for any member of this Committee to object to that abatement if an objection to an abatement is equivalent to a proposal to increase the taxes?

This is a matter which I do not think is the subject of a Ways and Means Resolution. The Clause in the Bill is the first time that the Committee approaches the matter. It is not an abatement that is in existence at the present time. Therefore, on various grounds it appeared to me allowable for the hon. Member to propose that, if there is to be an abatement, it should be for a less amount than is here for the first time proposed by the Government. Similarly it would be within the power of the hon. Member to move to leave out the Clause altogether.

My point is that during the course of the War, though there have been abatements granted to the licensed trade, the profits of the licensed trade, so far as I have been able to test them, have not been reduced by the restrictions. On the contrary, they have increased during the War. I admit there have been restrictions of output; in that case the abatements already granted by the previous Resolution arc quite sufficient at the present time, and there is no need to go any further. Those abatements began with the present Prime Minister when he was Chancellor of the Exchequer. He offered an abatement of 15 per cent of the Licence Duty in virtue of the restrictions which he imposed. That was subsequently increased to 25 per cent.; that is the abatement which exists at the present time. The Chancellor of the Exchequer, on a previous occasion, told me that the whole principle was given away by his predecessor the right hon. Gentleman the Member for Monmouth, who had, he thought, stated that the reduction of the Licence Duty ought to be in proportion to the reduced output of the trade. I have very carefully looked into it, and I cannot find any utterance whatever by the predecessor of the right hon. Gentleman to that effect. It is quite true that the Licence Duties were reduced 25 per cent. by the Chancellor of the Exchequer at that time, but the right, hon. Gentleman made no statement whatever as suggested. Certainly he laid down no principle which would justify a further reduction in the Licence Duty which the Chancellor of the Exchequer is now proposing. My point is this: that the principle on which this abatement is suggested, and advocated, by the Chancellor of the Exchequer is wrong. He is reducing these Licence Duties an extra 50 per cent., so that they are now only three-quarters of what they were before, on the grounds of the restriction in barrelagc—the restriction to 10,000,000 barrels. My whole point is that these Liquor Licence Duties are not taxes on output but taxes on profit. They are taxes on the monopoly value of the trade.

That was always the ground on which they were actually advocated, and, therefore, they ought to depend, not on the reduction in consumption or the restriction of output, but on the profits which the trade has made, whatever may be their output and whatever may be the consumption. If that is the case—and I contend that is what the Licence Duties are—they are really taxes on extra rent which can be claimed or exacted by the owners of public houses in virtue of the monopoly which the State confers upon them. That is the only justification for these Liquor Licence Duties. If that be the case, then my further point is that the profits of the licensed trade, so far as we can test them, have not diminished during the War, but, whatever the Committee may think, have actually increased. I have investigated the matter. I have looked through—I will not say very exhaustibly— but at all events have looked through the materials at my disposal. I have looked at the accounts of many of the breweries. I find that about 100 of them have increased their profits, and about forty-one have remained the same.

I am aware of that. But these Licence Duties fall primarily upon the big brewery companies.

7.0 P.M.

At all events, I do not think it can be argued that the smaller men in the free houses have been losing if the brewery companies have been gaining by the simple test of the profits of the trade. It is not merely my calculation. The Committee may think me an unsafe guide on the matter. But I have here an article which appeared in May in the "Economist." The paper was investigating the profits of the brewery companies. The "Economist" says:

"It is not perhaps generally realised that, taken as a whole, the brewing industry has had a prosperous time during the War up to now."
The paper gives a list of some eighty or ninety brewery companies' accounts for the years 1914–15–16, showing that their net profits amount to about £4,500,000 in money, and they have gone pretty steadily up each year. The "Economist" says:
"Ninety brewery reports published for the year ending 30th June, 1914, showed an increase in profit of £291,000. Eighty-one reports published for the year ended 30th June, 1915, showed an increase of £42l,000. Seventy-seven reports published for the year ended 30th June, 1916, showed an increase of £274,000. To take our record a little nearer to the present date, seventy-four reports in the calendar year, 1916, gave a. net profit of increase of £32,000. Twelve brewery companies published reports during the first quarter of 1917, the companies representing a total capital of nearly £11,500,000, and were able to show an advance of £65,000 net profit. In every case net profits are struck after deduction of debenture interest and other fixed charges."
In these circumstances, and if all this be true, then I cannot see why the Chancellor of the Exchequer should go out of his way to present this £1,000,000 to the brewing trade and to the persons who pay this Licence Duty. The argument of the right hon. Gentleman on a previous occasion was this: "You grant all licences for a period. You put restrictions on it, and just as if you restrict the use of the licence granted to a motor 'bus you ought to give the owner abatement, so in the case of the licence holder you ought to give him an abatement proportionate." There, if I may say so, I think the right hon. Gentleman is wrong. What you need to do is to diminish his Licence Duty in proportion to his profit. The profit, as I say, does not depend upon the output. It depends upon the business management of the trade. By means of dilution, by means of increased prices, and by other methods which are known to the trade, up till now the big brewery companies, and those who have to pay these licences, have not suffered. On the contrary, although they may have suffered inconvenience, although it may have been awkward for them to have their business interfered with, they have not suffered in the matter of profit. Therefore I venture to say there is absolutely no justification whatever for this very considerable throwing away of revenue. My Amendment proposes to leave the 25 per cent. reduction which was given in previous years, and to give the licensed trade abatement of their Licence Duties in proportion to any reduction which they can show to the Inland Revenue in their profits. If the Chancellor of the Exchequer is right, and the profits of the trade are going to fall off, as suggested, then they will get just as much abatement under my Clause as he proposes; if I am right, and the profits of the trade are not going to fall off to this extent, then in that case he will save revenue, and we shall not require to give this abatement. I have suggested, as a mere precaution to the Inland Revenue, that no abatement should be given unless the reduction of the profits amounts to 10 per cent. That would save them going into small reductions of profits which might be due to trading losses and so on, but, apart from that, I think you ought to make the reduction of Licence Duties dependent upon the reduction of the profits, and if you accept that principle, then I venture to think that the Chancellor of the Exchequer will not give away revenue which I think he requires.

I suppose the right hon. Gentleman thinks that this reduction, which is given in virtue of a reduction of output from 26,000,000 to 10,000,000 barrels, is going to produce this great diminution in the profits of the trade. There are two points on that which I wish to put. In the first place, will he tell us now, what we have asked for hitherto, what he proposes to do in reference to the 10,000,000 barrels? Is he going to increase the 10,000,000 barrels by another 3,000,000? That has been stated in the Press in apparently inspired quarters. If he is going to do that, then his reduction becomes still more unjustifiable. If, on the assumption that the barrelage is reduced from 26,000,000 to 10,000,000, he is reducing his Licence Duties by 75 per cent., now, if he raises the 10,000,000 barrels to 13,000,000 barrels, he has certainly no justification for a reduction of 75 per cent, in the Licence Duties. I have an Amendment further down to deal with that particular point, but we have not yet been able to find out what his intention is in this matter, and we should very much like to know.

The second point is this: The Government have just established a Commission to investigate the finances of the trade, and Lord Sumner and other Commissioners have been appointed for the purpose. If the right hon. Gentleman is right, that the profits of the trade have been cut down by 75 per cent, in virtue of these restrictions, I presume it will be for the Commission to take that fact into account when it fixes the price either for control or the purchase of the trade. If he is right in his belief that there is going to be this very profound and serious reduction in the profits of the trade, that is a very material matter for the Commission to consider, and if the trade, as it no doubt has done, claims this reduction on the ground of that reduction in their profits, then they cannot go to the Commission and say that their profits have been as high as I think they were. I will not proceed along that point any further, but I will say that many of us are feeling that in a great number of the Government Departments money is being thrown away recklessly with two hands. A vast amount of waste no doubt is inseparable from war, but while you are throwing away millions it is no reason to come down to the House and propose a gratuitous squandering of £1,000,000. It is only a million, no doubt, but the Chancellor of the Exchequer wants every million he can get, and unless he has got a very much stronger case than he has yet shown to this, Committee for throwing away £1,000,000, unless he can establish that there has been anything like this reduction in the profits of the trade, then it is a gratuitous squandering of the revenue; it is bad finance, and it is entirely unjustified.

This point on which my hon. Friend has dwelt with much knowledge and considerable warmth is really a tolerably simple question. He desires to reduce, as I understand, the abatement which the Government proposes of three-quarters of the Licence Duties to one-half—

That is a separate point. I am on the first Amendment. The effect of the Amendment which I moved will be to leave the abatement of 25 per cent., plus an abatement proportionate to any reduction of profits which the licensed trade can show. But I left that as an unknown quantity, because I myself do not believe it will show any reduction of profits.

The difficulty that the Government are in is this: We cannot quite take the hon. Member's view of the reason for which licences are given. He would claim that the licence is really given and calculated on the basis of the profit that the owner of the licence makes. A licence really—I speak subject to correction, for I am no lawyer—is that which gives a man the power to trade, and is calculated, it is true, on his annual value, and in that view there is possibly a rough kind of proportion maintained between what he pays and what he may be expected to make. But the question of profits qua profits has never come into this matter, and, in introducing the question of profit in making a calculation of this kind, my hon. Friend is bringing us on to new ground—ground that we have never stood on for this purpose before, and ground where, I very much fear, we could find no standing place where we could maintain our footing, and for this very obvious reason: It is no use telling me that because a large number of breweries have succeeded in maintaining the profits they have been making, therefore a large number of licence holders do not require the abatement which we propose to give them in this Clause. To my mind the two things are not on the same footing, and they are not comparable. It is quite impossible to prove between them any relation that would justify us in accepting the hon. Member's argument. We must remember that there are about 150,000 licence holders in the United Kingdom who are affected, and we must remember that a number of these have no accounts of profit and loss to show. They are too small men for that, and, having regard to the number of accounts which would have to be looked into, and having regard to the staff which exists for that purpose, it would be perfectly impossible —even if we thought it desirable—to make a calculation that would enable us to give effect to this Amendment.

We propose to have regard to what, I think, is perhaps the fairest thing to look at, and that is the facility that the licence holder has for carrying on the trade for which we grant him a licence. It was under the late Government that the hardship of the licence holder was recognised, and the restriction of hours which he suffered in certain parts of the country was allowed for by a certain abatement, but, as time has gone on. the licence holder is affected not only by the reduction in his hours, but by a very much more serious thing, and that is, the reduction in the amount of the material which he can purchase. The reduction of hours becomes to him a secondary question entirely, and it is for that reason that we remove the allowance given for the reduction of hours, and we merge what we believe the loss to which he is put into one calculation, and we make the proposal that we make in this Clause. We must remember that the difficulty of making compensation now merely on the ground of reduction in hours lies in this, that whereas it was possible, however reduced the hours were, to do good business throughout those hours, the position now is so far altered that in many cases difficulty is found in doing business during the hours which the licence holder is allowed to keep open. That has completely altered the problem. The question really which the Government have had to decide—we are perfectly open to consider the question with the best judgment the House can give us—is what, under the circumstances, we can arrive at the fairest bargain for making a licence to him which, I am sure, most members of this Committee feel he is entitled to on every ground of equity. We know that great reductions have been made in the amount of material at his disposal for sale. We know the difficulty that he has had to encounter in certain districts in his restricted time. We know the other difficulties with which he has, certainly in common with almost everyone else who carries on trade in this country, to contend—difficulties in securing service, and difficulties in securing the same kind of wage that he would have paid two or three years ago. I think when we take all these considerations into account, when we remember what the restriction is that has been imposed, when we consider the facts that for some time during the existence of the abatements that have been given hitherto—we know Members have got up here and claimed that, even under them the licensees were not receiving as much as they were entitled to—when you consider all that, I think the Committee will consider the view that the proposal we make that three-quarters of the full licence shall be remitted is not an extravagant view, and that we shall not be doing more than justice to a large body of people who, although they may carry on a trade which in the eyes of many hon. Members they ought not to be allowed to carry on under any circumstances, are fully entitled to this abatement by every rule of equity.

I think my hon. Friend will not be surprised when I tell him that he has not succeeded in convincing me. I would like to know, are we to understand that this reduction is based on the theory of a 10,000,000 barrel output, and in the event of that output being increased, is there going to be a fresh revision of the Licence Duty? What is the relation of this reduction of three-quarters to the supposed reduced profits of the licensed holders? I cannot help thinking that the Government has been misled in this matter. The Financial Secretary spoke of the reduction of hours and the reduction of the materials supplied to the brewers, but he did not attempt to show why those two things should lead to a reduction of this duty. The real argument for a reduction would come if you had reduced the profits of the drink seller, but no evidence has been presented or can be presented to the Committee that such a reduction of profits has taken place, and it seems very extraordinary when the Government are looking for revenue in all directions that they should, without proving that profits have been reduced, make a present of £900,000 to the drink trade. My point is that the profits of the drink trade had not been reduced to the end of the last financial year. It may be that their profits are going to be directly affected during the present financial year, but we have not had any increase up to the present upon which that matter can be determined. A mere reduction of the amount of the materials to be sold does not determine the amount of profit in any measure whatsoever. Prices have been raised, and the increased prices up to the end of the last financial year recouped the trade for the reduction of output and hours. It may be that that will not happen again, but before this duty is reduced some effort should be made to prove that the effect of the present measure is going to be a reduction of profit, and merely to talk about a reduction of the hours or output is to befog the eyes of the Committee. If the profits have been reduced that would be a fair argument for a reduction of the Licence Duty, but that argument has not been put forward, and I suspect the reason is that the Government have not in their hands the material to prove that the profits are going to be reduced in a way to justify this reduction.

I think the hon. Member has drawn our attention to a very important principle, and his arguments have not been met by what has been said by the Financial Secretary. It has been said that my hon. Friend was breaking mew ground, but if we turn to the Bill itself the very Order to give this relief is based upon a restriction of business, and because of that supposed restriction the Treasury propose this rebate. The hon. Member who moved this Amendment produced evidence to show that for three years the profits of some sixty or seventy breweries have steadily increased. This Amendment is along the lines of the Bill itself, and I think it is a proper way to base the licence upon profits made. If the profits have not been reduced it is most foolish of the Treasury to give away this £900,000, and probably more if the profits have increased. We certainly are entitled to retain this Licence Duty, and I think this Amendment deserves further consideration from the Treasury. The only reason for putting this Clause in the Bill was a restriction of trade. There has been no case made out to show that there has been any reduction of profits—in fact the evidence shows quite the contrary. My hon. Friend who moved this Amendment gave very significant figures showing an increase of profits, and why we should give a rebate and throw away some £900,000 passes my comprehension. I do not think the Treasury has made out any case for reducing this Licence Duty, and I hope, therefore, this matter will receive some further consideration either now or before we give away such an important concession as this.

Might I ask for an answer to my question as to what the Chancellor of the Exchequer is going to do with regard to these 10,000,000 barrels? Are we reducing this duty because of a reduction of the 10,000,000 barrels, because that was the reason given when this Clause was first proposed? Now we are told in the Press that the Government are going to allow an extra 3,000,000 barrels. If this abatement was right for 10,000,000 barrels it is entirely wrong for 13,000,000 barrels, and clearly I cannot think that this is intended.

Does it not depend upon who is to have the sale of these 3,000,000 barrels?

The Committee should not be expected to vote blindly in the dark. We do not know who will have to do with the 3,000,000 barrels. The Government have had a fortnight at least to consider this point, and yet they cannot tell us. I really do not think it is fair to ask us to give this abatement and refuse the information we have asked for. Supposing the Government have made up their minds and they do know what they mean to do. We do not know, and we are asked to vote blindly, and I very much object to doing that. The only other argument which the Secretary to the Treasury used was that it was too much trouble for the Inland Revenue to adopt my proposal. Under the Government proposal there will be 150,000 abatements to repay, but, under my plan, there would not be any. If I am right there will be no reduction in profits and no abatements to repay, and the revenue authorities ought to be grateful to me for saving them trouble. At all events there will be a good deal less trouble by my 10 per cent, margin than would be involved in repaying these abatements.

The other argument of the Financial Secretary was quite fallacious. He said I was breaking new ground and that I did not know the theory on which the Licence Duties had been levied. I know they have been levied on the monopoly profits as measured by the annual value, but that surely depends upon the profits. If the profits do not fall there will be no ground for the publican asking for an abatement in rent or of the annual value. If I can prove that profits have not fallen during the course of the War, then there is no ground for reducing the annual value and no ground for a reduction in the Licence Duty. It is no use telling us now that the great brewery companies do not own or control at least 90 per cent, of the houses under a tied-house system. It is no use saying that if the brewery owners are making a profit the individual licensees are losing money. If they are, the big brewery companies are losing money as well. It is obvious that the big brewery companies are not losing, and there is not a shadow of evidence showing that individual publicans are losing money. Has the Secretary to the Treasury a single case to prove this point? I could give him plenty of individual brewery companies who have increased their dividends and made hundreds and thousands of pounds extra profits during the War, but I will not trouble the Committee with them. It is perfectly obvious that the Secretary to the Treasury has not made out his case. He has submitted no argument to justify this abatement, and he is simply giving away public money for which there is no justification.

I do not really think it is necessary to say anything more, but out of courtesy to my right hon. Friend I shall try to give some reasons for the course we have taken. No member of the Committee likes to vote blindly, and I am quite sure my right hon. Friend will never do it under any circumstances. I think this is an illustration of an obection to proposals affecting this particular trade which I do not think they would have raised in connection with any other trade if we were dealing with it in the same way. I wish to put to the Committee exactly my reasons for dealing with this matter in this way. First of all, my predecessor found it necessary to take off 25 per cent, of the licence practically, and he did it on the principle that the restrictions then imposed really supposed that the holder suffered to the extent of the reduction given.

The Chancellor of the Exchequer then was not aware what the effect would be, and he estimated the reduction of output and based it upon a reduction of profits. We know now that that is not so.

My predecessor gave this reduction, and it had to be considered by the Customs authorities. The restrictions which were then proposed were enormously greater than those which hare brought about a reduction of 25 per cent., which is enormously greater. My advisers came to me with the suggestion that under all the circumstances a reduction of 75 per cent, was fair. My right hon. Friend asks what about the 3,000.000 extra barrels. I cannot give him the figures, because I cannot give them to the House of Commons generally, but we have made up our-minds as to the principle. I know it is difficult to carry it out in detail, and I cannot state the details until I know exactly what we are going to do. We are financing for a year, and we are making this arrangement for a year. What we have to consider, in view of the probability in front of us, is whether this proposal is a, fair or an unjust one. No Chancellor of the Exchequer would have hesitated for a moment in making the reduction greater than it was last year under the new conditions. The most that could possibly be said is that perhaps I might have been content by giving them one-half instead of three-quarters. I have done what on the whole, after the best advice I could get, I thought was fair, just in precisely the same way as I have given back a portion of the Motor Car Licence Duty where the owner is not able to get the petrol. My right hon. Friend says that I was irritated or something akin to it by what he said before. Not at all. Every time I hear my right hon. Friend speak on this subject I listen to him, not in anger, but in sorrow. I have always been keenly interested in temperance reform, as I understand it, and it is my deliberate opinion that it is the view of extreme advocates like the hon. Member that has done more to prevent temperance reform than anything else. That is my real opinion. Let me give my right hon. Friend an illustration. He says that the Commissioners, when examining into the fair price to be paid to the trade, must take into account the fact that they have lost three-quarters of their value. This loss is due to the War and arising out of the War, but my right hon. Friend says that it is the most natural thing in the world to look upon it as a permanent fall in the value of the trade. Rightly or wrongly, we have done what we considered just in the matter, and my right hon. Friend is quite mistaken in thinking that here the brewers and the licence holders are the same. He says that he can judge by the profits, but that is absolutely impossible. I am told by my advisers that there are 176,000 licences on the country, and in a great number of cases, probably the majority, they have no means of telling what their profits are. You have got to make an assumption, and I ask the Committee to believe that we are bound to make some concession—and that the concession which we are making is fair.

I am very glad that my right hon. Friend the Member for Lincoln (Mr. C. Roberts) has had a lesson in this matter, because I understand he is one of those men who are keenly anxious to see the State become the owner of all breweries and public-houses.

I think I am right. He leans very strongly in that direction. This is a lesson what he may expect. The views of the brewers and publicans are very well represented on that Front Bench, and this will be a lesson to him to be more alive as to what is in view and to assist some of us in trying to stop it.

Amendment negatived.

I beg to move, in Sub-section (1), to leave out the words "one sixteenth" and to insert instead thereof the words "one twenty-fourth."

The Chancellor of the Exchequer told us that apparently there is going to be an increase of 3,000,000 barrels, and I think in virtue of that the reduction should be one twenty-fourth per month, or a reduction of 50 per cent., instead of 75 per cent. The right hon. Gentleman in an Amendment later on the Paper seems to have taken some precaution to deal with the point, because, if I understand it aright, he seeks by that Amendment to take power if there is an increase of output to diminish the reduction. That Amendment, however, cannot be moved, and under the circumstances I submit that he ought to be content, in view of this increased output which is obviously coming, with a reduction of 50 per cent, instead of 75 per cent. With reference to the advice which he gives me as to importing passion, which I do not feel any more than I accept the account of my views attributed to me by the hon. Member opposite (Mr. J. M. Henderson), all I would say is that the right hon. Gentleman pursues the cause of temperance doubtless with philosophic calm and a very proper appreciation of the right spirit in which that great cause should be undertaken. I will accept with all humility the lesson which he inculcates for my guidance, but I only wish that the philosophic calm which he has always shown on this question had somehow or other led to greater practical results, because I cannot see that it has had any effect whatever in the promotion of temperance reform.

I lope that my right hon. Friend does not want me to make a speech about this Amendment. It really is not the case, and never has been, that the reduction is in direct proportion to the reduction of barrelage. You have to take into account all the other circumstances and look at the thing as a whole. I am sorry, but I cannot accept the Amendment.

I cannot see any principle in the right hon. Gentleman's proposal, except that he means to do it.

Amendment negatived.

Amendments made: After the word "duty" ["one-sixteenth part of the duty"] insert the words "for a full year."

At the end of Sub-section (1) insert the words, "but repayment shall not in any case exceed three-fourths of the duty paid for the licence."—[ Mr. Baldwin.]

Clause, as amended, ordered to stand part of the Bill.