Part V, Essay III

III.—THE MALT TAX, TEMPERANCE, AND RETRENCHMENT

This interesting speech was delivered by Cobden on April 14th, 1864, and was one of his last speeches in the House of Commons. Mr. Gladstone abolished the malt tax in 1880.

I LISTENED to the speech of my honourable and gallant friend—and I may say my representative—who opened this debate, with great pleasure. He brought forward his motion with much ability, and I have not a word to say in opposition to the views he advocates. But as an experienced agitator, I must be allowed to tell him that he has erred grievously in the mode in which he has introduced this subject for the first time formally to the House. There is no rule more deserving the attention of any one who takes charge of a question in this House than this—that he should never allow it to jostle or to become entangled with another question, good in itself, but with which it has no necessary connection. The mode in which his motion is introduced into the House is such as absolutely to preclude a fair division upon its merits; because my honourable and gallant friend asks the House to consider not merely the merit of the malt tax, but the merits of another tax which he proposes to remove out of the way in order that the malt tax may occupy its place. With regard to the sugar duty, looking at the matter only as a question for the consumer—although I am not going to deal with the malt tax solely in the light of a consumer's tax—I confess I should infinitely prefer abolishing the sugar duty to abolishing the malt tax. Perhaps there is no tax—after the tax on bread—upon which there may be so much said to justify total repeal as the duty on sugar. We live in a country where we have not so much of the sun's rays as more southern climes are favoured with. We know that it is the solar heat which bestows sugar upon the earth, and the consequence is that our fruits want the flavour which in other and more genial climes they possess. We require, therefore, more sugar as an admixture to our food. Again, the people of this country are large consumers of tea. We are denied the wine which they have in France and other countries, and the people consequently drink tea in larger quantities than any other in Europe. That consumption of tea implies the necessity of the consumption of sugar. Then, again, sugar appeals to the sympathies of all—not merely to the working man, for whose benefit alone, in seeking for a reduction of the malt tax, our sympathies are involved, but to his wife and children—not merely to the man in health, but to the invalid and to helpless infancy. I am very sorry, therefore, that this question, which is most important in itself, and excites so much interest, has been injudiciously complicated with another question, so as to deprive us of a fair vote upon its merits.

In dealing with the malt tax, I said I would not regard it solely as a consumer's question. Standing here as an advocate of free trade, and having applied free-trade principles with so much rigour to the farmer and the landowner, whom I will not separate in this matter, I am fairly bound to admit that, if they come before this House and state that the operation of the malt tax is such as to impede the processes of scientific husbandry, and to interfere with the most desirable rotation of crops—that if they establish the truth of that upon the judgment of practical farmers—this is a question that affects the interests of the producer as well as the interests of the consumer. I am bound to say that we have never lost sight of the producer in the great changes which we have been effecting in our fiscal system during the last twenty years. We all know that Sir Robert Peel began his commercial reforms, which have been followed up to the present day, by laying down and acting upon the maxim, that it was necessary, before exposing the manufacturers of this country to competition with the manufacturers of the rest of the world, to relieve them in every possible way from all disadvantages in the supply of their raw material and in the processes of manufacture. I was surprised that the honourable baronet the member for the West Riding (Sir F. Crossley), in his speech, rather lost sight of this principle which we have always claimed in the interests of the manufacturer. He said, that as the farmers of this country did not produce sufficient barley for its consumption they were not entitled to the removal of the difficulty and impediment which the malt tax imposed upon them. I consider that the fact that they do not produce enough of barley for this country is no argument why they should not have the full application of the economical fiscal system which we have been carrying out for the last twenty years. We admit the foreigner to free competition with them; the foreigner may not have this malt tax to interfere with his husbandry; and therefore I repeat it is no sufficient answer to say that the landowners and farmers of this country do not produce the full quantity of barley necessary for the consumption of the people. The question really is: What is the force and validity of the plea put forward by the producer? I have inquired of the most intelligent farmers with whom I am acquainted, and I will mention one because he lives in a county which has lately been the theatre of a great contest turning upon this question. I have had the great pleasure and advantage of being acquainted with Mr. Lattimore, one of the best farmers in Hertfordshire, for more than twenty-two years. He stood by my side at the commencement of the movement for free trade in corn, and much to his credit and greatly in proof of his enlightenment, was always an advocate of that principle. Mr. Lattimore is now one of the most ardent advocates of the removal of the malt tax; and, as one to whom I owe more than to any one for the information I acquired with reference to agriculture and its bearing upon free trade, I cannot but regard with the greatest respect the evidence he offers me upon the subject. Mr. Lattimore has stated publicly—and I believe he has stated to the Chancellor of the Exchequer and the Prime Minister—that the operation of the malt tax tends to interfere with the proper and judicious rotation of crops. Some soils are not so well suited as others for the growth of barley. Thus, taking Norfolk, where the soil is of a superior character for the growth of barley, and then taking those districts where the soil is not peculiarly suited for that kind of grain, and where the crop is of an inferior quality, you cannot sell that inferior barley for malting purposes, because the duty being the same upon barley of high quality as of low quality, it acts as a prohibitory duty in the sale of inferior grain for malt. Besides that, Mr. Lattimore tells me that he finds malt a necessary article for the consumption of stock, particularly lambs and sheep, at particular seasons. I have visited his farm, and I have seen his lambs at Easter season feeding upon malt dust brought from Ware. He was at that time paying, weight for weight, as much for his malt dust as he was selling his wheat for; and he tells me that he has been obliged to abandon the purchase of this malt dust, because it was so dear that he could no longer use it. I take the evidence of such men to be conclusive in the matter. The farmers stand, in my opinion, precisely in the same position with regard to barley, from which the malt is made, as they did with regard to hops before the hop duty was repealed. We all know that in Kent a very superior quality of hops is grown, and that in Sussex the quality is inferior. The duty being the same in both cases, its effect was to operate most oppressively upon the inferior quality of hops grown in Sussex. It was, in fact; a protective duty upon the superior hops grown in Kent; and it was on that ground that the hop-growers raised an agitation for the repeal of the duty. It was not an agitation in which the consumers were the movers. The movement originated exclusively with the hop-growers of Sussex, because they wanted to escape from the severe disadvantage under which they were labouring in consequence of the duties pressing upon them so heavily. Such is the position in which the farmer is now placed, and it appears to me that he has good grounds to come here and ask that the trade in malt should be made free, as a complement to those free-trade measures and that economical policy which have been enforced in every other direction during the last twenty years. It may be said that there has been a measure proposed for the purpose of enabling malt to be manufactured for the consumption of cattle. Well, I believe it is generally understood that that device will be a failure. I believe the farmers attach very little importance to it. But, independently of regarding the question merely as a consumer's question, I maintain that it would be a great relief to the very poorest part of the community, because I think the consumption of beer, probably more than of any other article, belongs to the very poorest of our labourers—I now speak of the male labourers more than any other. I am of this opinion, because all of us who are acquainted with rural life know that, if they could, the agricultural labourers of this country would all enjoy the beverage of beer. With their limited wages, and with the general habit of agricultural labourers to be married men, I think there is very small danger of these men ever carrying the indulgence too far. But, depend upon it, it would contribute very much to the contentment of that class, and to make them less dissatisfied when comparing their lot with that of the rest of the community, if, instead of being obliged to resort to the brook or the spring for their beverage, they could enjoy some share of the produce of the land on which they are employed in the shape of a draught of beer. I am not one myself who attaches very much importance to the beverage which men may take. I think more depends upon what they eat than upon what they drink. But I would like to lay down this as a rule in dealing with this question and with all other questions—that we do not sit here to legislate with the view of passing sumptuary laws either with respect to drink, or meat, or clothing. We do not pretend by our fiscal regulations to make men moral, and I think it is quite out of place to introduce the subject at all in discussions like the present. I should say that it would be a disadvantageous argument, in treating this question, to contend that by repealing the malt tax you would necessarily have a very much larger individual consumption of beer. If I, instead of my honourable and gallant friend, were dealing with this question, I would never put the case upon that argument. It does not follow if you take the duty off malt that the present beer drinkers will increase their consumption of beer. You may have many mouths drinking beer that now cannot get it at all, and you may have those who now drink beer consuming the same quantity at a very much less expense. Honourable gentlemen will find a passage in Adam Smith upon this very subject. He says in a passage which is well worthy of consideration, speaking as an advocate of the repeal of the malt tax, just as he would have advocated a repeal of the corn law, that it does not follow that because intoxicating drinks are cheap, therefore the people in the country where they are cheap should be necessarily intemperate; and he mentions the fact that in those countries where wine is cheap there the population is generally the most sober. And he states, as a fact, that though the regiments in France that had been brought from the northern provinces into the southern portion of the country were found at first to indulge their appetites to some excess, yet that familiarity with the cheap wines of the south speedily produced an effect rather sobering than otherwise. Now, who are the sober people amongst us at the present moment? Why, doubtless, the great progress in sobriety in this country during the last thirty or forty years has been precisely amongst those classes who have had in abundance the means of intoxication always at their hands. My honourable friend here (Mr. Lawson), who, I believe, wishes, with strictly benevolent views, to put temptation out of the working-man's way by the regulation of the number of public-houses, would not pretend to say that he would deprive any one of the fullest opportunities of indulging in his wine or his beer in his own house. I therefore think it would be wrong to assume that necessarily there would be a greatly increased consumption of beer arising out of a change in this law. I tell you what would happen if you abolished the malt tax. I have no doubt there would be a great consumption of other excisable and duty-paying articles. If beer were cheaper, the families of working men would consume more tea, sugar, tobacco, and other things that pay duty. Therefore, it is quite possible that you might have a very large increase in your revenue, arising from these other sources, without necessarily implying any large increase in the consumption of intoxicating liquor.

Well, we now come to consider the question of the financial difficulty of this great problem. I assume that whatever is proposed to be done would be done with the view of the ultimate abolition of this tax. I do not say that any Chancellor of the Exchequer would be likely to propose to do this in any one year; but if I were dealing with this question out of the House, I should look to total repeal, and nothing less, as my ultimate object. Now, where is the difficulty in the way of accomplishing this? I exhort my honourable and gallant friend opposite not to think of ever putting on a substitute in the form of another tax in the place of this. Let him depend upon it that this House will never put on any other tax as a substitute for the malt tax. How, then, are you to meet this case? Well, in the first place, if you abolished this tax, you would not lose that amount of revenue, because there would be a decided increase from other sources. In the next place, you do not intend to abolish it all in one year—that is certain. Well, then, I maintain you must all steadily look to a reduction of our expenditure. I consider that we have been running riot in our extravagance. For the first five years after I entered this House, when Sir Robert Peel was at the head of affairs, we spent £20,000,000 a year less than the average of the last five years. Will anybody pretend to tell me there is not a margin for saving and economy in that? This Parliament has been unparalleled in its extravagance. Names have been given to different parliaments. One was called 'the Long Parliament,' another was called 'the Unlearned Parliament,' and this ought to be called for ever 'the Prodigal Parliament.' Well, then, you have an opportunity for economy, in watching stringently your expenditure, and you have the natural growth of revenue which comes from reduction of taxation; and if you remain at peace you will have the growth arising from the elasticity and buoyancy of your finances which leaves you every year with a surplus of two or three millions. All this leads me to conclude, that if honourable gentlemen opposite are in earnest about this matter, they may ultimately accomplish what they have now in hand. What I should recommend to my honourable and gallant friend is that he should not take the opinion of the House on this motion. If he does, I should be in the same predicament as three or four other gentlemen who have spoken, who, while favourable to the motion, tell us that they shall be obliged to vote against it, inasmuch as it has been put in antagonism with the reduction on sugar. I should hope that my honourable and gallant friend will withdraw the motion, having the advantages of the discussion, which is all he can hope for at this moment, bearing in mind, too, that these are questions which are not carried in a session. One or two gentlemen have spoken of free trade in corn as if it were carried straight off; but I know, to my cost, that that question took us seven years of weary labour. You have now only just begun. You have only to press this question as a producer's question in addition to the interests of the consumer, and with that perseverance which I think will characterize honourable gentlemen opposite, when they are once roused to a question, and they are sure soon to accomplish their object, to the great benefit not only of that part of the community which they represent, but also to the satisfaction of all classes.