Kevin Brennan (Cardiff, West): I apologise for being late, Mr. Benton, and am grateful to my hon. Friend the Financial Secretary for giving way. Is not a better analogy a drink such as Baileys Irish Cream, which is a mix of cream and spirits? It is taxed as a spirit. Is not that a more appropriate analogy for a fruit and spirit mix such as the one that we are discussing?
Mr. Boateng: I shall avoid that one, because I do not want to get drawn into it. It would be pleasant to be drawn into a vat of Baileys; one can drown in a butt of malmsey wine or in a butt of Baileys—I know which I would prefer.
I do not intend to be drawn into that discussion. I believe that the measure is fair and that we have met the requirements of the principles that we laid down as the basis for taxation in this area. It is important to recognise that what we have done is completely consistent with what our predecessors—of all political parties—have done. I go back to the days of a former Chief Secretary to the Treasury, subsequently Chancellor of the Exchequer and First Lord of the Treasury, the former right hon. Member for Huntingdon, John Major, when he said in 1989:
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In 1990, the right hon. Member for South-West Norfolk (Mrs. Shephard), when she was Minister of State at the Treasury, said:
That is the Conservative party's track record.
Hon. Members have said that we should have consulted the industry more closely so that we could tell them what we were planning to do and get their views before making the change. That is a Damascene change of attitude on the part of the Opposition. I do not recall their taking that view when they were in government or rushing to consult the taxpayer before they introduced a tax hike. I cannot think of any Government who have ever seen fit to constrain themselves in such a way when taking basic decisions on alcohol duty rates. We saw no value in consultation. We were confident in our decision and saw no reason to delay it, just as we saw no need to consult on our decision to freeze the other alcohol duties and to cut the rate for cider.
There is something else that I know will interest the right hon. Member for Fylde, when he actually looks at the figures. I am mindful that the 10-day period that we allowed for the industry to change its systems was used by some producers to engage in some serious forestalling. That is another reason why I think that an extended period of consultation would have been both unwise and unnecessary. I can make available to Committee members who would like to see it an interesting graph that shows what occurred when the right hon. and learned Member for Rushcliffe announced in 1995 a duty increase that was to come into effect from 1 January. What we then saw was massive trade forestalling before the sector dipped and then renewed its steady growth again. There would have been real dangers in my submission for us to have adopted the rather unusual principle that the Opposition seem to have latched on to during their period in opposition.
We have listened carefully to what right hon. and hon. Members have said, and we understand where they are coming from on the issue, but the measure supports the steps that we have consistently taken to deliver a fairer burden of taxation on different alcoholic drinks and their producers. The clause ensures that the drinks carry their fair share of duty at a rate that probably reflects the nature of the alcohol that they contain. As such, I commend it to the Committee and urge Members to reject the amendments.
Mr. Jack: I have listened with care to some very good points that the Financial Secretary made in response to the inquiring lines that we put forward. I would say to him that at times there were dangers when, via the means of a question from the Opposition, he began to impute a policy to us. I
Column Number: 053think that we have every right, and I speak from the Back and not the Front Benches, to probe the Government about the logic and thought that lie behind that move.
The Financial Secretary showed an unusual degree of sensitivity when I probed him about the percentage of tax that those products will now bear as a proportion of their price in the future. We have had an interesting insight into some of the thinking behind Government policy on alcohol taxation. When the Government set out to raise money, it is not always easy to justify it in an entirely acceptable fashion.
Mr. Bercow: I am grateful to my right hon. Friend for giving way. Does he agree that the Financial Secretary's response on the subject of the proposed amendments should be treated with certain circumspection in the light of the not-very-auspicious debut to the issue of challenges that the Financial Secretary has so far made? Is my right hon. Friend aware that, on 8 May, in consideration in Committee on the Floor of the House, the Financial Secretary—he seems very proud of it because he referred to it a few moments ago—challenged me to identify any period in which there had been a freeze on beer duties in two Budgets—[Interruption.]—Oh yes; it is on the record. The Financial Secretary cannot cavil at my recalling the record. Is my right hon. Friend pleased to be reminded that, between 1985 and 1988, there was indeed a freeze on beer duty? It confounds the Financial Secretary and it does not encourage confidence in the veracity of his judgments.
Mr. Jack: I am always pleased to be reminded of useful information, and my hon. Friend has given some more to the Committee. I think that it also bears out the fact that, when we were in government, we did consult on spirits. For example, we consulted the Scotch whisky industry about matters relating to its tax.
I want to return to what the amendment is about. It reflects the desire for information to explain Government policy. I do not think that the Government should be upset about providing that information. I fear that the amendment may well be lost, but I would say to the Financial Secretary that anything that helps us to understand better why the Government do what they do is a perfectly sensible and reasonable thing to request, and that is what the amendment is designed to do.
Mr. Chope: May I, too, welcome you to the Chair, Mr. Benton? My right hon. Friend the Member for Fylde has just given a good reason why we should vote for the amendment. In summing up for the Government, the Financial Secretary addressed some of the issues. He conceded that, although the Chancellor said in his Budget statement that at no material time had there ever been a justification for the concession, there has been a justification for the concession in the Government's eyes for quite a long time, so that situation has now changed. At least that is a minor concession.
The Financial Secretary has also been much more moderate in his views about the impact of the measure on binge drinking, and I am grateful to him for that.
Column Number: 054However, he has not answered the question that the industry is asking: where spirit coolers compete directly with bottles of Budweiser and Beck's in clubs, why is it fair to increase the tax on one by 60 per cent. while leaving the tax on the other unaltered? They are all fashionable drinks whose alcohol content ranges from 4.5 to 5.5 per cent. Information on that and a wider debate would be facilitated by amendment No. 1.
The Committee divided: Ayes 9, Noes 16.
Division No. 1]
The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill.
Question agreed to.
Clause 3 ordered to stand part of the Bill.
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