I move:

(1) That in this Resolution—"the Act of 1973" means the Finance Act, 1973 (No. 19 of 1973);

"the order of 1973" means the Imposition of Duties (No. 208) (Beer, Spirits and Tobacco) Order, 1973 (S.I. No. 249 of 1973).

(2) That in lieu of the duty of excise imposed by section 47 (1) of the Act of 1973, as varied by paragraph 4 of the Order of 1973, there shall be charged, levied and paid on all beer brewed within the State on or after the 16th day of January, 1975, a duty of excise at the rate of £42,047 for every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees.

(3) That in lieu of the duty of customs imposed by section 47 (2) of the Act of 1973, as varied by paragraph 4 of the Order of 1973, there shall, as on and from the 16th day of January, 1975, be charged, levied and paid on all beer of any description imported into the State, a duty of customs at the rate of £42.047 for every thirty-six gallons of beer of which the worts were before fermentation of a specific gravity of one thousand and fifty-five degrees.

(4) That there shall be allowed and paid on the exportation as merchandise or the shipment for use as stores of beer on which it is shown, to the satisfaction of the Revenue Commissioners, that the duty imposed by paragraph (2) or paragraph (3) of this Resolution has been paid, a drawback calculated according to the original specific gravity of the beer, at the rate of £42.060 on every thirty-six gallons of beer of which the original specific gravity was one thousand and fifty-five degrees.

(5) That where, in the case of beer which is chargeable with the duty imposed by paragraph (2) or paragraph (3) of this Resolution or in the case of beer on which drawback under paragraph (4) of this Resolution is payable, the specific gravity of the beer is not one thousand and fifty-five degrees, the duty or drawback shall be varied proportionately.

(6) That section 24 of the Finance Act, 1933 (No. 15 of 1933), shall not apply or have effect in relation to the duty of customs to which this Resolution refers.

(7) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

I asked the Minister a question but I did not get an answer. The Minister brought in his budget today and surely he has this information.

It appears we are only voting on quarter of the budget.

Are the workers to be hoodwinked by the Minister? Surely we are entitled to an answer.

I must proceed to deal with Resolution No. 1.

The Minister must be able to give us some estimate.

The Minister got £27 million from petrol. Is he trying to do the same with the stamps?

If the Minister has not got the information perhaps he might consult the officials and give the information to the House.

The trouble is that the Minister knows the figure but he does not want to tell us.

He is ashamed of it.

For once he knows the answer—usually he does not know.

I would remind Deputies that the whole field of the budget is not open to question now.

If the Minister does not know perhaps we might ask the civil servants for the information.

We must deal with the budget in the usual orderly fashion. I am trying to deal with it in the normal way.

That is what the Minister is hiding behind.

Is it out of order to try to extract information in relation to the Minister's speech?

Yes, at this stage.

Of course the Opposition are understandably annoyed——

We are dealing with Financial Resolution No. 1.

The Deputy is the only one there to defend the Minister.

The Deputies opposite should read the speech in today's Irish Independent by a financial spokesman.

When can we get the information we want?

Of course there will be the comprehensive debate on the budget. We must proceed with business in an orderly fashion.

It is obvious there will be a considerable increase in the cost of the stamp and, so far as the workers are concerned, that is a form of taxation. The deductions made from their weekly pay packet will be considerably greater and they, and this House, are entitled to know what additional deductions will be made each week from the pay packets of insured workers.

That would be more appropriate to the general debate.

It is not a matter of a general debate. It is a question to which all of us want the answer. It is not only the Deputies who want an answer but the insured workers throughout the country.

We have a right to know what contribution the worker and the employer will make. So far as workers are concerned this is further taxation.

I submit to you as this information is not forthcoming our presence here means nothing.

It is not usual to question the Minister on details of the budget at this stage.

Of course it is.

Surely the Minister is deliberately witholding information.

Can we please deal with the budget in the usual fashion?

You, as representative of the workers, would like to know.

The Chair is seeking to do his duty. Financial Resolution No. 1: Customs and Excise —Beer.

In view of the fact that the Minister cannot give us that information can he tell us now exactly what the present social insurance stamp yields? The Minister brought the budget in here today.

Is Resolution No. 1 agreed to?

It has not even been moved. Let us have some democracy.

It has been put.

Is Financial Resolution No. 1 agreed to?

No, we will have to ask a few questions about this. I take it we are in the form of Committee at this stage, that this is the usual debating procedure?

Here I would like to say that the resolutions will be considered seriatim in a Dáil sitting as such.

As in Committee?

No, not in Committee on Finance, which was abolished under the recent changes in Standing Orders. I must say, however, that I am prepared, of course, to hear questions and a certain amount of informal intervention for the elucidation of each resolution in the usual way but we are not in Committee as heretofore. That procedure has been abolished but I will hear questions.

I will just start off with a simple question. Will the Minister agree, or if he does not, will he deny, that the 3p increase on a pint of beer is twice the increase imposed in any previous budget in actual money terms?

I am not an historian and make no pretence at being such, so I cannot say what the exact figures would be. Of the total increase 2.81 is the excise increase and .19 will be the VAT increase, making a total of 3p.

Will the Minister tell us whether the £15 million that the extra 3p tax will bring in will include any element of VAT or will the VAT tax be separate?

The VAT is included in this 3p increase. The actual excise increase is 2.81 and VAT .19.

When are the retailers entitled to put up the price of beer?

There is no element of retail increase in this increase. As the Deputy probably knows there have been a number of increases.

So, it will remain at the same price at all times?

This does not govern the retail price except in so far as the tax element is concerned.

When are the retailers entitled to recoup themselves for the extra tax?

They are entitled to pass this on to the consumer.

When? Tomorrow?

This takes immediate effect on stocks coming from bond. It would not be appropriate to charge it on beer which has not been subjected to this increase.

If the price of beer is increased tomorrow will that be all right?

It depends on whether or not the publican has taken it out of bond since the increase took place.

It says in the resolution that the increase will be "levied and paid on all beer brewed within the State on or after the 16th day of January, 1975". If they are brewing tonight and delivering tomorrow will the price be increased?

It will take effect on beer brewed as and from tomorrow but not beforehand. Retailers could easily have stocks for some time to come which would not have been subjected to this increase and it would not be appropriate for them to charge this increase.

The Minister has just informed the House that part of this 3p increase in VAT. He mentioned a figure of .19. If this Financial Resolution is passed is this applicable from tomorrow morning?

The VAT is a percentage of the retail price.

Exactly.

The retail price will not rise until the excise element causes it to rise. It is only when the excise element applies that the VAT addition arises on those new stocks but it would not apply to any existing stocks.

When will the Revenue Commissioners decide that shopkeeper A in Mountmellick is liable for the .19 VAT increase on sales? I claim, according to the regulation being made now, he becomes liable from tomorrow morning.

VAT depends on the retailer's turnover. His turnover is determined by what he charges.

Does the VAT element in the tax mean 3p per pint on beer? The retailer pays on the entire takings so the VAT element, as far as he is concerned, is non-existent. He pays on the entire turnover, the 3p plus 3p.

No. The excise figure is 2.81 and the VAT figure is .19.

It is 3p a pint on beer.

Yes, in plain terms.

Will the rate of VAT on the category in which beer is remain the same?

The relevant rate of VAT remains the same because it is a percentage of the price but in absolute terms it may rise. The percentage remains the same.

This is what Deputy Brennan was saying.

(Dublin Central): Could the Minister give any indication of what the duty is on a pint of stout?

The current duty is 7.8p.

(Dublin Central): Is that with the new tax?

No, that is the old rate. It is 7.81p plus 2.81p, that is 10.62p.

(Dublin Central): Could the Minister give any indication of what the duty is in the UK?

I am sorry, I have not got the rate.

(Dublin Central): I will enlighten the Minister what the duty is in the UK. It is exactly 4.9p.

This duty is related to gravity and I think it is common knowledge that Irish beer tends to be stronger than what one gets across the water.

Why does the Minister say that the gravity is 1,055 degrees when we know the ordinary pint of Guiness is being sent out at 1,041 degrees? Why is there the discrepancy between 1,041 degrees and 1,055 degrees? Is this to give Guinness a chance of getting more out of it? The specific gravity of Guinness is 1,041 degrees.

The Deputy has raised a grave problem to which I would not pretend to have an immediate answer. May I just say in relation to what Deputy Fitzpatrick has mentioned, the price in Britain, it could well be lower because the gravity tends to be considerably lower than what you could call the standard here. Therefore the comparision is not strictly appropriate. Furthermore, there is a higher VAT rate in Britain than operates here. Here the VAT rate is 6.75, whereas in Britain it is 8.

(Dublin Central): We talk about promoting tourism but if the Minister looks at Europe he will find the duty here is four times as high as in many other European countries.

Whatever about that, the price elsewhere is a lot dearer than it is here. Whoever gets the cream off, whether it is the Exchequer, the retailer or the brewer, I do not know, but it is a lot dearer elsewhere.

Has the Minister considered the possible effects on the employment situation of this 3p on the working man's pint in addition to the 2p that was imposed in the last few weeks? These increases over a short period could bring a downturn in the consumption of beer and consequently further aggravate the disastrous unemployment situation that exists already as a result of the Minister's mishandling of previous budgets.

I would remind the Deputy that I told the House that the consumption of beer has increased by 53 per cent in the last five years notwithstanding the very considerable increases in the price of beer in the meantime, most of which were not related to the duty content. I recall on another occasion one of my predecessors said, in justification of an increase on the old reliables, that they always produced the goods, that they were always buoyant. I do not think that the thirst of our people is necessarily any less now than it ever was before.

There is a serious difference now. There is less employment.

I do not want to be asking questions on matters on which the Minister has no information, but could he let us know the increase in the consumption of beer and spirits for last year? The five-year period has taken in the years when there was a Fianna Fáil Government and when things were going well. Could he give us last year's figure separately? Was last year up to the average that he gave for the five years, 41 per cent?

Between 1973 and 1974 it is 6.9 per cent for beer. Obviously I have not any figures for——

It is a lot less than 41 per cent. The Minister has taken a favourable period to impress us.

If that is true it would indicate a dramatic downturn.

You have reached the stage of diminishing returns.

If 41 per cent was the average of the five-year period up to the end of last March and 6.7 per cent was the increase in the last year for which the Minister has figures, that indicates a dramatic downturn in consumption.

On the other hand, you have an increase in the consumption of spirits. People's tastes are changing and that is one of the most significant patterns in the liquor trade. For instance, mineral waters showed the most significant increase, and, I think, wine after that, over the last five-year period.

Could I ask the Minister at what point is beer brewed? Is it brewed when it goes into the storage vats or when it comes out of the storage vats? It is important in relation to this resolution because it states it shall be paid on beer brewed within the State on or after the 16th day of January, 1975. What I have in mind are the storage vats at Guinness's. Is that beer brewed at this stage and will the increase be paid on that?

The Deputy will be wiser when I tell him it is deemed to be brewed at the worts stage.

At what stage is that? Is it before or after it goes into the storage vats?

It is pre-fermentation.

That is before the storage vats stage?

It is somewhere. Before it goes into the vats it is somewhere else.

The storage vats at Guinness's are fairly considerable. If the beer is brewed before it goes into the vats, then the vats in Guinness will be cleared before tax will be levied on that.

I do not know what the Deputy's worry is, because there is no change in the system.

I am not concerned about the system. I only want to know in relation to this document here exactly at what stage beer is brewed. Is it brewed prior to going into storage vats or after the storage vats?

The next question I expect from the Deputy is at what stage is beer consumed?

I know when it is consumed. It states here: "It shall be levied and paid on all beer brewed within the State on or after the 16th day of January, 1975." If there are considerable quantities that are brewed prior to the 16th day of January, 1975, will the tax be paid on that?

I hope this statement will assist the Deputy. The basis of charge is the standard barrel of 36 gallons of an original gravity—that is gravity before fermentation—of 1055º. In the case of home-made beer the account of the gravity of the "worts" from which the beer is brewed is taken at the brewery; in the case of imported beer, samples are analysed to ascertain the gravity of the "worts" from which it was brewed. "Worts" is the fermentable solution obtained by the infusion of malted grain with water. The gravity is measured by reference to the weight of distilled water at 60º Fahrenheit. If 1,000 is taken to represent the weight of distilled water at 60º Fahrenheit, the weight of an equal volume of the worts at the standard strength for duty purposes would be 1,055 and this is represented by saying that the original gravity of such beer is 1055º. I think that makes it perfectly plain. I think we need a blackboard now to get this correct.

I think Deputy Dowling has a serious question here. If tomorrow morning or tomorrow night the ordinary man goes in for his pint, he will have read in the newspapers or heard on the radio that 3p a pint has been put on beer. He will want to know when he is expected to pay that 3p a pint. Could the Minister give us a rough indication of when the application of this 3p is made in relation to its being brewed, and how long elapses between that time and the time the pint appears on the publican's counter? Would it be a matter of three days, five days or seven days?

As the House will appreciate, there are so many variables here, depending upon the consumption, the turnover, the speed at which a particular retailer turns over his stocks and so on, that it is very difficult to know at what stage the additional charge will come to be paid. There is usually a lapse of several days from the time at which the beer passes the worts stage and the time it leaves the brewery.

It is, of course, very difficult to quantify this. The fact is there should not be an instant increase. The pattern in the past has been, and this has been the experience of all good beer drinkers, that if they go to their regular house they will find that the proprietor does not instantly pass on the increase and some time elapses before the regular customers are charged the increased price. I would not expect any significant change in that pattern. If any publican acts unreasonably, then customers will tend to stay away from his house. Other than introducing martial law so that military personnel accompany every dispatch from a brewery or, maybe, I should say every passage of gallon from the wort stage right through there is no way of absolutely overseeing this.

I appreciate that, but one would expect that one would know at what stage the duty will be chargeable at retail level. That information ought to be available. It used to be the case in smaller breweries, which abounded up to five or seven years ago, that a lower rate of duty was applicable to the first 5,000 gallons brewed. Is that still in operation?

Yes. There is a rebate of £2 per barrel on the first 5,000 standard barrels brewed under the provisions of section 41 of the Finance Act, 1932.

I want to ask just one question. Recently Guinness's carried out a reorganisation scheme which led to a great number of redundancies. The purpose of this scheme was to get more efficient production and I understand they had to do what they did in order to stay viable. I assume this helped them to hold their price. Adding the recent price increase to this increase now, will that upset the employment potential in Guinness's all over again?

Beer has proved over the years to be particularly resilient.

There are still a great many people out of work in the Minister's constituency.

I want to point out briefly that it has already been calculated by economists that the effect of this increase on beer, plus the increases on spirits and tobacco, will add approximately 2 per cent to the cost of living index. Last year the increase up to mid-November was 20 per cent. Some of us may have been naïve enough to hope the increase might be a bit less in 1975 but the actions of the Government in the first month of the new financial year are such that they have already caused the cost of living index to go up by 10 per cent over and above what it was in the whole of last year. One would have hoped the Minister would be aware of what the consequences of these enormous increase would be particularly from the point of view of a considerable rise in the cost of living index. It comes ill of the Minister to exhort workers to moderate their demands for higher wages when what are basic items for a great many people, as these items are, are increased by figures far in excess of any increase ever imposed.

Might I remind the House that I said it is of vital importance that the rise in the consumer price index resulting from today's tax measures on non-essentials should not be used as a basis for demands for further income increases? There are many progressive and successful countries which have eliminated from their computation of wage increases any taxes on non-essentials when such increased taxation is for the purpose of transferring money from the better off to the less well-off sections. To seek total compensation through wage levels to offset increase in taxes on non-essentials would negative what is a desirable and morally obligatory social operation designed to transfer resources from less essential needs to the less well off in the community. No doubt this will be borne in mind in relation to further income negotiations.

Surely the Minister knows that beer is consumed by the poor. When did it become the wealthy man's drink? Talk about transferring wealth!

I have not asserted it is the wealthy man's drink. I have said it is a non-essential and I am as fond of my pint as anybody else; I always was even when I was a poorer man than I am now.

The Minister might as well tax the loaf of bread.

The essence of what I have said remains the fact.