Saturday 7 June 2014

Truman and Snowden's 1931 Budget

Yet another post I've managed to squeeze out of that single document. And I'm still not finished wringing. Not even had to use the mangle yet.

You should all be well aware of Snowden's 1931 emergency Budget. I keep going on about it enough. It was one of the most cataclysmic events in recent British brewing history. And about the only one which didn't take place in wartime. Its effect on British beer - a further lowering of gravities - was permanent.

Document B/THB/C/256c has some figures which highlight wonderfully the Budget's effect. There was an immediate drop in beer production. By 1933, the number of bulk barrels produced was down by more than 25% compared to 1929. But the impact in the number standard barrels* produced was even greater - a reduction by a third. Bad news for the government because the tax was charged on standard barrels.

Why the discrepancy between standard and bulk barrels? Because brewers lowered gravities to reduce their tax bills. This pushed average OG down below 1040. The net result was that even though the tax rate had increased by 42.5% (from 80 to 134 shillings) the amount of revenue collected fell.

By the time the increase was removed the damage was done. And the revenue collected fell even further, hitting its nadir in 1935 at 75% of its 1929 level.

Here's all that information in an tabley numbery form:

UK output and tax paid
year standard barrels -6% % bulk barrels -6% % duty payable % average gravity
1929 19,252,986 100 24,350,155 100 £70,846,978 100 1043.21
1930 19,550,867 101.5 24,984,168 101.3 £71,254,674 100.5 1043.05
1931 18,488,400 96 23,780,784 96.9 £69,269,299 97.7 1042.69
1932 15,514,209 80.6 20,675,383 84.3 £68,710,020 97 1041.19
1933 12,898,594 67 17,843,579 72.7 £67,097,581 94.7 1039.69
1934 15,043,120 78.1 20,182,308 82.2 £53,884,405 76 1040.99
1935 15,577,830 80.9 20,804,814 85 £53,582,335 75.6 1041.06
1936 16,356,985 85.1 21,969,763 89.6 £55,451,926 78.3 1041.02
1937 16,983,231 88.2 22,724,450 92.6 £57,318,585 80.9 1041.1
1938 18,055,539 93.8 24,205,631 98.6 £61,241,404 86.4 1041.02
1939 18,364,156 95.4 24,674,942 100.6 £62,370,034 88 1040.93
Source:
Document B/THB/C/256c held at the London Metropolitan Archives

Why are they giving the numbers minus 6%? Because brewers were allowed a wastage of 6%. Tax was payable on the amount of wort that went into the fermenters, minus 6%. That's where larger brewers had an advantage as their loss was less than 5%, meaning they paid no tax on some of the beer they sold.

These are the equivalent numbers for Truman. You can see that things panned out slightly differently for them:

Truman (including Russells) output and tax paid
year standard barrels -6% % bulk barrels -6% % duty payable % average gravity
1929 424,671 100 523,828 100 £1,600,838 100 1044.59
1930 449,373 105.8 558,898 106.7 £1,687,954 105.4 1044.22
1931 429,788 101.2 536,544 102.4 £1,673,738 104.5 1044.06
1932 346,549 81.6 460,534 87.9 £1,575,574 98.4 1041.39
1933 278,252 65.5 398,852 76.1 £1,465,428 91.5 1038.37
1934 333,364 78.5 454,587 86.8 £1,182,116 73.8 1040.33
1935 343,842 81 471,946 90.1 £1,183,347 73.9 1040.07
1936 359,492 84.6 493,712 94.2 £1,236,822 77.2 1040.04
1937 369,115 86.92 507,091 96.81 £1,269,215 79.3 1040.03
1938 373,459 87.9 518,762 99 £1,276,433 79.7 1039.59
1939 371,728 87.3 519,831 99.2 £1,264,241 78.9 1039.33
1940 370,528 87.3 522,691 99.8 £1,534,821 95.9 1038.99
Source:
Document B/THB/C/256c held at the London Metropolitan Archives

1930 to 1932 they did slightly better than the industry as a whole, even increasing output in 1931. After 1936, bulk numbers were almost back to their 1929 level, though standard barrel numbers lagged behind and were lower than average. This is explained by the other difference with the national picture: Truman's average gravity was lower.

It had taken the industry the remainder of the 1930's to get back to where it had been in 1929. And what happened just when everything was getting sorted out? WW II. Which completely buggered things up again.

In the first half of the 20th century the brewing industry was perpetually in turmoil, all of it caused by external factors. There was the 1911 Budget, WW I, the 1931 Budget then WW II. No wonder so many family-owned breweries were happy to sell up in the 1950's.





* A standard barrel is 36 Imperial gallons with an OG of 1055.

2 comments:

Jeremy Drew said...

Hi Ron,

Is that a typo in paragraph 5? I think it should be 1935.

Or was it slipped in to see if anyone is paying close attention?!

Cheers,

Jeremy

Ron Pattinson said...

Jeremy,

well spotted. I've fi8xed it.