§ Resolution reported,
§ 17. "That on and after the twenty-ninth day of September, nineteen hundred and 1036 fifteen, until the first day of August, nineteen hundred and sixteen, there shall be charged on any of the following articles imported into Great Britain or Ireland a Customs Duty of an amount equal to thirty-three and one-third per cent. of the value of the article, that is to say:—
- Musical instruments, including gramophones, pianolas, and other similar instruments.
- Accessories and component parts of musical instruments, and records and other means of reproducing music."
§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
§ Mr. PETO
I only rise, carrying out the Prime Minister's invitation, to ask the Chancellor of the Exchequer to consider one particular point with regard to this Resolution, and that is as to the effect of the imposition of the duty on parts of musical instruments which are necessary for the completion of those instruments in this country. They should, I suggest, be regarded from a different point of view from the imports of completed instruments. If we pass this Resolution imposing a duty on musical instruments coming to this country we shall make them more expensive in accordance with the policy which was so clearly laid down by the Prime Minister, but there is a certain hardship imposed upon those people in this country who have to pay exactly the same Import Duty on parts of musical instruments, which parts are necessary to complete the instrument. I believe that in answer to the right hon. Gentleman the Member for Swansea Town (Sir A. Mond) the Chancellor intimated that there would be a rebate granted upon imports which were subsequently exported. So far, that is in the interests of the trade of the country, and encourages exports, but in the interests of those people who are engaged in the industry in this country I would ask him to consider whether he might not charge upon 1037 parts of instruments which are completed in this country a lower rate than the rate charged on the fully completed article. I am quite aware that there are corresponding disadvantages in any discrimination between one part and another, and I fully appreciate, particularly in the case of these taxes, the advantage of simplicity and uniformity. But I would ask, before the Finance Bill assumes its final form, that the case put forward by the makers of musical instruments should be considered.
§ Sir JOSEPH WALTON
As a strong Free Trader, I desire to take this opportunity of stating why I conceive it to be my duty to support the Import Tax now under consideration. In times of peace I consider that Import Duties would be, as a paper stated this morning, incurably vicious, but at present, with the conditions with which we are confronted in time of war, when it is absolutely imperative that we should largely check the amount of imports into this country in order to do something to lessen the enormous balance of trade against us, our economic fiscal theories ought, I think, to be put on one side. What is the financial position that we have to face, and which makes this course proposed by the Government absolutely necessary and justifiable? We have a balance of trade against us in the current year of more than 500 millions sterling. It is perfectly true that we are going to get a little relief by the raising of this Franco-British loan of 100 millions sterling in America. But that will only be as a drop in the bucket. I dare say that the greater part of that amount is already owing to people in America for munitions of war and other goods supplied. Look at the high rate of interest that even to-day we have to pay.
§ Mr. SPEAKER
This is not a suitable opportunity for discussing the American loan. The Resolution deals with musical instruments.
§ Sir J. WALTON
I apologise. I had in mind the intention of showing that it was necessary to adopt this expedient of Import Duties in order to lessen imports into this country, and so as to lessen the huge balance of trade against us. We have to face that huge balance of trade, not only this year, but possibly next year and possibly even the year alter. Unless drastic steps are taken by the Government by the imposition of imported duties to lessen imports into this country, we may be in 1038 danger of drifting headlong to financial ruin. The question has been considered by His Majesty's Government, and they have made a small beginning, too small a beginning I think, because prohibitive taxation should have been imposed on all imports other than food supplies, raw material, and possibly certain other absolutely necessary articles which are required for maintaining the volume of trade as high as we possibly can during this war time. With regard to the tax specially under consideration, we have a working model of Protection, and if for no other reason than that the proposals of the Government will secure us a working model of the effect of protective duties on imports, I welcome their inclusion in the Budget. The piano manufacturers held a meeting at the Midland Hotel, Manchester, yesterday, I believe, or the day before, and they decided to raise their prices—not the importers but the manufacturers—in order to meet a tax which does not fall upon them. I have no doubt that others who have a similar opportunity are likely to take a similar course. That is an object lesson of the greatest possible value to the consumers in this country, because it will show the consequences which fall upon them by the imposition of Import Taxes.
Those Members who last evening spoke so eloquently in defence of the principles of Free Trade, in my opinion, misjudged the situation. These proposals and these taxes which we are about to impose will, so far from destroying and undermining the principles of Free Trade to which so many of us are attached, strengthen the position of the Free Traders of the future enormously in this country, and will secure that our fiscal system when time of peace arrives will not be on Tariff Reform lines. I, therefore, have no hesitation whatever, as a strong Free Trader, in supporting the imposition of these Import Taxes, and the other Import Taxes which the Government propose. I only regret that they have not extended them much further, not so much with the view of gaining revenue, but for the purpose of stopping imports. The people of this country, this nation as a. whole, have lived in a prodigal and extravagant manner so far this year, and having regard to an annual expenditure of two thousand millions, and the possible prolongation of the War, I say that everyone who wishes that we may be able to surmount the financial difficulties ahead of us will welcome in every possible way 1039 the limitation of the consumption of imported articles by the imposition of duties. I hope that those will be extended, and in the next Budget, so that we shall compel, by drastic measures, the lessening of the expenditure of this nation in order to have out of our annual income a larger sum towards defraying the cost of this terrible War.
§ Mr. LOUGH
I think my right hon. Friend the Chancellor of the Exchequer must often have said when my hon. Friend behind him was speaking, "Preserve me from my friends." There could not have been a more extraordinary illustration of the evils of this taxation which we tried to set before the House last night than the astounding speech to which the House has just listened. My hon. Friend was going to show that imports could be seriously restricted if these taxes were imposed, and in order to do so one would have thought that he would have quoted some figures or told us what the total imports were, and would have gone into the question of the great saving to the nation if these taxes had been imposed, but not a single figure had he at his disposal. He went on and plunged into the American loan till you, Mr. Speaker, mercifully saved the House from any more of it. His second point was that a meeting of manufacturers somewhere in the North had resolved, although they are not touched by the duty, to put up their prices corresponding to the duty, and that is his contribution to this Debate. If that is the sort of thing which is urged in support of these taxes, the Government may well ask to be preserved from such speeches.
I desire seriously to call attention to the tax on musical instruments. If it is possible to obtain a better illustration of the harmfulness of this taxation than was afforded by motor cars, I think you have it in musical instruments. You would think that there was a vast import, whereas in truth there is on balance no import at all. The exports are greater than the imports. Secondly, you would think the imports were going up. That is what my right hon. Friend said about these taxes. But he gave no justification, and he put forward no arguments appropriate to this particular tax. He said, "Go and look in your Votes." I have done so, and I find that the imports of these articles have fallen tremendously during the last year or two. Taking the first eight months in each year, the imports 1040 were, in 1913, the year before the War, £691,925; in 1914, £641,000; and in 1915, £169,000. The imports are almost gone. [An HON. MEMBER: "Good!"] Then there is no necessity for bringing in this tax. A large number of people in this country who are trying to maintain their trade in most difficult circumstances do not cry out "Good!" Are there not sufficient taxpayers in this country the greater part of whose business is already destroyed by the cruel incidence of the War, without the Government coming in with a fresh duty to destroy the remainder? On the other hand, we have considerable exports, and they will assuredly be injured, if not ruined, if the imports are stopped. There is no truer law—one would have thought my right hon. Friend would be acquainted with such elementary principles—than that you cannot maintain exports if you shut off imports. Here is a case in which the imports are to be shut off, although they come to only such a small amount, and yet our exports are £271,000. Apart from the requirements of the people of this country, a large export trade has to be supported, and I submit that it cannot be supported if the imports are cut off.
An immense amount of the imports are parts of musical instruments. That means that the manufacturers of musical instruments in this country, possibly those very manufacturers who passed the resolution to which my hon. Friend referred, will have their businesses seriously injured, and our home demand will not be able to be maintained if these parts are excluded. Of the £169,000 of imports, no less than £113,000 are parts. So that really there is only £56,000 spent on the imports of musical instruments, and that amount is spent largely with France and other countries with which we are in alliance. These facts show absolutely that if my right hon. Friend had gone through the whole table of our imports and exports he could not have hit upon an article which it would have been more discreet for the Government to let alone. I must protest against the way in which we are being treated in the House and the difficulties under which we have to debate this question, which is of such vital national interest. [An HON. MEMBER: "You were one of eight in the Division!"] It is not the first time that I have taken part in a Division with eight Members. The other occasion was in 1895, when I told with Mr. Bowles against the Government of the day's borrowing for purposes of annual expenditure. Although 1041 both Governments kept on doing it for ten years, we finally brought the wicked system to an end. Similarly the total of eight in to-day's Division is a good augury. The time will come when those eight will be able once again to speak in the name of a majority of this House.
At any rate, I respectfully protest against the way in which we have been treated by the Prime Minister to-day. I thought that a short announcement might be made at Question Time as to the course the Government intended to take, so that the compact entered into last night should not be broken. Instead of that the Prime Minister made a partisan speech, repeating the weak arguments that were put forward a hundred times last night, adding nothing new to the Debate, but using his great authority to put those of us who are fighting in such difficult circumstances in an even greater predicament than we were in before. What was the doctrine laid down by the Prime Minister? It was all bound up in one point, namely, that there was a united Cabinet—Heaven knows we all wish to support whatever Cabinet there is, in order that we may come successfully through the War—and that because the Cabinet had considered the tax the House of Commons ought to accept it. I protest against that doctrine. [An HON. MEMBER: "The Prime Minister never said that."] That was the whole argument of the Prime Minister. I say with great respect—I know I am speaking against a high authority—that that doctrine would be fatal to the liberties of the English people. It is no part of the business of the Cabinet to legislate. Their business is to administer. It is the business of the House of Commons to legislate. It is our duty, humble as we are, and knowing little as compared with the great men on the Treasury Bench, to use the intelligence we have, and to bring it to bear on every legislative proposal the Government bring forward. We have promised our constituents to do that, especially in all matters connected with taxation. If the Government wish to avoid these Debates—and I can imagine a hundred reasons why they should, especially the Prime Mnister—they ought not to bring forward these contentious proposals. If they bring them forward, we have to do our duty as Members of the House of Commons. When without any figures being given, without any case being made out, or attempted to be made out, a cruel blow is struck at a vast industry, we would be worse than 1042 traitors to our constituents if we did not examine the proposals and prononnce our opinion upon them.
After giving the matter full consideration, I can see no benefit in this tax whatever. £169,000 will not help our imports in any way. We are not a very musical people. That is one of the charges the Germans bring against us. Certainly they have this much to justify that argument, that we used to buy nearly a million pounds' worth of musical instruments from them. I think we can get just as good instruments from other parts. If this tax is imposed, there ought to be a corresponding Excise Duty, so that all the money raised would come into the Treasury and not go into the pockets of private manufacturers. The case for this tax on the figures I have given—and no case has been made out by the Government—is infinitely worse than the case for the tax on motor cars. Although, having made our protest, I do not see that it is much use our carrying our opposition further, yet if hon. Gentlemen opposite think well to go to a Division, I shall be glad to divide with them. I do not see why any restriction should be put on our taking divisions. What is the good of our coming here if we do not make our statements and put forward our arguments? I submit that this is a most vicious tax, contrary to every pledge of the Free Trade Members of the Government, and that the present is a most inopportune moment to bring it forward.
§ Mr. PRINGLE
I agree with nearly everything said by my right hon. Friend opposite. We have been invited by the Prime Minister to examine all these taxes on their merits. Up to the present none of the merits of this particular tax have been revealed to the House. Indeed, there has never been any tax proposed which would more merit the description of a comic opera tax. There is an ascending scale of absurdity in this delightful schedule of import duties. I propose to deal exclusively with musical instruments. We have had a defence of the musical instruments tax from the hon. Member for Barnsley (Sir J. Walton), and a most extraordinary defence it was. He admitted that it was a protective tax, but he believed that it was going to readjust the foreign exchange. I should have thought the hon. Gentleman would have taken the trouble to look at the records of our imports and our exports with those countries where the exchange is adverse 1043 to us, and that he would have shown that by excluding articles under this duty something would be done to readjust the value. So far as I know, hardly anything that would be affected by this tax comes from America—except a few gramophones and a few gramophone records. The main countries that will be affected are countries in alliance with us. Many parts of musical instruments are imported from France. I had a letter this morning from a firm engaged in the musical instruments industry, pointing out that this tax would affect the importation of catgut, which is required for violins. I am told that apart from this importation it is impossible to manufacture good violins in this country, and that the only countries from which we can get the catgut are France and Italy. Apparently the hon. Member for Barnsley is going to set right the balance of exchange by keeping out catgut. My hon. Friend the Member for Pontefract (Mr. Booth), who knows the local conditions in Yorkshire, informs me that they have only brass bands in Barnsley, consequently they have no interest whatever in catgut. The hon. Member for Barnsley is, therefore, quite willing to set right the adverse exchange by excluding catgut from France.
§ Mr. PRINGLE
I am glad the hon. Member appreciates the absurdity of his position. I have no doubt that before we have done with the discussion of these points he will be in the Lobby with his old Friends who still adhere to their former convictions. The most extraordinary of the hon. Member's contentions was that during a war was the best time to expose fiscal absurdities in practice. He said that it was impossible in times of peace to make experiments in Tariff Reform, but that when we are at war, when our attention is engrossed by this tremendous struggle, it is the time to make fiscal experiments, to expose the fiscal fallacies of our old political opponents, and to discredit in advance the proposals which they may possibly make in time of peace. Here, he said, we see the iniquities of Protection revealed in all their nakedness. Already yesterday in the Midland Grand Hotel at Manchester—an appropriate place—the piano manufacturers have met, and have agreed to raise the price of pianos by an amount exactly equal to the tax. They are going to put into their pockets the extra price, 1044 and the money, as far as they are concerned, will not go into the Treasury. The right hon. Gentleman is going to make a present to the piano manufacturers in the interests of the future fiscal policy of this country. Surely the main object, and the only object, of the Government at this time is to get in revenue. If the object is to get in revenue by means of the imposition of taxes upon pianos and other musical instruments, surely it is the duty of the Government in regard to taxes of this kind to see that there is a corresponding Excise. Obviously the manufacture in this country is far more important than the imports. In the old days before the War our main competitors were Germany—I think the figures will show that—for the imports from Germany ran into millions, whereas the imports from other countries only ran into hundreds of thousands. Consequently, the only people who are now really substantially interested in the trade are the home manufacturers.
The imposition of these taxes is going to give nothing to the Treasury, but is going to make a present to the piano manufacturers. I suppose my right hon. Friend will expect 50 per cent. from them in the way of taxes on war profits. It would be better to take it direct; to take the whole 100 per cent. by means of an Excise Duty. I know that these taxes are defended as sumptuary taxes. The Colonial Secretary yesterday, and the Prime Minister to-day, were equally eloquent in putting forward the sumptuary objects of these taxes. They spoke of the importance of restricting imports and imposing economy upon the people of this country. Surely it is better, if you are going to have this sumptuary object, not to allow any private interests in the country to make a profit out of your sumptuary legislation! My right hon. Friend is bound, I think, if he proceeds with these taxes, to insist on an Excise Duty accompanying the Import Duty. Unless we get some assurance that at least in these taxes there is to be an Excise, it will be necessary to vote against these taxes also. We were told that we were to discuss these matters on their merits. Apparently all these discussions have to be absolutely barren and sterile. We may go on discussing them for hours, riddling the case and exposing all its absurdities, and at the end of the time the Government expect us to allow their duties to be imposed without a Division. Under these 1045 conditions, obviously, the most absurd taxes can be imposed by the Government without any regard to the result of the discussion. Yesterday there was no case on its merits. The whole case was blown into the air by the right hon. Gentleman the Member for Swansea and the right hon. Gentleman the Member for Islington. No defence was made by the Chancellor of the Exchequer. To-day we are hearing nothing. We have only heard from the Back Benches of a matter raised by my hon. Friend the Member for Mansfield, who described himself as "an eccentric Free Trader"—a description with which I dare say the whole House will agree. Today we have had the hon. Member for Barnsley, whose Free Trade principles are equally eccentric, but whose sense of humour is not equally strong—
§ Mr. PRINGLE
The fact that the hon. Member is so benighted as to believe that Scotland is destitute of humour shows how short he is himself in that respect. In the discussion which we have already had it has been shown that the imports of musical instruments are negligible, and consequently that if revenue is to be derived from taxes on musical instruments it can only be obtained by having an Excise along with the Import Duty. We, in these circumstances, are entitled to ask from the Government one of two things, either the abandonment of the duty or a pledge that this duty, when it is imposed, will be accompanied by a corresponding Excise Duty.
§ Mr. W. THORNE
I was very much amused during the discussion upon this particular principle yesterday. To-day we had a very animated discussion upon sacrifice of principle because of the tax upon motor cars and musical instruments which are about to be considered. So far as I, a Socialist, am concerned, we have never pinned our faith either to Free Trade or to Protection. I am not pledged either to a tax upon musical instruments or upon motor cars, or anything else. But the Debate of yesterday, I think, will be an object lesson to the Labour party, and I shall do my level best to urge upon the Labour party to have some Divisions before the Finance Bill gets through. It all seems to me to be rather strange, when we have passed millions of taxation in extra taxes upon tea and sugar, and there was hardly a protest from any side of the House. 1046 Burdens amounting to about £22,000,000 are going to fall upon the wage earners of the country. They have gone through without anyone having the courage to call for a Division, either against the Tea Tax or the Sugar Tax. The reason why the Labour party did not vote against the Tea Tax or the Sugar Tax is because we have thought that the Budget was a fair and equal distribution of the taxes. So far as I am concerned, and so far as the Labour party is concerned, if we had done our duty we ought to have challenged two Divisions and urged upon the Chancellor of the Exchequer to raise the money required by direct taxation upon incomes and by an augmented Super-tax. I hope the Labour party will take some action of the sort and then we will begin to hear the squealing.
It is rather amusing to me to hear Members talking as they have done concerning this particular tax, simply because the piano manufacturers met yesterday and decided to raise the price of pianos in view of the fact that there is going to be a tax upon imported pianos. The matter has nothing to do with either Free Trade or Tariff Reform. I should like to know how many Free Traders in this House have been bleeding the country all through this War? Both Free Trade coal dealers and Free Trade chemical manufacturers have done this. The Member for Swansea is very bitter against taxes on motor cars and taxes upon imported goods. As a matter of fact, his company has been bleeding the country all the way through this particular War. [An HON. MEMBER: "Oh!"] Not only his firm but many other firms. I understand this Debate has devolved upon the question of principle. Free Traders talk about Free Trade principles, built up over a great many years. It means, they say, that we shall have to sacrifice these principles that we have been carrying out for so long. Might I ask the House who has made a greater sacrifice in this War than the trade unions? We have sacrificed our principles. We have relaxed all our rules and regulations in regard to overtime, apprentices, and many other things. Never let it be said that there are Members in this House who talk about the sacrifice of principle without remembering this. No body of workmen in this country have made greater sacrifices than those connected with the trade unions. Therefore, I am going to vote for these taxes with both hands. If you like to challenge a Division I will back up the Government every time, 1047 and I believe the majority of our party will back them up too. If hon. Members want Divisions they can have them.
I understood that during the continuance of this War we were all to be a happy family; that there was going to be very little division. But if hon. Members are going to start to play their own game and have Divisions, then we, too, shall call for Divisions. As the Finance Bill goes along some hon. Members will have to explain their opinions. I am very much afraid that some will have very great difficulty to explain away what they have already done, because they have allowed millions of indirect taxation to go through, such as the taxes on tea and sugar, while when it comes to taxing motor cars, which presupposes a certain amount of money before a man can possess one, then of course the House is up against principle! I do not think there is any principle at all involved. As I said before, the principle we stand for is to raise money by direct taxation, and I hope our party will take this matter into consideration when the Finance Bill comes along. If we set our minds to it you will have a busy time when the Finance Bill comes along. If we take up the attitude we ought to take up, that the extra money to be raised by the taxes upon tea and sugar should be taken off and placed in the way of taxes on what I should call the idle rich, then we will soon see where principles are, for I am very much afraid various hon. Members will be found in the Opposition Lobby! That has been my experience in this House. I have no apology to make either to my Constituents, or to anybody else, for voting as I have done in this matter.
§ Mr. OUTHWAITE
I find it rather difficult to follow, in his last argument, the hon. Member who has just sat down. He appears as a Socialist, and then when he is confronted with the fact that by imposition of a Protectionist tariff certain of our manufacturers of pianos have been able to increase their prices under a tariff some 33 1–3 per cent., so being able to take full advantage of it, he is quite delighted with that which enables them to do so and to plunder the consumer who very largely he represents.
§ Mr. OUTHWAITE
No doubt he would suggest under the circumstances going to the greater extent and excluding actual 1048 imports. The hon. Baronet the Member for Swansea has been bleeding the public, he says.
§ Mr. OUTHWAITE
What the hon. Member ought to do is to give the hon. Baronet the Member for Swansea a heavy duty to enable him to further bleed the public by excluding imports. Consequently I find it rather difficult to follow the hon. Member, especially when he tells us what he thinks the Labour party ought to do. I have spoken in the House in opposition to the Sugar Tax. I would have gone to a Division on the subject. I do not remember seeing one Member of the Labour party present.
§ Mr. OUTHWAITE
The hon. Member did not challenge the Division. Why not vote against all these taxes? What now is the position of the Chancellor of the Exchequer? Yesterday, when I pointed out that the Motor-car Duty was Protectionist in its incidence and that he was scrapping Free Trade policy, the right hon. Gentleman got up, and, with his hands on his heart, vowed that this was not against Free Trade principles, and that he would be the very last to introduce any duty which was protective in its incidence. There was, he said, no manufacture of motor cars in this country, and then he went on to speak of the manufacture of pianos—
§ Sir J. D. REES
On a point of Order, Mr. Speaker. May I ask whether the rule regarding repetition avails in respect of the repetition of the general arguments for and against Free Trade and Protection in respect of each particular Resolution upon the Paper?
§ Mr. SPEAKER
I think the hon. Member must in each case leave it to me to say whether an hon. Member is getting tedious or irrelevant. It is impossible for me to intervene on every occasion when an argument is repeated.
§ 5.0 P.M.
§ Mr. OUTHWAITE
It is rather hard to hear the suggestion coming from any hon. Member that one is either tedious or irrelevant. But to hear that from the hon. Member who has just put the point of Order is perhaps the last straw. My argument, though it may be exceedingly 1049 tedious to the hon. Member and the Chancellor of the Exchequer, is certainly relevant. I was pointing out that yesterday the right hon. Gentleman met the opposition of the Free Traders to this Import Duty by saying it was not protective in its incidence because no motor cars were being manufactured here. Now we have another duty levied upon pianos, and we do know that pianos are being manufactured here, and that already the manufacturers of our pianos have taken advantage of the Imposition of this tariff to proceed to raise their prices to the purchasers of pianos. Therefore, what is the position we are met with? The greater part probably of the revenue raised from the public by the imposition of this duty is not going, and will not go, to the Treasury. It will go into the pockets of protective manufacturers. The hon. Member for Barnsley said, at a time of war, of course, we scrap all principles. It seems to suggest that when we have scrapped the Commandment "Thou shalt not kill," we should proceed to scrap the Commandment "Thou shalt not steal." We are now going to allow certain individuals in this country to plunder the public under the law and steal under the law. I do not care what the Prime Minister has said, seeing that he did not take the trouble to come down and listen to the arguments of his former Free Trade Friends. He is probably too occupied to do so, and, therefore, I think his intervention at a particular juncture of the Debate is a little unfair to his supporters. But no matter what the Prime Minister or the Chancellor of the Exchequer may say, you cannot get over the fact that in this matter the Chancellor of the Exchequer is setting up a protective tariff, and he cannot meet our opposition to these tariffs, because they are protective, by denying the fact, at any rate so far as this duty is concerned. We are, as regards this matter, scrapping the Free Trade policy of this country to adjust the exchanges, as I understand, to the extent of £56,000. I think the Free Trade policy is worth more than that, and consequently I hope there will be another Division, and that I shall have the opportunity of opposing.
§ Sir ALFRED MOND
I regret I was not in the House when the hon. Member for West Ham (Mr. W. Thorne) made some personal reflections on me and on the firm with which I am connected regarding prices which we are charging during the War.
§ Mr. THORNE
I said that you and your firm were bleeding the public by the prices you were charging during the War as chemical manufacturers.
§ Mr. SPEAKER
However grave the provocation may be, the right hon. Gentleman is not entitled to make use of that expression.
§ Sir A. MOND
Naturally I withdraw the expression and substitute, if I may, that the hon. Member is entirely misinformed.
§ Sir A. MOND
The hon. Gentleman may see later on or not, but he has no right to make a statement of that kind. I only wish he would make it outside the House, so as to give me an opportunity of dealing with it.
§ Sir A. MOND
I have no wish to intrude any personal matter in this House, but I think it only fair to say that the firm with which I am connected have not raised the price of a single article since the War broke out. If the hon. Member refers to any work we have undertaken for the Government, I can only say that we have undertaken that work, as I think any fair-minded person would say, at a very moderate profit indeed, and at the urgent request of the Chairman of the Explosives Committee at great inconvenience, and at the cost of a great deal of labour to the people engaged on that work. I am sorry to have troubled the House on a personal matter of this kind, but I do think it is unfair for an hon. Member to break into this Debate with a personal charge in regard to a subject about which he has no information.
§ Sir A. MOND
I am not concerned with the coal owners; I only deal with myself. So far as the duty here is concerned, I do not intend to go into the general question. We have discussed that before, and I do not wish to open it out again on this particular item. I rise more to ask the Chancellor of the Exchequer a few questions which have been submitted to me in regard to the matter. The Chancellor of the Exchequer was kind enough to say last night, 1051 and he repeated it in an answer he gave to me to-day, that rebate would be allowed on imported parts where they could be sufficiently identified. That, of course, removes a good many objections we made to the taxation of parts which are being used by manufacturers here in articles which are re-exported. The only point that is troubling me is how you can provide for this method of identification on the parts, say, of pianos and other musical instruments. For instance, I am told that practically all our cat-gut for violins and other musical instruments comes from France. Somebody buys that cat-gut and puts it in violins made in this country, and then exports them, say, to Australia. In what way will the revenue authorities demand that the identification shall be proved? The same applies, of course, to a number of other goods of a similar character.
There is another question I would like to raise. Does the right hon. Gentleman propose, in introducing the Finance Bill, to make any kind of exemption for musical instruments coming from our Dominions? I have had a very strong appeal made to me by a large firm of musical instrument makers in Canada, who want to know what the Dominions have done during this War that a prohibited duty should be levied upon them, or whether any exemption is going to be made for them. I would suggest to the right hon. Gentleman that there is a point well worthy of his attention. It is not unnatural that those who are coming over here to fight for us, spending their lives and treasure in the service of the British Empire, should find it rather strange that we should exclude their goods from this country for the benefit of home manufacturers. A further point has been raised by large firms who deal in band instruments and in similar musical instruments. They point out that wood-wind instruments are made both in France and Belgium, and are not luxuries but necessaries, and they are to some extent, I imagine, useful when utilised by instrumental bands for regimental purposes. Could not some exemption be made, at any rate, for instruments being used for recruiting troops under our voluntary system? It seems very hard that you should levy a duty on instruments fulfilling such a patriotic duty, and that those who form bands playing round London for patriotic purposes should have to pay a 1052 higher price for instruments, which, in this case, are clearly a necessary and not a luxury.
The amount which this duty will bring in, I think the right hon. Gentleman will concede, is little enough. So far as I can understand—I mention these figures with great diffidence, because the right hon. Gentleman is always accusing me of using figures unfairly—musical instruments imported for the last eight months amount to £56,000, and instruments in parts to £113,000, the whole amount being £169,000. It does not seem a very large amount to rectify our exchange, nor does it seem to provide a large amount of revenue; but, since the collective wisdom of the Cabinet decided after long consultation that it is entirely necessary for us to pass these duties, however much we may dislike them, I will not offer any further financial criticism on them. I bow to the collective wisdom of the Cabinet—[An HON. MEMBER: "United Cabinet!"]—united Cabinet. But I hope the right hon. Gentleman will see his way to give an answer on some of the points which I have put before him, and also to explain the particular merit of these taxes. The right hon. Gentleman is always asking us to deal with these taxes in detail, but he does not do so himself. He has never told us, for instance, how much the British consumer will have to pay for home-made instruments in excess of what he would pay without this tax, and if it is a deliberate policy. If he wanted to diminish luxuries, I can understand his putting an indirect Excise Duty on musical instruments. Whatever his policy, it is worth while stating it. The hon. Member for West Ham and the people he represents are interested, I should have thought, in this question, and will want to know why they should pay 33 1–3 per cent. more for the benefit of the home manufacturer. Now the right hon. Gentleman might have explained to us why he has taken this particular item of musical instruments, more than a large number of other items. Silk is a large import, and I should have thought it is much more of a luxury, and a better subject from the revenue point of view.
With regard to gramophones, the right hon. Gentleman throws out some hope that he will make some exemption for gramophones, say, sent to France for the enjoyment of our troops. I am sure many would be glad to hear about it. I am not saying this because I want to score a point, but really I am serious about it. The number 1053 of appeals for gramophones from various camps is very large, and many of us have gladly responded by sending them; but, of course, everybody's money is limited, and with the heavier taxation coming everybody is certain to have less money to give. Naturally, therefore, the increase of one-third applied to gramophones would curtail one of the few things which really gives great enjoyment to our soldiers at the depots, camps, and training centres, and if something could be devised by which a gramophone that is certified for military purposes would be exempt from this taxation, the right hon. Gentleman, I think, would be really meeting a practical point.
§ Mr. GLYN-JONES
As one of those who would in any case support the Government in this matter, though in doing so I shall be appearing to act against views which I formerly expressed, and which I still hold, I would make an appeal to the Chancellor of the Exchequer to help those of us who are in this position by explaining why he has not put on corresponding Excise Duties. I also rise to say—I hope without presumption as a young Member of this House—what my position is in regard to these votes which are taking place. We have just had a Division, and I have sat here and heard threats of other Divisions on this subject. My own position was that, after the speech from the Prime Minister, whatever I thought on the immediate question, I had no right to go into the Lobby against the Government unless I was prepared to see this Government resign and some other Government take its place. I think it is a perfectly cheap way of obtaining notoriety to divide at this time against this Government, relying on other Members to save those who go into the Lobby against the consequences of their votes. The position, as I understand it, is that this Government brings forward these Budget proposals, and we are told that we are in a time of truce, and that we ought to regard them from the two points of view, namely, that of revenue and of preventing a larger amount of importation than can be avoided. I do not understand all the fuss that has been made about this matter, although, in normal times, they might be prepared to carry their objection to any length, such as resigning seats and fighting an election; but I do not quite understand the attitude they are taking now. If a Division taken at this time is meant to be an expression of the view of the British House of Commons on the subject voted upon, it is a 1054 perfect farce. Who will say that the numbers in such a Division represent the view of the Members of the House of Commons on that or any other subject? We are asking that the General Election should be postponed because a large number of the electors are in France, and if we are to decide this matter by Vote, then all the Members on service ought to be here.
§ Mr. GLYN-JONES
I see no reason for closing up the House. The Government up to now have been prepared to listen to argument, and my own view is that under the conditions of the War we should simply express our view and our arguments in support of it, but we should not carry our opposition to the extent of dividing the House, which, at a time like this, does a great deal to discredit the House of Commons.
§ Lieut.-Commander WEDGWOOD
I was pleased to hear the hon. Member for Stepney (Mr. Glyn-Jones) express his opinion upon the propriety of dividing the House of Commons. The hon. Member has been here some time, and he has always been a member of that party who did what the Front Bench told them. It is the habit of those hon. Members who sit on the benches behind the Government to adopt this attitude and then go to the Government offices during the day to get their friends jobs and concessions.
§ Mr. GLYN-JONES
I do not know whether the hon. Gentleman means to apply that to me, if so, I should be glad if he would give particulars of anything in that respect.
§ Lieut.-Commander WEDGWOOD
You said that those hon. Members who wanted a Division on this question were seeking notoriety.
§ Lieut.-Commander WEDGWOOD
The hon. Gentleman belongs to the goody-goody Members who always vote with the Government, lecturing the wild ducks and saying their conduct is endangering the country. We all want to win the War more than anything else. We put the winning of the War first, and our objection is that these taxes are not calculated to help us to win the War. That is perfectly plain and it is not a matter of 1055 principle. When you put a tax on musical instruments you enable the manufacturers here to tax the community on the kind of instruments they make. Already here they have decided to raise the price of pianos by 33⅓ per cent. in order that they may tax the people, which this proposal gives them the right to do. To do that is not the best way to ensure the prosperity of the country, or secure a sense of justice amongst the taxpayers who are being extremely hardly hit by the Budget.
You raise the price of gramophones and pianos and anybody who spends money on those things has less to spend on useful articles of production, consequently you produce a scarcity of money for the War and for keeping up the general stamina of the people. There are fewer exports and less money spent on home trades, and you have all the difficulties coming from increased prices. Whenever you find prices increase all round the trade is worse, and it is far more difficult to carry on your export trade. We do not want to put on a tax which is going to increase the price to the public, because they will have less to spend on other things. We do not want to pass a tax which will give a sense of injustice of that kind, and which will put money into private pockets instead of into the public purse. We are told that these imports amount to £160,000. If the Chancellor of the Exchequer really expects to reduce imports by putting a tax on musical instruments which can only effect £160,000 a year, I say he is trifling with the time of the House. The hon. Member for Barnsley (Sir J. Walton) said this tax was put on as an example of how stupid protection was, and to show the ridiculous result it would bring about. A time of war is not the time to try ridiculous experiments; you should try such experiments in time of peace if you must try them, but do not make the excuse for these taxes that they are imposed merely to show the country what a rotten system of taxation Protection is. I only rose because the hon. Member for Stepney seemed to charge us with trifling with the time of the House and not obeying the Prime Minister's will. I shall continue to act as my conscience directs me, irrespective of any jeremiads which may be thrown at us.
§ Mr. THEODORE C. TAYLOR
One argument in favour of this proposal is that it will regulate exchange. I thought it might interest the Chancellor of the Exchequer and the House to be shown a 1056 better way of regulating exchange, because this proposal will not affect it very much. I am most amenable to the arguments which have been put forward. Somebody said on the Free Trade side, it is quite true that as a rule exports and imports pay for each other, but the object of the Government in endeavouring to check imports is a legitimate one. As the Chancellor of the Exchequer said a good many of our imports come from the United States, and the munitions which are the largest part are compulsory imports. I would like to tell the Chancellor of the Exchequer and the House of the kind of import that is going on, and it is not compulsory. With British money we are paying for imports of our Allies into France—I am speaking with first-hand knowledge—and we are importing cotton textile goods made in America because the War Trade Department or the War Office prevents the Allies who are buying these goods with our own money having permission to buy them in our own country. This is an actual fact.
§ Mr. SPEAKER
I do not think that is relevant to this discussion, although it may be a very proper subject to bring before the House upon some other occasion.
§ Mr. TAYLOR
The hon. Member for Devizes (Mr. Peto) desires that this tariff should be made more scientific, and so do I. I think we ought to have some regard to the Colonies. I do not think the Chancellor of the Exchequer has given sufficient attention to making this tariff as scientific as it ought to be made, and I think he might give this matter a little more attention before this Bill comes on in order to make its operation more scientific. That would be acknowledging what the hon. Member for Devizes forsees: that this is a Protectionist tariff and that it will assist industry, If you hit a man on the side of the head very hard, it does not matter what you intend, it hurts his head. If you establish a tariff against the interests of art or music which will have the effect of excluding musical instruments not only for the rich but for the poor, it will not be any advantage. We are not protesting against the intention of the Government; all we are protesting against is the natural effect of what they are now about to do.
§ The CHANCELLOR of the EXCHEQUER (Mr. McKenna)
I hope we may be allowed to come to a Division on this 1057 Vote. I have been charged with being unwilling to consider each case upon its merits, but I do not think that charge is justified. This is the second tax we have had to discuss. On the first, relating to motor cars I considered every business representation that was made, but with regard to this tax no single business ground has been put forward. I admit that there are taxes coming later, notably the Plate Glass Tax and the Hat Tax, with regard to which I know from outside information there are serious business objections to be raised against them.
§ Lieut.-Commander WEDGWOOD
Surely the right hon. Gentleman is not going to consider only vested interests?
§ Mr. McKENNA
The hon. Member knows that I would not consider any vested interests. We ought not, however, to put on taxes which are going to interfere unnecessarily with business and restrict unnecessarily trade which is good trade and not merely for this purpose, luxury trade. As regards musical instruments, I think in the midst of the War we are bound to regard them as luxuries. I do not wish to hamper trade; but when my hon. Friend charges me with having only a crude system I would answer that if this were a permanent and scientific system of Tariff Reform it would not be introduced by me and it would not be like this. This is a tax intended for present conditions, and it has for its object the restriction of imports and limiting expenditure on luxuries, and I think those two objects are satisfied.
§ Mr. McKENNA
Because I cannot. Not only my hon. Friend, but others have repeated this argument again and again, and have asked why I do not impose an Excise Duty. I have not the machinery to do so, and I cannot. It would be ridiculous to set up the great machinery of an Excise for a ten months' tax. It would hardly be at work. I should not be able to engage the officials and train them for their work before the time for the renewal of the tax came. [An HON. MEMBER: "There are the difficulties of the export trade of musical instruments in parts."] I do not think that there really are difficulties. The export trade of musical instruments in parts offers no more difficulty than the export trade in sugar goods. I hope that this tax will be allowed to pass in order that we may get 1058 on to the other taxes, to which I admit there are more serious objections to be raised.
§ Mr. R. LAMBERT
I want to ask the Chancellor of the Exchequer whether he can see his way to make some concession to the violin industry. I understand that violins are principally made at Mirecourt, in the Vosges. They come to this country, and are the exports of one of our Allies. It would be a very hard thing indeed if at this moment we hit a blow at our gallant Allies by taxing an industry of a part of France which has been very sorely tried during this War. I want to add a word in support of what has been said about strings. The raw gut is exported from this country to Rome and Verona in Italy, to Barcelona, Lyons, and other towns in France, and it is there made up into harmonic strings and sent back to this country. Again, it is very hard that we should tax an industry of one of our Allies, and in doing so we are bound to hit the export trade of our own people in raw gut. If the Chancellor of the Exchequer could see his way to make some concession with regard to the string instruments and to the strings, I am quite sure he would be doing good service.
§ Mr. YEO
Do I understand that the trade has in no way approached the right hon. Gentleman in regard to this tax? What attitude does he intend to adopt with regard to those makers who are putting on 33⅓ without the tax affecting them in any way. I speak from thirty years' experience in the trade, and there are London-made instruments by the thousand, no parts being imported at all. Are these manufacturers to take this extra tax? After all, it is coming back upon the public, because when they come into our shops they will have to pay in addition to that 33⅓ an extra profit on that money. Cannot something be done to prevent the manufacturer putting on a tax that has never been put on him? Surely this is Protection in its deepest essence. We are allowing the manufacturer to set up his own factory, make his own piano through and through, except possibly for the growing of the wood, and he is going to charge in addition to the present price, which goodness knows is exorbitant enough—
§ Mr. YEO
I will buy as many as you like at that price. I can give you the name of 1059 a firm who will buy a million of them if you produce them at £9 10s. each. There is an order for you. They make them here, and put them on the market. The tax does not affect them, and yet they are going to charge us who are merchants the 33⅓ extra on the ordinary price, and we shall have to charge the people that and a little bit more besides. This is going to cripple the export trade of the piano industry. It is going to cripple the import trade of Germany. I will tell the House something from my own business experience. I have been thirty years in the trade, and I have not had twenty German pianos in my shop. I am a Free Trader, but I would not have them, because I do not believe in them. The Chancellor of the Exchequer is out for taxing extra war profits. Is he going for the piano manufacturers? Is he going to get this extra 33⅓ into the Treasury? If he is, then I shall not object to the tax, but, if he is not, I shall want to know why some step is not taken to prevent these people putting on that which they have never been charged. This is very far from being British business or honest business. I speak quite freely, and I say to the Chancellor of the Exchequer that I have in my hand a protest from the trade and a request that I should support a petition against this tax. Good heavens, they have never had to pay it, and they have never been charged it! Yet if I want a piano I have got to pay 33⅓ extra. It is not playing the game. This is the way of all patriotic employers. Yes, they pay the tax willingly and gladly—with other people's money. They make it out of the people. I am about sick and tired of taxes of this kind which do not deal with the thing direct.
I shall not rest content if I find that this tax goes through this afternoon. I do not wish to hamper the Government or to go into the Lobby against it. I wish to support them to get this Budget through, and, with other Members of this House, I desire to see this War prosecuted to a successful conclusion, but how can you expect business men who have the utmost difficulty in life in paying their way to pay the taxes that are put upon them when, on the other hand, manufacturers take out of them that to which they have no right? Look at it from any standpoint you like. I do not care from what standpoint you look at it. I may not be polished in my language, but I speak from my heart. It is utterly im- 1060 possible to be cool when we find it hard to support the Government and pay our way. I speak very little in this House, but I think I am as loyal a supporter of the Government as they have got behind them, or anywhere else. This is almost breaking one's loyalty to their principles and to the Government, and it is high time that this House woke up to the fact. Take it off hats. Good gracious, how much will that affect industry? I am surprised that men are fools enough to come into this House and take up the cudgels of an industry which has always been protected and which, when a tax is put upon it, wants somebody to take up its case. Twelve months ago we could sell London-made instruments on the English market for eighteen guineas. To-day we cannot retail one at an ordinary profit of 10 per cent. under thirty guineas. Now, on the top of that, we have got to add something extra. I make no excuse for repeating it. I represent a working-class constituency, and the working-classes have as much right to music as the upper classes. It is one of the things which helps to pass winter evenings and to bring harmony into the home. It is one of those things which when friends get together often keeps them out of a public-house, and helps them to spend happy evenings in their homes. I have said enough about the piano. I shall keep my eye on the Chancellor of the Exchequer, and I shall want to know whether he is not going to keep his eye on this 33⅓. It is an injustice to this House and to the nation for any manufacturer to put a tax of 33⅓ per cent. on any article on when he has never been compelled to pay it by the Government.
There are gramophones, nine parts out of ten of which are to-day made in this country. They have British cases, British sound arms, British boxes, and British horns. Of many gramophones only the motor is a manufactured article, and that is made in Switzerland. What are you going to do with the gramophones? I have been ordered to sign an agreement before manufacturers will send their goods to me. Is this business? I have another letter from a firm which has always made everything that it sells in this country in another department, and the Chancellor of the Exchequer can see it, telling me that I must sign the agreement by the 1st of October, which is to-morrow, if I want my goods to come in at 33⅓ advance. You can dismiss the tax for what you are going to get out of it. The revenue it is going to bring to this country will be outshone 1061 and outdone by the harm it will do to industry and trade within our own borders. The Board of Trade have asked this country to put its best effort forward and to try and catch German trade. The Chancellor of the Exchequer is bringing in things which are going to prevent us doing anything of the sort.
What will happen when this War is over? The manufacturers in this House who may be importers and exporters will go back to Germany if they can buy the article cheaper there than they can buy it in their own country. We have very little consistency, any of us, except when it touches our own pocket. I am not afraid to admit it, and hon. Members can make what reply they like, but they cannot say that Tariff Reform is a good thing when it makes the people of this country pay that which they have no right to pay, and that which has never been put on by the Government. No Tariff Reformer can say it is a right thing that pianos, organs, gramophones, and other instruments which are manufactured in this country, should have a tax of 33⅓ per cent. put upon them when the Government has never put it on for the purposes of the War. I apologise if I have been heated, or vulgar or rude, but business will never come to this country unless we adopt business methods, and if you call it business to put a tax upon those things which are manufactured in this country which have advanced 45 per cent. to 55 per cent. since the War began, I call it business of an insane kind, and it is unworthy of the business men of the British nation. I appeal to the Chancellor of the Exchequer with all the warmth I can in regard to this tax, and I assure him it will do no good and it will injure trade. I know one firm that has invested over £500,000 in this particular branch of industry which employs 800 men and which has given 300 men to the War, and it would, if this tax were removed, be able to increase its output and give a larger supply to the British market at the old prices, and would be able to create a bigger export trade than it has ever had before. But you are going to tie them up and throttle them. If the Chancellor of the Exchequer gets anything out of this tax he will be a lucky man.