Can the right hon. Gentleman inform me if the change from 5s. to 33⅓ per cent, ad valoreminvolves any extra charge on the subject, because, if so, it would be out of order?
§ Mr. LOUGH
What I intend to do is to reduce the charge, and I will amend my proposal by the words "whichever is smaller." I am told that some of these tinder boxes are sold at 6d. and 10d., and surely it is not intended to put a 5s. tax on articles of that kind. Some arrangement ought to be made to regulate that the tax is proportionate to 193 the cost of the article, and not prohibitive; otherwise we may be doing an injustice to a number of people, perhaps a small number, and may be depriving them of their means of living, since the imposition of such a heavy tax in proportion to the cost would do away with the manufacture.
§ Amendment proposed: At the end of Sub-section (1) after the words "a duty of Customs of five shillings," insert the words "or thirty-three and one-third per cent. ad valorem, whichever is the smaller."—[Mr. Lough.]
§ Question proposed, "That those words be there inserted."
§ 6.0 p.m.
§ Mr. WILES
If the right hon. Gentleman will accept this Amendment I shall be quite willing to withdraw one which I have down on the Paper a little later on. It would be a much fairer way to have an ad valorem duty rather than to put on a duty of 5s. on an article which is going to be sold at retail prices starting at something like 6d. It will mean that a 6d. article, which is not only used for lighting a cigar or pipe, but also, I understand for lighting a fire, is going to be very much prejudiced in comparison with matches, and I think the Committee will agree that the object of the Treasury is that these little articles for making a flame shall not Toe put in a better position than matches. If, therefore, my right hon. Friend will accept this Amendment, the matches will be taxed much more lightly than this competitive method of making a flame. I do hope he will meet this point, because it seems very arbitrary to put on an article which is sold at such a small price such a large tax as 5s.
§ Mr. PETO
I do not think there is anything in what the right hon. Gentleman said as to this being a very difficult or complicated matter. I agree with the hon. Member opposite (Mr. Wiles), and with regard to the Amendments standing in my name for other smaller taxes than 5s., I should be quite willing to accept this Amendment of 33⅓ Per cent, tax ad valorem. I think it would be of use to the Committee to know a little of what this industry really consists. So far as the home production is concerned, there are only two firms engaged in it, employing about seventy men, and turning out about 3,000 gross a year. The whole tax the right hon. Gentleman will collect will be about £10,000, on the Amendment of the right 194 hon. Gentleman (Mr. Lough). The alternative of putting 5s. on will be that he will get no tax whatever, and the only result will be practically to prohibit the manufacture of anything for lighting a cigar or cigarette except by matches which the Government tax. I do not think that is their intention, and when I add to that the fact that this small industry of tinder lighter manufacture has very largely increased during the War, as almost all these articles are sent out to our troops at the front, I think it quite obvious that the right hon. Gentleman cannot want to prohibit entirely the small manufacture of so useful an article. There are a great many of these articles which are more expensive, which produce a flame generally by means of petrol, which, when a button is pressed, lights a lamp. Seven thousand gross of these are used, which means about 1,008,000. They are mostly manufactured abroad, and the right hon. Gentleman's duty on these, which are more expensive articles, generally selling at 1s. or 2s. 6d., will be something like £50,000. I think the Amendment gives a reasonable proportion of tax, both as regards the imported and the home manufactured article, and one which does not act as a prohibition of a very small and perhaps rather useful industry to this country. I hope the right hon. Gentleman is going to accept it.
§ Mr. MONTAGU
.I agree with all my three hon. Friends who have spoken, that this tax is too high. It was not put on for the purpose of obtaining a large revenue, but simply and solely because when we were putting on the Match Tax it was represented to us—and it has been found in other countries to be so—that substitutes for matches ought not to be allowed free of tax. I do not think it would be of very much use to put an ad valoremduty upon them. What we ought to try to do is to tax them on their degree of utility, and not on their value as an article, and I should be very much obliged if my hon. Friends—
§ Mr. MONTAGU
We had a shot at 5s., and it is obvious that when an article is to be sold at 9d. that is going to kill the trade in that particular article, for which there is no necessity. We are now busy, my officers at the Customs are busy, discussing this matter with the people who make these things, with a view to trying 195 to agree as to what would be the right scale. I would prefer not to say anything about it to-day, because it is not quite fixed, and I do not want to announce a new rate which might have to be revised or altered later on. I think, however, we must proceed by two rules. I think we must have a rate for articles which contain spirit or petrol, and which are, I think, the more competing articles, and a lower rate for articles which do not contain them. Both these, I promise the Committee, will be very substantially lower than the rate now in the Bill, and if the Committee will be content with that I will move the necessary reduction on the Report stage.
§ Mr. PETO
I should like to point out that what the right hon. Gentleman proposes is very very close to what the right hon. Gentleman (Mr. Lough) proposes himself, because, as a matter of fact, the article which contains petrol, and which produces a flame, is the more expensive, to make, and, therefore, sells at a higher price—more than double that of the other. The right hon. Gentleman's Amendment, therefore, will mean, roughly speaking, a shilling in one case and sixpence in the other, and the Amendment I have on the Paper for specific duties is almost exactly what the right hon. Gentleman indicates it is his intention to introduce.
§ Sir F. BANBURY
I think the right hon. Gentleman's suggestion is quite reasonable, and I have no doubt the Committee will agree to it. I hope, however, that on the Report stage there will be a considerable reduction in the duty, because it is evident that this duty cannot produce anything, and the right hon. Gentleman has admitted that he does not want to kill a small industry, which is what would undoubtedly be the effect of continuing a heavy duty of this sort.
§ Sir G. YOUNGER
May I assume that if it is the case that these lighters are mostly sent to the troops a drawback will be paid on export?
§ Amendment, by leave, withdrawn.
§ Sir A. WILLIAMSON
Has the Government noticed that this Amendment might possibly go much further than they think? The Clause would then read that a tax should be levied on other mechanical contrivances for producing a spark. Mechanical contrivances for producing sparks are required in gas engines, oil engines, and things of that sort, and we should, therefore, be careful. We are not experts in this House, and I should like the trade outside to have an opportunity of considering whether that really would not come within this Clause and whether, while we are intending to tax only things that compete with matches, we are really going to tax an essential part of a gas engine, oil engine, or other things of that kind.
§ Mr. JOYNSON-HICKS
I am not quite sure that the words "spark or" would not include a magneto. The very essential of a magneto is that it should produce a spark, and, if that were included, where would motor traction be? I think the right hon. Gentleman should consider between now and the Report stage whether this would not include the spark of a magneto.
§ Sir W. BEALE
There are many conceivable ways in which these very useful little articles might hereafter be used, where you set a thing to work with an electric spark. There is the danger. What it is intended to indicate is where a spark operates in the same way as a match—that is, when it produces combustion—and it would be better not to use the term except with words connecting it with purposes for which a flame might be used.
§ Mr. MONTAGU
I think we had better put in the words "spark or," but I quite agree with the remarks of my hon. Friend about the danger of these words, and that they require the closest possible investigation with the assistance of experts. I will see that the magneto of a motor car, or of a portable gas engine, does not come under this tax.
§ Amendment put, and agreed to.
§ Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill.'197
§ Mr. LOUGH
I would appeal to the tight hon. Gentleman to consider the question broadly when he is taking into account the rate of tax, and to ask himself whether it is worth while persevering with it. I think the hon. Baronet opposite made a good point as to what is the danger in this, and I do not think my hon. Friend behind me sufficiently considered Sub-section (2) of the Clause. If there is only a small amount of revenue to be obtained by it, and it is revenue we are out for, surely it would be better to drop the Clause altogether. I will not persevere in moving my own Motion regarding the Clause if my right hon. Friend will consider the whole case in view of these difficulties, and as to whether it is worth having the Clause at all.
§ Mr. MONTAGU
I did not want this Clause at all. We only introduced it into this Bill because we were under a pledge to remove objections. It was pointed out that in other countries where they have a Match Tax—they have such a tax in France—a tax of this kind was necessary, and the people interested asked that we should tax these articles when we were taxing matches. We agreed, and I appeal to the House, therefore, in fairness to the methods we used to get through our Match Tax, to support us in this tax.
§ Sir C. CORY
May I ask the right hon. Gentleman whether this will not include electrical or oil lamps for underground? Surely it would include lamps for underground use.
§ Mr. MONTAGU
Surely you cannot get a lamp to produce a flame. You can only produce a flame in a lamp by introducing an outside agent.