§ Mr. LINFIELD (by Private Notice)
asked the Chancellor of the Exchequer whether, in view of the questions of the hon. Member for East Edinburgh (Mr. Hogge) and myself, last week, he is now in a position to make a definite answer regarding the future of the German reparation 26 per cent. levy which is now paid by the British taxpayer?
§ 23. Mr. HARMSWORTH
asked the Secretary of State for Foreign Affairs whether he has been in negotiation with representatives of the German Government regarding the cessation of payment of the reparations tax of 26 per cent. on German merchandise exported to this country; and, if so, whether he will state the result of such negotiations?
The negotiations which have taken place with representatives of the German Government on the subject of the Reparation Recovery Act have resulted in an agreement on the following lines:—
The rate of the levy will be reduced from 26 per cent. to 5 per cent. in respect of goods imported on or after the 26th instant, i.e., after midnight to-night.
In order to guarantee that no part of the levy shall be charged to British importers, the German Government has agreed to arrange for the compensation of the German exporters at a later date and to make it a punishable offence to charge any part of the levy to the British importer.
Customs receipts in respect of all goods imported prior to the 26th instant (i.e., those at the rate of 26 per cent.) will be reimbursed by the German Government in Gold Bonds. Further details in regard to these Gold Bonds (which are different from and of a higher value than the Bonds previously issued in certain cases) will be published in the next issue of the "Board of Trade Journal." I understand that the Journal will be available, including this information, in about two days' time.
§ Mr. LINFIELD
Is the hon. Gentleman aware that it will cost from five to ten per cent. to collect the five per cent. that now remains?
In reply to the second Supplementary Question, I may say that consideration will be given to the question of small parcels, which undoubtedly presents difficulties. I cannot go beyond 48 that at the moment. As regards the charge for collection, although the Government might have had to consider the complete repeal in certain circumstances, there are difficulties attached to a step of that kind at the present time. I am quite certain that from the point of view of the State, that is, the Government, the administration of this works out at a fraction of one per cent.
§ Mr. PRINGLE
I would like to put a question to the Prime Minister in view of the announcement which has just been made. Will the Prime Minister give time for a discussion of a Motion for the suspension of the German Reparation (Recovery) Act in accordance with the terms of Section 6 of that Act?
§ Mr. HOGGE
In view of the fact that the Order comes into operation to-night at midnight and that so many of the parcels are small, what good is the consideration which the hon. Gentleman has said will be given to the question of the small parcels going to be to the British importer of them, unless he knows where he is? Is it not a fact that since October this Government, and the last Government, have been discussing this matter, and have not been able to make up their combined minds?
§ Mr. A. M. SAMUEL
Will not this decision involve legislation? What right has the Financial Secretary to the Treasury to reduce the duty from 26 to 5 per cent.?
I cannot reply to the second supplementary, owing to the details of the matter, by question and answer, but there is power to do this by Treasury Minute, and that is the step which we propose to take.
The principle of the agreement, of which there are six heads, recognises the difficulty which the hon. Member for East Edinburgh (Mr. Hogge) has in mind, but, of course, the House will recognise that everything turns on the proportion of the levy which is borne by Germany and by traders in this country. I cannot give a precise answer this afternoon. Obviously, it is a matter 49 of adjustment, but the principle is, undoubtedly, embodied in the agreement.
§ Mr. NEVILLE CHAMBERLAIN
Will the Financial Secretary give us an assurance that he will not assent to any arrangement which will relieve Germany of her obligation to this country, except as part of a general settlement applying to all the creditors of Germany?
I cannot make any statement on the point which the right hon. Gentleman has raised, because it is a very much wider issue. We had to deal with the specific case of the 26 per cent. reparation levy which, as he knows, had broken down in operation due to the action of Germany. We had to come to a decision because of the position of traders in this country. Beyond that I cannot go.
§ Mr. CHAMBERLAIN
Does not the right hon. Gentleman realise that he can make some temporary arrangement without giving away the principle to which I have alluded?
The principle which the right hon. Gentleman has in mind has been considered in connection with this decision.