§ As from the first day of August, nineteen hundred and twenty-six, the duty chargeable under Section three, Sub-section (1) of the Finance Act, 1925, upon blank films on which no picture has been impressed, known as raw film or stock, shall cease.—[Mr. Hurst.]
§ Brought up, and read the First time.
§ Mr. HURSTI beg to move, "That the Clause be read a Second time."
The object of the Clause is to liberate the raw material of the film industry from the heavy tax now imposed upon 1932 it. The House will not misinterpret this proposal into any revolt against the McKenna Duties which constitute a master-piece of fiscal wisdom, but there is an enormous distinction between this particular duty and all the other McKenna Duties, inasmuch as all the other McKenna Duties are imposed upon fully manufactured articles and upon luxuries, whereas the raw material of the film producing industry is neither fully manufactured nor is it a luxury. It is clear that there is a great distinction between the duty imposed upon the printed film and the 1933 duty imposed upon the plain film. Many of us would like to see a heavy duty placed upon fully-printed foreign films. Although there are cases where the films reach a high standard of taste, which people are glad to see, in the main the effect of the importation of foreign films has been to flood the country with crude productions of inferior civilisations. The raw film is quite different because, without it, there would be no film-printing industry in the country at all. I ask the House to notice how heavy is the duty on this raw material. It is quite unlike any other duty on any import into this country, because the duty on the blank film represents nearly half the ordinary selling price. The ordinary price is ˙7 of a penny. The cost of production is one-half and the duty one-third of a penny and, taking into account the cost of freight, packing and insurance, imported films can only come into this country at the very lowest—if you add the actual cost of the material and the duty—at ˙8 of a penny, whereas the selling price is ˙7 of a penny. The result is that this duty fulfils no useful purpose at all.
The first question to ask is: Does it produce revenue? In the period between the end of July of last year and the end of May this year, the total duty received on the importation of raw film, after deducting the drawback on re-exports, was just over £16,000 and this very small sum was largely due to contracts in being before the duty was imposed, and also to the fact that foreign producers are anxious as long as they can to keep an interest in the British markets. The figures are so insignificant that, from the point of view of the production of revenue, no-one can justify the duty. The second question to be asked is: does it encourage British manufacture? The answer is, "No," because with the exception of the great Kodak corporation, which supplies all the raw film produced in England there are practically no companies in England producing blank film within the meaning of the McKenna Duties. If you do find, here and there, a firm which purports to deal in blank film, you will probably find that it is controlled by the Kodak corporation. Instead of free competition you have a monopoly. Free competition in blank film brought about a reduction in the price of this material 1934 from a l¾d. per foot to .7 of a penny. Now, there is no such competition so that the chances of reduction are negligible and the chance of an increase in the price, when the Kodak has got entire mastery and control of the market, is serious. It follows, therefore, that there is no justification whatever for it and it is subject to the objection that it is a tax on raw material. We have allowed the film printing industry to be controlled by foreign suppliers and it is a deplorable thing that the rising generation in England should grow up in an atmosphere of picture houses saturated with American melodrama. How are we to cure that? Only by the home production of films, and it is a cardinal condition precedent to the establishment of a healthy film industry, that you should have the cheapest and best possible supply of raw material. You cannot get the cheapest and best when you exclude foreign competition. So long as this duty is to be practically prohibitive, that cannot be realised, and the proposed new Clause aims at remedying that state of affairs.
§ Mr. GATESI beg to second the Motion.
The Mover has already covered the ground, and there is only one further point to which I would call the attention of the Chancellor of the Exchequer. The duty as at present levied amounts to 50 per cent. on retail price. If the duty were levied under the Safeguarding of Industries Act it would be 33⅓ per cent. on the value of the goods at the port of entry or considerably less than the present duty. I submit the present charge is prohibitive and would be more fairly levied according to the rate laid down in the Safeguarding of Industries Act. I have been asked by constituents of mine who are interested in the film printing industry to support the proposed new Clause.
§ Mr. PETHICK-LAWRENCEI also desire to support the proposed new Clause which seems to have every argument in common sense to commend it to the Chancellor of the Exchequer. I put it to the Chancellor, now that he has seen the working of this absurd and ridiculous tax, and has seen the injury it does to British film, he should withdraw it. The protective argument has always been in favour of taxing the manufactured article 1935 coming into this country, in order to give a benefit to the British manufacturer. This is a raw material for the cinematograph trade, and to tax this raw material is to injure British employment in that respect. Therefore, as the case is so straightforward I hope the right hon. Gentleman will see his way to accept the proposal.
§ Mr. McNEILLI quite agree that this particular duty is not on the same footing as some of those with which we have had to deal. I can agree, in this case, that it is a matter which calls for careful watching of the tax machinery of the Customs. We must see exactly how the importation proceeds, and the effect, especially the effect upon prices in this country, before we can definitely say that this is a duty which ought to be maintained. The Mover, however, seemed to leave out of account some facts bearing upon this question which ought to be taken into consideration. I do not think he is justified in what he said as to the rate of the duty. It is important to have regard to the fact that this duty formed part of the McKenna Duties which disappeared under the regime of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) in 1924. When the Chancellor of the Exchequer brought forward his Budget last year, among other McKenna Duties, this one was reinstated. It is significant that the price of the article which fell very low when the duty was removed in 1924, has not shown the smallest tendency to rise again in consequence of the reimposition of the duty, but stands at exactly the same figure of .7 of a penny at which it stood more than a year ago. The fact that it is so, and the fact that the importation is not such a negligible quantity as suggested, indicate that the hon. Member is not justified in speaking of the duty as prohibitive.
In the nine months from July of last year to the 31st March of the present year there was an importation of 8,000,000 linear feet, which is, of course, a small quantity, or rather relatively a small quantity of the amount used for the business. But it is not a quantity which can be altogether left out of account, nor can it be said that the duty upon the imported films is prohibitive. During the short period of two months, from the 1st April of the present year 1936 to the end of May there was an importation of 3,714,000 feet, and it seems that the amount of importation has gone up, is a rising quantity, and indicates that the revenue derived from it is not entirely negligible. I am quite sure that if this Amendment were accepted the loss to the Exchequer would be £100,000, which is quite an appreciable figure. The result of the imposition of the duty, in the first instance, under the McKenna Duties was to create an industry in the making of raw film that did not exist in this country before. I entirely agree with what my hon. and learned Friend said as to the foreign and American films, and though I do not intend to develop the argument, I should be glad to see more British films in our cinemas. I do not, however, quite appreciate his argument that the free importation of foreign raw films and unprinted films is going to have a very great effect in that respect. In any case, it is important that there should be a useful industry in this country, and that we should have here the manufacture of raw films as well as printed ones, and this was the effect of the duty when it was first imposed. It brought into being the manufacture of films in this country.
If it can be shown, as suggested by my hon. and learned Friend, that there was really something in the nature of a monopoly in this matter which made the prices unnecessarily or artificially high so that the result was that there was a drag upon the film industry, I would be prepared to agree, as I have always agreed, that the matter would require careful consideration as to whether or not something should be done to prevent that monopoly. I submit, however, to the House that we have no evidence that there is any such monopoly, no evidence that the present prices are artificial or that any importation would have, really, the effect of materially reducing them. The very fact that the Kodak Company is the only company that are manufacturing films in this country seems to me to point to the fact that the price is not so artificial, nor so high as to suggest that they are removed from the competition of their own trade. I quite agree with my hon. and learned Friend in what he said, and I have already intimated so, that the circumstances of this 1937 particular industry are such that we should certainly not throw aside the suggestion that has been put forward. We cannot accept the Amendment, but I do not see any reason that if, in the course of a few years or so, when we shall have had more experience of this trade, as we are likely to do, that if we found there was a monopoly and a decrease of competition, that we should have to deal with it. When we see the
§ whole of the situation the matter can be reconsidered.
§ Mr. HURSTIn view of what the right hon. Gentleman has said, I ask the leave of the House to withdraw the proposed Clause.
§ The House divided: Ayes, 140; Noes, 270.
1939| Division No. 324.] | AYES. | [5.39 p.m. |
| Adamson, Rt. Hon. W. (Fife, West) | Grundy, T. W. | Richardson, R. (Houghton-le-Spring) |
| Alexander, A. V. (Sheffield, Hillsbro') | Guest, Haden (Southwark, N.) | Riley, Ben |
| Ammon, Charles George | Hall, F. (York, W.R., Normanton) | Robinson, Sir T. (Lancs., Stretford) |
| Attlee, Clement Richard | Hall, G. H. (Merthyr Tydvil) | Rose, Frank H. |
| Baker, J. (Wolverhampton, Bilston) | Hamilton, Sir R. (Orkney & Shetland) | Runciman, Rt. Hon. Walter |
| Barker, G. (Monmouth, Abertillery) | Hardie, George D. | Saklatvala, Shapurji |
| Barnes, A. | Harney, E. A. | Salter, Dr. Alfred |
| Barr, J. | Hartshorn, Rt. Hon. Vernon | Scrymgeour, E. |
| Batey, Joseph | Hayday, Arthur | Shepherd, Arthur Lewis |
| Beckett, John (Gateshead) | Henderson, Right Hon. A. (Burnley) | Shiels, Dr. Drummond |
| Benn, Captain Wedgwood (Leith) | Henderson, T. (Glasgow) | Short, Alfred (Wednesbury) |
| Bowerman, Rt. Hon. Charles W. | Hirst, G. H. | Sitch, Charles H. |
| Bromley, J. | Hirst, W. (Bradford, South) | Slesser, Sir Henry H. |
| Brown, James (Ayr and Bute) | Hore-Belisha, Leslie | Smith, Ben (Bermondsey, Rotherhithe) |
| Buchanan, G. | Hudson, J. H. (Huddersfield) | Smith, H. B. Lees (Keighley) |
| Buxton, Rt. Hon. Noel | Hutchison, Sir Robert (Montrose) | Smith, Rennie (Penistone) |
| Charleton, H. C. | John, William (Rhondda, West) | Snell, Harry |
| Clowes, S. | Johnston, Thomas (Dundee) | Snowden, Rt. Hon. Philip |
| Cluse, W. S. | Jones, Henry Haydn (Merioneth) | Spencer, G. A. (Broxtowe) |
| Clynes, Rt. Hon. John R. | Jones, Morgan (Caerphilly) | Spoor, Rt. Hon. Benjamin Charles |
| Collins, Sir Godfrey (Greenock) | Jones, T. I. Mardy (Pontypridd) | Stamford, T. W. |
| Compton, Joseph | Kelly, W. T. | Stephen, Campbell |
| Cove, W. G. | Kennedy, T. | Stewart, J. (St. Rollox) |
| Cowan, D. M. (Scottish Universities) | Kenworthy, Lt.-Com. Hon. Joseph M. | Sullivan, J. |
| Crawfurd, H. E. | Kenyon, Barnet | Sutton, J. E. |
| Dalton, Hugh | Kirkwood, D | Thorne, G. R. (Wolverhampton, E.) |
| Davies, Evan (Ebbw Vale) | Lawson, John James | Thurtle, E. |
| Davies, Rhys John (Westhoughton) | Lee, F. | Tinker, John Joseph |
| Day, Colonel Harry | Lindley, F. W. | Townend, A. E. |
| Dennison, R. | Livingstone, A. M. | Trevelyan, Rt. Hon. C. P. |
| Duncan, C. | Lowth, T. | Viant, S. P. |
| Dunnico, H, | Lunn, William | Wallhead, Richard C. |
| Edwards, J. Hugh (Accrington) | MacLaren, Andrew | Walsh, Rt. Hon. Stephen |
| England, Colonel A. | Maclean, Nell (Glasgow, Govan) | Watson, W. M. (Dunfermline) |
| Evans, Capt. Ernest (Welsh Univer.) | March, S. | Webb, Rt. Hon. Sidney |
| Fenby, T. D. | Montague, Frederick | Wedgwood, Rt. Hon. Josiah |
| Forrest, W. | Morrison, R. C. (Tottenham, N.) | Wheatley, Rt. Hon. J. |
| Garro-Jones, Captain G. M. | Murnin, H. | Wiggins, William Martin |
| Gardner, J. P. | Naylor, T. E. | Wilkinson, Ellen C. |
| Gibbins, Joseph | Oliver, George Harold | Williams, C. P. (Denbigh, Wrexham) |
| Gillett, George M. | Palin, John Henry | Williams, David (Swansea, East) |
| Gosling, Harry | Paling, W. | Williams, Dr. J. H. (Llanelly) |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Parkinson, John Allen (Wigan) | Williams, T. (York, Don Valley) |
| Greenall, T. | Pethick-Lawrence, F. W. | Wilson, R. J. (Jarrow) |
| Greenwood. A. (Nelson and Colne) | Ponsonby, Arthur | |
| Grenfell, D. R. (Glamorgan) | Potts, John S. | TELLERS FOR THE AYES.— |
| Griffiths, T. (Monmouth, Pontypool) | Purcell, A. A. | Mr. Charles Edwards and Mr. |
| Groves, T. | Rees, Sir Beddoe | Hayes. |
| NOES. | ||
| Acland-Troyte, Lieut.-Colonel | Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Bennett, A. J. |
| Agg-Gardner, Rt. Hon. Sir James T. | Baldwin, Rt. Hon. Stanley | Bentinck, Lord Henry Cavendish |
| Ainsworth. Major Charles | Balfour, George (Hampstead) | Berry, Sir George |
| Albery, Irving James | Banks, Reginald Mitchell | Bethel, A. |
| Alexander, E. E. (Leyton) | Barclay-Harvey, C. M. | Betterton, Henry B. |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Barnston, Major Sir Harry | Birchall, Major J. Dearman |
| Allen, J. Sandeman (L'pool, W. Derby) | Beamish, Captain T. P. H. | Bird, Sir R. B. (Wolverhampton, W.) |
| Amery, Rt. Hon. Leopold C. M. S. | Beckett, Sir Gervase (Leeds, N.) | Blades, Sir George Rowland |
| Apsley, Lord | Bellairs, Commander Carlyon W. | Boothby, R. J. G. |
| Bourne, Captain Robert Croft | Gunston, Captain D. W. | Perkins, Colonel E. K. |
| Bridgeman, Rt. Hon. William Clive | Hacking, Captain Douglas H. | Perring, Sir William George |
| Briggs, J. Harold | Hall, Lieut.-Col. Sir F. (Dulwich) | Peto, Basil E. (Devon, Barnstaple) |
| Briscoe, Richard George | Hall, Capt. W. D'A. (Brecon & Rad.) | Philipson, Mabel |
| Brittain, Sir Harry | Hammersley, S. S. | Plelou, D. P. |
| Brooke, Brigadier-General C. R. I. | Hanbury, C. | Pilditch, Sir Philip |
| Brown, Maj. D. C. (N'th'I'd., Hexham) | Hannon, Patrick Joseph Henry | Pownall, Lieut.-Colonel Sir Assheton |
| Buckingham, Sir H. | Harland, A. | Preston, William |
| Bull, Rt. Hon. Sir William James | Harmsworth, Hon. E. C. (Kent) | Price, Major C. W. M. |
| Bullock, Captain M. | Harrison, G. J. C. | Radford, E. A. |
| Burgoyne, Lieut.-Colonel Sir Alan | Hartington, Marquess of | Ramsden, E. |
| Burman, J. B. | Harvey, Major S. E. (Devon, Totnes) | Rawson, Sir Cooper |
| Burton, Colonel H. W. | Haslam, Henry C. | Reld, D. D. (Country Down) |
| Butler, Sir Geoffrey | Heneage, Lieut.-Col. Arthur P. | Remer, J. R. |
| Cadogan, Major Hon. Edward | Hennessy, Major J. R. G. | Rentoul, G. S. |
| Caine, Gordon Hall | Herbert, Dennis (Hertford, Watford) | Rhys, Hon. C. A. U. |
| Campbell, E. T. | Herbert, S.(York, N. R., Scar. & Wh'by) | Roberts, E. H. G. (Flint) |
| Cautley, Sir Henry S. | Hills, Major John Waller | Ropner, Major L. |
| Cayzer, Sir C. (Chester, City) | Hogg, Rt. Hon. Sir D.(St. Marylebone) | Russell, Alexander West (Tynemouth) |
| Cazalet, Captain Victor A. | Holt, Capt. H. P. | Samuel, A. M. (Surrey, Farnham) |
| Cecil, Rt. Hon. Sir Evelyn (Aston) | Hope, Sir Harry (Fortar) | Samuel, Samuel (W'dsworth, Putney) |
| Chadwick, Sir Robert Burton | Hopkins, J. W. W. | Sandeman, A. Stewart |
| Chamberlain, Rt. Hn. Sir J.A.(Birm.,W.) | Hopkinson, Sir A. (Eng. Universities) | Sanders, Sir Robert A. |
| Charteris, Brigadler-General J. | Hopkinson, A. (Lancaster, Mossley) | Scott, Sir Leslie (Liverp'l, Exchange) |
| Churchill, Rt. Hon. Winston Spencer | Horlick, Lieut.-Colonel J.N. | Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.) |
| Churchman, Sir Arthur C. | Howard, Captain Hon. Donald | Shaw, Capt. W. W. (Wilts, Westb'y) |
| Clarry, Reginald George | Hudson, Capt. A. U. M. (Hackney, N.) | Sheffield, Sir Berkeley |
| Clayton, G. C. | Hudson, R. S. (Cumberland, Whiteh'n) | Shepperson, E. W. |
| Cobb, Sir Cyril | Huntingfield, Lord | Simms, Dr. John M. (Co. Down) |
| Cockeri11, Brig.-General Sir G. K. | Hurd, Percy A. | Sinclair, Col. T. (Queen's Univ., Belfst |
| Colfox, Major Wm. Phillips | Huttchison, G. A. Clark (Midl'n & P'bl's) | Skelton, A. N. |
| Conway, Sir W. Martin | Inskip, Sir Thomas Walker H. | Slaney, Major P. Kenyon |
| Cooper, A. Duff | Jackson, Sir H. (Wandsworth, Cen'l | Smith-Carington, Neville W. |
| Cope, Major William | Jacob, A. E. | Somerville, A. A. (Windsor) |
| Couper, J. B. | James, Lieut.-Colonel Hon. Cuthbert | Spender-Clay, Colonel H. |
| Cowan, Sir Wm. Henry (Islingtn., N.) | Jephcott, A.R. | Stanley, Col Hon. G. F. (Will'sden, E.) |
| Cralk, Rt. Hon. Sir Henry | Kidd, J. (Linlithgow) | Stanley, Lord (Fylde) |
| Croft, Brigadier-General Sir H. | Kinderstey, Major G. M. | Stanley, Hon. O. F. G. (Westm'eland |
| Crooke, J. Smedley (Deritend) | King, Captain Henry Douglas | Steel, Major Samuel Strang |
| Crookshank, Col C. de W. (Berwick) | Kinloch-Cooke, Sir Clement | Stott, Lieut.-Colonel W. H. |
| Crookshank, Cpt. H.(Lindsey, Gainsbro) | Knox, Sir Alfred | Strickland, Sir Gerald |
| Cunliffe, Sir Herbert | Lane Fox, Col. Rt. Hon. George R. | Stuart, Crichton-, Lord C. |
| Curzon, Captain Viscount | Lister, Cunliffe-, Rt. Hon. Sir Philip | Stuart, Hon. J. (Moray and Nairn) |
| Dalkeith, Earl of | Locker-Lampson, G. (Wood Green) | Styles, Captain H. Walter |
| Dalziel, Sir Davison | Locker-Lampson, Com. O. (Handsw'th) | Sueter, Rear-Admiral Murray Fraser) |
| Davidson, J. (Hertf'd.Hemel Hempst'd) | Lord, Walter Greaves. | Sugden, Sir Wilfrid |
| Davidson, Major-General Sir J. H | Lougher, L. | Templeton, W. P. |
| Davies, Dr. Vernon | Lucas-Tooth, Sir Hugh Vere | Thompson, Luke (Sunderland) |
| Davies, Sir Thomas (Cirencester) | Luce, Major-Gen. Sir Richard Harman | Thomson, Rt. Hon. Sir. W. Mitchell- |
| Davison, Sir W. H. (Kensington, S.) | Lynn, Sir R. J. | Tinne, J. A. |
| Dawson, Sir Philip | MacAndrew, Major Charles Glen | Titchfield, Major the Marquess of |
| Dixey, A. C. | Macdonald, R. (Glasgow, Cathcart) | Tryon, Rt. Hon. George Clement |
| Drewe, C. | McLean, Major A. | Turton, Rt. Hon. George Clement |
| Eden, Captain Anthony | Macmillan, Captain H. | Turton, Sir Edmund Russborough |
| Edmondson, Major A. J. | Macnaghten, Hon. Sir Malcolm | Vaughan-Morgan, Col. K. P. |
| Elliot, Major Walter E. | McNeill, Rt. Hon. Ronald John | Wallace, Captain D. E. |
| Ellis, R. G. | Maitland, Sir Arthur D. Steel- | Warner, Brigadier-General W. W. |
| Erskine, Lord (Somerset, Westen-s-M ) | Malone, Major P. B. | Warrender, Sir Victor |
| Erskine, James Malcolm Monteith | Manningham-Buller, Sir Mervyn | Watson, Sir F. (Pudsey and Otley) |
| Evans, Captain A. (Cardiff, South) | Margesson, Capt. D. | Watson, Rt. Hon. W. (Carlisle) |
| Everard, W. Lindsay | Marriott, Sir J. A. R. | Watts, Dr. T. |
| Falle, Sir Bertram G. | Milne, J.S. Wardlaw- | Wells, S. R. |
| Fanshawe, Commander G. D. | Mitchell, S. (Lanark, Lanark) | Wheler, Major Sir Granville C. H. |
| Fermoy, Lord | Mitchell, W. Foot (Saffron Walden) | White, Lieut.-Col. Sir G. Dairymple |
| Fielden, E. B. | Mond, Rt. Hon. Sir Alfred | Williams, A. M. (Cornwall, Northern) |
| Forestier-Walker, Sir L. | Monsell, Eyres, Com. Rt. Hon. B. M. | Williams, Com. C. (Devon, Torquay) |
| Foxcroft, Captain C. T. | Moore, Lieut.-Colonel T. C. R. (Ayr) | Wilson, M. J. (York, N. R., Richm'd |
| Frece, Sir Walter de | Moore-Brabazon, Lieut.-Col. J. T. C. | Wilson, R. R. (Stafford, Lichfield) |
| Fremantle, Lt.-Col. Francis E. | Morden, Col. W. Grant | Windsor-Clive, Lieut.-Colonel George |
| Gadie, Lieut.-Col. Anthony | Moreing, Captain A. H. | Winterton, Rt. Hon. Earl |
| Gault, Lieut.-Col. Andrew Hamilton | Morrison, H. (Wilts, Salisbury) | Wise, Sir Fredric |
| Gibbs, Col. Rt. Hon. George Abraham | Morrison-Bell, Sir Arthur Clive | Withers, John James |
| Glyn, Major R. G. C. | Nall, Lieut.-Colonel Sir Joseph | Wolmer, Viscount |
| Goff, Sir Park | Nelson, Sir Frank | Womersley, W. J. |
| Gower, Sir Robert | Neville, R. J. | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| Grace, John | Newman, Sir R. H. S. D. L. (Exeter) | Wood, Sir H. K. (Woolwich, West) |
| Grant, Sir J. A. | Nicholson, Col. Rt. Hn. W. G.(Ptrst'ld.) | Worthington-Evans, Rt. Hon. Sir L. |
| Grattan-Doyle, Sir N. | Nuttall, Ellis | Wragg, Herbert |
| Greene, W. P. Crawford | O'Neill Major Rt. Hon. Hugh | Young, Rt. Hon. Hilton (Norwich) |
| Gretton, Colonel Rt. Hon. John | Oman, Sir Charles William C. | |
| Grotrian, H. Brent | Penny, Frederick George | TELLERS FOR THE NOES.— |
| Guinness, Rt. Hon. Walter E. | Percy, Lord Eustace (Hastings) | Mr. F. c. Thomson and Captain |
| Bowyer. |