§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Second time."
§ Mr. HARRIS
The Bill which the House is now asked to pass a Second time is a customary Measure following on the passing of our own Finance Bill. This is a Bill with some peculiar features. We have a responsibility for this island, and while they have some discretion as to the taxes they prefer, we are entitled to ask why the beneficent Paper Duty is deliberately omitted for the Isle of Man? We have been told that this duty will have the effect of reducing the cost of paper, and the Isle of Man requires paper just as much as any other part of Great Britain. The hon. Member for East Dorset (Mr. Hall Caine) made a remarkable speech on the subject of the Paper Duty and told us that the duty would result in mass production and a great reduction in the price of this essential article. His name will always be associated with the Isle of Man, and I want to know why this delightful island should be robbed of the benefits of this duty. The 2066 Minister has no right to ask us to take this Bill as a matter of course. There are other peculiarities in it which require explanation. For instance, why is there a special Clause dealing with duties on matches? This does not appear in our own Finance Bill, but the Isle of Man each year has to decide whether or not matches are to be taxed.
We are asked in this Bill as in our own Budget, to tax silk and lace. In our case this is supposed to be a Measure for safeguarding important industries, but it is making a big draft on our imagination to suggest there are important silk or lace factories in the Isle of Man which justify the imposition of these duties with the inconvenience and trouble which they entail. I am informed there has grown up in the Isle of Man a large and prosperous manufactory of silk jumpers which is in serious competition with some of the factories of Switzerland and Italy. Now the Government ask that small infant industry to pay more for its raw material. It is on industries such as the manufacture of blouses and articles of that character, that the island relies in the winter time, when the tourist trade is bad. In the summer the people live largely by the tourist traffic, but in the long winters it is difficult for them to keep the wolf from the door except by means of small cottage industries. These have been enabled to survive in the past 2067 because of the benefit of free imports but now the Government are forcing on the Isle of Man all the ramifications of a protective tariff. We lost the American Colonies by imposing a duty on an unwilling people. This little island, it is true, is not large or wealthy and may not be able to fight this big country of ours, but this country has the responsibility of protecting the Isle of Man from being exploited by Tariff Reformers and we ought to champion the rights of the taxpayers of the Isle of Man.
§ Mr. SCURR
A short while back was published the Report of a Committee of the Privy Council on the question of Contributions to Imperial Funds from the Islands of Jersey, Guernsey, and Man, and on page 30 of that Report, paragraph 59 states:The Isle of Man now makes a perpetual payment of £10,000 per annum to the Exchequer under the provisions of the Act of 1866. Where this payment was fixed with regard to the then existing yield of the Insular customs duties or in the light of the cost to the Exchequer of Imperial Services, there can be no doubt that it is now disproportionately small. We recommend, therefore, that Parliament should be asked to amend the Act by increasing the permanent contribution of the Island to £50,000, which appears to us to be the smallest permanent contribution to the Exchequer which, in existing circumstances, the Isle of Man could properly make.We recommend that the additional payment of £50,000 necessary to make up a total contribution of £100,000 should be made for a period of 50 years, and that it should include the annual payment of £20,000 which the Island now makes.There was a great disappointment at the Tynwald Conference regarding the figures which the Treasury put forward, and certain allegations were made against Mr. Hawtrey, and I really think the Government ought to let us know whether this Bill affects that matter and whether it means that there is to be an increased contribution from the Isle of Man or whether any arrangement has been made in regard to it.
§ Mr. HALL CAINE
If the hon. Member for South-West Bethnal Green (Mr. Harris) had not raised this point in regard to wrapping paper, I intended to have mentioned it myself. The hon. Member seems to know as little about the Isle of Man as he does about the Wrapping Paper Duty. He seems to be under the impression that the Government are 2068 forcing Protective duties upon this poor little island, to which he referred as the Isle of Man, but which, as far as I could gather from his explanation in regard to jumpers, seemed to me to be the Isle of Woman. The real position is this: In the Isle of Man, Financial Resolutions are initiated by the Governor, but they have to receive the assent of both the Legislative Council and the House of Keys before they can become law. In the case of the Wrapping Paper Duty, I understand it was passed, with others, by the Legislative Council, but turned down by the House of Keys. I raise the point because I foresee considerable difficulties. If we have foreign paper being allowed in the Isle of Man free of duty and being sneaked over into this country by the back door, we may find that the whole of the proposals in the Bill are vitiated and will become as naught. I would like some assurance from the Financial Secretary to the Treasury that adequate safeguards are being taken by the Customs authorities that this shall not take place. I believe this is practically the only duty which has been passed in a Finance Bill which has not been ratified by the Isle of Man, and I can see no reason why it should not be ratified. I believe the interests of the Isle of Man are the same as ours. I have no wish to thrust anything on to that oldest of the self-governing Dominions—because I am proud of the fact that it is as self-governing a Dominion as it can be—but for smooth working it would be very much better if we could have an assurance, not that the Financial Secretary to the Treasury has interfered with the self-governing rights of the Isle of Man, but that he has taken adequate measures to protect us in this country against anything of the kind I have indicated.
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill)
The unprecedented Parliamentary success of my hon. Friend the Member for South-West Bethnal Green (Mr. Harris) reduced the House to such a condition of hilarity that I was unable to catch the points upon which he specially asked for an explanation. I have a very vague idea of the more serious parts of the speech which entertained the House so much. I think the case he made was, in 2069 the main, answered very conclusively by my hon. Friend the Member for East Dorset (Mr. Caine) who on this subject speaks, not only with great personal authority but, if I may say so, with distinguished hereditary authority. I am not prepared to give the hon. Member for South-West Bethnal Green explanations of particular duties contained in this Bill, because this raises a constitutional question. As the hon. Member for East Dorset has reminded the House, the Isle of Man is an autonomous part of His Majesty's Dominions. It has its own Parliament and its own constitution, and whenever it passes resolutions imposing taxation those resolutions are, for a certain period, valid in the Isle of Man. In order to give them complete legislative validity, they only require to be passed in this House in the form of a Bill which it would be unprecedented for this House to alter. I really do not know what would be the result if this House were to exercise what I think I must presume would be powers within its actual constitutional functions, and were to refuse to sanction the legislation of the island. I presume that in doing that the House would not be going beyond its constitutional and legal powers, but it would be unprecedented action, and I am confident this House will not take that action on an occasion of this sort. The duties contained in this Bill are the duties which have been imposed by the wisdom of those who govern the island, and in asking the House to give validity to those resolutions I am not prepared, as I have said, because I do not think it would be a proper course for us to take, to enter into criticism of them either those in the Bill or those which have been omitted. I can give the assurance for which my hon. Friend the Member for East Dorset asked. There is no interference, either in fact or intention, with the rights, privileges and constitution of the Isle of Man. I understand from our technical and expert advisers that the fact that the Wrapping Paper Duty has been omitted in the Isle of Man, while it is contained in our list of duties, will make no difference in the administration of the duties, and that they will be carried out perfectly well without endangering our own revenue or encroaching in any way on the rights of the island.
§ Mr. A. V. ALEXANDER
It is rather to be regretted that the Financial Secretary has not seen fit to make a reply to the specific question put by my hon. Friend the Member for Mile End (Mr. Scurr) as to what it is proposed to do with respect to the recommendation of the Committee of the Privy Council.
§ Mr. McNEILL
That was an oversight. I ought to have replied to that question, which I should have done by saying that, though I did not like to interrupt by rising to a point of Order, if the hon. Member had pursued his remarks I should have had to appeal to Mr. Speaker to know whether it was in order on this Bill. The point he raised has nothing to do with this Bill, and I am not in a position at the moment to say what action the Government may take with regard to that matter.
§ Mr. ALEXANDER
The question is, can this Report of the Privy Council be connected with the Bill presented to approve the raising of revenue in the Isle of Man? If the Financial Secretary refers to the earlier part of the Report which has been quoted he will find, on page 241, that it refers to the taxable capacity of the Isle of Man. We have just been told that we really have no business to interfere in this matter, and that we have no right to interfere with the legislation, financial or otherwise, passed by the two Houses in the Isle of Man. Yet it is clear from the Report of the Privy Council, which was submitted as a Command Paper, that, in fact, the Treasury does insist upon a certain amount being contributed by the Isle of Man to the Imperial expenditure. It must be obvious that the amount to be raised by the Customs Duties in the Isle of Man must have some effect upon the taxable capacity of the whole island and upon the amount fixed by the Treasury as a contribution from the island to the Imperial Exchequer. It seems to me to be a plain question, when we are considering these Customs Duties, to ask whether the Government are able to say what their action will be with regard to the recommendation of the Privy Council.
§ Mr. SPEAKER
I think I must now rule that that question is not relevant on the present occasion. The question of 2071 the amount of the contribution demanded by the Treasury should be raised on the Estimates.
§ Mr. ALEXANDER
When we are considering our finances as a whole, which includes the contribution to the Imperial Exchequer, I think we are entitled to ask that we should have all the necessary information, and the only way in which the Members of the House of Commons are able to get information as to the incidence of the Customs Duties and similar duties is from the Isle of Man amounts which are presented annually to the House. I find that on 24th June there was a White Paper submitted in dummy for 1925–26, and although we have a print in the Library of the amounts for 1924–25, we have not a copy of the amounts for 1925–26. Therefore, I cannot check what has been the change in the Revenue income from Customs Duties in the Isle of Man as a whole. Before we give a Second Reading to a Bill which ratifies an Act of the Isle of Man Parliament we ought to be able to get information as to what the yield was for 1925–26 from the accounts which are said to have been laid, but which, as a matter of fact, are not available to the House.
§ Mr. SPEAKER
Either the Isle of Man is self-governing or it is not in these matters. If I were to allow this argument, it would mean that we were interfering with the ancient rights of the people of the Isle of Man. That would be a retrograde step to take.
We have had a very clear statement as to the position, the clearest that has been made for some years, though the matter has been referred to every year. The position is this. Not the direct but the indirect taxes of the Isle of Man are proposed—the financial legislation is proposed by the Government. It is then submitted to the two Houses and the two Houses must pass Resolutions approving it. So that the Manxmen have the additional safeguard of this House in addition to the sanction of their own two Houses. You will find nothing like it in any Dominion. I contend that the powers conferred probably by the Act of 1765 are real powers and that we are quite 2072 within our rights in examining the propriety of the imposition of this sort of taxation in the Isle of Man. This is not the spontaneous action of the Manx population at all. Is it to be supposed that the inhabitants of the Isle of Man thought spontaneously of exactly the same ridiculous catalogue of import duties as occurred to the mind of the Chancellor of the Exchequer of this country—this amazing simultaneity by which we thought of gloves and they thought of gloves, we thought of incandescent mantles and they thought of incandescent mantles? What happened was that the Governor, acting no doubt in harmony with the Treasury—
§ Mr. SPEAKER
I think the hon. and gallant Gentleman knows enough of our Constitution to know that the Governor of the Isle of Man represents the Crown just as recommendation of taxes goes from the Crown here through the Minister. He must not attack the Governor in that indirect way.
I need not tell you, Sir, that any fault I have committed was committed inadvertently, and I express my regret for it. But just as the Government uses the power of the Crown here to propose taxes which we may object to, so the name of the Crown is in effect used in the Isle of Man to propose simultaneously the same taxes there. I contend that our responsibility in connection with these taxes is very different from our responsibility in connection with the taxation of any other of the semi-independent States that form the British Empire. It is a very curious thing that in one case the House of Keys actually rejected the duty. It has some concern for the hon. Member for Dorset, because he is anxious that the effect intended by the duty shall be secured, and he asks the Financial Secretary what steps he will take to protect this country from the position which has been created by the refusal of the Isle of Man to grant this tax. I have listened with some care to what the right hon. Gentleman said, but I did not gather any detailed particulars of the measures he intends to take to meet the wishes of the hon. Member below him. In general one can say if it is hard to impose on this country, which is a manufacturing 2073 country, a series of duties on manufactured articles which may, and no doubt will, benefit here and there an industry, it is a very much harder thing to take a country which is a non-manufacturing country and, in order to bring its tariff into harmony with ours, and for our convenience, to inflict upon consumers there a series of duties which must result in the raising of the cost of living. Time has not been wasted in discussing this aspect on the Second Reading.
Question, "That the Bill be now read a Second time," put, and agreed to.
Bill read a Second time.
Bill committed to a committee of the Whole House for to-morrow.—[Mr. McNeill.]