§ As from the thirty-first day of August, nineteen hundred and twenty-eight, the drawback granted in the case of tissue produced in Great Britain and Ireland if proved to the satisfaction of the Commissioners to be unweighted, in pursuance of the fourth Section of the Finance Act of 1925 and Part II of the Second Schedule of that Act, shall be seven shillings and nine-pence per pound.—[Sir F. Meyer.]
§ Brought up, and read the First time.
1327§ Sir F. MEYERI beg to move, "That the Clause be read a Second time."
Only a stern sense of duty impels me to move a new Clause of this somewhat difficult and technical nature at this very late hour, and I shall state the case for it with the utmost brevity, consistent with explaining the position, and at least I shall not weary the Committee with any figures. The Clause deals with drawbacks granted in connection with the Silk Duties. These duties, which were imposed by the Chancellor three years ago, have on the whole worked very smoothly, and I think I shall be speaking the mind of the silk trade as a whole when I say that it is very grateful to the right hon. Gentleman for the efforts he has made to meet its difficulties and to try to see that those duties, heavy though they are in some instances, do not interfere too much with its legitimate trade. I think the right hon. Gentleman will agree that the trade has tried, as far as possible, to co-operate with him and to give him its loyal support in carrying out the policy which he laid down when he imposed the duties. With regard to the drawbacks I would explain that the rates differ. In the case of silk goods made from foreign yarns the drawback rate is 7s. 9d. In the case of silk goods made from English yarns the drawback is 4s. 3d. These differential rates of drawback are related to the different rates of duty which are imposed for foreign yarns and English-made yarns.
The drawback which is used by the vast majority of those in the silk trade is a composite rate of 5s. 6d., and, if they wish to have a 7s. 9d. or a 4s. 3d. rate, they have to employ it for a whole year. Consequently, they have to take only foreign yarn or English yarn. In practice, they adopt a composite rate of 5s. 6d., with the result that it works out that, on every pound of silk which they convert into silk goods and then export and claim the drawback, there is a heavy loss owing to the differentiation between the duty and the drawback. There is a loss, first of all, in boiling the silk down and also in the actual manufacture. From 23 ounces of silk yarn, you only get 16 ounces of silk. Therefore, on a pound of silk stuff made from silk yarn there is a loss of 1s. 4d., and on a pound of silk material made from silk yarn there is a loss of 2s. This 1328 loss is a very heavy handicap to the export silk trade, and it is in order to do away with that loss that I have put down this new Clause, making the drawback a standard rate of 7s. 9d. The result of this proposal, if adopted, would be that the losses would be done away with, and there would be a very small profit instead. I hope the Chancellor of the Exchequer will be able to see his way either to make some concession or hold out some hope that this handicap on the export side of the silk business in this country may be done away with either now or in the near future. I am only speaking of a section of this important industry. Hon. Members will be surprised, I have no doubt, to hear that besides the fishing industry there is in Yarmouth a silk factory. The hon. Member for Macclesfield (Mr. Remer) speaks for a larger number of silk factory workers, and no doubt he will have something to say on this question. I hope the Chancellor of the Exchequer will be able to assure us that these drawbacks will be adjusted in such a way as not to inflict such a heavy handicap on the silk industry.
§ Mr. CHURCHILLIt has been known for some time that the silk trade has been complaining that the drawbacks are inadequate. I would like to point out that these duties have now been working for three years, and I hope that they will continue to go on in the same way for another year or two before they are remodelled. They are duties which have not provoked retaliation. These drawbacks about which so much was predicted, have not been treated as bounties, within the meaning of the legislation in foreign countries, which provide for definite retaliatory measures against bounties on export. The duties have also been attended by a diminution in the cost to the consumer, they have caused some increase in employment, and they have brought in a substantial revenue to the Exchequer.
I think it is much too soon to disturb this extremely complicated system of taxes, to the elaboration of which the House devoted an immense amount of time in the Budget of 1925 and which I trust we shall leave to work in a harmonious manner until at any rate a new-Parliament is established to take stock of it.
§ Mr. REMERI should not wish to detain the Committee but for the observations made by the Chancellor with reference to the export trade. Last year, when I moved an Amendment, the present Lord Chancellor made a statement that Mr. Mackenzie King, the Canadian Prime Minister, had promised to consider the question of the export of silk to Canada. As far as the Canadian Government are concerned, they charge the extra price for duty purposes, including the raw material, on goods exported from Britain. That is doing considerable injury to our export trade. These anomalies are not merely important things in themselves, but are doing very considerable injury to the silk industry. The Silk Duties, as a whole, are doing a great deal to help the silk industry. I cannot understand why my right hon. Friend, when he realises the hurry in which these duties are being put through and when obvious anomalies are put before him does not see his way to dot the "i's" and cross the "t's" of the duties. I would ask him to consider whether it is worth while to allow all the great work which he has done in regard to the Silk Duties to be destroyed merely for the sake of saying that he is going to leave the thing for three, four or five years more. Cannot he give some assurance that between now and the Report stage he will consider the matter again. If he would like figures put in front of him, I should be very glad to send them to him, so that he may see if something can be done to deal with these obvious anomalies which exist in the Silk Duties.
§ Motion and Clause, by leave, withdrawn.
The CHAIRMANThe new Clause—(Maintenance Claims)—standing in the name of the hon. and gallant Member for the Maiden Division of Essex (Lieut.-Colonel Ruggles-Brise) is out of order.