GOVERNMENT CHEMIST. (Hansard, 19 November 1928)

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel)
This Supplementary Estimate is for the purpose of providing a small additional staff for the Government chemist, who carries out the analyses for the other Departments. This chemist looks after such things as the adulteration of food, the assessment of drawback on export dutiable goods, and questions about such goods as may not be dutiable and ingredients in goods that are imported into England and are dutiable. In addition to that, the Finance Act of 1928 imposed on the Government chemist staff a large amount of additional work. No fewer than 10,000 extra analyses were made in respect of the Oil Duty. The change relating to the Sugar Duties also entailed greater work on the staff. We have taken steps to economise in this Department and have reduced the expenditure in many ways. The scale of sampling has been reviewed; there has been a reorganisation of the staff; several branches have been drawn under one directorate; and there have been considerable economies in working. These economies, however, have not been found sufficient to meet all the extra costs of the staff required, and therefore I ask for this Supplementary Vote.

§ Mr. E. BROWN
I rather suspect that behind this innocent looking Vote there is an interesting story. I rather suspect that this small Estimate is due to the 1502 haste of the Chancellor of the Exchequer. In the last few years, when we have been fighting elections, we have all been inundated with requests from motor-car users to change the horse-power tax to a petrol tax. That change was always refused until this year. This year the reasons previously given against the change were scrapped by the Chancellor of the Exchequer who came down to the House thinking he had solved what had been to the Treasury hitherto an insoluble problem—how to get a chemical frontier inside the light hydro-carbon oils which it would not be possible to evade. In the old days our constituents asked us "Will you support a petrol tax as against a horse-power tax?" I remember that at Rugby, in 1923, that question was put to me and I replied, "I do not advise you to ask for it, because you will find yourselves saddled with both taxes." That has been the case.
The Treasury has been worrying for years, as I have stated, but the Chancellor of the Exchequer came to the House and said, "We have solved all that. We will give the motor user both taxes, but we shall not have to worry about the chemical front, because we will now cut our frontier not vertically but horizontally between the heavy oils and the light oils." The Chancellor was in too much of a hurry; he was a month too soon, for he failed to recognise that inside the great sale of light hydrocarbon oils were great numbers of consumers, especially women, who were interested in using paraffin. He had to come down and face again a problem which has not yet been solved. Seeing that the Government chemist is dealing with samples and there have been many more samples in the last year for him to analyse, I suspect that the bulk of this £1,600 is to go for extra expert advice as to the finding of an accurate chemical frontier for the Oil Duty—a frontier which will not be evadable. Is this £1,600 an additional salary for an expert chemist, or more than one, or is it provided for overtime worked by other chemists inside the Department, in order that the Chancellor of the Exchequer may, inside this financial year, have a chemical frontier for these oils which it will not be possible to evade? Is this chemist the outpost of the frontier?
1503 The Chancellor's first Estimate was that he would get from the oil taxes £18,000,000, and now he is to lose £3,500,000 of that. Have the investigations of the chemists resulted in showing that the receipts will be above or below what was estimated? It is strange that on the original Estimate of £64,000, which was voted for this Department, the Financial Secretary should now have to come down and demand another £1,600. I hope for the revenue's sake that I am wrong, but I shrewdly suspect that the mass of the extra work for which this Vote is required has been due to the Chancellor's haste in thinking that he has solved the problem to which I have referred.

§ Lieut. - Commander KENWORTHY
I beg to move to reduce the Vote by £100.
I believe much of this extra expenditure is due to the Government's fiscal policy. I believe a great deal of it is due to the policy of hampering British trade by putting tariffs on imported dyestuffs or prohibiting imported dyestuffs. I do not know the exact extent of the list of fine chemicals taxed but I believe it runs into hundreds, and all this has been done in an attempt to bolster up the British chemical industry. That is a very wealthy industry, now entirely rationalised and trustified, and in no need of such assistance. The duties on chemicals alone would account for this extra expenditure. The duty on dyestuffs alone would account for it, and the Silk Duty may also account for some of it, and then, of course, there is the Petrol Duty to which the hon. Member for Leith (Mr. E. Brown) has referred. I am opposed to all these duties, especially when they are introduced in an underhand way, little by little. I am glad to see the Parliamentary Secretary to the Treasury in his place. He has told us how a full measure of Protection can be brought in by "driblets," so that the people may get used to it. There is a Chinese torture known as the "death of the thousand cuts." A skilled executioner can deal the victim a thousand cuts taking off a finger with one cut, a piece of the ear with another and so on and the victim only dies after a long time and in great pain. That is how Protection is being introduced. It is the policy of the thousand cuts—the 900 1504 taxes on fine chemicals, dyestuffs, and so forth. Incidentally, may I say that in this matter the pass was sold by the Coalition Liberals who allowed the Coalition majority to put a duty on dyestuffs or worse than a duty, the horrible system of licenses. All this has to be paid for by the taxpayer as a consumer, and he is now called upon to pay for it directly in the cost of extra staff. Therefore I shall not allow this Vote to pass without protest.

§ Mr. SAMUEL
I think I am in the fortunate position of being able to gratify the wishes and hopes of both the hon. Members who have spoken. The hon. Member for Leith (Mr. Brown) expressed the hope that he might be wrong in what he said. I am glad to be able to gratify his wish on that point. This extra sum of £1,600 is not intended to provide an outpost sentry on any horizontal or vertical frontier. [An HON. MEMBER: "Or diagonal."] This is a very simple straightforward proposal. The amount is required for staff to do, work which, in some degree, has been correctly described by the hon. and gallant Member for Central Hull. (Lieut.-Commander Kenworthy). The main reasons for which the staff is required are these. There is, first, work of examination in connection with the Revenue Department—it may be in connection with alcohol, or it may be in connection with smuggling—and there is also the examination of foods in reference to adulteration. Examinations are, of course, necessary to determine whether imported articles are dutiable, and the extent to which they contain dutiable ingredients. After all, Government Departments have to carry out the law. The work also includes the assessment of drawbacks on goods exported, but the main cause for the extra staff is in respect of the oil duties. [HON. MEMBERS: "Oh!"] We make no secret about it.

§ Mr. BROWN
May I ask then, does the right hon. Gentleman say that I am wrong? I suggested that this Vote arose from the very ticklish problem of finding that frontier in regard to the oils, and it seems to me I am right. I would ask again, are the Government satisfied that a satisfactory chemical frontier has been found for the purpose of this duty.

§ Mr. SAMUEL
Things change from day to day, and one can never know what fresh invention may take place and what fresh investigation may be necessary but there is no doubt about this fact—that the new oil duties have imposed extra work upon the staff. As I say, the law has to be carried out. It is also to be remembered that we altered the sugar duties for the benefit of the consumer, and in that connection certain investigations have to be made. For all these purposes more staff is required. As I have explained a large amount of economy was found possible, but not enough to cover the extra amount required.

§ Mr. BROWN
I cannot express myself as satisfied with the Financial Secretary's statement. He started by giving me a direct negative, but it seems to me that he contradicted himself and admitted the whole case which I have put forward, namely, that the whole of this work is connected with the difficult, complicated and delicate problem hitherto found insoluble by the chemists working for the Treasury, namely, the provision of a limit inside the range of light hydrocarbon oils. The Committee are entitled to a definite answer as to the progress which is being made in finding that frontier. The right hon. Gentleman dropped another hint which reminds me that I saw in the newspaper recently that a new device has been invented for applying crude oils to motor lorries. What effect will that invention have on the administration of these duties on light hydrocarbon oils, and in consequence upon the estimates of the Chancellor? When the duty was brought in it was a fluid duty, but it seems to be more fluid now than, it was when it was brought in first. I believe the Chancellor has not got that frontier which will be satisfactory from the revenue point of view as a basis of the great scheme of de-rating, and I propose to support the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) in his Amendment.

§ Mr. MAXTON
The hon. Gentleman has not replied to my question as to whether this additional cost is due to the appointment of additional permanent 1506 staff additional temporary staff, or overtime payments to existing staff. In particular, I should like him to tell us whether this represents a permanent addition to the working costs of this Department, or if it is simply a temporary expansion to meet a sudden development of work which will be non-recurring in its nature.

§ Mr. SAMUEL
I am informed that the staff is wanted for actual analyses of samples, and not in order to advise as to a new frontier.

§ Mr. MAXTON
Are they permanent appointments?

§ Mr. SAMUEL
I do not think so. I am not sure, however.

§ Mr. MAXTON
On the established service?

§ Mr. SAMUEL
I do not think so.

§ Mr. BUCHANAN
Does that mean that on and after this date we can look forward to this estimate being increased by this amount owing to the fact that you have engaged a certain extra permanent staff?

§ Sir R. HAMILTON
If this extra staff has been appointed to take the large number of analyses that are necessary, and if they are going to be permanent, does that mean that they are going to be permanently engaged on trying to solve this Problem? Are they really going to be permanently on the staff to take extra analyses, or will they only be temporary for the purpose of inquiring into this oil question?

§ Mr. SAMUEL
At present the staff is temporary, but it may become permanent if it is wanted. We do not know yet whether they will be wanted for any length of time. What they are doing is to examine samples as they come in, and we require two chemists and five laboratory assistants for this work. If what we need them for comes to an end, then these gentlemen will no longer be required.

§ Mr. MAXTON
Do I understand that these chemists are not on the permanent staff and that you will discharge them as soon as this particular bit of work is concluded?

§ Mr. SAMUEL
They are serving temporarily. They are employed as long as they may be wanted, and when they are no longer wanted, the arrangement is that they will be engaged no longer.

§ Mr. BROWN
The fact is, therefore, that the possibility of evasion because of the alteration made by the Chancellor of the Exchequer inside the light oils is such that it may be that the Government will have to keep two chemists and five laboratory assistants perpetually at work trying to detect the inventions which are trying to evade the tax.