HC Deb 23 December 1929 vol 233 cc1908-11

(by Private Notice) asked the Chancellor of the Exchequer whether he can now make his promised statement in regard to the Silk and other analogous Duties?

The CHANCELLOR of the EXCHEQUER (Mr, Philip Snowden)

I have carefully considered the representations made to me by various trade organisations as to the effect on business and employment of the uncertainty of the position in the next Budget of the Duties on Silk and Sugar and of the McKenna and Safeguarding Duties. The possibility of budgetary changes is an annual contingency which traders must recognise, and with regard to which they must from year to year make their own dispositions. I must state clearly, therefore, at the outset that I cannot contemplate any departure from the invariable rule that Budget decisions cannot be anticipated. I understand that the trade organisations concerned recognise that position, but they desire to be informed of the particular steps which would be taken in the event of particular changes being decided upon.

In normal circumstances I should be fully justified in declining to answer hypothetical questions, or to give any indication of the course that would be adopted in circumstances which have not arisen, and may not arise. But it is represented to me that at the present juncture, in the numerous trades affected by the Silk and Artificial Silk Duties, and in the sugar trade, business is being held up and employment affected, not merely in consequence of uncertainty as to whether the duties will be continued or not, but also because apprehensions are felt as to what will be the position in regard to duty-paid stocks, if the duties should in fact be removed. The view is held that continued uncertainty as to the general procedure that would be adopted in that event may prejudice employment to a serious degree, may embarrass the important export trade in silk goods, and may disorganise the arrangements for supplying sugar to the consumer.

The problem of duty-paid stocks in the case of the trades affected by the Silk and Sugar Duties is specially important. The Customs duties are accompanied by Excise duties on home production and manufacture, and the trades concerned work out of bond, which is a new situation in the case of sugar and has not previously arisen in the case of silk, since the duties were only imposed four years ago. It is, therefore, necessarily the case that, practically the whole of the stocks in the country at any time, whether produced at home or imported from abroad, have paid duty, and the removal of the duties would involve the trades concerned in heavy losses.

After careful consideration of the conditions under which the Silk and Sugar Duties are administered, I feel justified in saying that, in the event of their repeal in the next Budget, it would be necessary to take the exceptional course of proposing some scheme of rebates to meet the position of holders of duty-paid stocks. It must be understood, however, that I cannot commit myself to the precise scope, extent or method of any such scheme, which would require the most careful consideration of the circumstances of the trades and of the practical and revenue aspects of the problem if the occasion arose.

On the other hand, in the case of the McKenna and Safeguarding Duties, which are protective in intention and effect, and where there is no Excise duty on home production or manufacture, the problem of duty-paid stocks is confined to articles imported from abroad, which in many cases can be kept in bond. I am satisfied, therefore, that the situation in the case of these duties will be adequately met by an assurance that, if any of them are repealed, drawbacks on duty-paid exports would continue to be paid, as was done when the McKenna, Duties were removed in 1924. I have already stated that the various Safeguarding Duties will not in any case be renewed after the expiration of the periods for which they were imposed, and, consequently, to that extent the trades concerned can have no feeling of uncertainty.

In conclusion, I would add that I am not prepared to go beyond this general indication of the procedure that would be adopted if any of the duties referred to were repealed in my next Budget. II is only in consideration of the exceptional circumstances of the present time, and of their bearing on the pressing problem of employment, that I have agreed to make this statement with the object of enabling business to be carried on and employment maintained. I should be unable to regard this statement as ground for any assumption that the same course would be followed in different circumstances or in future years.


Is the right hon. Gentleman aware that by his menacing statement he has redoubled the anxiety and uncertainty?


I am not aware of that, hut I am aware that, if any uncertainty exists, it is entirely due to the policy of the right hon. Gentleman.


Is the right hon. Gentleman aware that the whole of the motor industry in this country has to plan six months or a year ahead, and does he realise that this causes such grave uncertainty that it is almost inevitable that unemployment will follow in the industry?


The hon. Baronet should have taken that into consideration when his party reimposed the McKenna Duties without a mandate from the country and without an hour's notice.

Captain EDEN

May I ask in all earnestness whether the right hon. Gentleman is aware that not only the motor car trade, but those who supply it, are at the moment shutting down their demands because of the uncertainty, and does he not think this is really an issue where he might take a slightly broader view than he has done?


I have repeatedly stated in the House that uncertainty is always associated with tariffs, and those who clamoured for tariffs for their particular industries and brought pressure to bear on the Government to impose those duties ought to have been aware of the uncertainty that would be caused.


Is the right hon. Gentleman aware that this is the first occasion in answer to any question that he has made reference to the Silk Duties, which are not Safeguarding Duties at all, but revenue duties, and, in view of the greater uncertainty which will be caused by his answer, will he receive a deputation of the Silk Association at the earliest possible moment?


The hon. Member had better wait and see the reception my statement gets from the trade organisations concerned. I am perfectly certain that I have met the representations that the trade has made.


On a point of Order. Would it be in order for me to ask the Lord Privy Seal a question about his views on this question?


No; that would not be in order at Question Time.