§ Where any article of apparel made wholly or partly of silk is imported, the article, instead of being charged with duty in accordance with the provisions of Part I of the Second Schedule to the Finance Act, 1925, may, at the option of the importer, be charged with a duty calculated on the whole weight of the article at a rate equal to twice the rate of the duty chargeable under the said Part I in respect of the class of silk contained in the article.
§ For the purposes of this sub-section—
- (i) the expression "silk" includes artificial silk;
- (ii) where silk of several classes is contained in the article, the article shall be chargeable with duty as if all the silk so contained were silk of that one of those classes in respect of which the highest rate of duty is payable under the said Part I;
- (iii) in determining the class to which any silk belongs regard shall be had to the stage of manufacture in which the silk appears in the article.—[Sir G. Rentoul.]
§ Brought up, and read the First time.
§ Sir GERVAIS RENTOUL
I beg to move, "That the Clause be read a Second time."
I move this new Clause for the purpose of calling attention to what seems to me to be a very serious anomaly. This is rather a difficult matter to raise within the rules of Order. Therefore, I am not desirous of insisting on the actual wording of this particular Clause, which I think could be easily amended 103 and put into better form, but I do want to call attention to the grave anomaly and hardship that exists, and which tends to create a feeling of injustice in the minds of many traders in this country. The position with regard to the Silk Duties, so far as I am able to understand it, is that in 1926 a differentiation was made as to the amount of the duty payable and the basis of the assessment of that duty as between the trader and the private individuals. It was laid down that any private person who went to some foreign country, say, France, and bought certain articles containing silk and brought them back into this country, was required to pay duty only on the weight of silk contained in the articles, which in many instances amounted to a very small sum, whereas if a trader went abroad or if a business man in this country sent his buyer to France to purchase dresses or other silk articles, he was required to pay duty on the ad valorem value, which might amount in many instances to 20, 30 and even 100 times as much as the duty that would have to be paid by a private person on these same articles. I do not know why that differentiation was made.
It is very difficult when one reads the discussion that took place at the time that the duties were imposed, to find any real justification for drawing such a distinction. As far as I am aware there is no parallel for such a differentiation being made in regard to any other class of goods. I should be interested to know if the Financial Secretary to the Treasury can tell us of any parallel case where a difference is made between the rate of duty that has to be paid by a trader and the duty which would be payable on that same article if introduced by a private person. Undoubtedly, this differentiation constitutes an anomaly and hardship and is in some ways detrimental to British trade. If any case can be made out for some concession being accorded to a private person, it certainly ought not to be anything like the divergence that now exists. It has a tendency to hamper trade and it has, as I know well from personal experience and from views that have been expressed to me by business people in this country, created a very real and justifiable sense of hardship in the minds of traders.
104 We are constantly told to buy British goods. Here is an inducement held out to people, who are able to afford it, to buy these goods in other countries, and to bring them into this country, and then they are only called upon to pay an infinitesimal amount of duty, instead of purchasing the goods, as they could and as they ought to do in this country, wherever possible, thereby helping British trade and employment. We are told that there are administrative difficulties that might arise with regard to this matter. I suggest that that is not a valid argument, when we bear in mind that all that is now being suggested is that the practice in this country should be the same as is adopted by the United States of America. They have a tax on goods purchased abroad containing silk material which are introduced into the United States. I understand that the procedure there is that the person importing those goods is required to produce the invoice from the business house or shop abroad where the goods were purchased, and on the amount of that invoice they pay duty. That is a system which seems to work perfectly easily and without any great complication or difficulty in the United States, and it is very difficult to see why the same system should not equally well prevail in this country. For these reasons, I move the Clause. The purpose—
§ Notice taken that 40 Members were not present; Committee counted, and 40 Members being present—
§ Sir G. RENTOUL
I hope that I have sufficiently brought to the notice of the Financial Secretary to the Treasury the purpose that I have in view in moving this new Clause and in calling attention, in the only way open to me, to the serious anomaly and injustice that exists. I think that purpose will commend itself to hon. Members, irrespective of the party to which they belong, and I hope that the Financial Secretary will give very careful consideration to the matter to see if he cannot arrive at some procedure which will remove from the minds of the traders carrying on business in this country, often under very difficult circumstances, a real sense of injustice and hardship.
§ Mr. PETHICK-LAWRENCE
I have listened with a great deal of interest to 105 the hon. and learned Member for Lowestoft (Sir G. Rentoul), and I am not prepared to deny that there is something distinctly anomalous in the existing method of levying these duties upon silk imported in the ordinary course of business and imported by private persons. This concession was made in 1926 by the right hon. Member for Epping (Mr. Churchill), who was then Chancellor of the Exchequer. When they were first introduced we, who were then in Opposition, foresaw that duties of this kind, dealing with articles of everyday use, were bound to be inconvenient in many ways and would give rise to considerable difficulty. When they had been in force for a short time, the right hon. Member found that these difficulties did arise, that there was considerable administrative inconvenience in treating goods brought by private individuals from the Continent or sent by post from the Continent to this country on precisely the same footing as an ordinary importation of wearing apparel containing silk by the traders of this country. For that reason, the right hon. Gentleman found that it was necessary to make certain administrative changes which were embodied in the Finance Act, 1926. The hon. and learned Member for Lowestoft makes the only proposal which it is possible for him to make under the Rules of Order, and that is to bring the position of traders into line with that of private individuals. I gather that if he had been able he would have reversed his proposal and brought the position of the private individual into line with that of the trade, but that, of course, would be out of order.
I am bound to consider the new Clause in the form in which it is moved. In the first place let me look at the cost to the revenue. It is anticipated that the cost of the alteration would be from £300,000 to £400,000 a year; a considerable change which, I am afraid, the Chancellor of the Exchequer cannot afford. But putting that out of account, let us see in what the hardship to the trader really consists. The trader has one or two alternatives. He may be bringing in wearing apparel, and if he is doing that he is not bringing in his whole stock-in-trade, but a Paris model for the purpose of copying it. As far as the individual Paris model is concerned, he is put to considerable greater Customs duty 106 than a private person bringing in an article to wear, but, on the other hand, when he proceeds to copy it and make it up out of the raw material, he escapes much more lightly, because in that case he only pays on the silk, and pays once instead of paying the double value which the private individual is forced to pay. Therefore, although there is an anomaly in the case of the actual Paris model as far as the great bulk of his work is concerned, he is much better off as against the private individual.
The reason why we cannot go back and adopt the proposal in the 1925 Act, or the American system, is that it would cause great inconvenience to travellers. It is an easy matter in America, where people bringing in large consignments go into full details of the articles. It is a far different matter in respect of the cross-Channel traffic between this country and the Continent. It would delay the whole procedure at the ports if we were to insist in every case on the production of the invoice. A great deal of this trade is also a matter of sending through the post presents which might be quite small, and in these cases it is much easier to handle it in the way it is done than to revert to the 1925 system. For these reasons, because administratively we should find it difficult to go back to the 1925 system and because for the purposes of revenue, as long as we are to have Silk Duties, I am afraid we cannot sacrifice £300,000 to £400,000 per year, I cannot accept the Amendment.
§ Mr. HOFFMAN
The Financial Secretary says that the great difficulty is in the matter of administration, but I can see no more difficulty in placing a value on dresses brought in than there is in valuing any cutlery brought from abroad. A declared value is to be made in that case and duty is paid accordingly, and from my experience there is no difficulty in the Customs Officers being able to put an approximate value on the dresses brought in. On the question of hardship, I say that the field of hardship is far wider than the Financial Secretary would have the Committee believe. I have been interested in the drapery trade. I was apprenticed to the silk trade, and in recent years have succeeded in organising the dressmakers in the West End 107 of London. It is a fact that this differentiation of duty has caused quite a large number of women to buy their dresses in Berlin or Paris whereas they used formerly to purchase them in this country. Numbers of dressmakers have been thrown out of employment. It is true that models are purchased abroad and brought into this country, but some traders are not so careful about the morality of the question and will take their assistants with them, purchase their models in Paris, and the girls will bring them back declaring that the dresses are for their own personal use. In this way they escape enormous duties.
Let me give one or two examples. Here is the case of a dress of the invoiced value of £114 15s. 6d. The duty which the trader pays is £38 5s. 2d. The weight of the dress is four lbs., and the private person gets off with a duty of £3. Take another case. In this the value of the dress is £32. The trader has to pay a duty of £10, while the private person pays 8s. 3d. Take a further instance, where £27 was the price of the dress. The duty paid by the trader is £9, whereas the private person gets off with 6s. I suggest that this is putting a premium upon persons going to Paris, purchasing models and bringing them back here as their own property. It pays all the expenses over and over again. I am going a little further. In my humble opinion, these instances make me tremble very much as to what will happen in case of the success of Lord Beaverbrook's campaign for duties all round. If this is an instance of what happens when duties are imposed, that the rich can wangle them so much in the interests of their wives and friends, I wonder what is likely to happen if we have duties imposed upon everything brought into the country? These are instances of something which is grossly unfair and wrong. It is not right that there should be this differentiation.
The only excuse given in 1926 was that the difficulty was to produce evidence as to the actual value of the goods brought in. That is now stated by the Financial Secretary as the reason for the continuance of these duties. If I bring in anything from the Continent, a present, a bottle of scent, I declare everything, and I am quite willing to leave it to the 108 good judgment of the customs officer as to whether I should be charged or not. I did so, on one occasion and I was charged 9s. 9d. duty on a bottle of Marc. I object to this preferential treatment on behalf of a few rich people. I would prefer to see it done away with altogether and I hope the Chancellor of the Exchequer, who is looking round for a few more sixpences, will be able to find a few on the backs of ladies when they bring these dresses home from the Continent. I hope he will remove this privilege next year.
§ Mr. HOFFMAN
I was only suggesting that the Chancellor of the Exchequer should consider it for next year.
§ Sir G. RENTOUL
I have achieved my purpose in getting a reply from the Government, and I beg to ask leave to withdraw the new Clause.
§ Motion and Clause, by leave, withdrawn.