HC Deb 23 February 1932 vol 262 cc260-5

I beg to move, in page 13, line 13, after the word "changed," to insert the words: and providing the process is one that cannot be satisfactorily carried out in this country. This is a very important Clause, and I make no apology for moving this Amendment. I desire to look after the interests of our own people. If the late Solicitor-General differs from me in that respect then we cannot go into the same Lobby. While I like to see other countries prospering I consider that my first duty is to look after our own people. What is the meaning of the words in this Clause: But that their form or character has not been changed. This may be perfectly clear to the legal mind but it is not clear to the lay mind. The Financial Secretary on the Second Reading suggested that the process of printing and dyeing cloth might not necessarily mean that the cloth had changed its character, but I should like to know how far the Customs officials are to go, or will go, in exercising their discretionary powers as to whether goods have been subjected to a process which had changed their form and character when re-imported into this country. Who is to decide this question? At the same time I consider that last week, when the Financial Secretary spoke on the Second Reading of the Bill, he did not quite faithfully interpret this Clause. I say that in no carping spirit. If I refer to the OFFICIAL REPORT of 15th February I find that the Financial Secretary said: In the case of imports for re-export there are provisions in Clauses 13 and 14 so that goods may be imported either for re-export or exported with a view to free re-importation so long as the process which the goods undergo does not change the form and character of the goods. In my reading of Clause 14 it appears to me, as a layman, quite clear that the statement made by the Financial Secretary does not quite coincide with the statement in paragraph (b) of the Clause. That paragraph definitely states that the goods, if they have been abroad and subjected to a process and then have come back to this country, if they have not changed their former character, shall pay a duty on the increased value of the goods to the extent of the cost of the process. On the other hand the Financial Secretary stated that when these goods came back, if the process had not changed the character of the goods, they could come back free. The Clause appears to be perfectly clear and to show that the goods will have to pay duty and will not come back free. The Financial Secretary said in the same speech: If the printing or dyeing does not change the form or character of the goods which have been exported, they will not be subject to the duty when re-introduced into this country."—[OFFICIAL REPORT, 15th February, 1932; col. 1300, Vol. 261.] Again I would refer to paragraph (b) of the Clause, which state that the goods shall 'be chargeable to duty in respect of the increased value resulting from the processing of the goods. In my view there are two reasons for the exporting and re-importing of goods. I cannot conceive that anyone would export any goods for processing in a foreign country except for one of those two reasons. The first would be that the processing could not possibly be done in this country; and the second would be that they could be processed in that foreign country at a lower cost than in this country. It is because of the latter reason that I wish to submit this Amendment. There will be in the minds of many hon. Members who are connected with various industries throughout the country many cases where goods can be processed in a foreign country and cannot be processed here. I give my own industry simply as an example. There is a type of leather which is manufactured here to a certain point but cannot be manufactured beyond that point. That particular leather is in the main manufactured in Germany, in Canada, and in the United States. I refer to the patent leather which goes into the manufacture of the uppers of boots and shoes. No matter what steps we have taken in trying to make patent leather in this country, so far it has never been successfully manufactured, for the simple reason that we have so much humidity in our atmosphere and not the dry atmosphere of the countries I have mentioned.

We ought not to stand in the way of anyone in this country desiring to send these things out to Germany or the United States to be processed in this particular manner when we cannot process them in this country. On many occasions I have exported goods to the United States, sent them 3,000 miles, brought them back 3,000 miles and sold them in this country. I would not have done that if I could have got the process carried out here. That is a case in point. Then there is the reason I have mentioned, affecting goods which are sent to be processed in a foreign country because the wages and conditions of labour in that foreign country are inferior to those of this country. I think we ought not to offer the slightest encouragement to the exporting of goods to a foreign country to be processed there and brought back here simply because in that foreign country the standard rate of wages and the conditions of life are worse than those in this country.

In connection with my own industry I notice that hides and certain skins are on the free list. In the past certain boot manufacturers have bought hides from various parts of the world, and they have sent them to Germany and Czechoslovakia, and have had them made dressed into leather, and then that leather has been brought to this country and manufactured into boots and shoes, and in some cases sold in the exporters' own retail stores. These people have received payment for the boots and shoes from their fellow-countrymen, but they have not been prepared to pay their fellow-countrymen for the cost of the dressing. Under the Bill what will happen will be that the hides and skins will not go direct to Czechoslovakia and Germany, because if they did, after they had been processed, they would come here and pay the full 10 per cent. on the full value of the goods; but they will come here, being free of entry into this country, and then the boot manufacturer or the merchant will send his goods from this country to Germany and Czechoslovakia, and just have them processed, because they can be processed without losing their identity.

Let us take, as a hypothetical figure, the value of the hide at 5d. per foot, and assume that the figure paid in Germany is 2½d. per foot for the process. It would mean that the duty would be payable only on the 2½d. when the goods were re-imported, whereas if the hides were bought on the foreign market and shipped direct to Germany and not to this country, the duty of 10 per cent. would be payable on the 5d. and the 2½d., that is 7½d. Therefore, the English merchant, or whoever he might be, who was sending his goods through our markets, getting the hides free here and then having them processed on the Continent, would only be paying 3⅓ per cent. on the total value of the goods, because he would be only paying 10 per cent. on the 2½d. When goods can he satisfactorily manufactured and processed in this country, I say it is up to hon. Members to stand by their own people for the safeguarding of the industries and employment of their own people, wherever we can satisfactorily carry out that work. It is for these reasons, amongst others, that I move the Amendment.


I hope that my hon. Friend will not press the Amendment, because it is one which could not be satisfactorily worked in this country. The effect of the Amendment would be that goods which had been subjected to a process abroad, which had not changed their form or character, nevertheless would have to be subject to full duty on re-importation into this country, unless they could not be satisfactorily provided in this country. That would throw on the Customs officials the onus of showing whether the goods could or could not be produced here, and that is an impossible task to put on the Customs. They could not possess the knowledge to carry it out. Therefore the scheme is not practicable. But by way of consolation to my hon. Friend I would say that at any rate the Bill is going to make it more difficult to get processed abroad goods which could be processed in this country, because in future the importer who has sent goods abroad to be processed will not only have to pay the cost of processing abroad but also a duty on the cost of the processing.


I am very glad that the Chancellor of the Exchequer has come to that decision. Last week, when travelling in the train on my way back from the North, I met a very prominent manufacturer of hides, and he told me that this very process which my hon. Friend has mentioned, in regard to patent leather, was to be undertaken by him. He said that his works were going to produce that particular patent leather, and that before Christmas of next year he hoped to be able to take that trade away from the Germans and to bring it to this country. That brings me to my main reason for rising. One can never be certain, when protection has been given to an industry, how the British people will get over difficulties and enable a process to be done in this country instead of abroad. I quite agree with the Chancellor of the Exchequer as to the overwhelming difficulty of Customs officials being able to decide whether work can be done in this country or not. Only yesterday a question arose as to some goods under the Abnormal Importations Act. The question referred to silk embroidery on cotton, and there was the difficulty of deciding whether the process could be done in this country or not. It is work which can be done and is being done in this country, and it was only because the merchants in this country had gone to the Customs officials and told them that the work could not be done here that misapprehension arose on that particular point. This Clause of the Bill is going to be of very great value to many people in this country, and I hope that my hon. Friend will not press the Amendment.

Amendment, by leave, withdrawn.