CLAUSE 17.—(Conversion of ad valorem duty into duty chargeable by weight or other measure of quantity.) (Hansard, 23 February 1932)

§ Mr. AMERY
I beg to move, in page 15, line 7, after the word "with," to insert the words "the Committee and."
This Amendment arises at the beginning of the Clause, and the abject is to enable the views of the Committee to be taken on the question whether the duty should be ad valorem or specific. As the Clause stands, the only reason for which the Treasury may convert an ad valorem duty into a specific duty is that of convenience. We know of many articles where the ad valorem duty is inconvenient administratively, and where it would be preferable to convert it as equitably as possible into an equivalent specific duty. This and the following Clause make provision for that. There is, however, a wider consideration than that of mere administrative convenience. For many purposes an ad valorem duty is not the most suitable form of duty from the point of view of the kind of protection we wish to give—

§ The DEPUTY-CHAIRMAN (Captain Bourne)
Do I understand that the right hon. Gentleman wishes to' discuss this Amendment and his two following Amendments together, because it does not seem to me that the question of the conversion of duty arises on this Amendment? If he wishes to have one discussion, I will make no objection if the Committee approves.

§ Mr. AMERY
The next Amendment—in page 15, line 10, after the word "greater" to insert the words "advantage and"—is directly relevant and consequential on this first Amendment. The Amendment after that—in line 13, after the word "duty," to insert the words "or part of the duty"—refers to estimating the duty in part or whole, and is not directly connected. With your permission, I should like to take the second Amendment with the first. The point I wish to make is that the advisory committee will have to consider as one of its chief duties whether ad valorem duties should be converted into specific duties, not merely on the grounds of administrative convenience, but because, from the point of view of protective tariffs, they are a better form of duty. If that he so, that aspect of the matter ought not to be left out of sight by the Treasury when 278 they are considering the conversion of any particular ad valorem duty to a specific duty. In order to make sure that there is touch between the two, I suggest this Amendment, which brings in the Advisory Committee. I do not think that it will add in the least to the labours of the Treasury, but will ensure that any conversion as contemplated in these Clauses is taken in consultation with the Committee. It does not in any way queer the pitch of the Committee in any recommendation they may make in regard to additional duties. I have, therefore, also suggested that the word "advantage" should be inserted.

Mr. CHAMBERLAIN
I do not think that my right hon. Friend has quite appreciated the limitation's which are contained in Sub-section (2), because the only way in which conversion can take place from ad valorem to specific is by an equivalent specific duty. There is no general power given to substitute a specific duty for an ad valorem duty without regard to the value of the ad valorem duty. That being so, I think that it is clear that the question is not one for the Committee at all. It is a question for the Treasury, for the only reason for converting an ad valorem duty into a specific duty is that it is administratively more convenient to do so. There is no other reason. If the two duties have to be the equivalent of one another, there can only be that one reason, and therefore, while I see no objection to accepting my right hon. Friend's second Amendment, I must decline to accept the first one.

§ Mr. H. WILLIAMS
The Chancellor of the Exchequer says that these duties are to be equivalent. Let us take an example. Under the old Safeguarding provisions gloves were dutiable at 33⅓ per cent. I forget the average value per pair, but let us assume that it was 3s. A specific equivalent duty would have been a duty of 1s. per pair, but its effect would have been entirely different from that of the 33⅓ per cent. duty, because there was a certain class of low-grade gloves, imported in large quantities at Is. per pair, and the effect would have been to exclude entirely the importation of such gloves while still allowing the importation, at a comparatively tow rate of duty, of the more expensive glovesspecialities—of a kind which would have 279 been imported in any event. Therefore I do not think the Chancellor is quite on sound ground in saying the Amendment is inappropriate on account of the limitations under Sub-section (2), and I would ask him to reconsider it in that light.

§ Mr. AMERY
May I add one word further as a plea to the Chancellor of the Exchequer? I do not think he has quite understood the purport of the first Amendment. While the Clause at present deals only with conversion on grounds of convenience, it may very well happen that when the advisory committee come to consider an additional duty on a particular article they may conclude, on higher grounds than convenience, that on general grounds of fiscal policy, the whole duty should be specific, but their present powers enable them only to make the additional duty specific. Therefore, if the rest of the duty is to be made specific, it is not only "convenience," but the views of the committee, which ought to influence the Treasury to make it specific. On the other hand, the committee may have very definite views that a certain duty should as a whole—that is, both the 10 per cent. and the additional duty—remain on an ad valorem basis, and though there might be some grounds of convenience for changing that into a specific duty, the Treasury would not do so if they were aware that the committee attached importance to the whole duty remaining an ad valorem duty. Therefore, I submit that the view of the committee as to the kind of duty there should be, whether specific or ad valorem, is one that ought to influence the Treasury, as well as the mere view of convenience which is put forward in the Clause. I am glad that the Chancellor accepts the word "advantage" and I hope he will give further consideration to the point that consultation with the committee is the best means of ascertaining whether there is or is not any advantage in making a conversion.

§ Mr. AMERY
I beg to move, in page 15, line 10, after the word "greater," to insert the words "advantage and."

§ Colonel WEDGWOOD
I hope that these words will not be inserted. I do 280 not understand the object of adding mere verbiage to an Act of Parliament—if it be mere verbiage; but if these words do make a change, as it seems to me it is possible they may do, then I think it is a change in the wrong direction. After all, the advisory committee have got enough work on their hands already. I do not know haw on earth five men will ever get through all the work to be done.

§ Mr. H. WILLIAMS
The committee are left out.

§ Colonel WEDGWOOD
If we add these words we shall impose upon the Departments concerned all the questions which the committee would otherwise determine. If the Clause remains at it is, it is simply a question for the Treasury and the Departments to substitute for the committee's determination of an ad valorem duty the exact equivalent duty on weight, but if we put in the word "advantage" they may have to consider a host of other questions in arriving at their determination. It seems to me that it, would widen the Clause and give greater powers to the Departments, lay upon the Departments part of that work which at present is to be left to an impartial committee. I think this Amendment has been accepted in order to placate the right hon. Member for Sparkbrook (Mr. Amery), but I feel they are dangerous words, and ought not to be included.

§ Mr. AMERY
The intention is certainly not to add to the labours of the Departments but to prevent their action being narrowed and limited by a reference to one consideration only—the consideration of convenience. In the question of conversion from ad valorem to specific there may be other considerations, though I need not go into them now, and since there may be advantages this Amendment would then enable them to be taken into account. I would prefer this change to be made on the recommendation of the committee, but if the Chancellor does not see his way to do that, I still hope that he will, as he said just now, allow wider considerations to come within the purview of the Treasury.

§ Colonel WEDGWOOD
The equivalent is a, question of mathematics—a question of bringing in the same amount; but directly we introduce the consideration 281 of advantages we are asking people to consider all sorts of questions which are not capable of being decided on figures.

§ Sir It BANKS
Convenience is not a question of mathematics.

§ Mr. H. WILLIAMS
I beg to move, in page 15, line 13, after the word "duty," to insert the words "or part of the duty."
After the expression of the views of the Chancellor of the Exchequer on the last Amendment, I am, naturally, a little doubtful whether he will accept this one. Nevertheless, I hope he will give it very serious consideration, if not now, at any rate before the Report stage, because now that we have inserted the word "advantage" we are not out of order in considering the advantage there might be in having a mixed duty. It may be of advantage on the ground that it would be the most suitable form of duty, suitable on the grounds of giving effective protection, and also suitable from the point of view that though an ad valorem is largely desired, nevertheless the fact that it has at the same time a large specific element is a very convenient device for protecting the revenue against losses that might arise from under-valuation. The real case for this Amendment I have put on a previous occasion, but I hope the Chancellor will be a little more considerate now than he was in dealing with the earlier Amendment with the same purpose.

Mr. CHAMBERLAIN
I think that this Amendment is really consequential upon another Amendment which was put down on an earlier part of the Bill but was not taken. That was an Amendment which would have had the effect of allowing the Committee to recommend that a duty should be partly specific and partly ad valorem, but that power was not given to the committee, and therefore I do not think this Amendment would be consistent with the rest of the Clause. The Amendment would mean that 'without any recommendation from the Committee that a duty should be split so as to be partly ad valorem and partly specific, the Treasury should proceed to convert it, but there is no rule given for converting part only of a duty and not the other part. I think, therefore, that this Amend- 282 ment is really unworkable without the Amendment to which it is really related.

§ Mr. AMERY
If the Amendment is unworkable in this place, I do submit that the whole scheme is less workable if the Committee or the Government are not allowed to divide the duty into a partly specific and a partly ad valorem duty. For many purposes such a duty would be much the fairest and most convenient, both administratively and from the point of view of the protection given. I hope that before the Report stage the Chancellor of the Exchequer, whether on this Clause or on some other Clause, will reconsider his decision, if he has really no objection—I can hardly believe he has —to allowing the possibility of mixed ad valorem and specific duties as part of our tariff. They form a, very large part of most other tariffs, and I should think they should form a part of our tariff, on certain ranges of articles at any rate.

Mr. CHAMBERLAIN
As far as I remember, I did not express any opinion on this point. The previous Amendment, as I said, was not taken. I cannot at the moment charge my memory as to why it was not, whether the Chairman said it was not in order or did not select it.

§ Mr. H. WILLIAMS
I think I can refresh the memory of the Chancellor of the Exchequer. The discussion took place on an Amendment proposed by my right hon. Friend which was part of a general reconstruction and consolidation of the two duties into one duty. The main part of the discussion took place on this point, but the Chancellor of the Exchequer objected to the Amendment not on this point, apparently, but on the point of the general reconstruction.