CLAUSE 5.—(Increased duties on mechanical lighters.) (Hansard, 24 May 1933)

§ Mr. MARTIN
I beg to move, in page 5, line 3, at the end, to add the words: except in so far as they relate to parts of mechanical lighters, being wheels for striking a flint. I am moving this Amendment in the absence of the hon. and learned Member for Central Nottingham (Mr. O'Connor), in whose name it stands on the Paper. It raises a very simple point, to which I hope the Financial Secretary will give his consideration. Anomalies have arisen in connection with mechanical lighters. Parts of mechanical lighters have come into this country free and have gone to manufacturers to be assembled into lighters, which were then taxed. The present Budget taxes the separate parts of those lighters which come into this country. The position would have been a simple one for the manufacturers if it were not for one of the essential small parts of the lighter, which is the wheel. They cannot find a sufficient supply of wheels in this country to meet their demands. This Amendment is proposed, therefore, with the object of enabling manufacturers to import these wheels free in order to assemble them, with the other parts, into lighters, and I very much hope that the Financial Secretary will see his way to accept it.

§ Major HILLS
I do not know why the English manufacturers cannot get wheels in this country. I should have thought they could have been made as well in this country as abroad. In its broader aspect, however, this is a revenue question. This is largely a duty imposed for revenue purposes, with the object of obtaining revenue from articles which are a substitute for matches. I know of no evidence to show that British industry cannot make the wheels which are used in these lighters, and I say with respect to the Mover of the Amendment that a much stronger case ought to have been made out in support of it. The House agreed on the Report stage of the Financial Resolution to keep the protective duty on the lighter, and that being the case we must include the parts of the lighter. Unless a very strong case can be made out for this Amendment, I hope that the Financial Secretary will resist it and that the Committee will reject it.

§ Mr. LOGAN
The hon. Member who moved this Amendment is labouring under a mistake when he says that there is any part of one of these mechanical lighters which cannot be made in this country. During the War supplies from Germany were no longer available, but Birmingham rose to the occasion, and made not one or two of these lighters but made millions of parts for lighters. As far as gramophones and various other machines and these lighters are concerned, we can get anything made in Birmingham, the only point being that they have to pay adequate wages to the men who make them.

§ Sir P. HARRIS
When the last Clause was under discussion I felt compelled to raise the question of the Treasury imposing a protective duty without the ordinary procedure of an inquiry under the Safeguarding Act or by the Import Duties Advisory Committee. The Financial Secretary to the Treasury did not deign to answer those points. He felt that he was under a grievance. He talked about my adherence to Free Trade and ancient principles. I was not raising that question at all, but the practical problem of our departure from the great principle underlying the Import Duties 1145 legislation through the Chancellor of the Exchequer proposing ft protective duty of his own volition.

§ Mr. HORE-BELISHA
I am trying to be courteous to my hon. Friend, but, when I was giving an answer upon that specific point, my hon. Friend was conversing with the hon. Member sitting next to him, and therefore did not hear the answer.

§ Sir P. HARRIS
The hon. Gentleman is not being courteous. He is following his usual habit of trying to be clever and scoring. I was not talking; I was listening to every word; I was hanging on to his valuable words as if they were so many diamonds, but I did not get any inspiration, and he did not answer my point. Here is a practical illustration of the effect of imposing a protective duty without having an inquiry. The hon. Member who moved the Resolution, and who has some practical knowledge, points out that the industry is going to be handicapped, because cogwheels, as component parts of mechanical lighters, are to be taxed. I happen to know that there-is a large export trade in mechanical lighters manufactured in England, and owing to the tax on the raw materials, as a result of this clumsy attempt to impose a duty without advice, without inquiry, and without giving the trade a chance to put their case before the impartial body provided under the Import Duties legislation, we now find that the industry is going to be handicapped and exports will be interfered with. It is the duty of the Financial Secretary to the Treasury to explain every new tax to this Committee. This new tax has never been explained. There have been no figures, no facts, no details, no inquiry, no report; they have not even taken the trouble to go before the impartial tribunal. I know it is a very hot day, and I willingly commiserate with the hon. Gentleman on his heavy task of defending the Finance Bill, but I hope he will meet the case of the hon. Member properly with full facts and figures.

§ Mr. HERBERT WILLIAMS
I hope that this Amendment will not be accepted. The hon. Member who moved it was suffering under the disability of looking after somebody else's Amendment, and was not able to give us as much information as the hon. and learned Member for Central Nottingham (Mr. 1146 O'Connor) would probably have been able to do. I happen to have in my con-. stituency a factory which manufactures mechanical lighters, and I have not heard any complaint from them of any difficulty in getting these wheels. It may be that some English firm of manufacturers have been buying their wheels from abroad and have not taken the trouble to find out whether they could get English wheels, and so they want these wheels to be exempted from duty. It is perfectly obvious that we can make them here, and, if we can, why should they want to import them? The hon. Member for South-west Bethnal Green (Sir P. Harris), who more or less supports the Government, as distinct from the hon. Member for Bethnal Green who does not, wants to know why this question was not referred to the Import Duties Advisory Committee. I ask him to read the Import Duties Act.

§ The CHAIRMAN
I have ruled out of order any discussion in detail of whether these matters should be referred to the Advisory Committee or not. We are dealing with a perfectly definite Amendment to leave out specific articles which it was proposed to include in this duty, and the discussion must be confined to that point.

§ Mr. WILLIAMS
I was only seeking to reply to a specific argument from the hon. Member for South-West Bethnal Green (Sir P. Harris) which was permitted. I was only pointing out that he had no right to raise that point, because the Chancellor of the Exchequer had no power to refer the matter to the Import Duties Advisory Committee.

§ Mr. MARTIN
I have been told on one hand that I have great knowledge on this subject, and I have been told by the last speaker on the other hand that as I am moving the Amendment for an hon. colleague I am probably speaking under a disability. As a matter of fact, I think that perhaps the latter explanation is nearer the case than the former. Such hon. Members as the hon. Member for South Croydon (Mr. H. Williams) who have these factories in their constituencies may forget that these lighters are very cheap articles, and that it is most essential that very cheap parts should go to their manufacture. If we are to put first-rate British stuff into a 1147 very cheap article it may mean that in the end these lighters will not he assembled here at all, and therefore I propose to the Financial Secretary that, unless it can be proved that British manufacturers can supply a really cheap wheel, which is an essential part of the lighter, he may find it more to the Treasury's advantage to give consideration to this Amendment.

§ Mr. HORE-BELISHA
The Committee are aware, I hope, of the exact position under this Clause. Before the Budget the Customs Duty and the Excise Duty on manufactured lighters was 6d. in each case. We have now made the Customs Duty 1s. 6d. and the Excise Duty 1s. When the Customs Duty and the Excise Duty were the same there was a right to import parts of mechanical lighters free into licensed manufacturers' premises and the revenue lost nothing, because it obtained 6d. if the mechanical lighter came in from abroad through the Customs, and it obtained exactly the same revenue by Excise if the parts were assembled here. Now, however, we are proposing a difference between the rate of Customs Duty and the rate of Excise Duty—the Customs Duty will be 1s. 6d. and the Excise Duty 1s.—and therefore the concession of importing parts free can no longer obtain. Otherwise, it would pay manufacturers in this country to import the parts free, to assemble them here, and thus to escape with a lower duty than the Customs Duty. I hope I have made that point quite plain to the Committee.
In moving his Amendment my hon. Friend asks whether the wheels used for striking the flints cannot be imported free although other parts are taxed. The purpose that my right hon. Friend had in view was to encourage the making of lighters in this country. It is hoped that the course that he has taken will have that effect. The hon. Gentleman suggests, by his Amendment, that that course cannot have such an effect, because there are not sufficient wheels made in this country, and consequently that until British manufacturers have adjusted themselves to the new position, instead of more lighters being made here fewer lighters will be made.
1148 We have made inquiries into the position, and we understand that nearly half the lighters manufactured in this country during the last financial year contained imported wheels, the reason being that wheels are not at present produced in this country upon a sufficient scale to supply requirements. The Committee will appreciate at once that the possibilities of encouraging the increased manufacture of lighters would be checked if our manufacturers had to pay a duty of 1s. 6d. on every wheel for the reason that sufficient wheels were not being made in this country. We hope very much that the duty will have the desired effect, and that the wheels will be made in this country. I gave some time to hon. Members who desired to state a case before I rose to reply, because it is only fair that the case should be made. The hon. Member for South Croydon (Mr. H. Williams) informed the Committee that wheels are made here and that he knew of cases where they were made. I do not in the least dispute that, but I hope that they will be made here in ever-increasing quantities. That they are not made here in sufficient quantities is, unfortunately, the fact. As we desire to encourage the making of lighters without let or hindrance, I hope that the Committee will agree that it will be proper to accept the Amendment of my hon. Friend.