HC Deb 04 June 1934 vol 290 cc591-623

3.54 p.m.


I beg to move, in page 4, line 30, to leave out "five shillings," and to insert "one shilling and sixpence."

It is within the knowledge of the Committee that arc-lamp carbons, which are to be subject to a considerable increase of duty under this Clause, were declared subject to a duty as far back as 1921, under the Safeguarding of Industries Act of that year. The duty then was at the rate of 33⅓ per cent., and the Committee will remember that the reasons given for imposing that duty on a very wide range of articles at that time were manifold. There was, first, the reason that an article might be produced in what was known as a key industry—the safeguarding of key industries was one of the objects of that Act of Parliament—and then there was protection against dumping. These articles became subject to the very high rate of duty of 33⅓ per cent. ad valorem, and that duty has been maintained. Then we find that in this Clause it is proposed that the duty shall be raised, in the case of arc-lamp carbons of more than 14 millimetres in diameter, to a rate of 5s., and, in the case of carbons of less than 14 millimetres in diameter, to a rate of 7s. 6d. per pound weight. The Committee will observe that this is a very high rate of duty indeed and must have a very considerable effect on the consumers, the people who use arc-lamp carbons for an ever-increasing range of purposes in this country.

I was astonished, when I looked at the Trade and Navigation Eeturns, to find the enormous quantities of carbons that are being used. I have not been able to ascertain the exact allocation of those quantities, which run into hundreds of millions a year. I was, as I say, astonished when I saw the figures, but we find that arc-lamp carbons are being used in this country very largely for projection purposes in cinemas, an entirely new use, and that projection is exclusively done by means of arc-lamps using these carbons, which are now subject to this duty. Then photo-printing, a practice which is gaining considerably in its application, especially in engineering shops and for purposes of that kind, such as the printing of documents of all kinds, is done by means of arc-lamps, which use very considerable quantities of these carbons, which are imported and become subject to this duty. Again we find that there is, for the purpose of the taking of films, an artificial lighting which is done almost exclusively by the arc-lamps; and in hospitals and clinics the lighting, which has now become a very general feature of medical therapeutics, is done also by these arc-lamps, which are used in a lesser degree for the lighting of shops and factories, and ships in some cases.

The Committee will be astonished to find that even after the curtailment which we have seen under the Import Duties Act the use of these arc-lamp carbons runs into 150,000,000 or 200,000,000. I am not sure whether the rate of consumption this year will reach as high a figure, but I think that during the four months of this year the consumption has run into between 50,000,000 and 60,000,000, so that at any rate there is an enormous quantity of these commodities which we import; and I am at a loss to explain why these commodities cannot be produced at home and why they should be subject, when imported, to this very high duty. I understand that the ad valorem duty runs into 50 or 100 per cent., but in many cases works out at from 300 to 500 per cent., on the value of the imported commodities. There is no instance of a dutiable rate in this country which runs anywhere as high as the rate now proposed for these carbons. I would ask the hon. Gentleman to give the Committee very much more information than has been offered so far. We had a Debate less than a month ago, in which the hon. Member for South-West Bethnal Green (Sir P. Harris) gave the House a good deal of information which he had collected. No full explanation was given to the House. The Debate came to an end very abruptly, and the House is still wishing for the full reply to the statement of the hon. Member for South-West Bethnal Green.

I, too, would like a good deal more information, first, with regard to the effect on the industries and the public services to which I have referred, and whether there is not a danger that this high duty is going to curtail facilities for such services as hospital services. The next point is, have the consumers been consulted? Have they been given an opportunity of expressing their opinion? Have the Government come to this decision with the interested parties in the trade who buy and sell or manufacture these carbons without consultation with the consumers, who must be very intimately interested in the price and the supply? Another point on which I would like to have information is this. We understand that competition in manufacture comes principally from Germany, France, and, in part, from Japan. Why is there a deficiency of the raw material in this country? Or is the failure to manufacture on equally economic grounds with those of competitors due to lack of experience? Seeing that these duties have become considerable since 1921, why is it that after 12 years of so-called protection—very heavy protection, indeed—we do not maintain our competitive capacity in respect to the manufacture of this kind of article? This is an unheard-of high rate of duty. It is going to bear very onerously indeed upon the consumers in the various industries and services to which I have called attention, and we would like to know whether there is any special reason why this high duty should be imposed. Unless that satisfaction be given to the Committee, we shall be compelled to ask the Committee to divide against this Clause.

4.4 p.m.


I would like to support this Amendment. There is another Amendment in my name on the Order Paper, with a similar object, but this Amendment serves very much the same purpose, because it raises the whole issue, and proposes to lower the proposed duty. But before I put forward my arguments, I want to be allowed to correct a statement which I made when I raised this matter on the Budget Resolutions. As a matter of fact, the point was not an argument for or against the duty, but it was, to some extent, a reflection upon the Customs, not that it was meant exactly for that purpose, but it had that effect. I was rather startled, as I think the House was, with the information given it. I suggested that the day after the Budget Resolutions had passed, an importer of some £1,500 worth of these carbons had been asked to pay a duty of £10,000. This statement was made to me—by the way, before a colleague in the House—by a man upon whom I thought I could rely. It naturally impressed the hon. and learned Member for East Bristol (Sir S. Cripps), and he dwelt upon it particularly. The Chancellor of the Exchequer, quite properly, asked me to give the name of the ship and the port, and when I sounded my informant and asked him for these particulars, he refused to divulge either. Of course, I can only unreservedly withdraw my statement. I regret that I gave it currency. My only excuse is that when one is given figures in such detail, one naturally assumes that they are made by a responsible person who is prepared to substantiate them. All I can say is that it was not germane to the argument for or against this particular duty, and I hope that the Committee will accept my apology, because I think it is the first time I have had to withdraw a statement. With all these complex duties, with so many interests concerned, when you come for information you must, to some extent, be guided by experts.

Let me come to this very remarkable duty. No one could be very much moved about electric carbons. The average person does not handle the article. It does not mean very much to him. Probably he does not know how it is used, worked or made, or what is its exact purpose. But, naturally, it is our duty, as we are responsible for taxation, to scrutinise every new duty and every old duty when it is altered, modified, reduced or increased, as the case may be. The Mover of this Amendment, quite rightly, said that this is an old duty. It dates back to the key industries, but it is apart from the ordinary tariff duties or even the Safeguarding duties. They were imposed, be it remembered, to protect certain industries which were necessary for national defence or for our national safety, and this one was imposed in 1921 to the extent of 33⅓ per cent., which at the time was considered adequate. Then, in 1926, the basis of it was altered from an ad valorem duty to a duty on weight of 1s. a pound, which was considered a more effective way of giving protection to the industry concerned, and to be more or less equivalent to 33⅓ per cent. It has been charged up to the date of the Budget at the rate of 1s. a pound, net imported weight.

There was some dispute as to the effect of this duty upon the article in question. I think that my hon. Friend the Parliamentary Secretary to the Board of Trade fell into the not unnatural mistake of basing his defence not on the import price but on the list price. I think that I am right in saying that the list price is the published price, the selling price of the importer and manufacturer of this article. I might explain that it is an article of commerce which assumes a great variety of purposes, and is subject to very heavy overhead charges. The dealers in these articles, not only the importers, but the merchants and business people who handle these articles, have to keep a very elaborate staff of mechanics and engineers to keep the carbons in the lamps in working. The gross profit put on the article, therefore, is considerable, and the list price is a very different thing from the invoice price. I am assured—and I have figures here which, perhaps, are familiar to the Chancellor of the Exchequer and the Parliamentary Secretary—that the old duty which is now being increased from 1s. to 5s. 6d. and 7s. 6d., according to the quality of the article, was something like 80 per cent. of protection to the producer in this country.

Even in these days, I venture to suggest that that is not inadequate protection. Many of the industries whose claims my hon. Friend the Member for South Croydon (Mr. H. Williams) is so eloquent in putting forward year in and year out, week in and week out, would be only too glad to get 80 per cent. protection; in fact it would be far beyond his wildest dreams. I am going to suggest that, at any rate, since 1927 the manufacturer of electric carbons in this country has had an equivalent protection of something like 80 per cent. and if any industry is to be self-reliant, is to be able to build itself up on a sound basis and prove itself a commercial proposition, surely if it has 80 per cent. protection for seven or eight years, that is all for which it is reasonable to ask, and I think I have the Committee with me in that.

In 1927–28 the imports were £23,000, in round figures, and the duty collected by the Customs was over £18,000. The next year the imports were £26,000, and the duty collected was £21,000. In 1929–30 the imports were £26,000 and the duty collected was £21,000. In 1930–31 there began the operation of the depreciated exchange. The Parliamentary Secretary again fell into a natural error. He will have an opportunity of putting me right, but, after all, we are here to debate the duty, and I think that we are quite right in putting forward the points which occur to us. He seems to have overlooked the fact that the year 1930–31 was the year when the depreciated exchange began to operate, when sterling went down in value and relatively the mark went up in value. In 1930–31, therefore, the imports went up in value in sterling, but not to any extent in marks. The imports in that year were £33,000, and the duty collected was £23,000. In 1931–32, the imports were £26,000 and the duty collected was £19,000. In 1932–33 the imports were £36,000 and the duty was about the same, £19,000; while the quantity of imports for the calendar year 1933 was £46,000, and the duty collected was £21,000. In other words, if you take into account the depreciated exchange, the amount of imports has remained more or less constant, and I submit that on the invoice price, the only effective way to judge the operation of the duty, the protection that has been afforded has been something like 80 per cent.

It should be made clear to the Committee what is the value on which you are levelling this 1s. duty, now raised to 6s. 6d. and 7s. 6d. per lb. The most expensive article imported is 3s. 7d. c.i.f. The cheaper kind comes down to 1s. 4d., but for the larger amount of carbon imported, the principal article of commerce, the article used in the homely cinema in every village, town and city in the country, the value of the carbon works out at something like 2s. 3d. a lb. If you add to that a duty of 7s. 6d., it will be seen that the duty amounts to something very near prohibition. It certainly cannot be argued that this is a case of dumping. In the last resort when the case is rather weaker than usual the defence falls back on the argument of dumping. Here it is not a case of unfair competition and selling an article below the cost of production, or alternatively producing it by cheap labour. There has been nothing of that kind.

There is a cartel, an arrangement between the English manufacturer and the Continental manufacturer for the Continental carbons to be sold at a higher rate than the English carbons. I have the printed agreement here. It is the more expensive carbons that are imported. The cheaper and lower quality carbons for the cheaper cinema houses and for various other purposes are supplied at home. The more expensive, more scientifically made, more effective and more efficient Carbon has come from abroad. I will not bother the Committee with this very complicated document, for it is very legal and is open to many great objections. I do not like cartels. One of the inevitable results of these new tariffs and quotas is a system of international trade agreements to keep up prices and to limit supplies. This agreement meets the suggestion which I understand is to be made by some of the defendants of this exorbitantly high duty, that there has been dumping or unfair competition. It destroys that argument and shows that there is not a tittle of justification for the suggestion. This agreement will probably be broken, but it is actually binding on the Engflish manufacturers who are now to be given a complete monopoly.

May I deal with the first and, as I think, the most effective argument for this duty, that of national defence? That was the justification urged for the imposition of this new duty in 1921. Selected carbons are vital for searchlights, especially in such things as air-raids and for our Navy. I am assured, and it is admitted by the First Lord of the Admiralty, that they are getting already, under the existing unaltered duties, all their supplies in England from the General Electric Company. Therefore, there is no need for any alteration in the duty. In fact, I understand that the demand is a comparatively small one and that it can be met by the General Electric Company, which is the big organisation whose chairman, incidentally, has been ennobled by the Government. It is a big powerful organisation that does not require any tariff and is not concerned to any extent with this particular duty, which has been asked for other purposes.

Then there is the ordinary street arc lamp which has more or less gone out of fashion. It gives a very bright light and has been discredited by the splutter due to inefficient electric- carbons. One of the troubles of the electric carbon light, with its daylight effect, has been the cost of carbons and the difficulty of getting from the home producer a satisfactory carbon that does not give that unpleasant splutter which is familiar to every person who walks about the streets of towns where, especially at the seaside, there is any form of electric arc light carbon lamps. They are unpleasant and a strain on the eyes, and that is due to the difficulty of getting the two carbons to meet correctly and burn evenly. The advantage of the Continental article is not its cheapness but its quality. For some reason or other, it has been possible with the aid of their chemists to get a more satisfactory carbon than up to the present we have been able to get. My hon. Friend above the Gangway correctly referred to the cinema, which has become a very large user. In order to project satisfactorily it is important to get a clear, sharp and steady light. Hon. Members will be familiar how often in a small village cinema they get a flicker and an unsteady and unsatisfactory result on the films. It is trying to the eyes and spoils the picture. That is due to using unsatisfactory carbons. I have a bundle of letters here, and I am informed that the large user, the large super-cinema, the big house that has made such immense progress in popularising the films attach immense importance to getting satisfactory projection, and a steady constant light with no flicker or splutter. They assure me that up to the present they have been dependent on the imported article.


Is my hon. Friend certain that the flicker is caused by the carbon Is it not caused by the defective machinery?


It is a contributory factor, but I do not pretend to be an expert like my hon. Friend. When the Parliamentary Secretary to the Board of Trade dealt with this question in the last discussion, he was in the impregnable position of being able to say that, in spite of my fairly convincing arguments that the cinema industry objected to this new duty as depriving them of an efficient raw material, the executive of their organisation had not only supported the duty, but had actually asked for it. That was a very remarkable thing. It is remarkable for the initiative to come from a user and that the user of an article should ask for a tariff on it. It certainly wanted some explanation; it was rather mysterious to me, and to the great number of people in the trade it came as a complete surprise. It is a fact, however, as I found on inquiry as to the reason. All I can say is that in a large scattered industry like this, with its great ramifications and members all over the country, this executive does not represent by any means the whole of the industry concerned.

I think it necessary to refer to three or four other interests which are vitally concerned. The first is the photo process of engraving. There are 12,000 machines using this process in the country. It is an industry which has made remarkable progress in the country. Previously we had to go abroad for this system of engraving, but now England is as good as any other country in the world. In order to get a perfect picture, a constant and steady light is required. Manufacturers of the machinery are quite disinterested and they explained to me that they had Protectionist leanings when it came to their own industry, but that when it came to buying the raw material they took great exception to having to pay an exorbitant price for it. That is only human nature. We are finding that in many other cases. There happens to be a considerable stock of electric carbons in the country, and unless there is a revolution in the production in this country of electric carbons, many of these engravers will be seriously handicapped when the stock is exhausted if the article they want is subject to a large increase of duty such as is proposed.

I also want to refer to the hospitals. In the work of healing perhaps more progress has been made in therapeutic treatment and the use of the violet rays in dealing with some of the most unpleasant diseases than in anything else. In the treatment of skin diseases, lupus, rickets and all kinds of disease—epecially in the treatment of babies—the use of electricity is of benefit, and the electric carbon has been a most effective contribution to medical science and the great healing work of the hospitals. I mentioned the other day St. Bartholomew's Hospital. The consulting engineer, unsought by me, came to me and said that he had made long and laborious experiments in carbons, and he found, in the light of experience, that the imported article was the only carbon that could be relied on to give perfect treatment without risk or danger to the patient and to the satisfaction of the doctor. My hon. Friend met me with a lot of figures to refute my statement. I can only pass on the advice of the technical engineer of St. Bartholomew's Hospital.

I am told that one difficulty is that these carbons are supplied to hospitals, not by the importing firms, but by merchants. I give this to the Committee for what it is worth, for I will not guarantee that the statement is correct; it is very difficult to get to the bottom of an intricate industry of this kind. The carbons are supplied by merchants who deal in both the British product and the foreign imported article. They are naturally concerned in providing plant, and the merchants' desire is to get good results from the use of their appliances. The electric carbon is part of those appliances, and it is suggested to me that the information which the Parliamentary Secretary has got is due to the fact that the ordinary doctor and hospital engineer gets his supply from these merchants and dealers in carbons, that they consist of all kinds of carbons, and that he is not able to distinguish between the foreign and the British article. In practice, however, they cannot get satisfactory results without being able to draw on the supplies of a foreign carbon which is scientifically efficient for the purpose, can be relied on, is correct, burns longer, and is more satisfactory in operation. There, again, it is not a matter of price, because the continental carbon is the more expensive. It is not bought because it is cheaper, but because it is more satisfactory.

It is a serious matter to come to the House of Commons and, without a word of explanation, without any memorandum, or report, or details, or statistics, to ask Parliament to impose a duty of an almost unprecedented figure—unprecedented not only in this country but, I believe, in any other part of the world. It is a very big duty—at the lowest estimate 200 or 300 per cent. I do not doubt the good faith of the Government in this respect. They were approached by very clever people who were looking after their own interests. I will not say they wanted to feather their nests, that would be putting it on too low a plane, but they wanted to get as good a bargain as possible for their trade. In the matter of these duties we have, during the last few years, built up more or less satisfactory machinery: machinery which is satisfactory to the opponents of tariffs as well as to the defenders of tariffs. When a new duty is wanted those who are asking for it have to go before a tribunal of three highly-qualified and experienced men drawn from different branches of the public service. Owing, however, to the fact that this is a key industry, this particular duty has been withdrawn from the scrutiny of this particular tribunal and that explains why we have no report. It is not on account of any plot on the part of the Government, but because the Act of Parliament particularly excluded key industries from the purview of the tribunal.


And all other existing duties.


It specifically excluded the key industries.




I am told that is so, and I think I am more or less correct. I am afraid I am too old a hand to believe that the Chancellor will give us a concession, though I should be extremely pleased if he could accept the Amendment or agree to lower the duty; but if he is not able to do that I ask whether he cannot submit this duty, which is now in operation, to the Imports Duties Advisory Committee without delay. Let them examine it in all its ramifications, let them find out which are the interests concerned and what repercussions the duty will have on other industries. If that is not possible, let the Chancellor set up a special committee of business men and experts to examine the duty. It is a bad thing for the country, and a bad precedent, to impose new duties on such a scale in the face of opposition from various classes of the users concerned. It would be unfortunate if this should be used as a precedent for other cases. This big duty on a comparatively small article was hidden away in the midst of an important Finance Bill and had it not been for our care it might have gone through this Committee practically undiscussed. I think I have made out a case, first, for the lowering of the duty and, failing that, for its examination by an impartial committee, so that we can have a full report by technical experts on the effect of the duty.

4.35 p.m.


When the hon. Baronet was referring to this particular duty as being hidden away in the Finance Bill, I thought I must have been dreaming, because I recollect the Chancellor of the Exchequer specifically referring to it on Budget day, and it also appears in the financial statement. Therefore, it is hardly fair to suggest that it was hidden away. I thought for the moment he was talking about Clause 5, of which I happen to be somewhat critical, which was not disclosed on Budget day. The Committee will have listened with considerable interest to the tribute paid by the hon. Baronet to the Import Duties Advisory Committee. He was in a new role there, and it is a sign of regeneration.


I have always said it was a good Committee—I do not think we could have got three more competent men—if we are to have a Committee of that kind.


Yes, but the hon. Baronet was praising the existence of the Committee, and not merely its composition. He went on to imply that the key industry duties had been specially taken away from the purview of the Import Duties Advisory Committee. If he will read Section 1 or 2 of the Import Duties Act he will find that it excluded all duties imposed under other enactments. All sorts of duties under other enactments were excluded, and there was no particular exclusion of the key industries duty. I hope I may have the attention of the hon. Baronet, because I listened with great care to him. He tried to explain that arc lamps had vanished from the streets of our cities because they were supplied with such bad British carbons. I should have thought he was aware that in recent years we have had the development of the gas-filled metal filament lamp, which, unlike the arc lamp, does not have to be trimmed daily, and therefore the cost of maintenance is very much lower. Arc lamps are now used only where, for technical reasons, it is impossible to have the gas-filled lamps. Therefore, his disquisition as to the reason for arc lamps vanishing from the streets is wrong technically.

The hon. Baronet professed to speak on behalf of consumers. I have not been approched by any consumers. One constituent who is an importer came to see me, but I had to tell him that I could not take his point of view. Let us realise why these carbons are dutiable. Part I of the Safeguarding of Industries Act, 1921, was not intended as a protectionist Measure in the ordinary sense, but was a device to give us the security that in time of war we should have a supply of certain, essential articles which in pre-War days were not produced in this country in satisfactory quantities. I believe I am correct in saying that if it had not been for the patriotism of the General Electric Company in pre-War days in deliberately maintaining a factory which was running at a loss we should have been in a very grave situation indeed through lack of arc lamp carbons when war broke out. The most important consumers, the cinema interests, for detailed reasons with which I am not familiar, have been very much perturbed recently about the are carbon situation. I am not in the least surprised that the hon. Baronet does not want to hear the full story.


That is an offensive remark. I will now return to my place.


Some time ago the situation was regarded with such seriousness by the cinema industry that they appointed a committee to consider it. They were afraid the time might come when they would be absolutely in the hands of the foreign producer. That committee, which the hon. Baronet rather despised, saying they were not representative, at least had the advantage of being familiar with the situation in its details in a way that the ordinary cinema proprietor up and down the country could not be. I have here a copy of the "Cinematograph Times," the official organ of the Cinematograph Exhibitors Association of Great Britain and Ireland, and I read the following from the general council—not the executive committee. It is a leading article on the subject of these very duties, published after Budget Day. The first words will please the hon. Baronet: Opposition was voiced at the meeting of the General Council, but was soon dealt with when the members realised that firm pledges had been given by the British manufacturers that their prices should not be increased. One or two delegates also pointed out that it was a mistake to describe the new duties as creating a monopoly for any particular firm. There is nothing monopolistic about the duties. They cannot create an exclusive charter for anybody. The suggestion was made that any foreign firm affected would be perfectly at liberty to make its carbons in this country, thereby not only retaining its present business but also adding to employment in this country. They go on to say: We may add that we look, in the comparatively near future, for something more than the absence of increase in price. We are looking for a reduction of present prices, and we shall be very much surprised if we are disappointed. That is the view expressed by the organ of the cinematograph exhibitors. On the next page I see the appropriate headline, "General Council endorses carbon duties." Then there is a report from the committee. The President says: I have to tell you this morning that the contemplated measures were taken, and your committee is perfectly satisfied with the safeguards obtained and can assure the general council that an adequate supply of British carbons for all purposes is certain. Furthermore, whatever happens to the prices of foreign carbons, the prices of British carbons will not be increased, in the course of a comparatively short time there will be a reduction in the price of British carbons. That is all the committee think it politic to say. There were fears that unless something was done the comparatively small number of British manufacturers would be reduced to none, and it was because of this sense of their peril if the manufacture of carbons in this country were destroyed and there were an interruption of foreign supplies that the consumers, in their own interests, supported these duties, which, I agree, are unusually high. But when we find consumers and producers alike agreeing, I do not think the hon. Baronet need worry unduly.

4.43 p.m.


The Amendment which we are discussing asks that the figure of 5s. per lb. should be deleted and 1s. 6d. substituted. The duty of 5s. per lb. applies to the larger carbons; there is a duty of 7s. 6d. upon smaller carbons. The Amendment does not propose to alter the duty on the smaller carbons. The greater part of the carbons used in this country are of the smaller dimensions. I appreciate that it is Parliamentary procedure which puts the Amendment in its present form, but I want the Committee to realise that by far the larger number of carbons used in the cinematograph industry are carbons below 14 millimetres in diameter. The Committee must have been very glad to hear from the hon. Baronet the very handsome and complete withdrawal of and apology for the allegations he made on a previous occasion. I need say nothing more about that, and dismiss the incident completely from my mind.

When this matter was last before the Committee the Chancellor of the Exchequer said, on the 26th April, that before the matter came before the House there would be ample opportunity to listen to and consider representations. He offered on behalf of the Board of Trade, that attention would be given to any fresh considerations put before the Board. In point of fact there has been no fresh consideration before the Board of Trade in response to that invitation. We have had a representation from the importers of German carbons frankly putting before us the position of the importer to the effect that where a duty is imposed it will obviously lessen the volume of imports. That is the situation, of course, in regard to any duty. Those who are accustomed to deal with a foreign article which it is proposed should be excluded for the future naturally have a sense of grievance.

There were photographic representations to the Board, but they seemed to be divided into two groups. There were those who had habitually used British carbons, and those who had used the foreign carbons and had never contemplated using the British. Broadly, the two interests in the photographic trade cancelled out. We had no representative of any hospital, and no fresh considerations of any kind have been put before the Board of Trade since the matter was before the House on 26th April. The hon. Member who moved this Amendment and called attention to the quantity of carbons which are consumed in a normal year in this country, may be interested to learn the results of an analysis which has been made in the Department and which shows how this large quantity of carbons is subdivided. Fully 85 per cent. of the whole is consumed by the cinematograph industry. Photographic work and process engraving consume approximately 10 per cent.; the balance of 5 per cent. covers street lighting and minor purposes and therapeutic work and hospitals. Taking hospitals alone it is estimated that their consumption is something under 2 per cent. I am mentioning these figures in order that the matter may be viewed in its right proportion.


What about defence purposes?


The amount used for defence purposes comes within the 5 per cent. which I have just mentioned.


When the hon. Gentleman speaks of the amount of foreign carbons used by hospitals, I take it that he means that of the amount of imports coming in, 2 per cent. is used in hospitals?


I was not dealing with imports at all, but with the total retail sales and the total consumption of carbons in this country, and I am pointing out that 85 per cent. of that total is cinema, 10 per cent. is broadly process and photographic, and that there is only 5 per cent. all told to be subdivided among the remaining different processes. The total retail value of the trade is something in the neighbourhood of £300,000 and the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) is substantially right in thinking that, on the basis of all foreign carbons excluded, the loss of revenue would be about £20,000. I understood his point to be that the imports have been stabilised and that the duty was roughly £20,000. Those figures accord broadly with the calculations that we have made.

The question arises as to who is likely to be affected by the exclusion of these foreign goods from the British market. Assurances have been given to us that the output capacity of British manufacturers is equal to supplying the whole requirements of the country. The hon. Member for Gower (Mr. D. Grenfell) asked why British manufacturers had not hitherto made these articles in sufficient quantities. The difficulties have been, as the hon. Baronet said, partly owing to a cartel arrangement under which the share given to the British market is relatively small. The possibility of supply is assured, because the supply facilities are adequate for the whole field. As to price, definite undertakings have been given that the price to the consumer shall not be increased; that is, the price of British carbons. If the consumer desire still to use foreign carbons, obviously he will have to pay the duty on them. As far as the cinematograph trade which deals with 85 per cent. of the whole is concerned, there is an undertaking that the price shall actually be reduced. It is hard to find any interest other than that of the importer of the foreign article, the volume of whose imports will necessarily decline, which is likely to be affected. There is no body of complaint and no representations of a new character. The duty was put on for reasons which were fully explained in the Debate of 26th April and which I think it is unnecessary to repeat. It was put on at the joint request of the makers of the article and the consumers of 85 per cent. The case for the imposition of the duty is clearly made out, all the normal safeguards to see that interests are not affected have been obtained, and undertakings are given by manufacturers that prices will actually be reduced.

4.52 p.m.


The Parliamentary Secretary has just told us that there was a joint request by the cinematograph exhibitors and the General Electric Company, I take it, as representing the manufacturers; will he tell us what manufacturers' union it was?


I did not say that it was a manufacturers' union at all. There are only two or three manufacturers in this country, and I think it was a specific manufacturer.


Will the hon. Gentleman tell us which one?


The Ship Carbon Company.


I understood that the representation was made by that company and the cinematograph exhibitors at the same time to the Treasury, asking for the duty to be imposed. I would like to ask the hon. Gentleman whether that duty was intended to implement some fresh arrangement that had been made for the international allocation of markets for this article. As the Parliamentary Secertary said, it is known that there have been cartel arrangements for the allocation of territory among the manufacturers operating through the cartel. He told us that one of the reasons why the article was manufactured in small quantities before was that the English portion of the cartel only had a very limited market allocated to them. Can he tell us whether some fresh arrangement has been entered into by the cartel, allocating a larger portion of the market to British manufacturers, and whether it was as a result of that cartel arrangement that the representation was made to the Treasury? In other words, whether we are now legislating to implement an agreement of an international cartel or legislating because we believe it to be right? That seems to be a rather important point in the control of the finances of this country.

The hon. Gentleman told us that there is an undertaking that the price of British carbons will be reduced. I should like to know the form in which that undertaking was made, how far it is binding, whether it is in legal form, and whether the reduction of price is irrespective of the movement of gold prices or sterling prices as regards other commodities. Suppose that the value of the pound falls; will the guarantee of lower price stand, or will it then be said that because of the variation in the value of sterling the price must be increased?

It is a curious practice for the hon. Gentleman to come before the House and ask for a prohibitive duty to be imposed upon an article which is used quite widely, on the basis of an understanding, the terms of which and the parties to which are not disclosed, and neither the method of operation nor any other detail is made public. If we are to have tariff arrangements of this sort, we shall need a body which can make an inquiry—not come to a decision—to ascertain what the facts are, and put the facts before the public if necessary. One thing is clear from what the hon. Gentleman has said: the idea that this has anything to do with the Defence Forces is nonsense. There is apparently no ascertainable figure, in the careful analysis which has been made by the Department, or the hon. Gentleman did not mention one, which is referable to the Defence Forces, so we may wipe out of our minds the idea that this has anything on earth to do with them. The way in which this prohibitive duty is put forward is quite unsatisfactory and we shall take steps to oppose it.

There is another matter in the hon. Gentleman's speech on which I should like to comment. He put it so delightfully. He said that an importer who dealt in German carbons had been to the Board of Trade and had explained that his business would disappear, which indeed it will, because that is the intention. The hon. Gentleman said that that is the sort of thing that happens when you impose a tariff. It is always nice to see Members of the National Government pointing out how necessary it is to have methods of confiscation when you legislate. Without any conpensation, the importer's business is just taken away. It may be interesting on some future occasion to point out to hon. Gentlemen opposite that confiscation is not such an extraordinary thing.

4.58 p.m.


It appears that this duty is of characteristically—I will not say sinister—but mysterious origin. The Parliamentary Secretary to the Board of Trade emphasised what he thought was a very good point, which was that since the last occasion upon which this duty was discussed, few representatives of the industries concerned have come to the Board of Trade to make representations. It is a most astonishing thing. It is almost unprecedented in the history of the tariff, at any rate in this country, that the users of an article should come to the Board of Trade and to Parliament and ask for a duty on the materials which they use. There can be only one explanation, suggested by the hon. and learned Member for East Bristol (Sir S. Cripps), that it is to operate some international cartel arrangement. It looks like it. It is clear that before this duty is approved there ought to be an impartial committee to inquire into the circumstances in which the duty was proposed.

Another obvious reason why some of these firms may be reluctant to go to the Board of Trade and make themselves conspicuous by opposing the duty, which may be damaging to their interests and to British industry as a whole, is that when the whole of the foreign carbons are excluded they will be left at the mercy of a very few British firms, and they will not be in the least anxious to make themselves conspicuous in the meantime by their hostility to the proposals. The hon. Gentleman further emphasised that no representatives of the hospitals had come to the Board of Trade to make representations against this duty——


Is the right hon. Gentleman aware that one of the reasons why the cinematograph exhibitors took action was that they wanted to destroy the cartel?


Obviously, the hon. Member has a good deal of information which is denied to me. I think that these matters should be thoroughly examined. It is a very curious thing, land it is not really explained by the assertions of the hon. Member or by articles in newspapers published by a particular trade; and the House of Commons ought not to be satisfied, before it imposes duties, by articles in such newspapers, but should require a thorough and impartial inquiry into the whole circumstances of this request.

The Parliamentary Secretary made a great point that the hospitals had not come to the Board of Trade to make representations, but every hon. Member knows that the hospitals would be very reluctant to mix themselves up in a matter which had already become one of political controversy in the House of Commons, and, as their interest in it is only 2 per cent. of the total production, they may well have thought that it was not a matter in which they would care to join in opposing the duty. But that does not affect the fact, which my hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) quoted, that it will to some extent—we cannot say how much—raise the cost of light therapy in this country. I want to know what this guarantee as to reduction of price amounts to. The hon. and learned Member for East Bristol pointed out that it would be affected by currency fluctuations, and it will be affected by a great many other things too. If there is that rise in prices which the Government desire, and at which they are aiming, there will certainly be increases in wages. There may be strikes in the industries which are affected by this duty, and, as a result, increases of wages. Does the Chancellor of the Exchequer suggest to us that there will be no increase in the price of any article after that? Of course, the contention is absurd on the face of it.

There can be no more foolish policy than to keep out of this country a commodity which is unique, like these German carbons—far better than any commodity which at present, as is admitted on all sides, we are able to produce—a commodity on which users are now willing to pay duty even on the present scale, equivalent to 80 per cent., and for which they are willing to pay higher prices than for the British article. Obviously, if users are willing to pay these higher prices, it must be a remarkably superior article to anything that we have here. The Government are trying to persuade the German Government and German private debtors to pay their debts. How can they pay their debts in a better form than by providing us with carbons of unique efficiency for the industries and hospitals of this country? To close the door against such a method is surely the height of economic folly.

There are in this matter various difficult technical questions into which a number of hon. Members have suggested there should be an inquiry, a proposal which I support; but really the situation boils down to this: either these British carbons are as good as the foreign carbons or they are not. If they are as good as the foreign carbons, why cannot we rely upon the capacity of the British producers to advertise their own carbons and to sell their own goods in their own country, with the benefit of the goodwill which always goes to a British product as against an imported product?. The Government may suggest that such goodwill does not in fact exist, but how can that be suggested in this case when we are told that the users themselves are asking for this duty in order to compel them to do something which it is perfectly open to them to do voluntarily if they wish? But, if the British carbons are not as good as the foreign, then this duty, intended to be prohibitive, will deprive important industries and hospitals of materials which are necessary to the efficiency of those industries and to the health of the people, and it must have the effect of encouraging inefficiency, because, behind this admittedly prohibitive, and deliberately prohibitive barrier, the British manufacturer will be able to carry on with his old methods of manufacture, and avoid the risks of embarking upon new and more scientific and progressive methods.

The most important argument, which has been urged in favour of the duty in the earlier stages of the Debate, is the argument of defence, and, in fact, these duties have been dealt with as key industry duties, and on that ground, as my hon. Friend the Member for South-West Bethnal Green pointed out, they have been withdrawn from the purview of the Import Duties Advisory Committee. The point raised against my hon. Friend by the hon. Member for South Croydon (Mr. H. Williams), who is always so well informed in these matters, really, if he will forgive me for saying so, missed its target, because my hon. Friend's point was merely that in fact these key industry duties have been, along with other duties—though that makes no difference—withdrawn from the purview of the Import Duties Advisory Committee.


Is it intended to imply that they have been specially withdrawn?


I am sure the hon. Member has misunderstood. At any rate, will he accept the assurance from me and from my hon. Friend that that was not his point? His point was much simpler, namely, that because these duties were dealt with as key industry duties, for that reason only—that is the only reason given by the Government—they have been withdrawn from the purview of the Import Duties Advisory Committee, and there has been no inquiry. The hon. Gentleman who speaks for the Government has pointed out that the requirements of defence must be, at the most, something like 2 or 3 per cent. of the whole production, and it came out in an earlier Debate that in fact our defence requirements were met from home sources. Therefore, there is no weight in the argument as to defence, and no reason why these duties should not form the subject of inquiry by the Economic Advisory Committee.

There is, let us admit, a problem. There is apparently a failure on the part of the British makers of these carbons to compete effectively with foreign producers. The Government, in my submission, have adopted the worst method of dealing with the problem. They have been putting up a prohibitive tariff wall which will prevent the Germans from sending here a commodity of the utmost value to us, and will encourage the British manufacturer to continue in his old inefficient ways. Surely, if the cinematograph exhibitors want to see a flourishing British carbon industry, the rational method is to come to an arrangement with the British manufacturers, for which they require no governmental powers—on the one hand a price arrangement under which they would buy the carbons they require, and, on the other, an arrangement, if necessary with the support of the Government, for subsidising research, which would put the British industry in a position equal to and in advance of that of its competitors. That, surely, is the constructive method to follow, and not the method of cowering defensively behind a prohibitive tariff wall. It seems to me that the policy of the Government is dangerous to health and damaging to industry, and, therefore, I shall vote in favour of the Amendment.

Question put, "That 'five shillings' stand part of the Clause."

The Committee divided: Ayes, 243; Noes, 45.

Division No. 261.] AYES. [5.12 p.m.
Acland-Troyte, Lieut.-Colonel Brown, Col. D. C. (N'th'I'd., Hexham) Cook, Thomas A.
Adams, Samuel Vyvyan T. (Leeds, W.) Brown, Ernest (Leith) Cooke, Douglas
Agnew, Lieut.-Com. P. G. Brown, Brig.-Gen. H. C. (Berks., Newb'y) Courthope, Colonel Sir George L.
Albery, Irving James Browne, Captain A. C. Cranborne, Viscount
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Buchan-Hepburn, P. G. T. Crooke, J. Smedley
Allen, William (Stoke-on-Trent) Bullock, Captain Malcolm Crookshank, Col. C. de Windt (Bootle)
Anstruther-Gray, W. J. Burgin, Dr. Edward Leslie Crookshank, Capt. H. C. (Galnsb'ro)
Applin, Lieut.-Col. Reginald V. K. Burnett, John George Dalkeith, Earl of
Aske, Sir Robert William Butt, Sir Alfred Davidson, Rt. Hon. J. C. C.
Bailey, Eric Alfred George Cadogan, Hon. Edward Davies, Maj. Geo. F. (Somerset, Yeovil)
Baldwin, Rt. Hon. Stanley Campbell, Sir Edward Taswell (Brmly) Davison, Sir William Henry
Baldwin-Webb, Colonel J. Campbell-Johnston, Malcolm Dawson, Sir Philip
Baltour, Capt. Harold (I. of Thanet) Caporn, Arthur Cecil Denman, Hon. R. D.
Barrie, Sir Charles Coupar Carver, Major William H. Dospencer- Robertson, Major J. A. F.
Barton, Capt. Basil Kelsey Castlereagh, Viscount Dickie, Jonn P.
Beauchamp, Sir Brograve Campbell Cazalet, Thelma (Islington, E.) Dower, Captain A. V. G.
Beaumont, M. W. (Bucks., Aylesbury) Chamberlain, Rt. Hon. N. (Edgbaston) Duggan, Hubert John
Beaumont, Hon. R. E. B. (Portsm'th, C) Chapman, Col. R. (Houghton-le-Spring) Duncan, James A. L. (Kensington, N.)
Belt, Sir Alfred L. Chapman, Sir Samuel (Edinburgh, S.) Dunglass, Lord
Betterton, Rt. Hon. Sir Henry B. Chorlton, Alan Ernest Leotric Ellis, Sir R. Geoffrey
Bllndell, James Clarke, Frank Elliston, Captain George Sampson
Boothby, Robert John Graham Clarry, Reginald George Elmley, Viscount
Borodale, Viscount Clayton, Sir Christopher Emrys-Evans, P. V
Bossom, A. C. Cochrane, Commander Hon. A. D. Erskine-Bolst, Capt. C. C. (Blk'pool)
Boyd-Carpenter, Sir Archibald Coltox, Major William Philip Essenhigh, Reginald Clare
Broadbent, Colonel John Collins, Rt. Hon. Sir Godfrey Fermoy, Lord
Brocklebank. C. E. R. Conant, R. J. E. Fox, Sir Glfford
Fuller, Captain A. G. Maclay, Hon. Joseph Paton Savery, Samuel Servington
Galbraith, James Francis Wallace McLean, Major Sir Alan Scone, Lord
Ganzont, Sir John McLean, Dr. W. H. (Tradeston) Selley, Harry R.
Gilmour, Lt.-Col. Rt. Hon. Sir John Macquleten, Frederick Alexander Shakespeare, Geoffrey H.
Gledhill, Gilbert Maitland, Adam Shaw, Helen B. (Lanark, Bothwell)
Gluckstein, Louls Halle Makins Brigadier-General Ernest Shaw, Captain William T. (Forfar)
Goff, Sir Park Mannigham-Buller, Lt.-Col. Sir M. Skelton, Archibald Noel
Goodman, Colonel Albert W. Margesson, Capt. Rt. Hon. H. D. R. Smithers, Sir Waldron
Grattan-Doyle, Sir Nicholas Marsden, Commander Arthur Somervell, Sir Donald
Grimston, R. V. Mayhew, Lieut.-Colonel John Somerville, Annesley A (Windsor)
Gulnness, Thomas L. E. B. Mills, Sir Frederick (Leyton, E.) Sotheron-Estcourt, Captain T. E.
Guneton, Captain D. W. Mitchell, Harold P. (Br'tf'd & Chisw'k) Southby, Commander Archibald R. J.
Hacking, Rt. Hon. Douglas H. Mitchell, Sir W. Lane (Streatham) Spencer, Captain Richard A.
Hales, Harold K. Monsell, Rt. Hon. Sir B. Eyres Spender-Clay, Rt. Hon. Herbert H.
Hamilton, Sir George (llford) Morgan, Robert H. Spens, William Patrick
Hannon, Patrick Joseph Henry Morris-Jones, Dr. J. H. (Denbigh) Stanley, Hon. O. F. G. (Westmorland)
Hartland, George A. Morrison, G. A. (Scottish Univer'tles) Stewart, J. H. (Fife, E.)
Harvey, Major S. E. (Devon, Totnes) Moss, Captain H. J. Strauss, Edward A.
Haslam, Henry (Horncastle) Muirhead, Lieut.-Colonel A. J. Stuart, Hon. J. (Moray and Nairn)
Hasdlam, Lieut.-Col. Cuthbert M. Munro, Patrick Stuart, Lord C. Crichton.
Hellgers, Captain F. F. A. Nation, Brigadier-General J. J. H. Sueter, Rear-Admiral Sir Murray F.
Henderson, Sir Vivian L. (Chelmsford) Nicholson, Godfrey (Morpeth) Sugden, Sir Wilfrid Hart
Heneage, Lieut.-Colonel Arthur P. Nicholson, Rt. Hn. W. G. (Petersf'ld) Sutcliffe, Harold
Hepworth, Joseph Normand, Rt. Hon. Wilfrid Tate, Mavis Constance
Hills, Major Rt. Hon. John Waller Ormsby-Gore, Rt. Hon. William G. A. Thomas, Rt. Hon. J. H. (Derby)
Hope, Capt. Hon. A. O. J. (Aston) Peake, Captain Osbert Thompson, Sir Luke
Hore-Bellsha, Leslie Pearson, William G. Thomson, Sir Frederick Charles
Horsbrugh, Florence Peat, Charles U. Thorp, Linton Theodore
Howitt, Dr. Alfred B. Percy, Lord Eustace Touche, Gordon Cosmo
Hume, Sir George Hopwood Petherick, M. Train, John
Hunter, Dr. Joseph (Dumfries) Pike, Cecil F. Tree, Ronald
Hurd, Sir Percy Pownall, Sir Assheton Tryon, Rt. Hon. George Clement
Joel, Dudley J. Barnato Ralkes, Henry V. A. M. Tufnell, Lieut.-Commander R. L.
Jones, Lewis (Swansea, West) Ramsay, Capt. A. H. M. (Midlothian) Wallace, Captain D. E. (Hornsey)
Ker, J. Campbell Ramsay, T. B. W. (Western Isles) Wallace. John (Dunfermline)
Kerr, Hamilton W. Rawson, Sir Cooper Ward, Lt.-Col. Sir A. L. (Hull)
Kimball, Lawrence Ray, Sir William Ward, Irene Mary Bewick (Wallsend)
Knight, Holford Reed, Arthur C. (Exeter) Warrender, Sir Victor A. G.
Knox, Sir Alfred Reid, James S. C. (Stirling) Wayland, Sir William A.
Lamb, Sir Joseph Quinton Remer, John R Wedderburn, Henry James Scrymgeour.
Lambert, Rt. Hon. George Rhys. Hon. Charles Arthur U. Wells, Sidney Richard
Law, Sir Alfred Ropner, Colonel L Weymouth, Viscount
Law, Richard K. (Hull, S. W.) Rosbotham, Sir Thomas Whyte, Jardine Bell
Leech, Dr. J. W. Ruggles-Brise, Colonel E. A. Williams, Charles (Devon, Torquay)
Lees-Jones, John Runge, Norah Cecil Williams, Herbert G. (Croydon, S.)
Leighton, Major B. E. P. Russell, Alexander West (Tynemouth) Willoughby de Eresby, Lord
Levy, Thomas Russell, Hamer Field (Sheffield, B'tside) Wilson, Lt.-Col. Sir Arnold (Hertfd)
Lewis, Oswald Rutherford, John (Edmonton) Wilson, Clyde T. (West Toxteth)
Locker-Lampson. Rt. Hn. G. (Wd. Gr'n) Rutherford, Sir John Hugo (Liverp'l) Wilson, G. H. A. (Cambridge U.)
Lockwood, Capt. J. H. (Shipley) Salmon, Sir Isidore Wolmer, Rt. Hon Viscount
Lumley, Captain Lawrence R. Salt, Edward W. Womersley, Sir Walter James
Mabane, William Samuel, Sir Arthur Michael (F'nham) Worthington, Dr. John V.
MacDonald, Rt. Hon. J. R. (Seaham) Sandeman, Sir A. N. Stewart
McEwen, Captain J. H. F. Sanderson, Sir Frank Barnard TELLERS FOR THE AYES.—
McKie, John Hamilton Sassoon, Rt. Hon. Sir Philip A. G. D. Sir George Penny and Captain Austin Hudson.
Acland. Rt. Hon. Sir Francis Dyke Grundy, Thomas W. Rothschild, James A. de
Banfield, John William Hall, George H. (Merthyr Tydvil) Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Batey, Joseph Hamilton, Sir R. W. (Orkney & Zetl'nd) Smith, Tom (Normanton)
Brown, C. W. E. (Notts., Mansfield) Harris, Sir Percy Thorne, William James
Cocks, Frederick Seymour Holdsworth, Herbert Tinker, John Joseph
Cove, William G. Johnstone, Harcourt (S. Shields) Wedgwood, Rt. Hon. Joslah
Cripps, Sir Stafford Jones, Morgan (Caerphilly) West, F. R.
Daggar, George Lawson. John James Williams, David (Swansea, East)
Dobbie, William Llewellyn-Jones, Frederick Williams, Edward John (Ogmore)
Edwards. Charles Logan, David Gilbert Williams, Dr. John H. (Lianelly)
Evans, R. T. (Carmarthen) Lunn, William Williams, Thomas (York., Don Valley)
Gardner, Benjamin Walter Mainwaring, William Henry Wilmot, John
George, Megan A. Lloyd (Anglesea) Mallalieu, Edward Lancelot Wood, Sir Murdoch McKenzie (Ban[...])
Grenfell, David Rees (Glamorgan) Mason, David M. (Edinburgh, E.)
Griffith, F. Kingsley (Middlesbro', W.) Pickering, Ernest H. TELLERS FOR THE NOES.—
Griffiths, George A. (Yorks, W. Riding) Rea, Walter Russell Mr. Groves and Mr. G. Macdonald

Motion made, and Question proposed, "That the Clause stand part of the Bill."

5.20 p.m.


I do not think we ought to let this duty pass finally without some further explanation of the methods and the reasons for which it has been imposed. We were assured by the Parliamentary Secretary to the Board of Trade that the chief reason which had actuated the Government was the fact that the principal consumers of this commodity, that is to say the cinematograph trade, had come to an agreement with the principal producers that, in the event of this duty being imposed, the price of the commodity would not be raised but would, in fact, be reduced, and the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) not unnaturally asked what guarantee the Treasury was working on. I imagine it is not the custom for the Treasury to ask the House for a duty unless it is satisfied that the grounds are adequate, and the grounds put forward here are that there is an agreement between producers and consumers. If there is such an agreement, I presume that it is in writing, that it has been seen by the Treasury and approved by them and that they are satisfied that it will be carried out. If that be the case, I do not see why the Committee should not be put in possession of the information. I should like to know between whom this agreement in fact has been made. We know that the Cinematograph Exhibitors' Association are one party, but who are the other? Are they certain specific firms manufacturing this article? Are they the representatives of all those firms or of only some of them? Can we know the reason why the Treasury is apparently satisfied that the agreement will be carried out? Are they resting solely upon a verbal agreement entered into between the producers and the cinematograph exhibitors, or what are they relying upon? Is there any reason to believe that an agreement of this kind can, as the hon. and learned Gentleman suggested, be permanent in the face of other economic changes? I cannot see how the exhibitors can be satisfied that in fact the prices will be permanently lower.

Another point made by my right hon. Friend needs answering. Why is it necessary for the consumers and the manufacturers of this commodity to ask for a duty? The hon. Member for South Croydon (Mr. H. Williams) said the reason why the exhibitors were asking for it was that they were frightened that the time would come when the carbon manufacturing interests in this country would collapse under the stress of foreign competition, and they would be left wholly at the mercy of the foreign manufacturer. But they had a very simple remedy for that. They could have gone to the manufacturers and said, "We are aware that foreign competition is damaging you, and we are also frightened of the damage being permanent and disastrous. We will guarantee to use nothing but British carbons if you will guarantee to lower your prices." They could have done that quietly among themselves without coming to the Treasury for this enormous duty. The only answer to that that I can see is that the Cinematograph Exhibitors' Association does not in fact represent the trade, and could not in fact have carried out such an agreement on behalf of its members. If it has the power to carry out such an agreement as suggested, and if it really represents the trade, it had that very much simpler method of procedure.

A final point to which I should like an answer is that about national defence. The Chancellor of the Exchequer, in the discussion on the Budget Resolutions, said that the question of national defence was the major reason which had influenced the Government all through in considering what modifications should be made from time to time in the duties imposed upon these carbons. We have had from the Parliamentary Secretary an analysis of the use of the carbons. Eighty-five per cent. is used by the cinemas, 10 per cent. by photo-process engraving, and 5 per cent. by all other users combined, of which I think 2 per cent. was hospitals and the remaining 3 per cent. included street lighting and all other uses, including national defence. Therefore, it would be reasonable and fair to say that the amount normally used in time of peace by the fighting services is 2 per cent. or under. It is impossible to believe that even in time of war the use of these carbons would be so immensely multiplied as to make it impossible for English firms to supply the demand. The trade, so far from being stagnant, is making progress. The Morgan Crucible Company is making experiments with a view to producing a better carbon, and it is really working hard at the problem. The General Electric Company, with its very large resources, is certainly not at the mercy of the carbon trade; it is perfectly well able to keep going that branch of its business and to expand it if necessity arises. Of the status of the remaining manufacturer of carbons, the Ship Carbon Company, I know nothing. I do not know whether its finances are sound, whether it is making a profit, whether it is in danger of collapse, whether it is in despair, whether it thinks only this duty can save it or what its position is; but I should like to know. Before we pass the Clause we are entitled to an answer to the questions which have been put.

5.29 p.m.


The questions which have been put deserve an answer. The hon. Member has mentioned the question of national defence, and he seemed to be basing his idea of the importance of the defence services on some percentages which I have given applicable to a year of peace. The point with regard to that is this: In an electric age, when arc lamp carbons are an important feature, it is, in the view of the Government's advisers, very desirable that the supply should not be only in the hands of one firm, however eminent that firm may be. As the Chancellor of the Exchequer said: I am assured that the Defence Services feel that it is most important they should have in this country a sufficiently strong industry in this line to be able to expand rapidly in time of emergency and they consider that as long as there is this large importation of foreign carbons coming in, we cannot expect this country to be sufficiently safeguarded if we should require, suddenly, a large supply of carbons."—[OFFICIAL REPORT, 26th April, 1934; col. 1940, Vol. 288.] It is a question of more than one manufacturer. There is the position I have put to the Committee. At present there is one manufacturer, and it is desired to encourage others. The bon. Member asks about the parties to the agreement of the cinematograph industry. That is an agreement to which the Government are not a party, but the Government came in for the purpose of securing an undertaking. An undertaking with regard to prices has been given to the Government. The parties are the Ship Carbon Company of Great Britain, Limited, and Charles H. Champion and Company, Limited, who are the manufacturers, and the Cinematograph Exhibitors' Association, who are the users. The undertaking with regard to the cinematograph industry is given direct by the manufacturers to the accredited representatives of the industry. With regard to prices to consumers generally, the matter is in writing in what is regarded as quite a satisfactory form, in that it is an undertaking given direct to His Majesty's Government. It is not necessary to go into the question of whether or not it is legal. The trouble does not arise when undertakings are given to His Majesty's Government.

The only other point I will mention is the one with regard to the cartel. The hon. and learned Member for East Bristol (Sir S. Cripps) appeared to think that this Resolution had something to do with cartels. It was the fact that the cartel limited the prices that could be charged in this country for carbons. That cartel, as in the case of many other manufacturers' associations, has a clause in it by which manufacturers can give notice to leave the cartel should they desire to do so. As long as a manufacturer has any assurance that he will have a share of the market, it is an advantage to remain in the cartel in which he has a small share. As soon as he sees the possibility of a very elaborate share, he very much desires to give his notice under the cartel so as to be no longer under the control and dictation of any foreign interest, but to be able to supply the requirements of the British market from a British source with British labour.

The object of this duty is to encourage, as the hon. Member for Gower (Mr. D. Grenfell) very rightly assumed it would be, the manufacture in this country of an article, the raw material of which is lamp black, of which there is an adequate supply, for which there is very great use, and the manufacture in this country of articles free from foreign control altogether and on conditions under which the consumers are protected. That is the reason behind this duty, and, added to the national defence object, it is the only one which, I think, I need put before the Committee.


The hon. Gentleman has not dealt with the suggestion which I made. Why could not the Treasury have suggested, if they are so anxious to encourage trade, that an agreement should have been made within the trade itself to use nothing but English carbons on condition that prices were lowered?


That is not a matter on which I am called upon to give any opinion. The hon. Member seeks to show that there was an alternative method by which the trade might achieve the same result, but I am not concerned with that matter. The trade choose to bring it about in this way, and if this method does not carry any objections and the consumers' interests are protected, no harm is done.


Will the Parliamentary Secretary to the Board of Trade tell the House why, after 10 years of protection under the Safeguarding of Industries Act, we are apparently no nearer being able to hold our own against foreign competition? Is there a technical secret which (he dare not divulge, or is there a simple explanation?


There was a simple explanation given at length in the Debate on 26th April. The point is that the value of these articles has altered entirely in comparison with their weight, and a duty of so much per pound has now become in ad valorem quite inadequate

owing to the alteration of price compared with weight. There is nothing sinister at all. It is a perfectly simple explanation, but as it had already been given, I did not think it necessary to go over the ground again.


I gave figures which rather disproved that. The quality of imports has remained normal during the last seven or eight years. I should like an inquiry. It is a very complicated matter, and obviously a Committee of this House cannot properly probe such a highly technical problem. It is unfortunate that this matter could not have been referred to the Imports Advisory Committee, or that the advice of some other appropriate committee was not taken.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 247; Noes, 46.