IMPORT DUTIES ACT, 1932.

HC Deb 19 March 1934 vol 287 cc957-72

8 p.m.

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)

I beg to move: That the Import Duties (Exemptions) (No. 2) Order, 1934, dated the twentieth day of February, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, and the Finance Act, 1932, a copy of which was presented to this House on the said twentieth day of February, nineteen hundred and thirty-four, be approved. I think it will be convenient if at the same time we consider Order No. 6. which is also down on the Paper: That the Additional Import Duties (No. 6) Order, 1934, dated the seventh day of March, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said seventh day of March, nineteen hundred and thirty-four, be approved. These two Orders do three things: They add certain classes of goods to the Free List, they take certain classes of goods from the Free List and they impose additional duties on the goods which are removed from the Free List. Strictly speaking, the addition of goods to the Free List does not require a Resolution from this House, but as the Order is before the House on account of its other provisions no doubt the House would like to hear an explanation of the Free List provisions also. The goods that are added to the Free List are certain paintings. The Import Duties Advisory Committee desire to exempt works of art from duty as far as is practicable, partly because they are media of culture but also because we have a very valuable re-export trade in works of art. British students and artists travel very widely and send back from abroad their own works and bring back material for pictures in the form of sketches. It is obviously desirable that our own people, painting pictures abroad and sending back sketches, should not have their works subject to duty. It was impossible to find a workable definition: of the expression "work of art." It will be within the recollection of the House that that question has often given rise to debate when eminent sculptors have taken a hand in affairs. As it was not possible to find a satisfactory description of "work of art," the Import Duties Advisory Committee have drawn up a very full description of what they mean. The other class of goods added to the Free List consists of printed parts of newspapers, periodicals and printed books, and of letterpress matter with certain exceptions. It seems quite clear that we could not extend the exemptions to labels, bags, wrapping materials and catalogues imported in bulk. We are also taking certain goods off the Free List in order to put a duty upon them. Nearly all catalogues, trade lists and advertising material are already subject to duty at 20 per cent., but we want to allow a certain type of catalogue to come in, and so the Order does not apply to such goods not exceeding eight ounces in weight. What we are trying to do is to prevent any British firm sending orders for catalogues abroad and importing them by the thousand; but we have no objection to an individual catalogue or to any bulk of printed catalogues when imported in a packet not exceeding eight ounces in weight coming in free.

The last type of goods taken out of the Free List and put into a dutiable class is out-of-date magazines. The House may be surprised, as were some Members of His Majesty's Government, to find that there is a big trade in imported out-of-date periodicals, particularly from the other side of the Atlantic. Apparently our own magazine and periodical trade is very seriously interfered with by publications from the other side of the Atlantic being sent here when they are out-of-date and being sold at ruinous prices.

Mr. ATTLEE

Is that for reading or pulping?

Dr. BURGIN

They are shipped here in order to get a price which is more profitable to the exporter than pulping them in the country of origin. In order to save themselves the cost of pulping they are prepared to jettison these books at extremely low prices. These magazines include many humdrum periodicals, and some literature the title of which is such that I simply dare not read it out. "Hollywood Nights" is one of them. This traffic is damaging to legitimate trade here, and the definition has been very carefully drafted. The class of goods being subjected to duty are periodicals imported more than 15 days after the end of the month when they appear. I would only make this clear. The House may wonder why one goes through the double-barrelled process of removing something from the Free List and then putting a duty on it. It is purely a question of drafting. Section 7 of the Finance Act of 1932 says that the Treasury may, on the direction of the Import Duties Advisory Committee, direct goods of any class to cease to be in the First Schedule to the Import Duties Act. The effect of that is to make the goods subject to the ordinary 10 per cent. duty. Section 3 of the Import Duties Act permits the committee to recommend, and the Treasury to order, additional duties, but that applies only to goods which are subject to a duty already. In other words, you can only have an additional duty if there is a duty already, and so in order to put something which is on the Free List into a dutiable class you have first to take it off the Free List, which puts it automatically into the 10 per cent. class, and then you have to apply to it the duty which is recommended. The duty is specified in these Orders No. 2 and No. 6. I do not think there is anything in connection with those two duties on which the House is likely to require further information, or any matter to which the House is likely to take exception.

8.7 p.m.

Mr. DAVID GRENFELL

The House is very much indebted to the hon. Gentleman for his very clear explanation of these two Orders, and we are grateful to him for suggesting that they should be taken together, because if considered separately neither of them means anything at all. The White Paper which has been published to supply an explanation of these Orders is certainly lacking in the clarity which the hon. Gentleman's speech displayed. I wish that he wrote the White Papers himself, because those who compile them do not write with as much conviction as the hon. Gentleman shows. Paragraph 4 of the White Paper dealing with Order No. 2 speaks of: Paintings in oil or water colours, pencil and charcoal drawings, and pastels, on canvas or paper (including board). Further down those are described as works of art. The hon. Gentleman referred to the difficulty of defining works of art, and we are still very much in the dark concerning the exact definition of the goods which will come under this description. The committee say: The committee decided to deal with the matter by recommending the exemption from duty of (1) certain clearly definable works of art. There are works of art and works of art. There are paintings on canvas and on board, and paintings on other material, which are far from being works of art, and it is this exact distinction between a painting on canvas or board which is a work of art and a painting on canvas or board which is not a work of art which should be made clear. I would like the hon. Gentleman to tell us whether a Low cartoon of Members of the National Government would be classified as a work of art, and whether if Mr. Low, in the fulfilment of his contract with the well-known evening newspaper which employs him, drew a cartoon in France portraying the National Government in any of its most presentable features, that would be regarded as a work of art for the purposes of this Order?

Dr. BURGIN

I do not know whether the hon. Member would like an answer now, because he is developing an interesting theme? The answer is that if it were a cartoon in black and white it would not be, but that if it were adequately coloured it would be.

Mr. GRENFELL

I feel sure that is a piece of information which will be of great relief to the Government themselves. If they could exclude Mr. Low's cartoons on any pretext at all I am sure they would be glad to do so. But we are grateful to the hon. Gentleman for giving us the information that a coloured cartoon is a work of art and an uncoloured cartoon is not a work of art. We on this side of the House believe that the uncoloured cartoon is a work of very great art and very effective art, but the hon. Member says that if it is not coloured it is not a work of art, and therefore it is not subject to this exemption. He told us further that the free entry of works of art into this country is of very great advantage to the re-export trade. I wish he would give us some idea of the value of that trade in works of art which are re-exported. We can quite understand paintings which are valuable through their age and excellent craftsmanship, but we do not know what value is to be attached to paintings of all kinds which come from all parts of the world to the market in this country. In asking for that information we would at the same time enter a protest against the manner in which this subject is presented to us.

I challenge any hon. Member who has read the White Paper to say that he is any the better informed after having done so. The wording of these White Papers must have been thought out, but although one reads them from beginning to end one gets no information, except that certain articles are to come in free of duty and upon others an additional duty is to be charged. It does not help the Committee very much, but we protest once more. We do not wish to divide the House on these two Orders, but we enter our protest against this procedure. We find in paragraph 3 of the Order the statement is made: We have received a considerable number of representations that additions to the First Schedule should be made in respect of printed matter which cannot be held to be either newspapers, periodicals or printed books, and so on. Who made those representations? Why is the House not told? From what source were the representations made? What kind of people made them, and were those representations made purely in the interests of the producers of this kind of commodity or in the interests of a small number of people who may profit considerably from the changes made in the existing import duty? Why cannot these things be made with some estimate of the financial result which will accrue from the operation of duties of this kind?

We may be talking about something which is very small, and which may only affect duties amounting in the aggregate to a few thousands of pounds. As far as the Orders are concerned, the additional duties may be a very considerable sum or they may amount to an insignificantly small sum. We ought to be given some estimate on this matter. It is because of the lack of information in the recommendations of the Import Duties Advisory Committee that we put these questions to the Minister. We are content for the moment to make our protest at the way in which these changes are made, and because of the inadequate information.

8.17 p.m.

Mr. JANNER

I would like to ask one or two questions of the Parliamentary Secretary to the Board of Trade before we decide what our attitude is to be. The hon. Member for Gower (Mr. D. Grenfell) has made the point that the explanation given in the introduction of these duties is even more difficult to follow than the terms of the Order itself. We, too—at least I should say I—feel a certain amount of difficulty in realising what is the exact nature of the relief which is to be expected, particularly in regard to objects of art. I should like to know, for example, whether we are to have included in this "clearly definable" definition such objects of art as sculpture. If not, why are these being excluded? There must be a large number of important objects of art which have to be included in an Order of this description. It clearly indicates the difficulties which must needs arise in regard to tariff impositions and the removal of them.

We pointed out, when the tariff measures were introduced, that difficulties of this nature and possibly of a very serious kind, would arise from time to time. Although this may be a small matter, it is one which shows quite clearly how such difficulties arise. Why is one object of art covered by a duty and another object of art is not covered? Who is to define what is and what is not within the Order? We ought to have a little clearer indication of how the matter stands, before we vote upon it.

8.19 p.m.

Dr. BURGIN

I can only address the House again with the permission of the House, in order to answer a few questions which have been put to me. In regard to general policy, hon. Members cannot complain that the House is overcharged with detail and then, when any part is delegated to another body to deal with the detail, complain that the detail is not discussed in their hearing. The hon. Member for Gower (Mr. D. Grenfell) asked what value was to be put upon this trade; what was it worth in pounds, shillings and pence? Bond Street has a world-wide reputation for the export of works of art. Some of us do not know what value to put on our pictures, because that is essentially a matter of opinion depending upon a very large number of factors. I therefore do not think that it is possible to put a particular figure upon the value of our re-export trade in works of art. It is a substantial British trade for which London has a deserved reputation, and which it is not desirable, or indeed possible, separately to assess in monetary value.

With regard to the nature of the works of art, I want to treat this matter quite seriously, and not to be led away by a Low cartoon, coloured or uncoloured. I want to give the House a true picture of what is being done. When the Import Duties Act, 1932, was being passed some question was raised as to works of art 100 years old, and it was stated that it was impossible to treat as manufactured articles a Titian or a Rubens, or some big picture passing to and fro. Therefore, by Section 20, works produced more than 100 years before the date of importation were free from duty. That was a recommendation given by the society dealing with antiquities. There was a recognised description. In July, 1933, there was a further extension to exhibits or specimens sent to approved galleries or to approved museums under the control of a public authority or a university. It was felt to be ridiculous that we should stop an exhibition or a museum piece sent to our country. Whatever their age, and although they may have been produced expressly for the exhibition, they were put on the Free List.

When the Import Duties Advisory Committee came, with the assistance of artists and experts, to consider museum pieces, they came to the conclusion that paintings in oil or water colours, pencil and charcoal drawings, pastels or canvas or paper or board should also be relieved of duty. There was nothing in the protectionist policy of this country which made it desirable to have a duty upon any of those things. As a result of further inquiry, and of representations from those who alone know the details of this trade, the committee have extended their recommendation to paintings in oil or water colours on canvas or paper when framed—not merely a painting, but the presentation, so to speak, in a frame—and to paintings, framed or not, in oil or water colours on materials that are not canvas or paper. So the House will get the whole idea of this matter. First, there were the old paintings, then the museum pieces, then the normal ones, and then the paintings when framed, and they were all included in the Free List.

The exemption does not extend to articles which happen to have a painting on them. For instance, a painted tea-service or textiles on which there is some design are not to wriggle through the Customs on the footing that they are paintings first and tea-services or textiles afterwards. The hon. Member for Whitechapel (Mr. Janner) asked questions about the definition. The definition is included in order that it shall relate to anything that is specific It is the Commissioners of Customs and Excise who interpret its meaning. There is a very serious observation that a great part of average conversation is perfectly right, but absolutely inaccurate when sifted. The definition is hedged about and is defined in this way with the assistance of the best experts which the trade can produce. If the definition which gets into the Advisory Committee's Report is wrong, that is a censure upon the trade, because the trade has had every possible opportunity to see that the definition is accurately expressed.

The hon. Member for Whitechapel says, "Why not sculpture?" The answer is that it is undefinable. Nobody has yet found a word that would adequately define sculpture. Imported marble, in whatever shape it may be brought, is subject to a duty of 15 per cent. Some people may call it sculpture, while others may call it nature's effort. Whichever it is, it is subject to a duty of 15 per cent., because there has not been any possibility of defining where granite stops and art begins.

The hon. Member for Gower raised another point, quite seriously, about newspapers and periodicals, and I want again to give him the short explanation which will make his mind range on the side of mine. Newspapers, periodicals and printed books were in the free list, but there was the ridiculous position that pamphlets and unbound sheets were liable to duty. If the whole thing was brought in, it was free, but if it was brought in in bits it was subject to duty. The effect of this present Order is to free from duty such printed matter as foreign official publications received under international exchange agreements, instructions for working machinery, information relating to letters of credit, travellers' cheques, express money orders, special invoice forms, telegraphic code cards, and printed forms required for exporting interests. These are all obviously articles that we ought to allow to be imported.

Sir HERBERT SAMUEL

Why did you not do so before?

Dr. BURGIN

Quite honestly it was a pure mistake, I think. Of course, that does not apply to wrappers and labels and things of that kind. I have endeavoured to give almost an exhaustive explanation of the extent of the application of the Order, because I hope it will in some measure clear up, not only misapprehensions, but points of legitimate difficulty.

Resolved, That the Import Duties (Exemptions) (No. 2) Order, 1934, dated the twentieth day of February, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, and the Finance Act, 1932, a copy of which was presented to this House on the said twentieth day of February, nineteen hundred and thirty-four, be approved.

Resolved, That the Additional Import Duties (No. 6) Order, 1934, dated the seventh day of March, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said seventh day of March, nineteen hundred and thirty-four, be approved."—[Dr. Burgin.]

Dr. BURGIN

I beg to move, That the Additional Import Duties (No. 4) Order, 1934, dated the first day of March, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said first day of March, nineteen hundred and thirty-four, be approved. This Order relates to two substances, di-sodium phosphate and tri-sodium phosphate. Di-sodium phosphate is used in silk weighting, calico printing, textile dyeing, sugar refining, water softening, and detergent compounds; and tri-sodium phosphate is used in laundries, in the manufacture of soap powders and in detergent and degreasing compounds. These sodium phosphates came in from abroad. In 1931 we began to manufacture them, but for the last two years our output for all purposes has been very much below the productive capacity of our United Kingdom manufacturers, and, despite the general ad valorem duty, Continental phosphates have been coming into this country at prices considerably below the British cost of production. Additional plant is available, firms are increasing their manufacture, and the Import Duties Advisory Committee desire to encourage the manufacture in this country of these phosphates to an extent sufficient to supply all the needs of United Kingdom industries; and they are satisfied that that can be done with only a negligible increase of cost to the industries concerned. The imports for the last seven years have averaged something like 46,000 cwts., and the value is something between £20,000 and £30,000. The industries concerned are very largely textile industries other than cotton. Eighty per cent. of the di-sodium phosphate is used for textiles, mostly for silk and for purposes not connected with cotton. As for tri-sodium phosphate, less than 10 per cent of it is used in the cotton textile industry. Something like half the whole quantity is used for textiles, but almost all unconnected with cotton.

The duties that are recommended are such a rate of duty as, with the ad valorem duty, will amount in the one case to 35s. a ton, and in the other case to 50s. a ton. I have had a good many inquiries made, as to the locality of the factories, the nature of the people who are going to take part in the manufacture, the number of men who are going to be employed, the average cost of these materials used in these particular industries, and the increase in cost that is likely to follow as a result of these articles being manufactured in the United Kingdom; and I am satisfied that this is a case in which we were importing Continental phosphates which we could quite well make here. I believe that on balance, when the facts are rightly explained, the consuming interest would prefer that these articles should be manufactured here and that the consequent additional employment to be given in this country.

8.31 p.m.

Mr. D. GRENFELL

Here again we do not propose to detain the House for very long, but there are one or two matters that we should like to have cleared up in regard to the uses to which these materials are put. Is the hon. Gentleman satisfied, and can he satisfy the House, that the cost of production will not be unduly raised by increasing the cost of raw materials to the industries using these two chemical substances, di-sodium phosphate and tri-sodium phosphate, which will now have to carry a very heavy percentage of duty?

The hon. Gentleman has not revealed the percentage, but I have worked it out from the figures that he gave us. We have imported these commodities at a price round about £10 per ton, and the recommendation now is that the duties in question, when added to the general ad valorem duty, shall be, in the case of di-sodium phosphate, £1 15s. per ton, and in the case of tri-sodium phosphate £2 10s. per ton. I do not know whether the prices of these two substances are approximately the same, but, if we assume that there is no great difference between their prices, we find that the scale of duty now recommended may reach an aggregate of 17½ per cent. of the value in the one case, and 25 per cent. of the value in the other. The point arises that, if the value of the commodity increases, we shall find that the additional duty over and above the present ad valorem duty works out at a lower percentage on the higher value, and that is all to the good; but the hon Gentleman would really help us on this side, and the House as a whole, if he could give us some indication of how far these costs are going to affect the industries of silk weighting, calico printing, and textile dyeing and finishing, which are now in a rather serious condition. The plight of the cotton industry gives serious concern to everyone in the country, and we now find that an article which is in use for calico printing, and which may be used very extensively, is to be raised in price, thereby adding to the cost of production of calico prints and textiles.

The other commodity, the tri-sodium phosphate, is used for the manufacture of soap powders, and I do not know whether the industry will be very much influenced by a small rise in the price, but every little additional item of cost to the textile industry is a very serious thing. I should like to know what is the approximate estimate of the cost of this additional duty. It is not a large sum, but, if confined to a limited variety of products, it may mean a very considerable increase indeed. The small addition revealed by the figure of £23,000 in the annual value of the imports, or an additional 10 or 20 per cent., is a very small sum taken over the whole of the trade in which these commodities are used, but, if they are used in a substantial proportion in any one industry, the cost may be considerable, and I should like the hon. Gentleman to inform the House on the point.

8.37 p.m.

Mr. GRAHAM WHITE

The hon. Gentleman in moving the confirmation of the Order said he thought that, if the users of these various kinds of products had the matter explained to them and were in possession of all the facts, they would prefer to draw their sources of supply from the manufactures which would presumably be developed if the Order is passed. I should like to know whether these users have already had an opportunity of stating their views. We attach the greatest possible importance to that. We have seen that, where inadequate notice has been given, very serious trouble has arisen, and I should be glad to know whether the usual notice was given in this case and whether those who are interested in the matter have had an opportunity of stating their views.

8.38 p.m.

Mr. PALING

It appears to me, although the third paragraph reads that these goods have been delivered here at prices lower than the British cost of production, the estimate does not prove that there has been undue competition. It says the capacity for production is greater than the output has been for the last two years, and in the next paragraph it says there has been such increased demand for it that the people who produce it are already putting down new plant in order to cope with the increased demand. From that it would not seem that the manufacturers have been suffering unduly from the competition of this low-priced stuff. If they are not complaining about the competition, and if that is not the reason for putting the duty on, what is the reason? The use of these things is growing tremendously. Have all these people, not only those who use it as a raw material but those who sell it in the shops as a finished article for the householder, been studied? Have they had an opportunity of putting their point of view before the committee before the decision was arrived at? Then, could the Minister give us some idea of the difference in price between the British made and the imported article? I think he said that 46,000 cwts. and £20,000 or £30,000 in value represents the importation from foreign countries. Will he also tell us the weight and the corresponding value of the British production?

8.40 p.m.

Dr. BURGIN

When an industry comes to the Import Duties Advisory Com- mittee and asks that it may be given an opportunity of supplying the British markets, the first essential is to show that it has the power to do it, so that no doubt these manufacturers who have been putting down increased plant were preparing their case. They were putting it within their power to make an application with any chance of success. The Import Duties Advisory Committee will not allow an increased duty against an article coming from abroad unless they are abundantly satisfied that the local market and the local consumers can be satisfied. Consequently, they expressly report that the plant is now being enlarged to enable the manufacturers to cope with a much increased demand and that they are satisfied as a tribunal, after hearing the evidence that they can supply all the needs of the United Kingdom industry. So that, quite apart from competition being negatived by the building of the plant, I say two things, first of all this is a product made in large quantities abroad and sold here below the bare cost of production and, secondly, that the manufacturers in England have satisfied the tribunal that they can supply the whole of the British quantities. Presumably the British quantities are not less than the total imported quantities plus what the British people were making before. I shall be prepared to deal with the figures on that basis.

What can I say about the users? The Import Duties Advisory Committee advertised their intention to deal with this matter and if people objected to the increased duties they were heard. There was certainly an opportunity for presenting the views of both sides and, as far as I know, that was taken advantage of by those who desired to make any comment. The hon. Member for Went-worth (Mr. Paling) asked what is the approximate difference in price. That, of course, is very difficult to say. Manufacturers have not yet had an opportunity of making it on a sufficient scale to tell us what the price will be, but I should have thought that the price, taken broad and large, might possibly go up by not more than 8 per cent. That is the calculation. I should like to give the hon. Member for Gower (Mr. D. Grenfell) a broad reply. Here we are dealing with chemicals. The scale of duty for chemicals is 33⅓ per cent. under the Key Industries Duties when it is a fine chemical of pure quality and 20 per cent. when it is not. If you look through all the Import Duty Orders, you will find that the broad general level for chemicals is 20 per cent. These have only been subject until this Order to 10 per cent., and the object of the duty is to put these two substances up to the general level of 20 per cent. We are dealing with depreciated and changing currencies and the possibility of lowering prices abroad. We are dealing in times when an ordinary percentage increase is not very satisfactory so, as far as possible, one is trying to deal with it on the footing of what it will be when it is realised here. What the Order really does is to include two chemicals which have hitherto been paying 10 per cent. in the general level of chemicals, namely, 20 per cent.

8.44 p.m.

Mr. PALING

Does the hon. Gentleman mean that the additional 8 per cent. that he suggested is the increase on the foreign article as sold now?

Dr. BURGIN

Yes. In other words, the consumer who has been accustomed to paying £1,000 for the quantity that he buys from abroad might have to pay £80 in addition.

Mr. WHITE

May I ask my hon. Friend whether the respective users who raised opposition to the proposals subsequently agreed? The hon. Member said he believed the users would prefer, if the matter were explained to them, to have the right permitted by this Order, and I am puzzled to know what the position is.

Dr. BURGIN

I do not want the House to be puzzled. I am trying to make two definite statements, one of fact and one of opinion. When the Import Duties Advisory Committee say, "We have under contemplation the raising of the duty on such a substance," it is technically open to anybody who does not like the rule to oppose it. They take into account the comments of the consumer who may say, "We consume so much of this stuff and do not want the price unduly raised against us," as it were. In actual fact that is the position. I use that argument in order to reply to the hon. Member for East Birkenhead (Mr. White). He asks, were they consulted? Certainly, and the Import Duties Advisory Committee had an opportunity of hearing their comments. I have no knowledge whatever whether that opposition was withdrawn, or how it was dealt with, or what impression they made on the Import Duties Advisory Committee, but I say, as a matter of broad opinion, that I believe the consumers in this country are prepared to accept the doctrine that cheapness, with men out of work, is not as desirable as a slightly dearer price, with more men employed. I believe that to be a doctrine which has found increasing favour throughout the country, and that, if these facts were clearly, and adequately explained, the consumers would be prepared to enable those goods to be manufactured in this country.

Resolved, That the Additional Import Duties (No. 4) Order, 1934, dated the first day of March, nineteen hundred and thirty-four, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said first day of March, nineteen hundred and thirty-four, be approved.