HC Deb 02 February 1937 vol 319 cc1552-60

10.32 p.m.

The Parliamentary Secretary to the Board of Trade (Dr. Burgin)

I beg to move: That the Import Duties (Exemptions) (No. 8) Order, 1936, dated the eleventh day of December, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said eleventh day of December, nineteen hundred and thirty-six, be approved. For the convenience of the House, and with your permission, Mr. Speaker, it has been the custom to make one introductory speech when a number of Import Duties Orders come before the House, leaving the House free to take its decision upon each Order separately. Unless objection is taken to this course, I propose to adopt it now. The two Orders which I am submitting are Import Duties (Exemptions) Order No. 8 dealing with oxalic acid and Additional Import Duties Order No. 32 dealing with knives. Oxalic acid is normally subject to a key industries duty of 33⅓ per cent. but for some time it was exempted from that duty because it was not manufactured within the Empire in substantial quantities. Later an Order was made under the Import Duties Act, 1932, adding it to the free list. The acid is now made in this country in very substantial quantities and consequently the exemption from the key industries duty has been discontinued. It would obviously be anomalous, when an article is subject to a key industry duty of 33 1–3 per cent., to leave it on the Free List, and the present Order takes it off. As the Order would have the effect of imposing a 10 per cent. duty if it ever were re-exempted from key industry duty, it is necessary to trouble the House to give an affirmative Resolution. In point of fact, oxalic acid is subject to key industry duty. The formality of taking it off the Free List is, therefore, but a formality, and the House would wish to have the Resolution properly affirmed.

With regard to the Additional Import Duties (No. 32) Order, this deals with knives and imposes a duty of 2s. per dozen knives and 1s. per dozen blades or blanks, in place of an existing duty of 20 per cent. wherever these specific duties are higher. The knives are knives other than those for use in machines, with one or more blades made wholly or partly of iron or steel. This is a Sheffield trade. It is thought that there are about 10,000 workpeople employed in the cutlery industry. Imports come principally from Germany and Japan and, as is the case with other Japanese imports into this country, they have expanded very rapidly recently. The level of prices of the Japanese imports has declined from 1s. 7½d. to 11d. a dozen, and it is that competition of the cheaper type of knife which is undermining the home trade and the export trade in the British knife. Sheffield has succeeded in making a knife that sells at 6d., and an export knife for the same price. That trade is cut into by the Japanese articles at 11d. per dozen.

The German trade is tending to become a little more expensive rather than less expensive, and it would be interesting, were time available, to contrast the difference between the character of the German and Japanese exports to this country. I am able to show that the export trade from Sheffield has lost as a result of these cheap importations. I have the particulars of the trade in these articles of each country, and the totals. I imagine that the House will not want to be worried with the details of them. It is another instance of where a trade in this country that has been carefully built up to the great advantage of the local workpeople is finding itself undermined by an attempt on behalf of one or other foreign country to capture the market by sending goods here regardless of cost.

10.39 p.m.

Mr. Benson

The two Orders and the explanations why these articles should be subject to a protective tariff are excellent examples of the effect on the human mind of becoming Protectionist. In the case of oxalic acid we are told that the reason it has been taken off the Free List and why an import duty of 33⅓ per cent. is being imposed upon it—

Dr. Burgin

I am sure the hon. Member does not wish to be led astray. This Order does not impose any duty on oxalic acid at all. It is already subject to key industry duty entirely independently. All this Order does it to take something which is subject to a 33⅓ per cent. duty under time Act off the Free List under another.

Mr. Benson

Has oxalic acid been subject to protection the whole time?

Dr. Burgin

Yes, except for a short period, when an Order was made expressly to avoid the duty under the earlier Act until home production came up to the standard required.

Mr. Benson

Ah, yes, that is my point, that in order to increase the production of oxalic acid in this country they allow free imports—that is what the Minister said—

Dr. Burgin

indicated dissent.

Mr. Benson

—and as soon as production in this country has, under a system of free imports of oxalic acid, grown to a certain proportion, they then put on a duty of 33⅓ per cent. In the case of knives, it is because, apparently, the trade is going down that a duty is put on. The various reasons given by the Minister for clapping on duties reminds me very much of Gulliver's explanation of why princes went to war. His explanation to the inhabitants of Brobdingnag, I think, was that princes sometimes went to war because they had too much time, sometimes because they had too little time, sometimes they went to war because their neighbours were too strong, sometimes because their neighbours were too weak. The Minister tells us that sometimes they clap on a duty because the proportion of production in this country is increasing, sometimes because the proportion is decreasing, sometimes because our own manufacturers can compete with importers, sometimes because they cannot.

Really, I think it was most tactless of whoever was responsible for putting down these two Orders together to expect the Minister to move that two import duties be put upon two different types of article for entirely contrary and mutually destructive reasons. The Import Duties Advisory Committee are supposed to be a body of gentlemen who weigh up the problems of any particular industry and decide whether it should or should not be protected, but, apparently, if they cannot find one reason for protecting it they will find another. The Import Duties Advisory Committee, instead of being a carefully judicial body to weigh up facts, have become simply and solely a committee to give the Government some excuse for clapping on unnecessary duties.

10.43 p.m.

Mr. Messer

In my view we have tonight an illustration of one of the false premises on which this tariff system is based. In the case of oxalic acid one can see that the object, superficially, is to protect the home producer. If that is not the reason—

Dr. Burgin

I do not want the hon. Member to fall into the error of the last speaker. This Order does not protect oxalic acid. It is already protected under the Safeguarding of Industries Act. This says that when oxalic acid coming into this country is chargeable with a duty of 33⅓ per cent. as a chemical under an Act which is outside the Import Duties Act altogether, it is ridiculous that it should remain on a Free List under another Act of Parliament. That is all it does. It does not alter the duty on oxalic acid at all.

Mr. Messer

Neither does it alter the fact, and it is the fact which I want to bring home to the House, that this tariff on oxalic acid increases the price of it and, in consequence, makes dearer the raw material of a big industry. Oxalic acid is used for many things. It is not merely the raw material of the undertaker; it is the raw material of furniture makers, joiners and shop-fitters. It is used as a bleaching agent by french polishers and, after splitting, by those whose work is renovation. In the development which has taken place in those industries, additional burdens and difficulties have been placed in their way. The advent of metal shop-fronts and of metal furniture, and the difficulties in which french polishers and painters have had to compete with the new cullulose, have made it urgently necessary that the raw materials of their trade should be cheaper and not more expensive. It may be true that the Order does not specifically do this, but it illustrates the point that the protective tariff put upon this raw material injures another trade.

10.46 p.m.

Mr. A. V. Alexander

Just before we let this Order go, I want to say that I thoroughly agree with the hon. Member for Chesterfield (Mr. Benson) as to the diversity of argument which it suits the Parliamentary Secretary to use when he presents these Orders from time to time to the House. I support also the hon. Member for South Tottenham (Mr. Messer) in the protest with regard to oxalic acid, which is an important raw material not only in the trades which the hon. Member mentioned but in relation to certain types of manufacture in some of which I happen to be interested. It is no use the Parliamentary Secretary simply saying that the Order has no effect. Unless the Order be capable of still further explanation, it is a fact that oxalic acid will be automatically removed, if the Order is passed, from the Free List.

Dr. Burgin

It being subject to 33⅓ per cent. duty under another Act.

Mr. Alexander

It is being removed from the Free List under the Import Duties Act. Is it to be subject to the suspension of the operation of the flat rate?

Dr. Burgin

So long as it is subject to the Key Industries Act it is not subject to this Act at all, and the only reason why I have to bring this Order to the attention of the House is that if the Government exempted oxalic acid in the future from the Key Industries Duty it would then, under the Order, become automatically subject to the To per cent. At the moment, the Order does nothing but remove an entry in a Schedule, but it would be within the power of the Government to exempt oxalic acid from the Key Industries Duty. If the Order were made and I had previously removed it from the Free List, it would then be liable to 10 per cent. duty.

Mr. Alexander

If there were some further Amendment of the position of this Duty under the Key Industries Act, the Government would have passed in advance a duty of 10 per cent. under the 1932 Act.

Dr. Burgin

That is not the intention.

Mr. Alexander

It is a little difficult to understand why the House should be troubled with it if the Government have no such intention. There is something far more sinister behind this than the mere wiping out of a line of this sort. With regard to the second Order, we have had one illumination from the Parliamentary Secretary, although he was commendably brief. He talked about the position in regard to that very important section of the Sheffield cutlery industry which deals with knives. We are asked to increase the duty on knives in such a way that, if the Parliamentary Secretary had not spoken, we should not know the size or weight of the duty. We are told now that knives come into this country and can be bought, at the wholesale price, for so cheap a sum as 11d. per dozen. The duty under the old Order was 20 per cent. But the duty in the new Order is 2s. per dozen, a specific duty. So that the old formula of the old advocate of tariff reform that 10 per cent. was about the rate of duty, has resolved itself in the case of these knives to 208 per cent.

I have here a knife. I should think that at the time when I first represented Sheffield in the House of Commons, the quality of Sheffield knives spoke to the world of the value of Sheffield workmanship. To-day there is an exact replica, marked "Made in Sheffield," of a cheap imported article which used to be sold in Woolworth's. These cheap knives are now apparently made in England by the same people who made this cheap and nasty knife abroad. They are marked "Made in Sheffield," advertising to the world what marvellous products can be made in Sheffield. I know of nothing which is more detrimental to the name of Sheffield cutlery than that knife, which has been transferred to be made by a foreign firm in this country, and to advertise it as a typical example of British craftsmanship. Because of that kind of thing and because we are being challenged by a still further cheapening, we are asked to pass a duty of 208 per cent. in order to protect this cheap and nasty knife. There might be some case for asking for more protection for a knife of a different character, of real craftsmanship.

Dr. Burgin

There is no competition there.

Mr. Alexander

A specific duty is to go on all knives. Perhaps the Parliamentary Secretary will explain. I have read the Schedule fairly carefully and I would like him to explain if I am wrong. As I understand the Schedule it is to apply to knives of one blade or more. If the other knives do not want the protection I want to know why the Import Duties Advisory Committee are recommending it. Surely the Parliamentary Secretary ought to know the case better than that. Having listened to his earlier very short speech of explanation, I am less inclined than I was to let this duty go. Unless he can give us some better explanation I shall be very inclined to resist the Motion.

10.55 p.m.

Dr. Burgin

A Minister who receives deputations from hon. Members opposite as to how to deal with imports from Japan may be pardoned in feeling some surprise that, when he tries to deal with imports from Japan, he is met with the kind of arguments that have been used. I think the right hon. Gentleman is right in saying that the Order will apply to all knives. I was equally right in saying that there is no effective competition, and by that we mean no effective import of the high quality knife. The House will like to know that the enormous increase in these imports from Japan has been shown by the fact that, in the six months from July to December of last year, 130,169 dozen of these knives came in from Japan alone, at wholesale prices of under 1d. apiece. We are dealing with a trade employing 10,000 people, which claims to have a definite percentage of the home trade and a definite percentage of the export trade from this country to the Dominions. That percentage of the home trade and of the export trade to the Dominions has been decreasing as the result of these cheap importations, and it is quite natural that, on the demand of the industry, after searching inquiry, an Order should be made putting a specific duty instead of an ad valorem duty upon these particular imports. That is the whole object of the recommendation of the Import Duties Advisory Committee.

As regards oxalic acid, I accept what has been said by those who are experienced in various industries as to where oxalic acid is used. It is also used, of course, in the textile industries among others. The total consumption of oxalic acid is about 1,000 tons a year. It used until recently to be supplied exclusively by factories in Germany and the Netherlands; it is now supplied from Widnes and London.

10.57 p.m.

Sir P. Harris

The House is now being asked to pass a system of duties in accordance with what has become an invariable practice of the Import Duties Advisory Committee and carried out by the Government, namely, to go in for the system of specific duties. That means that the cheap articles used by poor people with low wages are subject to a very much higher rate of tax than the more expensive luxury articles used by the well-to-do. Almost every one of these recommendations that is brought before the House follows that line. This proposal is that there should be a specific duty of 2s. per dozen or 20 per cent., whichever is the greater. In other words, while an expensive knife is only subject to a duty of 20 per cent. a cheap knife—and people only buy cheap knives when they are poor and cannot afford a knife of better quality—are to be subject to a duty of 207 per cent. I call that a very mean policy.

Sir Geoffrey Ellis

The hon. Baronet forgets that, if this duty is not passed, a great many very poor people will have to go without wages.

10.58 p.m.

Mr. Magnay

There is another point of view that the House should have in mind in considering this matter. There are millions of boys in this country who could not pay 1s. for a pen-knife, but who would go to Woolworths, where I got this knife which I have here, and have one in each pocket; while over and above that there are thousands of men who will be employed and the industry will be safeguarded in other places.

Resolved, That the Import Duties (Exemptions) (No. 8) Order, 1936, dated the eleventh day of December, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said eleventh day of December, nineteen hundred and thirty-six, be approved.

Resolved, That the Additional Import Duties (No. 32) Order, 1936, dated the twenty-first day of December, nineteen hundred and thirty-six, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the nineteenth day of January, nineteen hundred and thirty-seven, be approved."—[Dr. Burgin.]