§ "(1) As from the appointed day, Section three of the Finance Act, 1925 (which imposes duties on motor cars, musical instruments, clocks, films, etc.) shall be repealed, and accordingly the enactments (which amend or relate to that Section) set out in the Schedule (Enactments relating to certain customs duties repealed) to this Act shall also be repealed as from that day to the extent specified in the third column of that Schedule.
§ (2) The Treasury shall by order direct that as from the appointed day—
- (a) there shall be charged under Section three of the Import Duties Act, 1932, on all goods to which this Section applies (except mouth-organs), an additional duty of such an amount as will, with the general ad valorem duty, amount to the rate of the duty chargeable thereon immediately before the appointed day under Section three of the Finance Act, 1925; and
- (b) drawback of the duty or duties chargeable under Part I of the Import
1661 Duties Act, 1932, shall be allowed under the Second Schedule to that Act in respect of all goods to which this Section applies.
§ (3) For the purpose of any order for the time being in force (whether made under the last foregoing Sub-section or otherwise) providing for the allowance of drawback of any duty or duties chargeable under Part I of the Import Duties Act, 1932, in respect of any goods to which this Section applies, any duty paid in respect of any such goods before the appointed day under Section three of the Finance Act, 2925, shall be deemed to have been chargeable under the said Part I.
§ (4) Section five of the Import Duties Act, 1932, and Section two of the Ottawa Agreements Act, 2932 (which exempt Empire goods from the general ad valorem duty and any additional duty), shall not apply to any goods to which this Section applies; but, as from the appointed day, any such goods which, but for this Sub-section, would be exempt by virtue of those Sections from the general ad valorem duty and any additional duty (hereafter in this Section referred to as "Empire goods ") shall, subject to the next following Sub-section—
- (a) be charged with those duties at the preferential rate of two-thirds of the aggregate full rate of those duties applicable to the goods; or
- (b) in the case of goods on which the general ad valorem duty alone is chargeable, be charged with that duty at the preferential rate of two-thirds of the full rate of that duty applicable to the goods.
§ (5) If at any time the Treasury are satisfied that any agreement set out in the First Schedule to the Ottawa Agreements Act, 2932, which is for the time being deemed to be in force for the purposes of that Act, requires that, in the case of goods of any class or description produced or manufactured in and consigned from the country the Government of which is a party to that agreement, any duty or duties charged at a preferential rate under the last foregoing subsection shall not be charged or shall be charged at a reduced preferential rate, the Treasury shall by order direct that that duty or those duties shall not be charged or shall be charged at that reduced preferential rate, as the case may be, on any goods of that class or description being Empire goods:
§ Provided that—
- (a) the Treasury shall revoke any such order or any provision thereof directing that any such duty or duties shall not be charged on Empire goods of any class or description, if and when they are satisfied that no such agreement so in force requires that the duty or duties shall not be charged on goods of that class or description produced or manufactured in and consigned from any country the Government of which is a party to any of the said agreements; and
- (b) the Treasury shall revoke any such order or any provision thereof directing that any such duty or duties shall be charged on Empire goods of any class or description at a reduced preferential rate, if and when they are satisfied that no such agreement so in force requires that goods of that class or description produced or manufactured in
1662 and consigned from any country the Government of which is a party to any of the said agreements shall be charged at that reduced rate; and
- (c) every such order shall provide that, in relation to any goods produced or manufactured in a country the Government of which is a party to one of the said agreements, the provisions of the order shall not in any case have effect at any time when that agreement is not deemed to be in force as aforesaid.
§ (6) Paragraph 4 of the Fifth Schedule to the Finance Act, 1933 (which enables the Commissioners to require proof that any goods are, under any provision of the Import Duties Act, 1932, exempt from duty or chargeable with duty at a rate less than the full rate), shall have effect as if the last two foregoing Sub-sections were provisions of the Import Duties Act, 1932.
§ Provided that an order made under paragraph (a) of Sub-section (2) of this Section—
- (a) for the purposes of Section nineteen of that Act shall be deemed not to be an order imposing a duty of customs; and
- (b) for the purposes of proviso (b) to Sub-section (5) of the said Section nineteen (which provides that an order may not be varied without a further recommendation so as to increase the rate of an additional duty above the rate specified in the original recommendation) shall be deemed to have been made on a recommendation of the Import Duties Advisory Committee specifying the rates of duty imposed by the order.
§ (8) For the purpose of this Section, the expression "the appointed day" means the twentieth day of August, nineteen hundred and thirty-eight, and the goods to which this Section applies are all goods which immediately before the appointed day were chargeable with a duty of customs under Section three of the Finance Act, 1925."—[Mr. Stanley.]
§ Brought up, and read the First time.
§ The President of the Board of Trade (Mr. Oliver Stanley)
I beg to move, "That the Clause be read a Second time."
We had an opportunity on the Financial Resolution upon which this Clause is based, of discussing this question only last week. The Clause follows very closely the lines of the Financial Resolution and the explanation which I then gave, and I think it will be convenient if I now formally move the Second Reading and later reply to any questions which may be raised.
§ 10.32 p.m.
§ Sir Percy Harris
My hon. Friends and I have already expressed our view about 1663 this alteration in the law which transfers the famous McKenna Duties from the procedure of the Finance Act, 1925, to the procedure of the Import Duties Act, 1932. I do not intend to give an encore on this occasion, or to ask the Committee to go to another Division upon this question, but I think it unfortunate, now that we have the Chancellor of the Exchequer here, that he should transfer the responsibility for this new departure from the Treasury to the Board of Trade. I think we are entitled to know whether he had made any estimate of the possible loss of revenue involved. These Duties at the, I will not say comparatively modest, but at any rate not prohibitive rate of 33⅓ per cent., have been a considerable source of revenue, and if they are to be transferred to the Import Duties Act for the direct purposes as I understand it, of keeping out motor cars, they will cease to be a source of revenue and become a loss to the revenue.
There are two points which I wish to make. If the Import Duties Advisory Committee after their investigation which we assume will be considerable, come to certain conclusions, we ought to have a guarantee that their recommendations will be brought to the notice of the House at a reasonable time so that they may receive careful scrutiny. My second point, to which I attach even more importance, is that we should have a full report giving all the evidence and all the facts and figures on which the Committee arrive at their conclusions. A new procedure of this kind, involving a great interest in this country, is very important and I think I express the feeling of the whole Committee when I say that I hope we shall not merely have the recommendations placed before us, but also facts and figures explaining why the Committee arrive at their conclusions. It is possible, I might say almost probable, that they may come to the conclusion that this wealthy and prosperous industry which has done so well in the last 20 years, has adequate protection at present. In that case those who have been pressing for special protection for this industry are entitled to know how the Committee have reached their conclusion. Equally, if they decide that it is necessary to increase this duty, and give this industry further protection, we ought to have the facts and figures on which they base that decision.
§ 10.35 p.m.
§ Mr. McLean Watson
As one who supported the Government the last time this matter was discussed, I should like to put some questions to the President of the Board of Trade. Does he intend to make these duties really effective, that is to say, to keep these foreign commodities out of the country, or are we to have a repetition of what has gone on up to the present, with increased quantities of these foreign manufactured goods coming into this country, despite the tariffs imposed upon them? I drew the attention of the House quite recently to the fact that we have increasing numbers of questions being addressed to the President of the Board of Trade about the increased quantities of foreign goods coming into this country, despite the operation of this particular weapon with which he is asking the Committee to arm him. Does he intend to make this system that the Government have adopted really effective in keeping certain forms of manufactured goods out of this country?
As I have said, I supported the Government the last time this question was before us, because I want to see British industry protected as effectively as it can be, and the Government have assured us that this system will give us protection. Well, we have had it in operation for the past six or seven years, and it is not protecting the industries that it is purporting to protect. I am willing to adopt measures that will protect our industries, but I am just as definitely of the opinion that this system will not give us the protection that we require. The right hon. Gentleman knows that increasing quantities of foreign goods are coming into this country, goods that are produced under infinitely worse conditions than those in which they are produced here, and I ask him to tell the Committee frankly whether he intends to make this system really effective.
§ 10.38 p.m.
§ Sir Joseph Nall
I am sure that the remarks of the hon. Gentleman who has just sat down were all to the good, because they illustrate the fact that this matter of protecting our industries by means of import duties is no longer a party question, but is supported from all sides of the House. I want to reinforce this point, that it is to be hoped that the addition of this Clause to the Bill, transferring this section of the old McKenna duties to the purview of the Import Duties 1665 Advisory Committee, is really something more than mere eyewash. it means nothing at all if the Import Duties Advisory Committee does no more than it has so far done in so many cases where it might have done quite a lot, had it really had the intention of doing anything and had the Treasury been willing to carry out its recommendations. The reports of that committee are entirely futile unless they are implemented by executive action, and this Clause means absolutely nothing at all unless the Government are going to make use of it and to act upon it.
In these circumstances I hope my right hon. Friend the President of the Board of Trade is bringing the Clause forward in all good faith and with the intention of making use of it. After all, the mere fact of its being tabled to-night is a forewarning to quite a number of people to get ahead of the import duties and to implement their stocks in this country before any action is taken under this Clause. It is quite conceivable that we may see a considerable increase in the imports not only of German cars but of every kind of foreign car which is already imported into this country, with the result that, unless this Clause is implemented by executive action in a comparatively few weeks, it will really be no use because several years' stock will have been brought into this country. I hope that effect will be given to it. It would have been much more simple and effective if, instead of this Clause, my right hon. Friend the Chancellor had proposed the simple remedy of doubling the McKenna duty. That would have been immediately effective. It would have secured the objects which this Clause purports to aim at, and we should have had an indication that the Government are really in good faith in moving this new Clause.
§ 10.41 p.m.
§ Mr. Ede
I am, curiously enough, in favour of something that the hon. Member for Hulme (Sir J. Nall) said towards the end of his speech. I would have preferred this matter to be dealt with in the Finance Bill, because there would then have had to be a full justification for it and all the reasons for the proposed alteration. When this matter comes before us from the Import Duties Advisory Committee, if it ever does—and suspicion seems to have now been generated in strange and diverse quarters, and I shall 1666 soon be getting suspicious about it myself if I find people both to the right and the left of me entertaining this suspicion—[Interruption]. It just shows the extraordinary position we are getting into on the matter. Not that I am worried very much about what the Liberal party thinks of it. Can we have to-night some reason for wanting to do this particular thing, because up to the present we have had no reason other than the fact that the Import Duties Advisory Committee, through their report, will prevent the hon. Member for Barnstaple (Mr. Acland) from making a speech on the lines that he desires to make when the matter comes before the House.
The right hon. Gentleman has been questioned about the German motor cars which have been imported in such large numbers, and I understand from the answers he has given that he is not at all sure of the way in which they are placed in this country at such a comparatively small price. Three suggestions have been made. The first is that the German Government are directly subsidising them. The right hon. Gentleman has never accepted that, although it was put to him by some hon. Gentlemen sitting behind him. Then there was the suggestion that the German Government were using some method of currency exchange by which they were able to give a concealed subsidy. I was bound to listen to that with great respect because it was put forward by the hon. Member for South Croydon (Mr. H. G. Williams), who speaks with an assurance on these and other matters which makes it difficult to believe that he could possibly ever be mistaken. That was put by him on more than one occasion to the right hon. Gentleman, but I gather that the right hon. Gentleman did not accept it, although he did not deny it. He only said that there was a great deal of mystery about the matter. Recently the third suggestion has been put forward that there was some arrangement among the motor car producers of Germany by which, through some system of mutual arrangement, they were able to place these cars abroad at this low figure. That also has been put to the right hon. Gentleman in the form of a question and up to the present he has not accepted it.
He now comes to the House and asks for the transfer of these duties from the Finance Bill to the Import Duties Ad- 1667 visory Committee, so that apparently that committee can investigate these matters and in course of time produce a report upon which this House may be asked to impose some duty other than this duty of 33⅓ per cent. Has the right hon. Gentleman, in deciding that the duties ought to be transferred, reached any conclusion about the three alternatives which have been suggested by his own supporters, or does he think the matter requires investigation to discover the real means by which these cars are placed in this country at the price they are? I am not one of those who supported the Government the other night. I had intended to support them until the right hon. Member spoke, but his speech was of such an alarmist nature that I found myself unable to vote with him, and I hope that this evening he will tell us which, if any, of the three explanations suggested by his supporters has his support, or whether he still believes the matter is one of mystery which can only be solved by the kind of inquiry which the Import Duties Advisory Committee can conduct.
§ 10.47 p.m.
§ Mr. T. Johnston
To the three questions put by my hon. Friend may I add a fourth? Under this Clause motor cars are, for some reason hitherto not explained, to be handed to the Import Duties Advisory Committee for their recommendation as to the tariffs which shall be imposed. Is it the case that the agitation about motor cars which has resulted in the appearance of this Clause has arisen out of the importation of Opel cars? Is it the case that that Opel car is manufactured in Germany by an American company; that all the capital is American; that the corporation importing the car into this country is an American corporation; and are the right hon. Gentleman and the Government now busily engaged in preventing an American corporation—which also owns the Vauxhall car—from getting its money out of Germany? Will the right hon. Gentleman tell us frankly if it be the case that the Opel car is manufactured not with German capital at all; that there is no question of Herr Hitler or any one else subsidising its exports by Germany; but that, as a matter of fact the American company which initiated the Opel works in Germany is now desirous of getting its money 1668 out of Germany in the shape of cars; and are the right hon. Gentleman and his friends now doing what they can to prevent this company getting its money out of Germany?
§ 10.49 p.m.
§ Mr. Levy
I was one of those who led a deputation to the Chancellor of the Exchequer and my right hon. Friend the President of the Board of Trade with regard to this Clause. The reason for the deputation was this: as the Committee knows quite well, the Import Duties Advisory Committee was set up for the purpose of allowing industries which felt they could make out a case for duties to be increased or decreased, as the case may be, to submit their case for consideration to the Committee. Here we have rather a peculiar position. It is true that among the industries dealt with under the Clause is the motor car industry, but I hope the Committee will agree that the Clause also covers a number of other industries which, by the very character of the duties coming within the scope of the Bill, were precluded from stating their case before the Import Duties Advisory Committee. The industries concerned considered that it was exceedingly unfair that some industries were permitted to state their case before the committee for their consideration and other industries, simply because they happened to come within the scope of the Treasury under the McKenna Duties, were precluded from doing so. The question as to whether the import duties are going to be increased or decreased is by the way, but what is important is that every industry should be permitted to go before the Advisory Committee to state its case, if it felt so disposed, and this Clause certainly gives them the right so to do.
I wish to thank the Chancellor of the Exchequer and my right hon. Friend the President of the Board of Trade for the consideration that they have given to this matter so as to enable those industries, should they feel so disposed, to state their case before the Committee. With regard to the Opel car, I am not going to discuss its merits or demerits at this stage, but I will say this, that if the motor manufacturers find that they are at a disadvantage, they have the right, if this Clause goes through, to state their case before the Advisory Committee and they can be dealt with accordingly, and that applies to all 1669 the other commodities that come within the category of the industries which were precluded from stating their case before the Committee. The industries as such are perfectly satisfied to have this concession given to them.
§ 10.53 p.m.
§ Mr. Kingsley Griffith
In case the President of the Board of Trade should feel rather elated by the fact that on the last occasion he got such a wonderful combined Lobby I should like to point out to him that it is only the last speaker in this Debate who has really supported him at all. Every other speaker in every part of the Committee has been united on one thing, and that is in expressing complete lack of confidence in this particular procedure. And even the hon. Member who spoke above the Gangway said that these duties were being transferred for some reason hitherto unexplained, and therefore I presume he has not got very much confidence in them. As for the hon. Member for Hulme (Sir J. Nall), he was convinced beforehand that he was going to get an unsatisfactory result. Of course, different Members may approach the manner in which this board discusses these duties from different points of view. Some may feel that the duties are likely to be too high, and others that they are likely to be too low, while others, like the hon. Member for Barnstaple (Mr. Acland), feel that we do not get enough discussions on essential questions when they are before us.
But the whole result of the Debate does show that there is a feeling that this procedure through the Import Duties Advisory Committee starves the House of its proper control over the imposition of these duties. Whether tariffs are right or wrong has been for some years the subject of controversy, and doubtless will go on being so, but everybody will agree that they are an enormously important subject, and it has been one of my grievances against the trend of our politics that one important subject after another is taken out of the direct control of this House and put under some board or commission whose decisions we simply register. I was glad to hear the hon. Member for Hulme saying he would rather have had it in the Finance Bill. I do not know whether he noticed that that was exactly the proposal that we put forward on the last occasion when we only had 16 in the 1670 Division Lobby. I did not look at the list, and perhaps his name was upon it.
§ Mr. Griffith
What I suggested was that this should be in the Finance Bill so that we should have a clear discussion in this House and hear the reasons for or against the issue whether the duties were to be higher or lower.
§ 10.55 p.m.
§ Mr. Duncan
Unlike the last hon. Member, I support the new procedure. Some years' experience of the Import Duties Advisory Committee has convinced me that it has done essentially good work. I want particularly to call attention to an industry mentioned in the Clause which has not benefited from the McKenna Duties, whatever the reason may be, and that is the industry of watch-making. I happen to be the governor of an engineering college in Clerkenwell, the old watch-and-clock-making part of London. In the good old days we used to make watches and clocks for all England, but since the days of Swiss and American watches that has completely died out. The McKenna Duties have been on for some years with a tariff of 33⅓ per cent., but no watches are being made in this country, despite that fact, although there is a good deal of repair work being done. Here is a case in which there is a great opportunity for the Import Duties Advisory Committee to encourage the manufacture of watches in this country again.
Perhaps hon. Members for distressed areas would welcome another new industry, or rather an old industry renewed, which may have a good effect upon employment in this country. I imagine that the protective tariff would remain upon the parts of watches used for repairing, but I should like to see the Import Duties Advisory Committee take strong action to free the manufacture of watches until somebody comes along, puts down a plant, gets experts from abroad and teaches British industry watchmaking again. When this has been done, protect the industry as much as it requires it. Under the old McKenna procedure that was impossible, but under the new Import Duties procedure that will be possible, and I therefore support the Clause.
§ 10.58 p.m.
§ Mr. Lyons
I rise for a moment to support my right hon. Friend the Chancellor of the Exchequer in the Clause which he has introduced. One has raised this matter on more than one occasion, and I venture to say that the industry and the workers who are employed in it will welcome the safeguards which are being provided by the Government. We have noticed for a long time that they have been put into danger by the increased importation of foreign cars into this country. That was in no way justified, and many of us think that the time is ripe to-night to offer our support to the Government wholeheartedly for their action in altering the machinery so as to provide for an increase of the tariff on these cars. We realise now that if the industry fails to protect itself it cannot be said to be the fault of His Majesty's Government. We welcome the readiness shown by His Majesty's Government in altering the machinery so as more efficiently to protect those employed in this industry. I am sure that we all support the Government in the step they have taken to give a reasonable measure of protection to an industry seriously threatened by increased importation from any foreign country, whose standards and conditions in this direction cannot be compared with our own. I want to say, on behalf of a large number of people in this industry, how much we appreciate the action of the Government in taking the steps they have taken in its support.
§ 11.0 p.m.
§ Mr. Stanley
The challenge of the hon. Member for East Middlesbrough (Mr. K. Griffith) has called forth two doughty champions. I think that most hon. Members on this side of the Committee are prepared to support the Clause, and I do not think I am called upon at this late hour to defend, against the hon. Member for Dunfermline (Mr. Watson) and my hon. Friend the Member for Hulme (Sir J. Nall), in what I should say was a rather uneasy partnership, the work of the Import Duties Advisory Committee, though I should be prepared to defend the working of this system against anyone. I believe that experience has shown that the method adopted in 1932 has given to this country, as I think even those who do not believe in tariffs will agree, a cleaner and better method of protection than is 1672 enjoyed by any other protectionist country in the world.
I cannot agree with the right hon. Gentleman that no explanation has been given as to why this proposal was brought forward. I did give an explanation on the previous occasion. What I think does require explanation now is why the duties are not separable. You cannot really distinguish between clocks, musical instruments, and motor cars, and all the other thousand and one commodities which now fall within the purview of the Import Duties Advisory Committee. If the system of protection is to be of any avail against the kind of trading conditions which we see growing up more and more on the Continent of Europe and elsewhere in the world to-day, surely we must have some more flexibility and celerity of action than is provided by a Finance Bill once a year, which enables the foreign competitor when the Third Reading of the Finance Bill has gone through, to say to himself, "I am safe for the next 11 months, and able to do whatever I like."
In reply to the specific question which was put to me with regard to motor cars, I would point out that motor cars are not the only subject referred to, but that other commodities are covered by the Clause, and I have already been receiving complaints about certain types of clocks which are also being affected by what is claimed to be subsidised competition. I do not think that the hon. Member for South Shields (Mr. Ede) can really have listened very carefully to the answers I have given recently to questions. I have said quite definitely that, according to my information, no direct Government subsidy has been granted, but I have also stated that I believe there is some kind of industrial pool from which a subsidy is drawn for particular commodities; and I believe, also, that to some extent manipulation of the exchanges helps the exporter. It is true that the maker of these cars in Germany is—I do not know whether to the full extent of the capital, but to some extent at any rate—an American firm. The right hon. Gentleman says that this is their way of getting capital out of Germany, but whether or not they are able to keep for themselves and use outside Germany all the exchange that they get from the sale of these motor cars, I do not know. I am very doubtful whether that is the case, but, at any rate, it does not seem to me to matter. We 1673 are concerned with the potential employment which can be given by the manufacture of cars in this country, and if the competition is unfair we believe this tribunal should have a chance of pronouncing upon it, and that we should have a chance of putting that verdict before the House of Commons.
The hon. Baronet the Member for South West Bethnal Green (Sir P. Harris) raised two important points, to which, I think, he was justified in drawing attention. First, he asked for a guarantee that there should be a reasonable time in which any change could be considered by the House. I think the hon. Member will agree that wherever there has been a really important duty imposed, as for instance, the iron and steel duties, full opportunity for discussion has been given. I certainly agree with him that if, for instance, any change is proposed in the duty on motor cars, a departure of great importance, the House should have an opportunity of considering such a change at a reasonable hour and with reasonable time for discussion. With regard to the fullness of the report, the hon. Member will recollect that some time ago complaints were made by hon. Members that the reports of the Committee were too scanty and were not full enough of information. I promised at the time, or my right hon. Friend, who was then in another position, promised on my behalf, that I would bring this suggestion to the notice of the Import Duties Advisory Committee. Hon. Members will recognise that the Import Duties Orders a few weeks ago, after that suggestion had been made to the Committee, were accompanied by much fuller reports. and I think in that way gave satisfaction to the Committee.
§ Clause read a Second time, and added to the Bill.
§ Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to. —[Captain Hope.]
§ Committee report Progress: to sit again To-morrow.