MERCURY BICHLORIDE. (Hansard, 12 July 1939)

§ The Parliamentary Secretary to the Board of Trade (Mr. Cross)
I beg to move, That the Additional Import (Key Industry) Duties (No. 1) Order, 1939, dated the fourth day of July, nineteen hundred and thirty-nine, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said fourth day of July, nineteen hundred and thirty-nine, be approved. This Order relates to mercury bichloride which has been subject since 1921 to a duty of 33⅓ per cent. Under the Order it becomes liable to duty at such a rate as with the Key Industry duty will amount to 2s. per lb. The new rate is equivalent at the present value of imports—and those values are extremely low—to an ad valorem duty of a little more than double the previous rate. Mercury 2373 bichloride is used for pharmaceutical purposes as an antiseptic, in certain types of dry batteries, as a parisiticide for the treatment of wood, and for the manufacture of other mercury compounds. The United Kingdom has sufficient capacity to supply all our home requirements. Since 1937 there has been greatly increased competition from imports at very low average values. These have come particularly from Italy and in the course of the present year they have also come from Russia at even lower average values.
The Italian exporters, I understand, have been able to get supplies of mercury, and mercury is the principal component and the most costly component in mercury bichloride, at prices lower than the world market prices which have been paid by United Kingdom manufacturers. Indeed this has gone to such a length that the c.i.f. value of the imports in many cases has been less than the cost to the United Kingdom manufacturers of the mercury content alone. As a consequence of this competition the United Kingdom share of the home market and the volume of our export trade have both been greatly reduced. The duty on the recent values of imports is on a reasonable level, despite the fact, which I have already indicated, that it would be something more than twice the 33⅓ per cent. which obtained in the past. The 2s. duty added to the import value of mercury bichloride would bring the total import value up to 4s. 6d. per lb. and that compares with the United Kingdom schedule price of from 4s. l0d. to 5s.

Mr. Alexander
Is that net?

§ Mr. Cross
I would not like to say whether or not it is net. It is the schedule selling price of United Kingdom manufacturers.

Mr. Alexander
This is an interesting little sum in arithmetic. If the import value is 4s. 6d. a pound and the United Kingdom price is 4s. l0d. to 5s., how is the hon. Gentleman going to justify this additional tax? How is this going to benefit the United Kingdom manufacturer if you leave the import at a lower price?

§ Mr. Cross
I think if the right hon. Gentleman adds selling cost to the import value which I have given him, he will see what the position is, and he must also make some allowance for the fact 2374 that the British manufacturer may accept a price somewhat below the actual schedule price. I mention these figures to show that this protection is not excessive and I seem to have been very successful because the right hon. Gentle-man apparently feels that this duty might be foolishly inadequate and purposeless. The United Kingdom manufacturers have given the Import Duties Advisory Committee a satisfactory undertaking to maintain their prices at the present level, subject to adjustment in accordance with the variations in the price of mercury. The Committee report that the industry is efficient and there has been no opposition from consumers to the application for an additional duty.

Mr. Alexander
I do not propose to ask my hon. Friends to divide against this Order, but I feel that the Parliamentary Secretary to the Board of Trade has just now been proving what we on this side have said so often with regard to the two and a half years' campaign in Spain. This Order is one of the direct results.

§ Mr. E. J. Williams
This is the price that we are paying for Franco.

Mr. Alexander
The Parliamentary Secretary shakes his head, but he need not do so. It is clear at any rate that this mercury bichloride has come, in the past, in large quantities from Italy. The hon. Gentleman said in a rather gentle and naive way that Italy was now able to get large quantities of mercury. Of course we on this side know what that means. They have now very much better access than they otherwise would have to the great resources of mercury which Spain possesses, and therefore we are in the position to-night of having to put on this additional duty to protect our industry here, which no doubt has experienced considerable difficulty in the last three years in obtaining adequate supplies of mercury in order to make bichloride. I suppose the Parliamentary Secretary will be frank with us about that aspect of the matter.
Of course none of us really wants to create exchange reserves in this country for totalitarian States who might find it very useful to use those reserves in the present state of nerves and of rearmament throughout Europe. This is just a little part of the penalty which the Gov- 2375 ernment has to pay for its acts of un-wisdom, for its sins of omission and commission in foreign policy in the last three years. I can understand from reading some of the uses of this substance which are mentioned in the White Paper, such as its use for antiseptic and pharmaceutical purposes, that it would be of considerable value to us in war time. As I say, I do not think my hon. Friends will regard this as a big enough question on which to divide and I shall not ask them to do so, but I do wish that in connection with Orders of this kind the Government would take the House a little more into their confidence.

§ Sir Percy Harris
I agree that in this matter we have to recognise the special circumstances of the case and the necessity for keeping alive essential chemical industries. I have a vivid memory of the fact that this is one of the key industries about which there was such controversy when these duties were originally imposed. We have now had 18 years of protection of this industry and it ought to be in a very strong position by this time. But apparently there are special circumstances in this case. There is one comment I would make on Orders of this kind. There is a paragraph in the Import Duties Advisory Committee's recommendation which says: There are no official figures published of the home output or of total imports but we have obtained in confidence information as to production from each of the firms concerned and we have had access to official statistics of imports which, however, are not available for publication since this might reveal particulars of the trade of individual importers. With great respect to the Committee I think that when an order of this kind, extending an exceptional amount of protection and special privileges, is in question, Parliament is entitled to have a statement of the imports and some indication of the amount of production in this country. I do not see that there is any adequate reason for concealing these facts and figures, and I hope this case will not be taken as a precedent. It is not argued that it is not in the public interest that we should not know what the imports are or what quantity is produced in this country. All that is said is that it would be inconvenient to the interests of the traders concerned that the information should be 2376 disclosed. I say that when business people ask for these very exceptional privileges we are entitled to know the position as regards imports and home production, at any rate in round figures.

§ Mr. Cross
In reply to the hon. Member for South West Bethnal Green (Sir P. Harris) there is, I think an exceptionally good reason on this occasion for not giving the figures of home production. There are only two concerns engaged in production here and each of them has given its figures confidentially, and either of them would need to do only a very small subtraction sum in order to get information as to the business of the other which is not at present available to it. The right hon. Member for Hillsborough (Mr. Alexander) told us that our sins in foreign affairs were coming home to roost. Whether they be sins or not, nothing is coming to roost, because strangely enough—I think the right hon. Gentleman will think it strange—my mind worked in exactly the same direction as his. As a consequence I made inquiries, both in the Board of Trade and of the Import Duties Advisory Committee, as to whether this might not be a Spanish export which the Italians are anxious to get rid of. I did that all the more because I observed that the first year of heavy imports into this country was 1937, and with my mind working on lines parallel with his I was inclined to attach special significance to that fact, but I am assured that there is every reason for thinking that this is not a Spanish product, because the mercury is mined exclusively in what throughout the greater part of the struggle was a Government area in Spain.

Mr. Alexander
With the permission of the House may I remind the hon. Gentleman that they were practically all Italian troops who captured those mercury concessions.