HC Deb 06 December 1950 vol 482 cc346-9
36. Mr. N. Macpherson

asked the Secretary of State for the Colonies what is the result of the discussions that have taken place between the Government of the Federation of Malaya and the rubber interests regarding the proposed new export duty; what final form the duty is to take; how far the proceeds are to be devoted to the welfare of the industry as a whole, how far to the cost of the emergency and how far to other purposes; and whether he will specify those other purposes.

Mr. J. Griffiths

An announcement was made yesterday by the Federation Government, the text of which I will circulate in the OFFICIAL REPORT. In addition to the new scale of export duty, a cess is to be levied when the price of rubber exceeds 60 cents a pound, the proceeds of which will be paid into a special fund to be devoted to replanting and new planting with high-yielding varieties of rubber. There will be further consultation with the rubber producers regarding the method of disbursement from this fund. The proceeds from the rubber export duty itself will be paid into general revenue and will not be reserved for any specific purpose.

Mr. Macpherson

Does the right hon. Gentleman not realise the inadvisability of depending for revenue on the tax of a product liable to such very wide price fluctuations? Would it not be better to treat this as a capital amount?

Mr. Griffiths

I appreciate the weakness of a fiscal system which depends so much on fortuitous increases in prices. I have been discussing with the High Commissioner what further steps can be taken to broaden the basis of taxation.

Mr. W. Fletcher

How will the right hon. Gentleman deal with the question of assisting replanting by Asiatic smallholders, whose problems are totally different from those of the big estates which have spare land available?

Mr. Griffiths

The question of how this fund will be disbursed is to be discussed with the industry, and the question of how it can be disbursed to the smallholders will be one of the important problems to be considered.

Mr. Harrison

Does the announcement made yesterday mean that there will be an overall reduction in the tax collected?

Mr. Griffiths

No, Sir. It means a reduction from the original proposal put forward, but it will be an increase over the amount previously obtained.

Mr. Gammans

Is this new arrangement regarded as satisfactory by most of the interests affected by it?

Mr. Griffiths

I hope so. I can only repeat what I said earlier, that it is most essential, especially perhaps in these times of very temporary prosperity, that as much of the money as possible should be available to the Government and people of Malaya.

Mr. Lennox-Boyd

Is there not all the difference in the world between the situation upon which the right hon. Gentleman expressed some comments a week ago and the new situation arrived at yesterday? Is not that new situation as a result of consultation with interests which should have taken place before the first announcement was made?

Mr. Griffiths

There was some consultations before the first announcement was made, and I made a statement about the consultations which had taken place.

Mr. W. Fletcher

In view of the inadequate reply given by the Minister and the statement he made at the end of his reply, I beg to give notice that I shall raise the matter on the Adjournment.

Following is the announcement:

>Rubber Export Duties

The arrangements outlined below and the illustrated attached appendix will come into force on 1st January, 1951, subject to modifications stated in paragraph 5. They have been determined in the light of discussions held by the Government with representatives of the Rubber Industry.

2. Orders under the Customs Proclamation will be made for collection of:

(i) A duty to be calculated:

(a) according to the formula 1.55 P-63 over 10 when price (P) exceeds 60 cents per pound,

(b) at 5 per cent. ad valorem, when the price does not exceed 60 cents per pound.

(ii) A cess, the proceeds of which will be made available to the industry for replanting and new planting, calculated according to the formula 0.45 P-27 over 10, when price (P) exceeds 60 cents per pound.

(iii) The cess, the proceeds of which are payable to the Malayan Rubber Fund.

Calculations in respect of (i) and (ii) will he taken to the nearest one-eighth of a cent.

3. The proceeds of the cess to be made available for replanting and new planting (paragraph 2 (ii) above) will be paid into a separate fund and held in trust until a satisfactory method of disposing of it has been worked out in consultation with representatives of the Rubber Producers. It is intended to suspend the collection of this cess as soon as a satisfactory scheme has been worked out for making similar deductions at the source (i.e. when rubber is first sold) and passing the credit for such deductions direct to individual producers on production of satisfactory proof that the money will be spent on replanting and new planting. Government will give every assistance in the formulation of such a scheme.

4. The method of determining duty will be to announce, every Thursday in the Government Gazette, the basic price for that day and the six days following (the first announcement will, however, be made on Monday the 1st January, 1951, for that day and the nine days following). This basic price will be the average noon price for Number 1 B.S.S. f.o.b. in Singapore for each of the working days in the fortnight immediately preceding the date on which announcement was made.

5. During the period 1st January, 1951, to 4th April, 1951, the total rate of duty plus replanting cess will be 20¼ cents per pound (in proportion 16⅜ to 3⅞). If, however, for any week during the same period the average price announced in respect of that week and the preceding week should yield a lower figure than 20¼ cents per pound, the lower figure will be adopted for that week. For these purposes the period 1st January, 1951–10th January, 1951, inclusive, will be counted as one week.

6. Forward contracts for 1951 claimed to have been made bona fide prior to 24th September, 1950, will he examined by a special committee. Arrangements for this committee and for submission of claims have already been announced. Where a claim is admitted rubber concerned will attract duty at the new rate calculated on the price current at the time when contract was made. This current price will be determined as follows:

(i) When gazetted price for the week during which contract was made is 60 cents or less, the gazetted price will be taken to be the current price;

(ii) when the gazetted price for the week during which the contract was made is more than 60 cents, then 10 per cent. will be remitted from that price, provided that such remission in no case reduces the prices below 60 cents.

7. The rubber industry has been invited to consider the possibility of further improving the mechanics of imposition and any representations made by them in this connection will receive the careful and sympathetic consideration of the Government.

APPENDIX (all figures are of cents per pound).
Price (i) Duty (ii) Replanting and New Planting Total of (i) and (ii) (excluding Malayan Rubber Fund Cess)
50 2½ Nil 2½
60 3 Nil 3
70 4½ ½ 5
80 6⅛ ⅛ 7
90 7⅝ 1⅜ 9
100 9¼ 1¾ 11
110 10¾ 2¼ 13
120 12½ 2¾ 15
130 13⅞ 3⅛ 17
140 15⅜ 3⅝ 19
150 17 4 21
160 18½ 4½ 23
170 20 5 25
180 21⅝ 5⅜ 27
190 23⅛ 5⅞ 29
200 24¾ 6¼ 31

And so on.

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