New Clause.—(REDUCTION OF MATCH DUTIES.) (Hansard, 28 June 1951)

§ Mr. Jay
I beg to move, "That the Clause be read a Second time."
The Clause is intended to give greater flexibility to the Government in exercising price control over matches without having to legislate too frequently to make alterations in the duties. At the moment, the inter-relation of rapid movements of costs in match manufacture, the price control and the form of the duty, present rather awkward practical difficulties. Indeed, if costs tend to rise, and unless one can alter the number of matches in a box, the price of a box must be altered, and, in practice, it cannot be altered by less than ½d.
Thus, one might be placed in the awkward situation of having to raise the price excessively and give excessive profits to the manufacturers in order to get out of a situation in which, otherwise, they were not able to cover their costs. The obvious solution to that difficulty from the price control point of view is, of course. to alter the number of matches in the box. That, however, in the existing state of the law as to the duty is, unfortunately, not possible. The existing duty is charged according to the size of the container—that is to say, the matchbox—and the size of the container is defined according to the number of matches in the box.
Our new proposal gets away from the old scales and substitutes two new scales, which are related to the number of matches; that is to say, the tax becomes a tax per match and not a tax per container. That makes it possible to alter the number of matches in the box without having to alter the structure of the duty, and gives us the necessary flexibility. I may say that the effective rate of duty 1607 per match is not altered by this change. which leaves the duty per match neither higher nor lower, but just where it was. All that is altered is the form in which the duty is levied.

§ Mr. David Eccles (Chippenham)
I think that we have a right to complain about the sidenote to this proposed new Clause, where we read the words "Reduction of match duties." Any pipe smoker who heard that would instinctively, when feeling in his pocket for his matches, silently thank the Chancellor for doing a little something, but it is, of course, a complete swindle. As the Financial Secretary has just told the House, the duty per match remains the same. The fact is that the object of this new Clause is to prepare the way for a new price order. The box of matches will cost 2d., and the duty per match will be the same, but there will not be so many matches in the box. Well, that is putting up the price of matches in a very round-about way.
I do not think that my hon. Friends complain about the statement that the cost of manufacturing a match has gone up. After all, it consists of wood and sulphur, two raw materials which have been notoriously mishandled by the Government—which is no doubt one of the reasons why we had the debate yesterday. It is serious when the costs of something which goes into every house go up. I ask the Government whether they have in mind bringing forward a new price order. If so, what will be the reduction in the number of matches from 50, which is the usual number for 2d.? How many shall we get for 2d. when this new Clause becomes law?

§ Mr. Jay
With the leave of the House, perhaps I might answer the hon. Gentleman's questions. First, he asked whether it was intended to bring forward a new price control order. That, of course, is entirely for the Board of Trade and not for ourselves or the Customs and Excise. All we are doing here is altering the form of the duty so that it is easier to make price control changes if it is desired to do so. Secondly, he asked why the words "reduction of match duties" were used in the margin. I agree that the phrase is used in a somewhat Gilbertian sense. It is, however, true in this sense, that if the old tax had remained in force and the 1608 number of matches in the box had been reduced from 50 to, say, 48, or whatever it might be, the tax per match would have gone up. Under our new proposal, if that happens the tax per match will remain the same, and in the opinion of some of those concerned that can be described as a reduction.

§ Captain Crookshank
I do not think we can let that go quite so easily. It is rather awkward when a new proposal like this is put on the Order Paper for the first time the day before the Report stage begins. We have not really had full time to make any private inquiries, and we have had to rely upon what the Financial Secretary has just told us. I would call his attention, and that of the draftsmen, to the fact that, whatever else this is, it is not, as my hon. Friend has said, a reduction of match duties. The Financial Secretary says, "Oh, that is a question of drafting, because you could not alter the various differentiations about containers without using those words."
If he would look at the 1949 Act. which he is now amending—and would in 1951 carry on the same drafting procedure—he would know that the normal practice in dealing with a Customs and Excise Duty of this kind is to put it into a Schedule and not into a Clause at all. There would be an introductory Clause, which would be very much on the lines of what happened in 1949. In 1949, when they changed the Match Duties they had a Clause, the sidenote to which was merely, "Matches," without saying what was going to happen; then they had a Schedule, described as MATCHES (RATES OF DUTY)…RATES OF CUSTOMS DUTIES…RATES OF EXCISE. If the hon. Gentleman had only done that, he would have avoided all this trouble, and he would not have to try to defend what, on the face of it, seems to be indefensible. However, at this stage we have no option but to let this new Clause be added to the Bill. If the result is to be a drastic one on the price of matches, and if that has to come before the House in the form of an order. I take it that that will be the best occasion upon which to protest.

	Rate of customs duty	Rate of excise duty
	s.	d.	s.	d.
(a) for every 10,000 matches in containers in which there are not more than 30matches	19	11	19	2
(b) for every 7,200 matches in containers in which there are more than 30 matches	14	5	13	9