HC Deb 24 February 1953 vol 511 cc2042-52

Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Studholme.]

10.6 p.m.

Mr. R. E. Winterbottom (Sheffield, Brightside)

The purpose of this debate is to pinpoint the decline in the cutlery and silverware industry and to advocate the reduction or the abolition of the present 100 per cent. Purchase Tax or the 33⅓ per cent. Purchase Tax, where they apply.

We are doing this because this very important industry is dying on its feet and I hope to show the logical way whereby the industry can reach a measure of prosperity again. I know that the Financial Secretary to the Treasury cannot give me a definite answer tonight, and I know, too, that in the short time at my disposal I cannot fully make out the case for the industry. Therefore, I want to put to him two questions and respectfully to ask from him an affirmative reply in each case.

The first question is: Will he assure us, and, through us, the industry, that the many representations which have been made to various Government Departments, and the excellent speech of my hon. Friend the Member for Sheffield, Park (Mr. Mulley) on 12th December last year, will receive very serious consideration by the Treasury, before the Budget is finalised? The second question is: Will the Financial Secretary be willing, in the very near future, to meet a representative deputation composed of hon. Members of all parties and representatives of the trade and to listen carefully to their views on the situation that exists in the industry? It is a story which, with the best will in the world, I cannot complete tonight. An affirmative reply to these questions is vital to the city which I partly represent.

The industry, one of the prides of British craftsmanship, is in serious danger of near extinction. It is because this important trade is one of the best associated with the steel industry, in terms of convertibility value, and can earn precious overseas currency including dollars, that the Treasury must not allow the present decline in the industry to continue unchecked. If that decline continues because Treasury help is refused, it will be a national calamity.

There are two things that prevent the rehabilitation of this industry. First, there are the restrictions imposed on production, many of which are now unnecessary, some of which are distinctly silly and all of which increase the price at home and abroad. I shall not deal with that problem because I understand that certain alterations will be made in regard to those restrictions in the near future and I am waiting to learn what they will be.

Mr. R. Jennings (Sheffield, Hallam)

Is the hon. Gentleman aware that I had a letter from the Chancellor this morning promising to bear the matter of Purchase Tax in mind, but saying that he could go no further until he considers his Budget proposals? I think, therefore, we can accept that as a promise by my right hon. Friend to consider the matter when the time comes.

Mr. Winterbottom

Yes, but the hon. Gentleman will realise that when the Chancellor sends him a letter he does not, unfortunately, send a copy of it to me

Mr. Jennings

The hon. Gentleman should raise the matter with the Chancellor.

Mr. Winterbottom

I want a reply from the Financial Secretary. I know that the hon. Member for Hallam (Mr. Jennings) and myself are at one on this issue in order that Sheffield shall be reassured officially from the Front Bench opposite.

Secondly, and most important, there is the problem of Purchase Tax. I could stress the anomalies that are arising as a consequence of it, especially on goods that are necessary to the domestic table and also on the tools of trade, but time forbids. I shall, however, press one argument strongly on the Financial Secretary. In this industry production for export at competitive world prices is automatically conditioned by the capacity of the home market to absorb the surplus that cannot be sold overseas. If we are to capture the dollar market for cutlery and silverware, it is essential that our price should be right. Incidentally, at the moment there are no restrictions in the United States of America and Canda on the sale of cutlery and silverware.

There are innumerable instances of orders that have been rejected in those two countries. The explanation is that enterprise in design is suffering because manufacturers of the necessary kinds of cutlery and silverware cannot be expected to embark on the initial work of producing a design, or even sizes of that design, after meeting the expenses of designing and of casting the dies, if stock is left on shelves in this country because it is subject in certain cases to Purchase Tax of 100 per cent.

For instance, to make a 22-inch tray for export it is essential to have at least 12 stampings, all being produced at the same time. The following figures, though hypothetical, prove my point. If nine trays go for export and three are left unsold in this country because of Purchase Tax, how can we hope to capture world markets and maintain employment in this industry, which 2,000 skilled craftsmen have left during the last six to eight months? The reason is that they know it is a dying industry. They know that the skill that they have used is comparatively useless if the goods that cannot be sold abroad are allowed to remain on the shelves since they cannot be sold because of their inflated prices due to Purchase Tax.

The industry will never regain its proud export position unless each manufacturer can standardise within his works. That is Sheffield's essential need. There cannot be a set of dies for the Continental trade, a set for the Commonwealth trade, and another for the American trade. There is an inevitable increase in the cost of production because of that increase in the number of dies. Some restrictions have been removed and others, I understand, are to be removed shortly, but even then the industry cannot produce at world competitive prices if the relief market the home market—is bogged down by Purchase Tax.

I want briefly to put the present position. Australia has been allowing the importation of 20 per cent. of its former imports of cutlery and silverware. During the last week or so, I understand, the figure has been increased to 30 per cent., but this will not be effective for the next 12 months. The three markets of Australia, New Zealand and South Africa used to take 53 per cent. of the whole of our export trade in cutlery and silverware. We now have about half of that market. Norway, last week, prevented the import of knives, forks and spoons.

The only chance for the industry is development on the American Continent. The United States and Canada are willing buyers if the price is right, but in budgeting for their prices manufacturers cannot be right if they are unable to sell their cutlery at home. That is the paradox and the peculiarity of the industry. At the moment hotels, restaurants and big firms will not purchase new goods if they can avoid it. I could quote one very well-known firm which has reduced its orders for cutlery and silverware to the extent of 100,000 items this year alone, and I could go into the statistics of the trade in regard to many firms to prove my contention. That is why the industry is dying.

The Sheffield cutlery industry is declining. I do not object to the death of the present Government—I could not be expected to say anything else—but I do object to their cutting their own throats with Sheffield steel. My final point is that these are the only goods on our domestic tables that are not now freed from Purchase Tax. I plead most earnestly with the Financial Secretary to give affirmative replies to my questions and, if he can do this, to make arrangements to implement those affirmative replies as speedily as possible, in the interests of this vital industry in Sheffield.

10.18 p.m.

Mr. Peter Roberts (Sheffield, Heeley)

1, too, should like to press my hon. Friend on this point on behalf of the industries in Sheffield and also in the other great cities of Birmingham and elsewhere where these industries are carried on.

I must point out, first, that deputations went to the previous Government on a number of occasions on this very point. It is unfortunate that the warnings which we gave at that time, from both sides of the House, were not accepted. In fact, I remember asking the right hon. Member for Battersea, North (Mr. Jay), when he held the post which my hon. Friend holds now, whether it was his intention by Purchase Tax to move the labour force from the cutlery industry into the steel industry by bankrupting the firms engaged in cutlery. I must admit that the right hon. Gentleman said that that was not so, but we warned him that that would be the result. And that has been the result.

I sincerely hope that tonight we shall have some encouragement from my hon. Friend the Financial Secretary to show that this Conservative Government are prepared to do what a Labour Government would not do. I would point out to my hon. Friend that it is very difficult for back benchers to put down Amendments to the Finance Bill when dealing with Purchase Tax because, usually, the form is so carefully drawn that they would be out of order.

Mr. Speaker

In any case, one cannot discuss Amendments to the Finance Bill on the Adjournment.

Mr. Roberts

I will not follow that point any further. I am sure my hon. Friend sees the importance of realising this point now rather than later.

Mr. Joseph T. Price (Westhoughton)

It is even more important to go into the Lobby against it.

Mr. Roberts

I would stress that, first. we need greater overall reduction in the cutlery trade. We believe that the 331/3 per cent. tax is a handicap to the basic trade of the industry while the 100 per cent. tax on the luxury side is killing the craftsmanship in Sheffield. My great great grandfather, 150 years ago, in Sheffield, I am proud to say, was one of the greatest makers of Sheffield plate. From his time has been built up a craftsmanship for which the city has been known for many years and which we would all be sorrry to see die out now. It is not enough to say that a tax is to be put on luxury goods; we should see that the craftsmen can still get their living.

I will not detain the House further, because I hope that we shall have further support from other hon. Members, but I can assure my hon. Friend that when the question of a production council was considered a large number of hon. Members in all parts of the House realised the harm which Purchase Tax was doing to the silverware and jewelleryware trades as well as to the cutlery trade. I urge on my hon. Friend the importance of considering this matter with his right hon. Friend.

10.22 p.m.

Mr. Frederick Mulley (Sheffield, Park)

I should like to pay tribute to my hon. Friend the Member for Brightside (Mr. R. E. Winterbottom) for being so generous in allowing other hon. Members time to take part in this very precious half hour of debate, a fact which is not generally appreciated by hon. Members.

I have spoken on this subject a number of times and I wish to underline one or two points. First, I would say to the hon. Member for Hallam (Mr. Jennings) and the hon. Member for Heeley (Mr. P. Roberts) that it is not our desire to make a particular political point of this matter. If it were a question of politics the Financial Secretary and the Chancellor could have responded last year when the position began to deteriorate very rapidly. We want to do something for the workpeople and the firms in Sheffield, and whether hon. Members opposite or we get the political credit is another matter.

In support of the plea that the 334 per cent. tax should be removed, I would point out to the Financial Secretary that the knife, fork and spoon about which we are talking tonight are the only items on the table which are subject to Purchase Tax and we think it is time that they were freed from that tax. The 100 per cent. tax on luxury goods is particularly important from the point of view of the craftsman. We have had valuable information from the assay master of Birmingham and the Financial Secretary may recall that I gave almost identical figures of a 60 per cent. decline in the City of Sheffield when I spoke on this matter in an Adjournment debate in December.

It is a strange thing that the Treasury are not able to produce any figures of the actual yield of the 100 per cent. tax on silver and cutlery apart from a number of other items which are not strictly related to this trade. I have asked Questions and found it impossible to get the exact figure, but I have taken the trouble to find from eight individual firms representative of the industry in Sheffield that the amount of the tax they have paid at the 100 per cent. rate has dropped by 80 per cent. between 1945 and 1952. A sum of £95,880 was paid in 1945 and only £20,657 in 1952. I suggest that if the tax were reduced from 100 per cent. to 331/3 per cent. it would give the industry a chance to survive and enrich the Treasury.

The Financial Secretary may not be aware that if an item is called a paperknife it is subject to tax at 100 per cent. But if it is called a letter-opener it becomes liable to Purchase Tax at 33⅓ per cent. The anomalies which arise regarding articles which are in cases or are not in cases; the invoicing and the amount of work involved for the industry as well as the staff at the Treasury, and the Customs and Excise, would be lessened if the tax could be reduced. I ask the hon. Gentleman to bear all these considerations very carefully in mind before the Budget statement is produced.

10.27 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

As was indicated by the hon. Member for Brightside (Mr. R. E. Winterbottom), it is peculiarly difficult for me at this season of the year to reply to a debate of this character. In the first place, as you, Mr. Speaker, reminded my hon. Friend the Member for Heeley (Mr. P. Roberts) a few moments ago, we cannot anticipate legislation. I have to use the formula, with which I make myself unfortunately tedious at Question time, of saying that I cannot anticipate my right hon Friend's Budget statement.

I have listened with great interest to the speeches made by hon. Members on both sides of the House, and as they know, representations on this subject have been received by my right hon. Friend and myself. We are to a considerable degree aware of the problems which exist. The hon. Member for Brightside asked me to answer two questions. The first was whether serious consideration would be given to these representations. I have no difficulty in answering that question in the affirmative. It is the object of my hon. Friend and those associated with him to give the fullest consideration to all representations made to us in connection with articles and commodities which in these days come within the tax sphere. I can assure the House we do our best to give the most earnest and serious consideration to the points, issues and questions which arise.

The hon. Member asked whether I would receive a deputation of hon. Members. I am sorry that he thought it necessary to put that question in so formal a way across the Floor of this House. I am sure he is aware—

Mr. R. E. Winterbottom

I said in the very early future.

Mr. Boyd-Carpenter

—that my right hon. Friend and myself regard it as our duty to make appropriate arrangements for lion. Members to see us, if they wish to do so. Needless to say, that would apply in the present case, and I feel it a pity if hon. Members are under any illusion that we are in any sense inaccessible. On the contrary we regard it as a duty to put ourselves at the disposal of hon. Members who desire to put their points of view before us. Provided a mutually convenient time can be arranged, so far as we are concerned such facilities can easily be provided. My right hon. Friend will not be available for the next few weeks, for reasons which are well known, but I shall be at the disposal of hon. Members.

On the broad issues which arise, it is very difficult for me to say anything that is not of a general nature, but I can assure the House that we have a very high regard for this ancient industry, with its long tradition of craftsmanship, with which in particular the family of my hon. Friend the Member for Heeley has been associated for a very long time indeed. It is an industry with a long tradition and with a very high repute in the world.

I do not think I exaggerate if I say that its products, from the point of view of quality, are without equal anywhere in the world; and we have the very highest regard for it both as an ancient craft industry and as a valuable contributor to our balance of payments position. I appreciate that, in particular, it has encountered difficulties as a result of the recent reduction in Australian imports, though recent news would appear to indicate that that situation looks like tending to improve.

The hon. Member for Brightside in the course of his natural enthusiasm betrayed himself into a certain degree of exaggeration. which is unusual for him. He said, as I understood him, that cutlery was the only item on the dinner table which was subject to this tax. He will, no doubt, recall that cut glassware carries a tax generally at 662/3 per cent., that tablecloths carry tax, and that certain forms of what I understand are called electro-plated condiment receptacles similarly bear tax. Therefore, the case so far as cutlery is concerned—though I would not suggest it was in any degree diminished by these facts—was not, as a matter of fact, accurately described as being the only article on the dinner table which enjoys the blessings of taxation.

We make it our business to be fully informed of the facts of this, as of other industries. The extent to which the difficulties of this or of any industry are directly due to taxation as opposed to other factors is a matter of opinion. There are very few who would suggest that taxation was the only difficulty which a particular industry encountered, and certainly none of the hon. Members who have spoken tonight made that no doubt exaggerated suggestion which one has heard in other quarters outside this House.

It is equally clear that taxation is a material factor in one's assessment of the situation as it affects various industries, and it is particularly appropriate at this time of year that that aspect of the matter should be given the closest consideration. From that point of view in particular, this debate has been very helpful to my right hon. Friend. What has been said is not merely on record in my memory—though I have listened carefully—but is on record in the OFFICIAL REPORT, and, as the House knows, my right hon. Friend pays a great deal of attention to what is said by hon. Members on both sides of the House in the course of our debates.

The facts of the situation as we know them, and the way in which they have been stated tonight, will receive the most careful consideration in order that in this matter, as in others, we shall act sensibly and rightly, bearing in mind that the facts which affect this industry affect other industries and the wellbeing of the community. As the hon. Member for Brightside indicated, that is all that I can reasonably be expected to say from this Box at this time, but I am glad to say it, and I hope that I may, without impertinence, congratulate all the hon. Members who have taken part not only for the excellent way in which they have deployed the case but for a display of brevity which is in a very high category indeed.

10.35 p.m.

Mr. John Hynd (Sheffield, Attercliffe)

The main point, which I would like to put in the few seconds which remain, and which I and my hon. Friends want to impress on the Financial Secretary, is that while we appreciate that Purchase Tax may be a form of taxation which cannot immediately be removed generally, there is a special argument for cutlery. That is that it is essentially a trade associated with this country, where the highest standards are found, and specifically associated all over the world with Sheffield.

Furthermore, this industry is not merely suffering from the general effects of Purchase Tax, but is losing the ancient skill which it has developed through generations; and which, as the Financial Secretary knows, is something which cannot be regained if, after a deathbed repentance, somebody decides to remove Purchase Tax altogether and new apprentices are brought in. That simply cannot be done and I would—

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-four Minutes to Eleven o'Clock.