(1) Where duty is chargeable under Part I of the Import Duties Act, 1932, in respect of any goods being tapes, wires, discs or other articles which have been recorded with sound by any means, except—
and the amount of that duty would apart from this subsection exceed the amount which would be so chargeable if those goods had not been used for recording sound, the duty chargeable on those goods shall be charged only up to the last-mentioned amount.
(2) In heading (b) of sub-paragraph (iii) of the Table set out in paragraph 1 of the Third Schedule to the Finance Act, 1939 (which specifies the duty chargeable under Part I of the Import Duties Act, 1932, on exposed cinematograph film containing only a single sound track), the words "a single" shall be omitted; and heading (b) of sub-paragraph (iii) of paragraph (20) of Group XVIII in the Second Schedule to the Import Duties Consolidation) Order, 1949, shall be amended accordingly.
(3) The provisions of the Schedule (Duties on Exposed Cinematograph Film) to this Act shall have effect with respect to the duties which are chargeable on exposed cinematograph film in accordance with the said Third Schedule to the Finance Act, 1939, and the said Order of 1949.—[Mr. Boyd-Carpenter.]
§ Brought up, and read the First time.
§ Mr. Boyd-Carpenter
I beg to move, "That the Clause be read a Second time."
This new Clause, as hon. Members will appreciate, is somewhat more complicated in character than the one I have just moved. It is designed to deal with a difficulty which has arisen in the calculation of the import duty upon various forms of sound recording. Modern developments, particularly in connection with the 3D type of film, have involved the recording of sound not photographically, but magnetically, more usually, I understand, upon cellulose acetate, metallic tape or wire.
The particular difficulty which this Clause is designed to meet is that under the law as it stands at present the import duty payable is calculated on an ad valorem basis. It is, of course, a matter of extreme difficulty for the Customs, presented at the ports with a strip of sound recording material, to put any sensible value upon it. The difficulty is very similar to that which confronted us a few years ago in connection with 1062 cinematograph film, and which was overcome in Section 3 of the Finance Act, 1939, by doing away with the ad valorem basis and imposing a specific duty of, I think, 5d. per foot of film. This is the solution proposed in another new Clause on the Order Paper in the name of the hon. Member for Islington, East (Mr. E. Fletcher). Both the hon. Member and the Government are endeavouring to tackle the same rather awkward problem.
Our proposal is upon a somewhat different basis, but what, in substance, it amounts to is that we propose to disregard the recorded sound and charge the duty simply on the material on which the recording is made. The ad valorem duty upon a sound track of, shall we say, 100 feet of cellulose acetate tape will be the duty payable on a plain strip of that material of the same size. The sound recording is disregarded and the duty is assessed solely on the material. That gets rid of the complication of valuation and I recommend it to the House as a satisfactory solution.
This is not a great matter. As hon. Members who are familiar with the industry will appreciate, the import tax upon films is very small in its incidence. I think that last year the yield was about £140,000. Of course, the protection to the home industry depends not on the tariff, but on the quota system. On the other hand, these new developments have caused considerable difficulty and we are trying to tackle them in this way. We are taking advantage of so doing to tackle the general problem of recorded sound which is covered by this new Clause, not only film sound tracks but other forms of recorded sound.
If I may be allowed to mention the new Schedule which goes with this Clause, one or two rather technical adjustments are made in the tariff law dealing both with cinematograph films in the strict sense, and those recorded magnetically to which the Clause mainly refers. This is a somewhat technical and perhaps unexciting proposal, but I suggest that not only does it facilitate the task of levying the duty but makes easier the task of the trade interests concerned, with whom discussions have taken place.
§ Mr. Eric Fletcher (Islington, East)
I am obliged to the Financial Secretary for his explanation. He has indicated that this new Clause is designed to serve the 1063 same purpose as a new Clause in my name and the names of my hon. Friends which was put down for the Committee stage but was not selected, and which appears again today on the Order Paper.
I entirely agree with what the Financial Secretary has said. It is very difficult to find the right form of words to deal with the new problems which have arisen. I am prepared to accept the view that the words devised by the Government are more apt than the words in my proposed new Clause. This is really a case of trying to make Parliamentary language catch up with the improvements in scientific technique and skill.
As the Financial Secretary has said, this problem arose over a very simple matter. Hitherto, the sound film, which is part of a film, has been produced by exposure to light. In the words of the Schedule under the Import Duty Act under which Customs Duties are levied, reference is made to "unexposed" and "exposed" film. Recently, owing to improvements in science, sound has been reproduced photographically on wire, on a strip or a belt. It is produced, not by exposure to light, but by exposure to magnetic attraction.
It became a matter for argument as to whether "exposed" film was the relevant term to describe film produced by exposure to a magnetic field, and I think there was legitimate room for argument between the industry and the tax commissioners. No doubt if this problem could have been foreseen when the Act was originally introduced a form of language would have been devised to cover it. What has been done is what we hoped would be done. A practical problem has been solved in the proper way, not by allowing the commissioners to make an interim administrative arrangement, but by introducing a Clause in the Finance Bill to deal specifically with the problem and put it right.
§ Question put, and agreed to.
§ Clause read a Second time, and added to the Bill.