JEWELLERY AND SILVERWARE

HC Deb 20 March 1953 vol 513 cc351-433

11.5 a.m.

Sir Edward Boyle (Birmingham, Handsworth)

I beg to move, That this House notes with concern the declining prosperity of the British jewellery, silverware and ancillary industries, which have contributed materially to the level of trade and employment in the city of Birmingham; and this House asks Her Majesty's Government to give urgent attention to those causes which are preventing these industries from maintaining that level of high-quality craftsmanship on which their prospects, both at home and overseas, depend. It is not very much more than three months ago that I was last fortunate enough to draw a lucky number in the Ballot. I believe that you, Mr. Speaker, with your very extensive—indeed almost word-perfect—knowledge of the works of Shakespeare must, as you called me again this morning, have been reminded of one of the opening lines in "Hamlet": What, has this thing appear'd again? I should like to say at the very outset of my remarks how much I regret the absence this morning of someone much more qualified to talk on this subject than I am, namely my hon. Friend the Member for Edgbaston (Sir P. Bennett) who has been in business, as he reminded me the other day, as long as 57 years. I am sure that all of us hope that when he comes back after Easter he will be entirely restored to health.

The jewellery and silverware industries in this country have had a long and distinguished history through many centuries. The oldest recorded evidence of goldsmiths working in Birmingham is contained in a manuscript of Lord Middleton dated 1524, which is 308 years before the city of Birmingham had a single representative in Parliament, and 23 years before any recorded evidence of the proceedings of this House.

The future of both Birmingham and Sheffield as centres of the silverware industry was assured in the year 1773 when a local Act established assay offices in both of those cities for assaying and marking of sterling silver. This was due very largely to the initiative of the great Birmingham industrialist, Matthew Boulton, whose works were situated in that party of the city which I have the honour to represent in this House.

This Act of 1773 was amended in 1824 so that Birmingham could then start the assay and marking not only of silverware but of gold wares as well. I think it is also worth pointing out that all through the history of this industry external factors have considerably affected the quality and type of its ouput. During the 18th Century the price of tea fell and a great deal more tea was consumed. That was one of the reasons there was such a great increased demand for silver tea services during that century. Hon. and right hon. Gentlemen acquainted with Bos-well's Life of Johnson will recollect how Doctor Johnson himself was capable of drinking up to about eight dishes of tea on occasion, and the tea in that household was often dispensed by a blind woman, Mrs. Williams, who used to feel with her fingers to see if the hot water had been poured high enough into the cup.

It might be of assistance to the House if at the outset of my remarks I said a few words about the products of this group of industries and their location, and also a word about the manpower position. In doing so I shall rely considerably on that valuable document, the Working Party Report on the Jewellery and Silverware Industry which was published by the Stationery Office in 1946. These industries, as the Working Party Report says, have traditionally and rightly been regarded as very closely associated. Today one often comes across a manufacturer who is both a jeweller and silversmith, but just for convenience I will deal with them separately and describe the categories of goods which the jewellery and silverware industries produce.

There are three categories of jewellery. First of all, there is the best category, which is known as "fine" jewellery, where each piece or set of pieces is individually and specially designed. Secondly, there is what is popularly called cheap jewellery, which consists partly of factory-made copies of fine jewellery and partly of rather more valuable work in semi-precious stones. Thirdly, there is what is known as imitation or fashion jewellery, which consists of artificial stones set in mounts which can be cast from dies. The point about this kind of jewellery is that it must be inexpensive and must adapt itself to changes of fashion, and indeed to changes in the patterns of dress.

Silverware can be divided into two categories. The first is what is known as "flat ware," that is to say articles like spoons and forks in matched sets. It is difficult for the layman to realise that a spoon ranks as flat ware, as do ladles. Secondly, there is what is known as "hollow ware" which consists of such items as tea sets, entree dishes, cigarette boxes and candelabra. As I shall explain later, the silverware industry is suffering most acutely of all.

I want to read from the Report of the Working Party a short passage which describes very clearly how much craftsmanship goes into the making of the best hollow ware. On page 2 of the Report are these words: Most large-scale manufacturers of sterling silver goods use more elaborate mechanical equipment, such as electric melting and annealing furnaces, powerful drop-stamps and drawing presses, machinery for engine-turning, spinning, polishing and finishing, and equipment for making steel dies, and for enamelling and engraving. But for high grade products they only use mechanical operations to shape the articles and to impress the patterns in rough form; they still produce the fine details of a design by employing craftsmen who are proficient in hand-raising, mounting, filigree working, inlaying, engraving, engine-turning, chasing and piercing. The value of a piece of silver may be greatly enhanced by one or more of these operations. Beside sterling silver, flat ware and hollow ware, there has been a very considerable growth during the last 100 years in the production of what is called "silver plated ware," and I shall have a good deal to say later on about this branch of the industry. Silver plated ware has become popular because of the lower cost of raw materials and because mechanisation can be more extensively used.

I pass from the various products of this industry to their location, and I shall refer only to three centres: London, Sheffield and Birmingham. London is the main home of fine jewellery which is mostly made in small workshops by craftsmen who fashion individual articles in gold and platinum. London silversmiths specialise in solid silver hollow ware. Sheffield makes virtually no jewellery, but contains about 100 silverware firms many of which concentrate on the manufacture of spoons and forks. A large percentage of the total output of flat ware, both solid silverware and electro-plated, is made in Sheffield. The silverware industry in Sheffield is very closely associated with the cutlery industry, which does not come within the terms of my Motion today. I come to Birmingham, which is the—

Mr. Frederick Mulley (Sheffield, Park)

Would not the hon. Gentleman agree that a considerable amount of table-ware is made in Sheffield? Would he make that clear?

Sir E. Boyle

Thank you, very much. I should have mentioned it. The hon. Gentleman was talking to me about it only recently. I should have made it clear.

Birmingham is the largest producer of silver and electroplated goods, if all kinds of products are taken together. In addition there are about 300 jewellery firms, approximately 200 of which make real jewellery and 100 make fashioned jewellery. It is worth pointing out that in 1946, when the Working Party Report appeared, small firms with not more than 10 persons produced 60 per cent. of the total output of jewellery in Birmingham. There are larger concerns making fashion jewellery which may employ 250 workers and, of course, there are some fashion goods firms which employ about 300 workers. The jewellery trade of Birmingham still very largely consists of small businesses.

The hon. Member for Yardley (Mr. Usborne) warned me that he would not be able to get here at the outset of the debate. If he should be fortunate enough to catch your eye later on, Mr. Speaker, he may want to say something about the impact of present-day conditions on those-small businesses.

The jewellery industry in Birmingham is concentrated in an area of about 100 acres. I was interested to see in the Working Party Report that during Victorian times the present jewellery quarter in Birmingham was a residential quarter where wealthy people lived who possessed large gardens. I am sure that the hon. Member for Aston (Mr. Wyatt), who represents the jewellery quarter today, will be surprised to think that this was ever a wealthy residential area, with a large number of gardens attached.

I would mention in passing that many leases are falling in today in the jewellery quarter, and that a certain number of people are somewhat anxious on that account. I shall not develop this point at all, but if those who are anxious would read the Government's White Paper on Leasehold Property, and particularly paragraph 43 which deals with business premises, they might feel considerably less apprehensive. The jewellery quarter in Birmingham is a great Birmingham institution.

Before I leave this part of my speech, I must say a word about the connection of the jewellery quarter with the Chamberlain family. Mr. Joseph Chamberlain himself was the Member of Parliament for the West Birmingham Division, in which the jewellery quarter was then located, from 1886 to 1914. After his death, his son Sir Austen Chamberlain became Member for West Birmingham down to the time of his death in 1937. Both Mr. Joseph Chamberlain and Sir Austen Chamberlain were regular attenders at the annual banquets of the Birmingham Jewellers' and Silversmiths' Association. I have heard those annual banquets referred to on numerous occasions as "Joe's Forum."

I was rather amused to read a brochure commemorating the Jubilee of the Birmingham Jewellers' and Silversmiths' Association and to see a cartoon of Mr. Joseph Chamberlain fixing stones into a Crown. The Crown is marked "Empire" and the stones are marked "South Africa," "India" and "Canada." At the bottom of the cartoon are the words, "The greatest jeweller of them all." Times have changed since that cartoon was published. I mention it in passing only to show the close connection of Mr. Chamberlain and the jewellery industry in Birmingham. Today, the Birmingham Jewellers' and Silversmiths' Association has been merged into the British Jewellers' Association, but the annual meeting of this association is still held in Birmingham.

During the last few weeks I have done my best to obtain statistics to show the number of people employed in the industry but, as some hon. Members probably know, it is not always easy to do this. The best I can do is to say that the British Jewellers' Association has a membership of about 2,000. In 1952, the number of people employed in the businesses run by members of the B.J.A. in Birmingham was about 19,300 and in London more than 14,000. Those figures represent a drop of some 12 per cent. compared with the figures for 1951. It has been pointed out to me that there has been a good deal of concealed unemployment, and I shall mention it later on. I have not the figures for Sheffield.

During the war, the jewellery and silverware industries contributed a very high proportion of their skilled labour to the production of precision instruments, but when the war was over the men were gradually absorbed back. In the years immediately following 1945, every effort was made to expand the exports of those industries. It is, as hon. Members will know, extremely difficult to get accurate export figures. As a matter of fact, in this industry it is difficult to get figures of any value at all because, as the final Report of the Jewellery and Silverware Development Council has emphasised, so much of its products are exported by parcel post, and therefore no track can be kept of them. If I may quote from paragraph 35 of that Report: A point to which attention has frequently been drawn… is the inadequacy of the official records of exports of industries which, because of the high value and relatively small compass of their productions, use the postal services rather than the freight services and thus go unrecorded in the Trade and Navigation Accounts. Estimates of the proportion of exports sent by post have occasionally been made, based on enquiry among cross-sections of exporters, but it has never been possible to more than guess at the relationship between true exports and recorded exports. The Report goes on to say in paragraph 37: In the case of fine jewellery six-sevenths of exports … went by post in 1949 and 1950, and seven-eighths in 1951. I have seen it claimed that as much as 60 per cent. of the total production of this group of industries was exported in one post-war year. I feel that this figure is rather optimistic, but one thing is certain, that the present position of these industries is extremely serious and, in the case of the silverware industry, absolutely critical.

I daresay many hon. Members read the letter which appeared in "The Times" on 17th February from the Birmingham Assay Master, in which he said that one of the oldest and most famous craft industries, that of the silversmith, is fast sinking to extinction. The Assay Master has been kind enough to send me official figures showing the weight of gold and silver articles submitted to his office for hall-marking since 1900. If one looks at those figures, which I will not read to the House, there is no question but that since 1947 the weight of gold submitted for assay has fallen by about one-third and the weight of silver by about two-thirds. The Assay Master says in his letter that the amount of gold hallmarked would probably be greater in the post-war years but for the existence of a large black market in gold articles brought into being by the 100 per cent. Purchase Tax.

It is certain that, if we add the figures of all the assay offices together, the evidence is clearer still. I have with me the last report of the Development Council which gives the figures for silver in troy ounces for all the six United Kingdom assay offices. The weight of silver for all the six offices added together has fallen from 1,362,647 troy ounces in 1951 to 1,064,319 troy ounces in 1952, and for every quarter since the last quarter of 1951 down to the last quarter of 1952 there has been a steady fall.

So far as gold is concerned, it is pointed out in this Report that the continued upward trend of the figures for gold up to June, 1952, and the rapid decline since then, reflect the rise and fall of the special trade in lightly manufactured gold articles. As I understand it, this special trade in lightly manufactured gold articles which do not figure in the normal production statistics of the industry, is not likely to go on for ever. Therefore, although on the face of it the gold figures look much more encouraging than those of silver, one cannot draw much comfort from them, and the figures for the six assay offices added together could not be more discouraging. I have seen it estimated that the production of the gold and silverware industries during the present year is likely to fall by 75 per cent. compared with 1947 figures.

Now I want to say a word about manpower and employment. As I mentioned a moment ago, in the firms which are members of the B.J.A. there has been a decline of 12 per cent. since 1951, and it has been particularly serious in the silverware industry. In businesses making hall-marked sterling silver goods the intake of trainees has ceased and the average age of the craftsmen is 65. Many of these craftsmen are receiving today skilled rates of pay for unskilled work, and there is a good deal of concealed unemployment due to manufacturers simply adding to stocks of goods in order to keep their skilled men employed. That process cannot go on indefinitely.

At the same time it would be unwise to underrate the seriousness of the position in the fashion jewellery trade, where manufacturers are finding themselves forced to concentrate largely on traditional lines and are hesitating to produce new ones. In this branch of the trade there is a seriously diminishing number of trained designers and of new tool makers. Here, too, therefore, the industry is in a serious and declining state.

Before I go on to the reasons for this sorry state of affairs, I want to make a passing mention of the dissolution of the Development Council. That was agreed to in this House on 18th February last, and I shall not go over the arguments for and against it. The first of the two things I want to say in this connection is that if we do nothing else in the Select Committee on Delegated Legislation, I hope we shall be able to save the House from having to put up with such an unsatisfactory type of debate as we had on that occasion, when a great many hon. Members wanted to speak but when, in view of the fact that there were some more Prayers down on the Order Paper, every effort was made on both sides to prevent the debate lasting for more than a few minutes. In this connection I think I shall have the support of the hon. Member for Brighouse and Spenborough (Mr. J. Edwards).

Secondly, I think the whole episode of this Development Council and its dissolution shows how important it is that this group of industries, faced with such difficult times, should be able to present a united front. Incidentally, the final report of the Development Council is a valuable document, and I am grateful to the Parliamentary Secretary for letting me borrow his copy in order to make a note of certain sections of it. There should be copies of all these documents available in the Library but, due to the predatory habits of a few hon. Members and a few noble Lords in another place, it is not always easy to find these documents.

Now I come to the reasons for this sorry state of affairs and what can be done to alleviate it. While all those to whom I have spoken about this industry are convinced that the principal cause is the cumulative effect of a penal rate of Purchase Tax, I do not want to give the impression of over-stating my case. I would be the first to agree that, even if there were no Purchase Tax, there would today be a decline in the number of private people wishing to commission sterling silverware.

That point was made in "The Times" leading article, and, as far as it goes, it is a completely valid one. Yet it does not explain why it is that the industry has declined so rapidly since 1947. I want to deal with what I regard as the three principal reasons for the sudden decline in the fortunes of this group of industries. First I shall say a word about the difficulties from which manufacturers producing plated ware are suffering as a result of the prohibitions on the use of nickel. Then I want to say something about the closing of export markets, and finally, something about Purchase Tax.

First, a word about the effect of the prohibitions on the use of nickel. There is only one metal which can be satisfactorily used for electro-plated goods, and that is the alloy known as nickel silver. In fact, the mark "E.P.N.S."— electro-plated nickel silver—is recognised in almost every foreign market and is something almost analogous to the hallmark on sterling silver goods. This alloy nickel silver consists of some 60 per cent. of copper, 30 per cent. of zinc and 10 per cent. of nickel.

The House will remember that at the end of 1950 there was a serious shortage in this country of non-ferrous metals, and their use was for a time prohibited, for a large number of purposes. Since then the position has improved and the restrictions on the use of copper and zinc have now been removed. Some of the restric- tions on the use of nickel have also gone. Nickel can, I understand, now be used for table hollow ware, but certain lines are still prohibited. One still cannot use nickel for cigarette cases and boxes, for propelling pencils or for what are politely known as "toilet requisites," which, I think, means such articles as sets of brushes.

I understand that only 10 million tons of nickel would be required by this group of industries if these items were freed from prohibition.

Mr. Mulley

Does not the hon. Member mean 10 tons?

Sir E. Boyle

I am sorry. At least, I have the precedent of my right hon. Friend the Secretary of State for War in making a somewhat analogous mistake the other day. Ten tons of nickel would be required if the prohibitions were removed from these items, and I ask my hon. Friend to say whether his Department would be prepared to get in touch again with the Ministry of Supply to see whether these restrictions could not be removed. Their removal would make an enormous difference to the section of the industry which produces electro-plated goods.

Secondly, I must say a word about the export difficulties. Today, this group of industries cannot export at all to South America or to India. It is allowed only small quota allocations to Australia, South Africa and Egypt. Sweden has now reopened her markets, but during the time that the Swedish prohibitions were in force the Swedes themselves have learnt to make these goods—nothing like as good as the British ones—but, at any rate, a new industry has grown up behind the protective wall of a complete prohibition.

Incidentally, one of the most alarming features of trade today is the tremendous effectiveness of prohibitions as a protective wall, and I still hold the view that whatever opinions there may be about the old question of free trade and protection, freedom of trade is absolutely vital in order that the total volume of world trade should be as large as possible; and it is in the end bound to be in the interests of all the countries concerned.

A further point which has handicapped these industries has been the trade recession in Canada, where our sales of jewellery and silverware products have declined heavily since 1951. Another point is the heavy duties and sales taxes in some parts of the world; for instance, 100 per cent. in Ceylon and a heavy sales tax in the United States of America. On top of Purchase Tax in this country, those extra taxes have proved an enormous handicap.

All this time, of course, we are being faced by growing competition from Germany and from the United States of America.

Mr. Emrys Hughes (South Ayrshire)

Hear, hear.

Sir E. Boyle

I am provoked by the hon. Member into saying that if he is opposed to Western Germany making any contribution towards her own defence, that is bound greatly to increase the extent to which Germany will be able to intensify her competition in the markets of the world.

Mr. Hughes

Is not the hon. Member himself trying to weaken the defence programme? He wants to take the nickel from the super-priority advocated by the Prime Minister for the new aeroplanes and to transfer it to the silverware industry.

Sir E. Boyle

I am always much impressed with the hon. Member's ingenuity in being able to make his usual speech not only in defence debates, but in the debates on all three Service Estimates also. He will go up even higher in my admiration if he makes his contribution when we are discussing the Birmingham silverware and jewellery industry. I hope, however, that when my hon. Friend replies he will say something about export prospects and what he thinks is the future of the export markets of this group of industries.

Now, I come to Purchase Tax. Not only is it the view of all business men that the present penal rates of Purchase Tax are the greatest handicap under which this group of industries labours, but that view is also clearly expressed in the last Report of the Development Council. Paragraph 46 of the Report states: No report concerned with the jewellery and silverware industry would be complete or logical without repeated reference to the cumulatively harmful effects of a high rate of Purchase Tax. The next paragraph begins: We repeat our conviction that Purchase Tax is chiefly responsible for the serious decline of fine jewellery exports over the past four years. It is fair to say—and I will justify this remark—that no single group of industries has to bear such a heavy Purchase Tax burden. If hon. Members look at Notice No. 78, issued by the Board of Customs and Excise, it will be seen that in Group 26 Jewellery and imitation jewellery being articles consisting wholly or partly of stones or beads, … is subject to a 100 per cent. rate of tax. Group 27 imposes a 100 per cent. rate of tax on all goldsmiths' and silversmiths' wares. Group 28 says that Purchase Tax of 100 per cent. is charged on Articles made wholly or partly of ivory, amber, jet, coral …" and Articles made wholly or partly of mother-of-pearl other than buttons and studs." Finally, Group 29 imposes 100 per cent. rate of tax on a large number of fancy or ornamental articles of the kind produced in quantity for general sale. I have looked all through the document, but there is no group of industries on which so high a rate of Purchase Tax is imposed.

Mr. Bernard Braine (Billericay)

That is not so. There are other craft industries, notably the fur trade, which bear 100 per cent. tax.

Sir E. Boyle

I agree that fur is the nearest competitor, but I understand from my hon. Friend the Member for Cheadle (Mr. Shepherd) that it has been brought within the scope of the D scheme.

Mr. Braine

With no benefit.

Sir E. Boyle

We can argue that during the Finance Bill debates.

The one exception are the E.P.N.S. goods, and this range of articles pays tax according to the class of goods made. For example, 33⅓ per cent. is paid on electro-plated nickel silver tableware and —which is, perhaps, not quite so unreasonable—there is a 100 per cent. rate of tax on electro-plated nickel silver sports mugs.

Quite certainly, Purchase Tax today is a tax on quality and on craftsmanship, because it means that cheapness becomes the aim of the producer at the cost of design and finish. But it is not only a tax on craftsmanship, because 100 per cent. Purchase Tax virtually kills the home market and very greatly injures the export trade as well. In the first place, the present rate of Purchase Tax is responsible for a lower rate of production than is economically efficient and the rate of Purchase Tax reduces the number of ranges which a manufacturer can offer his customer from stock. In the past the home market was the natural testing ground for new designs and enabled the overseas buyer to order from a wide range of designs at an economic price. There is no doubt that the present rate of Purchase Tax, by killing the home trade in so many possible lines of production, has immeasurably increased the difficulties of our manufacturers who are trying to produce for export.

I have received a number of letters on this subject from business men in Birmingham who point out the difficulties under which they are labouring. One manufacturing jewellery firm writes: Our difficulty here is that, due to Purchase Tax, the home market requires the articles to weigh as little as possible to keep down the cost whereas the export market prefer heavier weights. It is not always economical to produce two sets of tools etc. for similar articles. That leads me to the point I was making earlier, that the present rate of Purchase Tax is causing many manufacturers to concentrate on familiar and existing lines and is undoubtedly handicapping them in enterprise and attempts to find new export outlets. Not only that, but the present rate of Purchase Tax does unquestionably very greatly encourage the black market and tax evasion. I can give two examples of what I mean. It means that manpower is drawn off to what the trade euphemistically calls "irregular channels" and also that retailers retain a large majority of their rings which cost more than £10 as theoretically second-hand rings. A number of businessmen have written to me on this. Here is an extract from one letter which I have received: Owing to the 'Black Market' we are unable to sell rings costing more than £5 to £6 each. Above this figure the retail jeweller appears to buy 'so-called' second-hand rings. In London and the 'Home' counties the position is worse and customers just smile when our London Representative mentions that Purchase Tax is payable on our rings. Generally speaking the 'Black Market' prices of rings are much dearer by comparison than those we manufacture, but, of course, they have the 100 per cent. to play with, consequently they get a bigger profit, and also show an advantage to the Retailer. It is a very serious matter when the rate of taxation is so high that the black market is really heavily subsidised.

Incidentally, I always notice that when the Government are at a loss to know what to do about a particular black market operation, they say that things are not quite so bad as they are made out to be. But, if it is easy to counter the black market by imposing some new fiscal exaction, they say that this is a very grave matter. So I shall not be impressed if in reply my hon. Friend says that this is not quite so serious as I have suggested. I do not want to be unreasonable on the subject of Purchase Tax. I have never doubted at all that the rate of taxation, both direct and indirect, must remain permanently a great deal higher than it was before the war, but it is not true to say that we can go on loading industry with burdens without finally breaking its back.

I do suggest to my hon. Friends as a first priority that he should pass on to the Treasury the suggestion that the tax on hall-marked sterling silverware should be reduced to the same level as the existing tax on electro-plated silverware. Secondly, I would urge him not to dismiss the question of the tax on fashion jewellery as something which is unimportant.

I notice that "The Times," in a leading article, were suggesting that because fashion jewellery was mass produced and entirely derivative the Purchase Tax on this section of the industry did not matter so much. It is worth pointing out that the Germans not only have no Purchase Tax on fashion jewellery but are actually heavily subsidising it. It will be quite impossible for our fashion jewellers to compete with the German trade so long as ours bears such a heavy rate of tax and German jewellery is heavily subsidised. I think the hon. Member for Aston will bear me out when I say that according to one estimate about 90 per cent. of fashion jewellery is today subject to 100 per cent. rate of tax.

I turn now, for a few moments, to hallmarking. There are today six assay offices in the United Kingdom empowered to enforce the hall-marking laws. All these offices are independent and work under Acts of Parliament peculiar to themselves. I ask my hon. Friend to look into the question of whether or not it would be a good idea to have a consolidation Act which could combine all existing hallmarking statutes. A great deal has been done in the way of consolidating legislation and I wonder whether the hallmarking statutes would not be a good case for such consolidation.

It has been suggested to me that in certain ways the hall-marking, laws themselves could do with some revision and that in certain respects they act as a barrier rather than a help to the industry. For instance, one such law debars a British manufacturer from making sub-British standard gold and silver goods for foreign markets even in cases where such sub-standards are perfectly legal. I suggest that it is a pity to lose hard currency simply because a foreign power wants a low standard of quality which happens to be prohibited in this country.

Further, and much more important, I must say a word on American imitations of British hall-marks, on which a memorandum was submitted to the Board of Trade last November. This is a very serious matter because there have been cases quoted to us of American companies which are registering British hall-marks as their trade marks. Those companies may well attempt to prevent the importation into the United States of all silver hallmarked in Birmingham and Sheffield on the grounds that they infringe their registered trade marks. I suggest that the Board of Trade or the Foreign Office might make a direct approach to the United States on this matter, and try to secure some kind of international agreement for the protection of hall-marks.

I will say just one word about design. I want to make it perfectly clear that the British Jewellers' Association are fully in support of the idea of a design and research centre. I have been told that in the old days, before the Development Council came into existence, the B.J.A. used to hold a design competition. I ask my hon. Friend if, when he replies, he can say anything about whether he proposes to take any action under Section 11 of the Industrial Organisation and Development Act, 1947. In Section 11 that Act lays down that The Board of Trade may, with the approval of the Treasury, make grants out of moneys provided by Parliament—

1. (a) to the Council of Industrial Design;
2. (b) to any association or body, corporate or incorporate, the objects of which include promoting the improvement of design in any industry or activities appearing to the Board to be conducive thereto …"

and so on. I ask whether it is his intention to consider taking some action under the terms of that Act.

I have never thought, and I am not suggesting today, that it is the job of the Government to do all the work in pulling an industry out of a hole. What I do believe is that the Government should try to create an economic climate which enables every industry in this country to give of its best by its own efforts and that is what we are asking in this Motion. I suggest to the House that the jewellery and silverware and ancillary industries are industries of which this country has a right to be proud, of which the city of Birmingham has a right to be proud, and that they are worth fostering. The Working Party Report says on page 10: There is no doubt in our minds that it is in the best interests of the nation to cherish, and if possible to strengthen further the jewellery and silverware industry. As we have said, the British reputation for fine workmanship is in our view an essential part of British strength in the markets of the world and this industry plays a very full part in maintaining it. Whether we are today, as some hon. Members maintain, a second-rate nation or whether we are today, as some still maintain, a first-class nation, one thing is quite certain—it is that a trading nation cannot afford to squander any of its assets; and one of the assets we have in this country is the craftsmanship, skill and experience which have gone into these trades of which I have been speaking.

11.50 a.m.

Mr. Woodrow Wyatt (Birmingham, Aston)

I beg to second the Motion.

I must thank the hon. Member for Handsworth (Sir E. Boyle) for asking me to second this Motion. It is a great kindness to me because, as he knows, I represent the greater part of the jewellery quarter in Birmingham. I must congratulate him on the way in which he has presented his case. He has made a comprehensive and entertaining survey of the whole of the jewellery industry from a very early period, and I think he has brought out almost every conceivable point that could have been brought out relating to this industry; and he has done it in a manner which has been very pleasing to us all.

A few weeks ago I had a talk with the manufacturers in this industry, and I found them extremely gloomy. They asked to see me about the position of the trade. I think they feel that their trade as a whole has never been in a worse position than that in which it is today. Exports have gone down, very largely, I think, because of the closing of foreign markets; but the volume of the home trade is so small, owing to the effect of Purchase Tax, that prices in the jewellery trade are rising, because, naturally, if the volume gets smaller the prices must go up.

That means again that it becomes even more difficult to compete in the export trade, because rising prices make it more difficult to get into the export markets even when restrictions are lifted. The key men are going out of this industry; the skilled craftsmen are leaving it; and it will not be very long, unless something is done about it, before the finer part of this substantial industry has disappeared altogether.

I want to say just one word about the nickel silver position. I think the hon. Baronet made a mistake when he said that 10 tons of nickel was all that was needed to allow all the other articles to be included in the relaxation. I think a smaller amount is needed, because only 80 tons of nickel silver was required to make the total relaxation the trade asked for, and as nickel itself is only 10 per cent. of nickel silver, a much smaller amount is needed to allow smokers' requisites and these other things to be taken off control.

Purchase Tax is, of course, right at the centre of the problem of the jewellery industry, but it is not only the rate of the Purchase Tax that is the matter. There are also substantial difficulties arising from the way in which Purchase Tax is administered. It almost seems occasionally to those in the jewellery trade that the Inland Revenue have a desire to persecute the jewellery trade, as though they thought its sufferings were not already great enough and they proposed to make them even greater through the administration of the regulations.

For example, the Commissioners are making great difficulties today about the registration of new wholesalers, and are also finding every opportunity they can to de-register existing wholesalers when they change their style of business. Why this matters is that it is only a registered wholesaler who is allowed to postpone the payment of his Purchase Tax after he has bought the goods. If one is not a registered wholesaler one has to pay the Purchase Tax immediately one buys them. If the registration is taken away, as has happened to quite a number of firms recently, it means one has to pay in a lump sum the tax on all the hitherto untaxed stocks that one may have, and that may involve a very large sum of money indeed. Moreover, one has to make a reduction in the amount of stocks one carries.

Then one also finds that manufacturers often refuse to deal with unregistered houses on account of the difficulties arising from the various methods in which Purchase Tax is paid, because the unregistered houses have not the facilities for postponing the payment of Purchase Tax to a more convenient date. I do not know why the Commissioners should make such difficulties for the trade when it is already in difficulties, and I hope that the Parliamentary Secretary to the Board of Trade will look into this matter.

Again, I think there might be a little more grace given to some of the registered wholesalers in the payment of the Purchase Tax. There is one system of payment by which it is paid every quarter. There is a firm in Birmingham that paid on 30th January the bulk of the tax due for the quarter ended 31st December. The difficulties in the trade had made it delay the bulk of this payment of the Purchase Tax to 30th January. It said that it would send the balance within 10 days, and, in fact, did so, but before the 10 days were up the Commissioners were already instituting legal proceedings against it, which is a little hard at a time when the trade is in such difficulties.

So complicated has the machinery of Purchase Tax in this trade become that individual Purchase Tax officers interpret the regulations quite differently. Not only do they interpret them differently in Leeds, Sheffield, Birmingham and London, but they even interpret them differently in one and the same town. It is very hard to make out how the rates of Purchase Tax apply to the various articles that are manufactured.

A manufacturer told me the other day that he made ladies' hairbrush sets. If he puts them in a box or case with a mirror attached, 100 per cent. Purchase Tax has to be paid. If he takes them out of the box and sells them separately the mirror carries 100 per cent. Purchase Tax but the brushes will carry 33⅓ per cent. Purchase Tax. This makes it very difficult for the manufacturer, because if he packs these goods ready for export, and then finds he cannot export them, and decides to sell them on the home market, he has to take them out of the boxes in order that he may get a lower rate of Purchase Tax.

Sir Herbert Williams (Croydon, East)

Is it not the case that the boxes are still at the high rate?

Mr. Wyatt

That is quite true. Let us take another example. A manufacturer the other day was approached with a view to making leather cases for sets of Coronation coins. He could manufacture a case to sell at 4s. 9d., but along comes the Treasury and says, "We are going to charge 3s. 2d. Purchase Tax on that," which is very nearly the value of the case itself. So the manufacturer has had to abandon the whole idea, which might have been very successful, as these goods, packed in this way, might have sold very well amongst foreign visitors. The idea of the leather case has been given up, and a cellophane bag has had to be used instead.

Another irritating facet of these difficulties is that ordinary plain metal brooches carry Purchase Tax of 66⅔ per cent., but if an imitation stone is put on the brooch the tax goes up to 100 per cent., although the imitation stone itself would not carry that rate of duty. Again, a tie pin with the pin attached—the old-fashioned style—is free of tax, but a tie pin with a slide to fasten it to the tie instead of a pin carries 100 per cent. Purchase Tax. Here is another extraordinary example that I came across the other day. A metal key chain which has a leather attachment, which enables it to be fastened to a trouser button—I do not know how many Members of the House use these articles, but apparently they are sold—

Mr. Ede (South Shields)

Yes, here is one.

Mr. Wyatt

Well, I do not know whether it can be attached to my right hon. Friend's trouser button.

Mr. Ede

Yes, it can.

Mr. Wyatt

Well, I hope my right hon. Friend bought that article at a time when it was in Group 4 and called haberdashery and was charged at the rate of 25 per cent. Purchase Tax, and not more recently, as it has now been put into Group 2 and classified as hardware and builders' materials and charged at 33⅓ per cent.

Then there is the question of cigarette lighters. There is no Purchase Tax on an ordinary, plain metal cigarette lighter, unless it is made in the form of a figure. So long as it is plain, flat and uninteresting, no Purchase Tax is paid. If it is made more interesting the Purchase Tax at once goes up to 100 per cent., and the Customs put an Excise Duty on it as well. If it is made into a cigarette case, then Purchase Tax is paid at the rate of 66⅔ per cent. Another curious example is that of barometers. If a barometer is made in the form of a ship's wheel 100 per cent. Purchase Tax is paid unless the article is so constructed that the spokes are shorter than they are wide. Then it is free of Purchase Tax.

It is almost impossible for a trade to conduct its business when it is beset by regulations of this sort which are interpreted differently by the Inland Revenue officers within a town. I do not see how on earth people can grope their way through the extraordinarily complicated edifice which has been built up. I give a final example of shopping bags which, if they are made so that they have an open top, are tax-free. But exactly the same type of article with a cord through the top to prevent the goods falling out is subject to Purchase Tax at 66f per cent. That is carrying absurdity to lengths which one would imagine that no Government Department would reach.

The incidence of Purchase Tax hits the silversmiths' and goldsmiths' wares hardest. Perhaps it does not hit the ring manufacturers as hard as it should for the reasons which the hon. Member for Handsworth gave. It is much easier to engage in the black market if one is making very small articles, as one of the silversmiths regretfully explained to me, than it is to send through, for instance, a large silver tray and escape all Purchase Tax, what with the assay officer and one or two other difficulties on the way. Of course they do not say that they would engage in the black market if they could, but they point out that it is much easier for some of their friends to engage in it. The hallmark presents a difficulty, in addition to the bulk of the articles that they fashion.

It is high time that we looked at the question of 100 per cent. Purchase Tax, which creates so large a black market. I am sure that the Parliamentary Secretary to the Board of Trade will tell the Chancellor of the Exchequer what he has heard in this debate today. This tax has hit the silversmiths and goldsmiths so badly that only the other day one of the oldest and most distinguished firms in Birmingham was put up for sale. It was put up for sale only because of the fact that, owing to the heavy rate of Purchase Tax, it simply could not survive any longer.

Mr. Emrys Hughes

Why should it?

Mr. Wyatt

My hon. Friend is slightly off his normal path. I will tell him why it matters. If we can keep a firm in operation then it can have a fairly substantial export trade, especially when some of the restrictions which foreign countries impose are lifted. But if it can have no home trade at all, that means that it will be making so few goods that it will have to force up the price of those goods which it is trying to export. Unless the business is based on a reasonably good home trade it cannot survive and, therefore, it cannot export anything because it will not be in existence. The firm must have some kind of home trade on which to base itself. Purchase Tax is so heavy today that some firms have almost no home trade at all.

Mr. Hughes

If all of us argue in this way about the various trades in our constituencies, the Chancellor of the Exchequer will get no Purchase Tax, and then where will the Revenue come from for the rearmament programme?

Mr. Wyatt

I hope to help my hon. Friend on that point later. I do not suggest that no Purchase Tax should be paid by this trade. I suggest only that the rate of tax should be more comparable with that paid by other trades in the country, and that it should not be what I think can only be described as a penal rate. As has been hinted, most of the people in the trade would like to see Purchase Tax taken off altogether. That would be their first priority, but I do not go with them all that way.

Their second request, and this is a more reasonable one which may be more acceptable to the Government, is that whatever rate of tax is paid it should be a flat rate throughout the whole industry. The difficulties of accounting for all sorts of different types of articles within a firm are so great that the introduction of a flat rate would ease each firm in its accounting branch and would also enable the Treasury to dispense with the services of a large number of assistants who have to go round trying to assess the different articles according to the most absurd regulations ever drawn up.

Two things would be achieved by the introduction of a flat rate. It would mean that there would be fewer overheads incurred within each firm in trying to assess the different articles and fewer overheads for the Government, who employ all sorts of officials to try to assess the goods. Perhaps the flat rate might be 33⅓ per cent. or 25 per cent. for all types of jewellery, including fashion jewellery. As the hon. Member for Handsworth said, 90 per cent. of the fashion jewellery trade today pay 100 per cent. Purchase Tax. That makes it very hard for them to move into a slightly higher class of manufacture than the one they are engaged in at the moment. This is an important consideration if we are to compete with foreign designers. We must achieve a rather higher quality than we have today.

If this proposition is not acceptable to the Government, then the next priority is that if they do not touch the tax on any other part of the jewellery industry they should at least reduce the rate of tax substantially on the wares of the goldsmiths and silversmiths. If they do not, there just will not be a goldsmiths' and silversmiths' industry any longer. I do not think it was intended, when Purchase Tax was introduced, that that should be its effect. The situation has changed a great deal since this tax was fixed. Purchase Tax was designed for quite a different situation.

That is the main action that the Government can take to help the industry. They can readjust the whole of the tax system by creating a flat rate and by greatly reducing the amount paid on the wares of the goldsmiths and silversmiths. The second thing the Government should do more obstinately and persistently is that when negotiating trade agreements with other countries they should see that some provision is made for the admission of British jewellery into the respective countries. We seem to be almost the only country in the world which takes in everybody else's luxury goods although nobody accepts ours.

Mr. John Edwards (Brighouse and Spenborough)

No.

Mr. Wyatt

Perhaps I have overstated the case. We seem to accept other people's luxury goods in a way which the trade feel is not always reciprocated.

Also the Government should try again to see what can be done about a continuing body for the Development Council. We had an interesting debate about that on a previous occasion, and I do not want to go over all the ground again. It was a fact that 75 per cent. of the trade—the Birmingham trade and the London trade—were agreed about the sort of line on which the Development Council should proceed, and it was held up by a minority at Sheffield to which the Minister listened rather than listening to the majority.

My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) asked, why should the jewellery trade survive? I do not think that the first part of my answer will please him at all. It is because the workers in the jewellery industry work with such precision and in such fine detail that they are always extremely valuable to the defence effort of the country. During the last war the whole of the jewellery trade was engaged in making fine precision instruments of the most detailed and meticulous kind. That sort of work can be done only if the trade is in existence when a war begins.

If the jewellery trade vanished and we were unfortunate enough to have another war, then it simply would not be possible to make fine precision instruments similar to those made by the trade during the last war. That is a most important point. This is not merely a luxury trade: it is a trade which has a very real contribution to make to the defence of the country when called upon to do so.

The second reason it should be allowed to survive is that it has a significant part to play in the export trade of the country. I do not think it has a gigantic place in the export trade, but it has a significant place, and it will not retain that place if these penal rates of Purchase Tax in this most valuable part of the export trade drive it out of business, as will happen if it continues.

The third reason is not a material reason at all. It is simply that the craftsmen in the jewellery trade are themselves artists. They are people who possess a genuine old craft which has been handed down from family to family and which engages the finest artistic skill of those in the craft, and it is also one of the crafts which have built up the reputation which Britain has established for skill in making beautiful objects, even though they may not seem to have any material use or value.

On that ground alone, it would be a terrible tragedy to allow this old craft to vanish, and it is a very sad thing to go around some of these firms and find that some firms in the jewellery trade, and their skilled men, are being driven out of business, and their skill diverted to other directions. The skill and artistry of workers in every trade and craft is fast disappearing in this country, and, because of that, we ought to try to see whether we cannot save this one before it is too late.

12.12 p.m.

Sir Herbert Williams (Croydon, East)

I think we have all enjoyed very much indeed the speeches of the two hon. Members who have moved and seconded this Motion. When my hon. Friend the Member for Handsworth (Sir E. Boyle) sat down, I thought he had left nothing for anybody else to say, but the hon. Member for Aston (Mr. Wyatt) brought in a whole lot of new stuff, and I am equally grateful to him.

Apparently, my hon. Friend started with Shakespeare, and I am going to start with Hitler, because I have to declare an interest. I happen to be associated with a company in this industry which came to this country because of Hitler's religious persecution, so it is a legitimate cause to plead. The proprietor is a British subject and he brought his business over here from Frankfurt and transferred his main activities to this country. He invited me to be associated with him, because of the knowledge I have of this country, which, perhaps, he lacked. For about 17 years, I have had some connection with this industry, though not so much on the jewellery side, and I am glad that the word "ancillary" appears in the Motion, because it carries the matter a little further, and enables me to deal with ladies' handbags, many of which are decorated with fashion jewellery.

There is not the slightest doubt that the effect of the Purchase Tax on craftmanship is quite deplorable. It is becoming quite impossible to make the higher class goods because of it. It is quite impossible for a manufacturer to have a successful export trade unless it is based on a home market, and nobody could possibly say that there is any justification why ladies' handbags should attract Purchase Tax of 100 per cent. why, when sold alone, some goods are charged 33⅓ per cent., or 100 per cent., when packed in a box, which is a nice piece of work, and by itself carries a rate of only 50 per cent. The whole tiring becomes absurd.

There is the case of a manicure set, which is part of the products of Birmingham and Sheffield. I do not think anybody would regard a manicure set in the possession of a lady as a luxury. It is a very desirable sanitary article. [Interruption.] If one is minded like the hon. Member for South Ayrshire (Mr. Emrys Hughes), one would want fancy manicure boxes, but I see no reason why people should not express their choice. Some people like smart suits, and some people like shabby ones. It is a matter for individual taste. Some people like to use what they save on their suits for something else, and we all admire our own vices and deplore the vices of other people. I really think the hon. Gentleman should not be so intolerant.

There is not the slightest doubt that a lot of fraud is going on, and "black market" is a polite term for fraud. I have some information supplied by the firm with which I am associated, and I am told that what happens sometimes is that much larger quantities are delivered than are, in fact, invoiced. Part of the quantity pays Purchase Tax, but a considerable part of it escapes, and the volume of this kind of manufacture is so small that it is quite impossible to check up on that kind of fraud, which is really unfair on those people who endeavour to conduct their businesses honestly.

Then, of course, there is a loophole which leads to a legal evasion. If a firm handles less than £500 worth of trade a year, their transactions are exempt from Purchase Tax. There are many people who have come into the business and are handling up to £500 worth of trade a year and not paying Purchase Tax, and there are a large number of practitioners in that art, if one may so describe it, which is terribly unfair to those who, however much they dislike the Purchase Tax, feel that it is their duty as good citizens to pay it.

If we look at the future of this country, and have regard to the vital necessity of the export trade, we should not now aim to be successful exporters of the mass production goods in which the United States excel. The United States, with its vast home market, is able to mass produce to the extent that we could not possibly do, but what we can do is to produce goods of a higher quality than anybody else in the world, and which represent a very high value.

I think it would be absolutely fatal if this country, by our system of taxation or anything else, should destroy the possibility of producing high-class goods made by people with the highest degree of skill. Such a step would degrade our standard of living and increase the risk of renewed unemployment in this country, because, though we are only discussing one not very large industry today, the same thing applies over a wider field, and, in fact, the late Administration recognised it when they gave exceptional treatment to, of all things. Rolls Royce cars.

The real effect of the Purchase Tax is much greater in respect of high quality luxury goods than it is in respect of popular goods, and that fact has not been sufficiently realised. It is really important that we should understand that, if we are to preserve the expert craftsmanship of this country and retain our export trade, in order to enable us to import the necessary raw materials for our industries and foodstuffs for our people, we must not destroy the basis of our industry by imposing Purchase Tax to the limit of folly.

12.19 p.m.

Mr. Henry Usborne (Birmingham, Yardley)

I am sorry that the hon. Member for Handsworth (Sir E. Boyle) has had to leave the Chamber, because I wanted to start by apologising to him and to the House for the fact that I was not able to get here in time to hear the opening of his speech. Like everybody else, I am extremely indebted to the hon. Baronet for giving us the opportunity of drawing attention to the difficulties of the jewellery industry in Birmingham, and, in particular, in doing this, also to the problems of the small industries in Birmingham.

The hon. Baronet has drawn his Motion widely, mentioning the ancillary industries. It is no good considering the problems of the jewellery trade in isolation fom the problems of the ancillary industries which support and feed it. These two things, and, indeed, others relating to it, are all part and parcel of the same problem. There is no doubt, as my hon. Friend the Member for Aston (Mr. Wyatt) mentioned, that at the present moment the incidence of Purchase Tax is both heavy and awkward. I think that at a very early stage the Government must look into this, straighten it out and simplify it. That can and should be done. I also agree with my hon. Friend that so long as the State requires considerable revenue for many purposes, some of which I regard as good and others which I regard as bad, Purchase Tax is obviously inevitable.

We must therefore face the fact that these trades have to produce goods and sell them while they carry Purchase Tax. Regarding the jewellery trade and the small industries in Birmingham, I would remind the House that Birmingham industry, the Midlands industry, derives its strength from the fact that it is extremely diverse and is made up of a multiplicity of very small firms.

The last time that I looked at the figures of Birmingham industries, which was two or three years ago—I am speaking now from memory—there were then 11,000 industries in Birmingham each employing less than 20 people. The jewellery industries are made up of a great many small units, very often family units, and even if not related family units, groups of individuals of two or three families who have for generations worked closely together, employing only two or three people and using small shops in back streets which are sometimes described as rabbit-warrens, but which, nevertheless, are very efficient production units.

Those who maintain that the modern streamlined factory is essential for cheap productivity are not always right. One will often find that even in a modern streamlined factory, and after putting everything into perfect shape, on-costs have gone up so much that production costs are not less but more. There is a great deal to be said for these little industries working in their rather primitive factories. I also want to emphasise that in this way—

Mr. W. R. Williams (Droylsden)

A good Socialist view.

Mr. Usborne

Did I understand my hon. Friend to say "Good Socialist patter?"

Mr. Williams

No, I said a good Socialist view.

Mr. Usborne

I do not know whether my hon. Friend is being cynical about it, but I think it is better Socialism to have a friendly atmosphere in which the people work. If the factory is mechanised, large and glamorous it is not necessarily friendly because then the individuals employed may then tend to become streamlined like the machinery and the factory layout, to become soulless automatons rather than good pals.

The problem of these small factories is a vital problem to which the Government of this country in particular must give very careful attention. The prosperity of Britain today, and certainly in the future, will depend upon whether we can maintain our craftsmanship. We shall never be able to compete with the mammoth industries because, in the first place, America has the immense natural domestic doorstep market which is an essential prerequisite of large-scale production.

I rather suspect that in the very near future we may see, as I hope we shall, an integration of the nations of Western Europe producing as a very large Customs free economic unit in which, I am afraid, Britain will not be in on the ground floor. They will develop the same kind of large-scale advantages which the Americans now enjoy, and in this sense Britain will be isolated from both of them.

We should not try to compete on a large-scale production basis. We should remember the fact that wherever large-scale moving belt streamlined production is used, it will result in driving out skill and craftsmanship. The two things are incompatible.

Sir H. Williams

Except in the tool room.

Mr. Usborne

Yes, it is possible that so long as an independent tool room is maintained a certain amount of craftsmanship can be kept, but after a time even that will tend to ascape. I do not know why it is, but I am sure it is analogous to the incidence of the grey and the brown squirrel. For some reason or another the grey squirrel does not kill the brown squirrel; it frightens it away. The two cannot live in the same territory. Nor can craftsmanship and mass production survive in the same shop.

The tendency these days is to undercut in a highly competitive market the price of the product of a competitor. It appears at first sight that this is done by getting industry to unite in ever bigger units. That may be true in certain parts of the world; but I am sure that it would be a mistake for this country. The backbone of British industry must depend upon the small firms and their skill and craftsmanship.

I wish to emphasise some of the problems which small firms have to face and which are peculiar to them. In the first place, they depend very largely on a demand which can fluctuate very rapidly as a result of Government action. For instance, one of the reasons why, in my view, the jewellery trade is now suffering from a very considerable depression, and why it is, indeed, as my hon. Friend the Member for Aston mentioned, almost on the verge of extinction, is that in the last two years the standard of living has been falling in this country and people cannot now afford to buy those items of luxury to the same extent as they did before.

Sir H. Williams

The consumption of beer is going up.

Mr. Usborne

The hon. Member knows more about that than I do. It is quite possible that is so, but the consumption of luxury articles for the adornment of the fair sex is evidently not increasing to the same extent. The jewellery industry in Birmingham, for example, is very dependent on the general standard of living and the buoyancy of trade and full employment in this country.

The hon. Baronet concluded his remarks by saying that he did not necessarily ask the Government directly to salvage this industry, but that he did expect the Government to provide a climate which made it possible for little firms in the industry to flourish. I do not want to introduce too much party politics into this debate, but I must point out that what is happening today is that the Conservative Party in power today, whether it likes it or not and whether it meant to do so or not, has destroyed the climate without which this trade cannot survive.

It has upset a buoyant economy, and has produced, as many hon. Members have openly admitted, an economy of under-employment. That is a polite way of saying an economy in which a considerable amount of unemployment prevails. As a net result, two things occur. First, the consumer demand for luxury and semi-luxury goods is falling right away, and the jewellery trade is directly hit. Secondly, and of paramount importance, in an economy of underemployment, an economy in which there is not full employment, in which there is not buoyancy and not an expanding productivity, there is considerably reduced efficiency in the small firms. I want to spend a few minutes explaining that remark, because I think it is of importance.

Many sincere and thoughtful Conservatives have said to me in the past, and have openly argued in the Press, that the British worker has been idle for the last few years because he has not had the spur of possible unemployment, and that if full employment—which was the proud result of the Labour Government —were taken away there would then be increased efficiency due to the fear of the sack for the worker. I have never believed in that, and the figures show conclusively that, although there is now the spur of unemployment, national productivity per man-hour is falling; the national product is not getting bigger, it is getting less.

It may be true that in some very big firms the fact that employees are frightened of being fired produces efficiency. I will not deny that it could happen, although I should like to add in parenthesis that, from my experience in and around Birmingham, I have not yet found any firm the management of which admits that the efficiency of work in its own factory has increased since unemployment has increased.

I am not denying that theoretically that might be so, but I do say categorically that in small firms, which are virtually friendly family units, the fear of unemployment, of working themselves but of a job, is the worst possible incentive, because in a small firm, such as most of those in the jewellery trade are, everybody knows precisely how many orders there are on the books; they know perfectly well how many hours they must all work before they clear those orders off the books; they know from their friends on the selling side of the industry the prospects of more orders, and if it becomes apparent that by working harder they will all be out of a job soon, they obviously cannot be persuaded to work harder—nor would it be right that they should do so. Incidentally, not even the management or the proprietors of such firms would ask their employees to work extra hard if they know perfectly well that in two or three weeks they will, as a result, have to fire some of their staff.

If, on the other hand, by keeping the same tempo, not increasing efficiency, they can, nevertheless, clear the orders from the books, it can be argued that at long last there is an opportunity to get some goods on the shelves which the salesmen can sell from stock. Now I do not believe it creates a good psychological atmosphere for achieving increased production in any firm to have it known—as in every small firm it would be known—that the stuff being made on the bench is going on to the shelves in the stockroom.

That is, in itself, a considerable deterrent. They know perfectly well that it is merely building up stock which appears on the shelves only because it is unwanted, and nobody knows what will happen to it. No team of people works faster, or even as fast as they have done, when they know their products are merely stacking up on the shelves. Furthermore, with the present incidence of taxation and the financial difficulties every firm faces, few can afford to carry the amount of stock that they could in the past.

There are many other points I should like to make, but I will make only one. The Government ought to realise that many of these little firms, precisely because the future of industry in Britain depends upon the little firms, must be helped in some way. An ever-increasing proportion of the national economy now flows from the purchase of Government Departments in one way or another, but it has been my experience as a small Birmingham trader that Government Departments are not easy to deal with, in the sense that they tend always to place their orders with the big firms whom they know well.

I know it is difficult, boring and a nuisance, for Government Departments to search out the little firms and try to give small slices of the big orders which they must place to a multiplicity of little people. It is much easier for the official in a Government Department to call up the representatives of the big firm he knows very well, whom he is constantly seeing, and to say, "Look, the Department want the following goods. This is a big contract. Can you take it on? Can you quote us in bulk for the whole lot. If part of it is not right up your street, perhaps you can get someone to sub-contract for you."

I think that is wrong. If Government Departments hand out to a few favoured big firms the whole of the contract and then expect the big firms to sub-contract parts to little firms, it will be found— as I certainly have found from my own personal experience in Birmingham—that the big firm takes all the best parts of the contract and sub-contracts only the sticky bits which will probably carry no profit.

Only a very few big firms—and there are not many in Birmingham—can afford to keep a London office and London salesmen who are constantly in touch with Government Departments, and who are known to the officials in those Departments when contracts have to be placed. It is not good enough for Government Departments in London to expect small traders to be able to come to London, or to go any great distance, constantly to be interviewing those Departments. I know it is difficult for Government Departments to send out their buyers, the people who place the contracts, to interview all the little firms in their own towns and in their own factories, but something more along these lines ought to be done, because only the comparatively big firms can afford to employ and to pay individuals who spend most of their time making contacts in the Government Departments in Whitehall.

Sir H. Williams

Surely the hon. Gentleman is aware of the fact that the Ministry of Supply have branch offices in all the big centres where they are buying things. There is no need to come to London.

Mr. Usborne

I have heard it said that there is no need to come to London. I have 20 years' personal experience of running a small Birmingham factory, widen I still run, and we could and did go to meet Ministry officials in Birmingham, but most of the contracts we actually obtained were obtained through London and not through the local administrative offices. It is fairly well known in the trade that it is not enough merely to make contact with the local office.

I know that this is a difficult problem, but it is one which needs going into carefully. I simply wanted to take this opportunity of emphasising that it is the bounden duty and responsibility of the Government to foster and to help the small firms, to realise their difficulties, and to try, as far as possible, to maintain a climate of buoyant economy, prosperity and full employment, because without that the little firms go down even though the big firms may keep going. Without the little firms there is no future for Britain.

Finally, to sum up what I have been saying in the earlier part of my speech. first we must simplify the incidence and form of Purchase Tax; second, we must remember that the small firms are, for the most part, very small indeed, that they cannot by their very nature operate like the bigger people; and, third, that the Government buying departments have a big responsibility to search out these firms, to put work in their way so far as possible, and to help them get the job done.

If the Government would do that, we shall all be extremely grateful, and I know that the industrialists in Birmingham and many of my constituents who work in these factories will be indeed grateful to the hon. Baronet who brought forward this Motion and gave us an opportunity to debate it.

12.41 p.m.

Mr. Bernard Braine (Billericay)

I should like to take the opportunity to congratulate my hon. Friend the Member for Handsworth (Sir E. Boyle), not only on his success in the Ballot, but on the informative and engaging way in which he addressed himself to this important subject. He said, in the course of his remarks, that he did not wish to overstate the case of the effect of Purchase Tax on this craft industry. I think that I should say at once that the experience of the jewellery and allied trades in this matter is not unique. It is shared by other trades producing goods which require a high degree of skill in their manufacture.

Nor is it a new problem. I must say that I very much regretted the remarks of the hon. Member for Yardley (Mr. Usborne), who seemed concerned to link the present depression in the jewellery and silverware trade with a lack of buoyancy which, he alleged, was attributable to the present Government's policy. That is complete and utter nonsense. The problem facing this industry is almost as old as Purchase Tax itself.

Indeed, the hon. Gentleman should refresh his memory by reading the Douglas Committee Report. He will remember that the Douglas Committee, concerned with goods for which there was a Utility scheme, sat in 1951. Commenting on representations that quality production was suffering, the Committee reported: We have sympathy with the fears which have been expressed my many industries that a change of this order in the pattern of production might very soon discourage recruitment of the skilled craftsmen on whose efforts the quality and prestige of many British products, particularly in the export markets, have in the past depended. The same forces tend equally to discourage the small craft industries whose products are, in the nature of things, different from and more expensive than the machine-made goods which the Utility schemes were devised to cover. That was in 1951, before the present Government came into power. This is not a new problem; it is as old as Purchase Tax itself.

Mr. J. Edwards

Would the hon. Gentleman not agree that it is substantially a good deal older than Purchase Tax itself? I should have thought that the position of industry before the war showed many of the symptoms about which we are now complaining.

Mr. Braine

On the contrary, in 1938, according to the Birmingham office of the Ministry of Labour, the number of insured persons working in Birmingham in the jewellery and silverware industry, not including people engaged in the manufacture of fashion jewellery, was 16,691. By 1952, the figure dropped to nearly half —8,208.

I do not object to taxing consumer goods. It has been done before by means of Excise and Import Duties. But Purchase Tax is a tax upon production. I agree that in time of war it may be fully justified. Purchase Tax was a most effective instrument during the war years for discouraging production of a certain kind and for curbing inflation. Indeed, there were advantages in having a large reserve of skilled craftsmen who could be drawn into the war effort.

On the other hand, anyone who argues that in peace-time this sort of production ought to be discouraged ought to have his head examined, because the earning capacity of the craft industries is out of all proportion to the number of work people engaged in them. I would say, as a general principle, that where Purchase Tax can be shown to have reached the point where it is damaging craftsmanship, where it is lowering the standard of quality, where it is freezing the initiative of designers, and where it is undermining faith abroad in our ability to produce the best, it is a bad and uneconomic tax, and something ought to be done about it.

In the jewellery and allied trades and. indeed, in the fur trade, with which, as the House knows, I have some connection, and in the leather goods trade. Purchase Tax has become a tax upon skill, upon quality, upon beauty and upon the fund of British craftsmanship. What distresses me is that some people seem to be quite indifferent to the fact that the fund of craftsmanship is drying up. Some seem to think that it will never dry up. It is drying up in this particular industry.

Purchase Tax at the rate of 100 per cent. has almost killed the domestic market for silverware and fine jewellery. It has priced quality goods out of the market. I have been told by retailers that they are reluctant to stock up with high-quality goods for sale to possible Coronation visitors, because there is always the chance that they will not be able to sell all their stocks and will be left with goods which cannot be bought because of the price, which is beyond the range of the ordinary customer.

I assert that the position has arrived where the tax collected in respect of sterling silver is almost negligible. The true state of affairs is concealed because receipts of tax from all sections of the jewellery trade are bulked together, and the increased home trade that has been taking place in cheap imitation jewellery has concealed the drop that has taken place in sales of high-quality goods.

Mr. Usborne

The hon. Gentleman was saying a moment ago—and forcibly, too—that Purchase Tax of 100 per cent. was killing the industry. What evidence has he or anyone to show that if Purchase Tax were substantially reduced the sales of these particular articles would greatly increase? Leaving aside the fact that Coronation year is a special and isolated case, and that it may be true that more could be sold and more cheaply, is there any evidence, assuming that even if on many of these articles Purchase Tax were completely abolished, sales would greatly increase?

Mr. Braine

It is very difficult to produce evidence in a particular trade where 100 per cent. Purchase Tax has been levied for a good many years There is no yardstick by which to measure. But it is generally accepted—and it was accepted by the Douglas Committee— that the incidence of tax on craft industries was seriously affecting production. The hon. Gentleman is surely not going to argue that a reduction of taxation would have no appreciable effect. People still have a desire for beautiful things. If beautiful articles could be brought within the range of their pockets through a reduction in Purchase Tax I am certain that people would buy them.

Reduced production is increasing costs, and it is doing so in the industry at a time when many overseas markets are completely closed to us and trading difficulties elsewhere are very great. Capacity to introduce new patterns has been reduced. Designers are frustrated. Skilled craftsmen are being turned off. I have already given the House some figures which prove the point. I am told that the only way in which some firms are able to keep their craftsmen going is to employ them making objects which have been classified by the Arts Council as objects of art, for they are then tax-free, but the scope is very limited.

Is it surprising that in these circumstances the intake of apprentices and trainees into the industry has steadily declined? Is it surprising that the average age of the workers in the industry is between 60 and 65? As Emerson said many years ago: Skill to do comes of doing. A man is not rated as a good silversmith until he has passed 40. What future can there be in an industry which young people are not entering? Surely some regard must be paid by those who devise our taxes to the effects of taxation upon the whole future of an industry.

It is no use saying that these difficulties obtain only in the jewellery trade. It would be out of order for me to refer in detail to the trade with which I have some connection—namely, the fur trade —but that also happens to be one which bears Purchase Tax at the rate of 100 per cent., and the effect of that has already resulted in a decline in the number of craftsmen employed and in a diminution in the numbers of young entrants. It is pertinent to observe that for every 10 youngsters entering the fur trade before the war to learn what can only be acquired in a lifetime of skill and experience, only one is coming in today.

There is no reason in the world why these craft industries should remain located in this country. We have no silver and we produce no furs; all we have is that skill, and we are finding that others can make these things, too. The fund of craftsmanship is not inexhaustible, and once it has dried up it cannot be replenished. It is a matter of the highest importance that this House should jealously guard our fund of skill and craftsmanship.

Mr. W. R. Williams

I agree with that sentiment, but every report in connection with our war effort stresses that never in its history has this country had a larger number of people employed on precision work requiring the high standard of skill attained during the war. How can that be reconciled with the hon. Member's statement?

Mr. Braine

I do not follow that line of argument. I said that during the war Purchase Tax was an instrument deliberately designed to discourage certain production and to encourage other forms of production. It was a most fortunate thing that this country had a comparatively large reservoir of skilled craftsmen who could be switched from an industry regarded in war-time as inessential to one regarded as essential. But the country is now at peace and is engaged in a struggle to make ends meet and it is vital for us to encourage in every possible way that skill and craftsmanship which alone can maintain our position in the world.

Mr. Williams

I agree that it would be ridiculous for anybody to suggest that we did not need to retain this high degree of skill and efficiency in precision work, but I am not prepared to concede to the hon. Member that this can only be done in the small hole-and-corner ways about which we have heard this morning. There is a tremendous amount in the argument that the wider the scope of our activities the better are our possibilities of attaining increased skill and efficiency.

Mr. Braine

I do not think we are really at cross-purposes. If the inference behind the hon. Gentleman's remark is that the employees in the industry have left it in order to enter other industries, that makes complete and utter nonsense of the argument of the hon. Member for Yardley, who said that unemployment was being created.

I am not suggesting for a moment that there is not widening scope all the time in this country for skill and craftsmanship. What I am saying is that in these fields where we have an enviable reputation for the production of goods of high quality—this applies not only to silverware but also to fur garments and leather goods—it is a fundamental duty of the House and the Government of the day to safeguard that reputation. If we cast it away, we shall have lost something which we can never replace.

12.58 p.m.

Mr. Victor Yates (Birmingham, Ladywood)

I have much sympathy with the views expressed by the hon. Member for Billericay (Mr. Braine) because I felt that my hon. Friend the Member for Yardley (Mr. Usborne) tended to look at the problem from a political point of view rather than from the point of view of the immediate difficulties.

Responsibility for the industry's situation goes back some way and certainly to the beginning of Purchase Tax. My constituency touches part of the jewellery industry district in Birmingham, and my knowledge of the district goes back about 30 years to when I used to pass through it every day on my way to business. I have observed from year to year the difficulties which have been experienced by that industry, and I have come to the conclusion that it is not possible to deal with its problems other than by a fundamental change of attitude on the part of the Board of Trade and the Treasury towards the industry. That is vital.

In 1946, one of my constituents wanted to float a company in Birmingham for the manufacture of fashion plate jewellery. He managed to get two Czechoslovakians who had had experience of that trade in their own country. He thought how valuable it would be for the export trade of this country, but the Board of Trade, a most inflexible Department, with which only the War Office can compare for a hidebound sort of discipline and for rigidity, said "No, we cannot have Czechoslovakians on the board of this industry in Birmingham."

We had to pursue the matter and fight the case. I had to go to the Board of Trade offices to try to convince the officials that it would be good for Birmingham to manufacture the sort of jewellery that was produced by Czechoslovakia, for which there was a good demand on the Continent. Eventually we got the company floated, but only after a struggle. That company today is doing extremely well. Its exports have not yet reached the figure of 60 per cent. but they have reached a high percentage. I have seen that firm rise from small beginnings to become a very important industry.

That firm today is labouring under difficulties such as have been enumerated in this debate, some of which I want to mention. Unless there is a complete change of attitude by the Board of Trade to this industry, I do not think that any great improvement will come about. When I speak of "change of attitude to the industry" I mean that it is wrong to say that it is a luxury trade. Anything which brings culture to mankind is a necessity.

Here I would disagree with my hon. Friend the Member for Aston (Mr. Wyatt), who I am sorry is not here at this moment. He said that an important reason for maintaining craftsmen in this industry was because of the rearmament programme. The skilled craftsman who brings beauty and culture into the world is engaged on much better production than the manufacture of atom bombs. If his work means that there is less available for the war machine, I would not be very deeply distressed, even if my hon. Friend was.

Mr. Emrys Hughes

This is the most sensible contribution to the debate yet, but is not my hon. Friend's argument that the main enemy of the jewellery trade is the rearmament programme.

Mr. Yates

In general, I hold that the rearmament programme has damaged this industry. Since it was initiated it has had a tremendous impact upon the industry, and when it was announced by the previous Government I called attention to the difficulties that would be experienced in Birmingham as a result.

Like other Members of Parliament from the city of Birmingham, I have been invited to attend the famous jewellers' banquet. I have the utmost sympathy with the manufacturers, who explained to me time and time again about all the regulations and demands which were being put upon them, and they told me that it would mean they would gradually become extinct. I find that when the previous President of the Board of Trade attended that jewellers' function they were rather rude when he was talking. I do not blame them if they were feeling strongly about the position, but I was particularly interested this time to note—I was not present at the function—that the principal speaker was the right hon. Gentleman the Secretary of State for War.

According to "British Jeweller," which is the official journal of the British Jewellers' Association, the right hon. Gentleman said this: He believed that most people were hoping and wishing that there could be some reduction of taxation. Above all things, there was nothing that would be a greater tonic to industry than some reduction in that field … Those were malters equally well-known to the Chancellor and the Government, but before its fulfilment stood an obstacle which to a considerable extent comprised himself and the two other Service Ministers. Their demands and difficulties were one of the major obstacles to any marked reduction in taxes. The central problem which influenced almost every action of the Government, which was constantly being considered, was to strike a balance between the needs of defence and the needs of economic recovery. I thought that was rather interesting. I do not believe that the Government have struck the right balance.

I am now going to refer to the Working Party Report on Jewellery and Silverware. That Report embraced three aspects of the matter. First there was Purchase Tax. I do not think that tampering with Purchase Tax is the real solution. I agree with what the Report says on page 77: But we feel bound to emphasise that, viewed simply from the point of view of its effect on the health of the industry, the purchase tax has made a thoroughly bad start in the jewellery trade in its impact upon fine jewellery and fine silverware; we do not see how the evil effects can be avoided except by the abolition of the tax. I say that the Government at that time had a clear warning from the Working Party, the chairman of which was an extremely able man who had gone into this matter most carefully. I cannot but feel that the evils which the Working Parly foresaw are with us today in a most horrifying way.

The second point mentioned in this Report, and which I myself have noted as I pass through my constituency and through Aston from time to time, is the industry's working conditions. The workers appear to be so used to their conditions that they seem hardly to be aware how bad they are. They are proud of their craft and their own skill. They take pride and pleasure in the work of their own hands, but the conditions are bad. When I have seen the unhealthy conditions under which some people are working in the jewellery quarter of Birmingham, I have asked myself how the industry could provide the conditions that are required if it is being hamstrung with all the difficulties and regulations which are being imposed upon it.

There is another very important point which has not been mentioned in the debate. The Working Party said: They do not, so far as we can judge, encourage their children to enter the industry. Many of the craftsmen wish their sons to be craftsmen after them, but they do not regard this industry as a favourable one for the rising generation. I notice that Mr. Southam, a director of the British Jewellers' Association, making comment on a letter which appeared in "The Times," said that the volume of trade was not nearly sufficient now to absorb young people from the art colleges and technical schools whose ambition was to become craftsmen.

He said that it took 10 years to train a craftsman, and that in the absence of newcomers the average age of those employed was as high as 60 in some firms. It is very unfortunate that in a wonderful craft like this we should see the loss rather than the retention of skilled workers, and an inability to provide opportunities for training to those who wish to come into the industry.

I want to quote from a letter which I have received this morning from a jeweller in Birmingham, but before I do so I should make reference to a question which bears upon what I want to say. My hon. Friend the Member for Aston mentioned that he had been in consultation with the industry. In this publication "The British Jeweller" there is a record of what apparently took place. On page 68 is a report headed: M.P. Hears Trade's Difficulties and Promises His Support.

Sir E. Boyle

What is the volume?

Mr. Yates

This is the most recent issue, for March. This report contains the following: Lieut.-Colonel A J. Round said that although, as outwork platers, his firm was not directly concerned with purchase tax, it dealt with goods which were The Customs exercised their authority and regularly went through his firm's invoices, amounting to some 10,000 a week. These invoices were checked by purchase tax inspectors to see if the manufacturers had told the truth. This checking kept hundreds of men employed in Birmingham alone, and this army of officials could be cut by 90 per cent. if there was a flat rate of tax. There is a Board of Trade and Customs and Excise Department in Birmingham, and officials are certainly there in no small number.

The letter which I have received this morning is from a manufacturing jeweller. He refers to the officials, and says that the trade is being strangled by the methods used by the overwhelming number of civil servants who litter over the industry like a swarm of locusts. I shall not be as strong as that, but that is what he says.

I should like the Parliamentary Secretary to note this extract from the letter: I have just returned from an extended business journey, visiting four Continental countries, in an endeavour to break in the market with goods of British manufacture and to study their methods of production and their sales structure. I am amazed at the progress and developments that have taken place since my last visit of two years ago. To state one country only: In West Germany the industry is considered of such high importance to the national economy that they have developed a State scheme that is the second in priority of all national efforts. In an area formerly used for the storing of war material (gunpowder and dynamite) they have established a factory and dwelling site to house this industry to deal with the fashion jewellery section only. I was so struck with the development that I sought reliable information and, from the local labour exchange manager, the following facts were obtained: Two years ago the employed personnel was 2,500. Today, 21,000 people are employed. The hon. Member for Handsworth (Sir E. Boyle) mentioned the figure 19,000 in this country—

Sir E. Boyle

For Birmingham,

Mr. Yates

—but whereas in Birmingham the figures of those employed have been reduced, in Western Germany the population employed in fashion plate jewellery alone has increased from 2,500 to 21,000.

My correspondent goes on: Any proved manufacturer can obtain State help, by being provided with a factory building and a house. They can obtain capital loans at 2½ per cent, interest for capital machinery and office equipment. Consequently, all the factories are equipped with new, up-to-date types of machinery. Aid is given in obtaining the required raw material for production. Displaced people who have formerly been engaged in the industry can obtain houses and are granted a loan to a liberal amount for furnishing their homes… The exporters are given banking facilities such as are undreamed of here. I understand that deputations are going to Germany from India, Pakistan and Australia to examine the experiment which is taking place. Here we are today, seeing this development, and we are not prepared to face in a bold and vigorous manner the management of our own industry. There is a tremendous need for the closest inquiry, and I ask the Parliamentary Secretary to the Board of Trade whether the Government will seriously inquire into the position in Germany. I do not think the industry wants to be State-subsidised but it wants every possible assistance. It wants to be freed of red tape and regulations about forms. A drastic reduction of Purchase Tax is necessary, not a little one but a vast reduction, if the industry is to survive.

I am proud of this industry and its craft. In spite of the difficult conditions, I have never seen in any factory in England a greater spirit of comradeship than in the small factories in the jewellery quarters. Those people are proud of their skill, which will help to bring culture and happiness to mankind. If it were otherwise, we might just as well go back to prehistoric times.

The hon. Member for Handsworth has performed a service not only to Birmingham but to the industry and its craftsmanship and skill by bringing this Motion before the House today. Let us be assured that the House will follow it up and will see that the Government of the day, whatever mistakes may have been made by their officials or their predecessors, start on a new path which will restore this great craft industry in Birmingham.

1.20 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)

It may be convenient if I intervene at this stage in what has been an interesting and valuable debate. This industry has been the subject of three short discussions in recent months. The hon. Member for Sheffield, Park (Mr. Mulley) raised a matter connected with it in an Adjournment debate on 12th December last year. Then we had the debate on the dissolution of the Jewellery and Silverware Development Council on 18th February, and on 24th February there was another Adjournment debate to which my hon. Friend the Financial Secretary to the Treasury replied.

This, however, has been the first occasion on which we have had some hours in which to debate any aspect of the question that any hon. Member wished to raise. The House is especially fortunate in that the hon. Member who constantly wins the ballot makes such good use of his opportunities. As one who has been in this House for a number of years and has never drawn a place in anything, I have always been astonished at the frequency with which the same Hon. Member has success in the ballot, but I think everyone will agree that the hon. Baronet the Member for Handsworth (Sir E. Boyle) has made most admirable use of his opportunity today.

This is an ancient and celebrated industry and, as is apparent from all the speeches, its present state is causing anxiety and serious thought everywhere. Reference has been made to the recent correspondence in "The Times." Perhaps the most useful thing I can do is to give a little factual background by quoting some figures which may enable us to know the actual position. I want to say at once that I do not draw any complacent conclusion from those figures—I share the anxieties that have been expressed by many hon. Members—but it is important to get the figures right because accurate knowledge is the best basis for drawing conclusions.

If hon. Members will refer to the last Report of the Jewellery and Silverware Development Council, they will see these figures. I will give them in millions, omitting the odd thousands. The total production in 1935 amounted to £8 million, in 1948 to £14 million, in 1949 to £15 million, in 1950 to £15 million, in 1951 to £17 million. I have no corresponding figure, on the same basis, for 1952, but my advisers have computed a figure based on reports from some 500 manufacturers. This shows that the total production in 1952 will again be £17 million, that is, approximately the same as for the previous year, which was in excess of the years before.

Mr. Mulley

Am I right in assuming that the figures the hon. and learned Gentleman has given are the value of the output of the industry and, if so, are they with or without Purchase Tax, and has any allowance been made for the increase in costs in computing those figures? Otherwise the comparison is hardly valid.

Mr. Strauss

I agree with the hon. Gentleman that the alteration in the value of raw materials affects the utility of the figures but, as I have said, I draw no complacent conclusions from them.

Mr. Wyatt

Is there not another point? It is not only a question of the value of raw materials, but of the increase in wages and in all sorts of other costs as well.

Mr. Strauss

Certainly. I do not know if the hon. Member for Aston (Mr. Wyatt) was here when I started; I deliberately said that I thought it would be useful to give this factual background, but that I did not draw any complacent conclusions. I thought it would be useful for the House to be in possession of these figures as some estimate of where we stand in this matter.

Mr. William Shepherd (Cheadle)

Can my hon. and learned Friend give us the breakdown of these figures within the industry? Do they take into account the fact that a large number of the silverware firms are doing a good deal of work outside the silverware industry because they cannot find jobs within their own trade? Do these figures include the work done outside the sphere of their proper trade?

Mr. Strauss

I am not quite clear what my hon. Friend means by "their proper trade," but it is certainly what they do in the trades with which we are dealing in this Motion. I do not have the analysis of the different branches, but I have an analysis of the reports we get from the 500 manufacturers showing the production in the different sections. Perhaps it would be to the convenience of the House if I give the 1952 figures. These are: Jewellery made of precious metals, £3,579,100; jewellery made of other materials, £2,492,200; making a total for jewellery of £6,071,300. Goldsmiths' and silversmiths' wares amounted to £3,543,600, making a total of £9,614,900. In reply to the hon. Member for Sheffield, Park, the figures I gave just before his intervention were without Purchase Tax.

Turning to the employment figures, the Ministry of Labour returns show no great change in the course of the year. There are also two figures relating to the weight of silver assayed, which I will give to the House. Again I give the warning that I make no over-optimistic deductions from them because, as the hon. Member for Aston (Mr. Wyatt) and others have said, there was a serious decline in the last quarter of last year.

I thought that the House might like to know the latest figures, of the silver assayed in the first two months of this year as compared with last year. The figures, in troy ounces, are:—Birmingham: last year, 86,285; this year, 84,148. London: 1952, 41,504; this year, 40,466. Sheffield: last year, 53,351; this year, 47,907. The addition of the three figures gives a total for last year of 181,140 and for this year of 172,521.

Mr. Wyatt

Does the hon. and learned Gentleman realise, however, that the reason the figures are still more or less the same in the first two months of this year as compared with last year is that the manufacturers concerned are loath to dismiss old and trusted workers and are piling up on their shelves any number of these goods which they cannot sell? Every one of them in the jewellery quarter of Birmingham has stacks of unsold goods of this kind.

Mr. Strauss

I am sorry if the House thinks that I ought not to have given these figures, but I have given them with every warning and because I thought that the House would like to have the facts. 1 agree with the reason that prompted the hon. Member's intervention; it would be wholly wrong to draw optimistic conclusions and to assume that there was no substance in any of the fears which have been expressed this morning on both sides of the House. The hon. Member may not have been present earlier when I paid tribute to the speeches that have been made and said that I shared the anxieties but thought it might be useful if I gave some sort of factual background because, through my advisers, I might have information which was not in the possession of the House. I was about to give a warning of the kind which the hon. Member has just suggested.

Some of these manufactures have been prompted to come forward by the attraction of the Coronation mark. There are a number of matters that should warn us not to exaggerate the effect. Nothing that I say is designed in any way to minimise the seriousness of the matters to which previous speakers have drawn attention. My sole desire is to be helpful to the House by giving the latest information which is in my possession but which may not be in the hands of other hon. Members.

Mr. Mulley

I thank the hon. and learned Gentleman for that helpful explanation. Would he be so kind as to see that his words are written in letters of gold in the Treasury, because we feel that the Treasury look only at the figures and do not pay so much attention to the underlying factors?

Mr. Ede

If written in letters of gold, they would be subject to Purchase Tax.

Mr. Strauss

I was coming to a matter which directly concerns my right hon. Friend the Chancellor of the Exchequer. As the House knows, my right hon. Friend carefully reads and studies everything that is said in debates of this kind in matters pertaining to his great office.

On the causes of the decline, I was glad that the hon. Baronet and other hon. Members, in considering the interests of this industry, were not guilty of what would be a great mistake, namely, oversimplification. There are many matters which may cause difficulty to the industry. There are changes in public taste. There is the very different spending power in the hands of those who were once in a position to commission the making of articles of silver. There are differences in the sort of houses that people live in, and there are the difficulties in the markets to which we export.

These difficulties, of course, have not come wholly unexpectedly. The Working Party Report mentions some of them. When I read the Report again last night, this sentence seemed to me to express some of them so well that perhaps I may quote it. The passage on page 59 relates to the position at the time of publication in 1946: The products of this industry are in many cases selling for two or three times the prewar price, and in some cases at an even higher figure. Volume for volume, exports at present may be only one quarter to one half as great again as they were before the war. Moreover, there is what appears to be an almost insatiable and uncritical market due to starvation in regard to goods of this kind in the war years, and main competitors are wholly or almost wholly out of business in the export field. I quote that to show that some of these difficulties, which hon. Members know so well through their knowledge of the industry in their constituencies, are not wholly unexpected. They were to be expected in the natural evolution that was foreseen by the Working Party.

I support the remarks of the hon. Member for Ladywood (Mr. Yates) regarding the impressive rise since the war in the standards of quality and design abroad, particularly in the United States, not only of craft goods but of goods produced in quantity.

Every hon. Member who has spoken has mentioned Purchase Tax, coupling with his remarks the hope that this matter would come to the attention of my right hon. Friend the Chancellor of the Exchequer. As was promised by my hon. Friend the Financial Secretary to the Treasury in replying to the recent debate on 24th February, my right hon. Friend the Chancellor will study what has been said.

Those who have spoken have adopted as part of their argument what is said in Chapter 9 of the Working Party Report and in paragraph 46 of the recent Report of the Development Council. My hon. Friend and others mentioned the export markets, and there are, of course, difficulties in the export markets. I have the comparative figures in the value of the exports to the principal markets in the last two years, but I do not think I need trouble the House with details because the difficulties are known to all.

Import permits for jewellery and silverware are being refused or restricted in a number of countries, in the Argentine, Australia, Bolivia, Brazil, Chile, Denmark, France, India, Norway, South Africa, Turkey and Uruguay. High import duties are imposed by a number of countries. As I said in reply to the debate on the Adjournment raised by the hon. Member for Sheffield, Park a number of countries are deliberately fostering the home industry. This is so in the Argentine, Brazil, Canada. India, Malaya, Peru and South Africa.

There was one figure which my hon. Friend who initiated the debate did not get quite accurately. He said that possibly he was not accurate and he realised the danger of the figure. According to our best estimate, on the basis of returns from manufacturers to the Board of Trade, the export proportion in the last three years, 1950–51–52, was 35.5, 38.7 and 34.8 per cent., respectively.

Mr. Mulley

Has the hon. and learned Gentleman the figure for 1947, as that was the peak with which we compared the amount of silver assayed?

Mr. Strauss

I am afraid 1 have not got that at the moment, but I will endeavour to let the hon. Member have it. A number of hon. Members have referred to nickel restrictions. Those are the last of the restrictions and, unfortunately, it is still necessary to impose them. When I replied to the hon. Member in December I was able to announce the abolition of certain of these controls and to give a hint of a forthcoming relaxation which we desired and which since has been accomplished.

I recognise the desire of my hon. Friend the Member for Handsworth, the hon. Member for Aston and others that the remaining restrictions on nickel should go. I can assure them and the House that their wish is fully shared by my right hon. Friend. The trouble is that there is still a world shortage and supplies remain subject to international allocation. That imposes the necessity of economy. There is the further fact that the O.E.E.C. have a common list of prohibitions agreed between them. Nevertheless, I would assure the House that it is our desire to get rid of these restrictions as soon as that can be done, and the possibility of further relaxation will be carefully studied.

Mr. Wyatt

It is not actually now the shortage of nickel that is holding the matter up but international agreements, is it not?

Mr. Strauss

I think it is all the things I have mentioned, the world scarcity, the system of international allocation and the agreements; all those factors play their part.

The hon. Baronet dealt with problems of the assay offices and mentioned the antiquity of the various statutes. He suggested that it might be useful if the question of consolidation were studied. I think that a study of these statutes will show that consolidation without first a certain amount of modernisation and amendment would not be useful and any amendment would require a great deal of preliminary examination. Among other things, we should want to know the attitude of the assay offices, and I think it right to point out that so far we have received no requests for consolidation. But I will certainly consider what my hon. Friend said.

My hon. Friend raised a matter in this connection with which I think the House would wish me to deal. He suggested that perhaps the law should be so modified that sub-standard silver could be exported to countries where it would have a sale. I do not want to go into that matter now, but it is a highly controversial suggestion, on which there might be a great deal to be said on the other side. One of the historic reasons for this legislation was to prevent the loss of overseas markets through debasement of quality. I think we should have very carefully to consider whether the reputation of English silver might not suffer if something which could be accurately described as English silver were not of the quality which at present the law requires. It would certainly be a major departure from previous policy. I would remind the House that the Act of 1738 specifically includes goods for export within its scope.

My hon. Friend mentioned the fact that a memorandum had been sent to the Board of Trade on the subject of misuse of our hall-marks by American manufacturers. That would be a matter of the greatest importance to United Kingdom manufacturers and to our interests as an exporting nation. We shall certainly take whatever action seems most likely to produce the best results. We are in consultation with our Embassy in Washington on this matter.

May I say a word about a matter which I know interests many on both sides of the House? That is the question of design. I might mention at this point a matter raised by the hon. Member for Yardley (Mr. Usborne) who drew a great distinction between what was produced by the craftsman and what was produced by the machine. Of course, he is quite right in thinking that quite different qualities are required in the two cases. But it is equally true that design is important in each. I may remind the House of what I expect is already in the minds of hon. Members, that the meaning of the word "manufacture", or manu factum, is that which is made by hand. Yet, by a natural and quite legitimate transition, we apply it to the product of the machine because the machine is using human skill at one remove. I do not want to go into the question of design and aesthetics too much, but I think that nowhere is good design more important than in the products of the machine. While machines should not be used to imitate a hand-made article, that does not mean that a machine-made article cannot be most admirably designed.

I think almost the only controversial thing said in this debate was said by the hon. Member for Yardley. I do not wish to be controversial, but since he said that we want a buoyant economic climate which this Government had destroyed with consequent injury to this industry, I would remind the House that if a buoyant economic climate was what was being enjoyed when Her Majesty's present Administration took office, then it was a climate which, had not its tendencies been reversed, would have brought starvation and widespread unemployment by last summer. I make that remark entirely non-controversially just to show the hon. Member for Yardley that I could, if necessary, make a party point —and a party point that has complete truth to support it.

I was asked by my hon. Friend the Member for Handsworth about whether grants could be made under Section 11 of the Industrial Organisation and Development Act, 1947, which enables the Board of Trade, with the approval of the Treasury, to make grants to design centres. The answer is yes, and that is, indeed, our intention, on this condition: if the industry itself voluntarily contributes to support a design centre, authority will then be sought to continue the grants on similar principles to those that have operated hitherto.

I know that there are other hon. Members who wish to intervene in this debate, so I will only say this in conclusion. The prospects of these industries will depend primarily on the efforts of the manufacturers, craftsmen and workers in the industries, but where the Board of Trade can help the Board of Trade are determined to do so. Our silversmiths in the past have done work of unrivalled excellence and beauty, as some splendid exhibitions organised by the Goldsmiths' Company have proved, and as an exhibition they are about to have this year will prove again. It is very suitable, I think, that a revival of consciousness of the beauty of the products of this industry should become more widely spread in this Coronation year. The House will support me in the hope that this great industry, in spite of all its difficulties, may have a future worthy of our traditions and our skill.

1.54 p.m.

Mr. John Edwards (Brighouse and Spenborough)

At the time we considered a Motion about the Jewellery Development Council I thought, and, I am sure others thought, that it was a great pity that we had such limited time for it. When, therefore, the hon. Member for Handsworth (Sir E. Boyle) was lucky in the Ballot and selected this subject, I thought it admirable and at once complimented him upon it. As I have listened to the debate—and I would say that I cannot claim to speak with that direct constituency interest which most hon. Members who have spoken have—I have wondered, however, whether hon. Gentlemen were not slightly inclined to over-emphasise the function of Government in relation to the industry and to under-estimate what the industry had to do itself.

I am inclined to ask, were there no difficulties in the industry before the war? Is there anything for the industry itself to do? In asking those questions, I do not want in any way to diminish the force of what those who have spoken before me have had to say about such matters as Purchase Tax, trade policy, nickel restrictions, hall-marks, or those other matters in which the Government are necessarily to a great extent involved.

Many of us have obviously been rereading the Working Party's Report. I re-read it last night, as obviously did some other hon. Gentlemen. I recollect reading it first when it come out. I was at the time Parliamentary Private Secretary to Sir Stafford Cripps, and it was, therefore, a matter of duty to read these working parties' reports as they appeared. This Report struck me at the time as being a first-class job of work. It really stirred not only one's ordinary interest in economic affairs but one's imagination as well, and I believe that it still stands out and is worthy of the quotations that many hon. Members have drawn from it.

However, as I re-read this document last night I wondered whether the things that are in it have really been taken to heart, and whether the industry would not be a good deal better today if some of the recommendations embodied in it had been put into effect.

Mr. Mulley

By the Government?

Mr. Edwards

Not only by the Government, I would say to my hon. Friend.

I do not know what other hon. Members felt, but I was very surprised when my hon. Friend the Member for Yardley (Mr. Usborne) rallied so enthusiastically to the defence of the buildings in which a good part of the industry is carried on, and I turned up, as he spoke, what the Working Party's Report said about it. This is what it said in general: In our view the problem of rebuilding is the most urgent and fundamental of the problems which face the industry and needs to be dealt with drastically and quickly at the earliest possible moment. The inefficiency of the existing buildings makes it impossible for the industry to have a fair chance of developing the efficiency in production necessary to enable it to compete with its main rivals either in the home market or abroad; and in the present centres of production it will not be possible, in our judgment, without better premises to recruit young labour of the quality and quantity required to safeguard future strength and prosperity. That is what it said in general.

In respect of Birmingham in particular, it says: To sum up, the large majority of the buildings are by any standards unsuitable, unhealthy, utterly uneconomic, and worn out. How my hon. Friend the Member for Yardley could possibly talk as he did about those buildings does rather defeat me. I do not want to suggest that we cannot have good teamwork, or good work done. All I am saying is that I am sure we should have better work done if some of those premises were better than they are.

Mr. Yates

I do not know that my hon. Friend the Member for Yardley was defending bad buildings.

Mr. Ede

He was.

Mr. Edwards

All I can say is that I listened with the greatest of care to him, and, in my opinion, he was at pains to insist that it did not really matter whether those buildings were like that or not; the work would be as good in those circumstances as it would be in new, good buildings.

Sir E. Boyle

I quite agree with the hon. Member, but, of course, it is hardly the industry's fault. Ultimately, the jewellery area in Birmingham will be redeveloped, but the industry cannot choose when that moment will be. That is all connected up with the problem of the capital investment programme. One hopes that redevelopment in many parts of the City of Birmingham will come fairly soon.

Mr. Edwards

I had not finished what I was saying on this subject. I do not suggest that this is a matter for the industry alone. I say, however, that if we are looking at what the industry must do and what the Government must do, there are other considerations besides those hitherto advanced. They may not be as important, but they ought not to be left out of account.

I would make the same comment about hall-marking. It is important that the whole arrangements for hall-marking and all the various statutory provisions should be looked at. I do not underestimate the task. To revise them would be a considerable job. But, looked at in terms of the future of the industry, it would be time well spent if we could, without much delay, get on to the business so that at any rate such proposals for legislation as are needed could be brought forward on the basis of real knowledge of the up-to-date requirements in respect of hall-marking.

I come to the main point which I want to discuss. We have had some reference to the importance of design. I should like to elaborate what has been said, for important though price is in any market, design can never be disregarded. All of us in our everyday shopping are not mindful merely of price: we always think of price in relation to what we are about to buy. I can think of instances in the last few years when I have paid higher prices for articles because I thought that they were better designed, rather than lower prices for goods which, frankly, I would not have bought at any price.

We must not go on behaving as though people have no discrimination—no taste. The hon. Member for Handsworth talked about manufacturers who were driven to go in for cheapness at the expense of design and finsh. That is being penny wise and pound foolish. There can be no future for the industry if considerations of design are disregarded. Again I appeal to the admirable Working Party Report, which says: It is quite clear to us that there is only one urgent problem in this connexion— they are talking about the position of the designer— namely, how to revolutionise the attitude of the industry and convince it of the importance of design. It might have been thought that the success of continental fashion jewellery would have convinced the British trade. Our evidence suggests that it has in large measure convinced the retailer, and in some degree the wholesaler; but that, with a few exceptions, it has done little or nothing to convince the manufacturer. Earlier it talks about the need for … revolutionising the philosophy of design in the whole industry, and with it the whole attitude to the industry of cultivated members of the public, nearly all of whom seem to take it for granted at present that British design is unenterprising and bad. That was written in 1946, but the truth of the matter is that those words could be said today.

If anybody doubts that that is the view, I ask him to have a conversation with anyone who is concerned with what we can broadly describe as the fashion world. At once he will hear this kind of criticism. I do not say that they are always right, but that if we have what the Working Party talked of as the "philosophy of design in the whole industry" then the whole attitude to the industry of cultivated members of the public would change as well.

It is against that background that I view with the utmost dismay recent developments in respect of the Design and Research Centre. This centre arose largely on the initiative of the Goldsmiths' Company and other leading people in the industry. The Goldsmiths' Company gave it very substantial support. It is a great tragedy that the position of the centre should be weaker today than it was even before we had a Development Council.

It has been most unfortunate that the fate of the centre has been bound up with that of the Development Council itself. The way in which the organisation has been allowed to run down is a great handicap to the industry. I do not know how many people are employed at the moment. There cannot be more than three, four or five.

Sir E. Boyle

Five.

Mr. Edwards

Its director of research has gone. Its director of design, Mr. Stanley Wright, a man of superb artistic sensibility and considerable business acumen as well, has gone also. It will be most difficult to build up this team again. Although it is good to know that the Association will back the centre—and I was relieved to hear the hon. Member for Handsworth say that—it will not be easy to build up the centre to anything like its previous position for a long time to come. One cannot organise teams for this kind of special purpose overnight.

I was grateful to the Parliamentary Secretary for his reply about the use of Section 11. I hope that there will be no equivocation whatever in the reply of the industry to the statement he made. I cannot understand how such bodies as the Goldsmiths' Company and the leading people in the industry could have been content to allow this breakdown to occur, in view of what they had done previously. I hope that even now there will be the possibility of restoring the centre and, with it, the prestige of design in this industry.

The only other comment I would make is, to quote again, with my full approval, the words which the Member for Hands-worth read from the Working Party Report: … it is in the best interests of the nation to cherish, and if possible to strengthen further the jewellery and silverware industry. There are, however, many things which no Government can do. The fact that the Government are not doing all that they could, or should, is no reason why the industry itself should not do these many things which it could do for itself if its members would co-operate with one another.

The Development Council has gone. I think that it was a mistake to let it go. The industry must find some way by which it can work together and speak with one voice. If it cannot do this then whatever is done about those matters on which the Government have influence it will not survive. The Research and Design Centre exists, but it is only a shadow of its former self.

There are many other tasks waiting to be done. I hope that the Parliamentary Secretary will go into the many matters which have been raised. I do not think that it is too late. We have here in Britain the craftsmen albeit many of them are old. We have a latent genius for this kind of activity which it is our business to develop.

2.10 p.m.

Mr. Stephen McAdden (Southend, East)

It may appear a little odd that one such as myself who represents the constituency of Southend, East should interest himself in the affairs of the city of Birmingham. It might indeed be that my only interest was in providing rest, relaxation, sunshine and fresh air for the tired workers of the City of Birmingham. It happens, however, that for 20 years, on the bench, in the factory and on the road, I have been engaged in business in connection with the products of the fancy goods trades, including quite a number of items manufactured within the city of Birmingham. Therefore, I can speak with some little experience of the difficulties and problems of that industry to which the attention of the House has been directed by my hon. Friend.

I was particularly interested in the remarks of one hon. Gentleman opposite who stressed the importance of realising that it is wrong to classify any industry as a luxury industry and leave it at that, hoping that, by so classifying it, one might exempt oneself from criticism of any action taken in dealing with what one might regard as a luxury industry. If we were to adopt the attitude of the past—the attitude that anything which at a particular period of history was regarded as a luxury should therefore be treated in an exceptional way—a great number and variety of articles which have come to be regarded as ordinary necessities of life would never have come our way.

There are many things today which we regard as ordinary necessities of life which, comparatively few years ago, were regarded as luxuries, and which, had they been subjected to the same impositions as those levied upon what are alleged to be luxury industries today, would not have been produced to the extent which exists at the present time, whereby we all regard them as commonplace necessities of life.

So it is with this particular industry, and I am sorry that the evil effects of the burden of Purchase Tax are not more fully realised, for this tax is an insupportable burden in that it has driven out those very designers to whom the hon. Member for Brighouse and Spenborough (Mr. John Edwards) made reference. I agree entirely on the importance of design in industry, but if we are to have this penal taxation on what are alleged to be luxury goods, it inevitably means that we shall have a cult of the commonplace, which will fasten upon our domestic population commonplace goods, and they will have to put up with them, because nothing better will be available for them. It is an unfortunate fact, which we have to realise, that we in these islands cannot live by taking in one another's washing, and, although we may force each other to put up with commonplace articles of various kinds manufactured in this country for our own consumption, we cannot impose on our customers overseas the same willingness to accept the commonplace which we force upon ourselves.

I know from my own experience in trying to sell British merchandise in the markets of the world that other people do not want the ordinary, simple and useful articles from us. They never expect that sort of goods, but expect something that is well designed, nicely styled and well manufactured; in short, craftsmanship production. So long as we have this penalising taxation upon this unfortunate industry, so also shall we divert the type of labour which can be used for the production of craftsmanship goods to the production of the simple and the commonplace, and that is a mistake.

It is wrong for us to assume that the type of labour which is suitable for craftsmanship production is equally well employed in turning out goods by mass production. Nor do I think this country has much of a future in the export markets of the world if we divert our production from craftsmanship goods to those which are mass produced, because in that field we have not got a chance. It seems to me that the population of this country is comparatively small as compared with the resources which are available to other manufacturing nations.

In the United States of America, where they have a very large fashion jewellery business, they have an enormous advantage. If they want to tool up production of one item, they have an enormous assured home market for which they can produce, while they can still sell their overplus at comparatively cheap prices in the markets of the world. We do not have that advantage, and in this country, if we are to pursue the development of our overseas trade along the lines of attempting to copy mass production methods of other countries, we shall not get very far, particularly in the industry to which our attention has been drawn today.

Mr. J. Edwards

Is not the hon. Gentleman being a little over gloomy here? After all, before the war, we had substantial imports of fashion jewellery from Czechoslovakia, for instance, and even today people in London go to Paris for fashion jewellery. We do not really need to despair about our position.

Mr. McAdden

I am not at all despairing, and I am well aware of the importations of fashion jewellery that we used to have from Pforzheim in Germany and Gablonz in Czechoslovakia. I am also aware that in the post-war years that competition was not forthcoming, and, therefore, we were able to maintain the fashion goods trade in this country in a rather more prosperous position than is the case today, when fashion jewellery is coming into this country again from Pforzheim and Gablonz.

It is because I am well aware of the changing trend in international trade, and of the fact of the emergence of these competitive forces which have for some years been out of the picture, but which are now perhaps coming into the picture again, that I think that there is perhaps too rosy a picture regarding our trading prospects today, because I am not unaware of the resurgence of the competition with which we were faced before.

It is a fact, and I am sure the hon. Gentleman opposite will agree, that the Birmingham jewellery industry did a remarkably good job, with the help, in many cases, of European technicians who have come to this country and helped to build up the industry here, in which they have done such a good job in fashion jewellery. I am not so sure that we can go on doing that, but I am quite sure that our safest bet, whether in fashion jewellery or in any other form of craftsmanship production, is not to allow to pass out of existence this craftsmanship and skill which the world knows exists through the craftsmanship products emanating from this country.

If I may make a passing reference to yet another industry—the leather goods industry—it is because one finds exactly the same difficulty as in the Birmingham jewellery industry. I have considerable experience of the leather goods industry, and I can say that the craftsmanship and skill which are so useful and capable of manufacturing high quality goods are not at all the same qualities as those suitable for making goods of imitation leather.

Some people may say, "What does it matter whether they are made of real or imitation leather, so long as people are usefully employed; why should we worry?" I think we should worry, because while we may force our own people to accept substitutes in imitation goods, we cannot force our overseas customers to accept them, for the reason that they can make that sort of thing much better themselves. It is only the craft and skill of British workmen that will enable us to make goods that will sell overseas.

I very much hope that the House will give sympathetic understanding to the plea which has been submitted by my hon. Friend, and will accept the view that if, through excessive taxation, these skills upon which our trade has in the past been based should disappear, or at any rate, disappear from this very important sphere, in which they are capable of being of the greatest assistance to our exploit trade, we shall be making a great mistake. I do not suggest for a moment that the skill and ability of our people is not still present, or that it is not possible to find skill and ability in the substitute industries with which we are surrounded, but these substitutes can never replace the kind of craftsmanship production upon which the future development of our trade must depend.

May I make one other reference to the question of the handicaps from which not only this but other industries suffer, and that is the rather rigid way in which they are controlled by the Customs and Excise Department in their interpretation of the Purchase Tax regulations. Like a simple fellow, I imagined that once the regulations are laid down as to the form in which this particular tax is to be operated, then, by the broad good sense, ingenuity and brains of the manufacturer, he could produce within that definition the most attractive article that it was possible to provide in conformity with the definitions which have been clearly laid down for taxation purposes.

I am afraid I must tell my hon. Friend that Her Majesty's Customs and Excise play all sorts of tricks once they have made the definition. I have always thought it a bad thing to alter the rules once the game has started, but I am afraid Her Majesty's Customs and Excise do not view the matter in that light. If a manufacturer uses his skill and ability, and his knowledge of design in order to make the article upon which he is engaged more attractive, more interesting and to have a greater sales appeal than it would otherwise have, then inevitably Her Majesty's Customs and Excise use the greatest ingenuity to devise some regulation after the game has started in order to uplift the particular article from a lower to a higher rate of Purchase Tax.

That does not seem to be quite fair. Once Her Majesty's Customs and Excise have laid down the form in which a particular article should qualify for a lower rate of tax, it really is not playing the game—after a manufacturer has tooled up for its production strictly within that definition—to alter the rules in order to bring the article into a higher rate of tax.

I hope that greater sympathy will be given to the problems of manufacturers not only in this industry, but in kindred craft industries in order that they may be able to use their ingenuity in producing goods and in order that they may be able to incorporate in their manufacture skill and design without being penalised for their ingenuity. I hope that we shall give these industries, which are already sorely tried as a result of the resurgence of competition from Germany and Czechoslovakia, an opportunity to exploit the craft and skill of our people which are our principal selling assets in the markets of the world.

We sometimes tend to forget that we are one of the most densely populated countries in the world, that we do not possess any raw materials worth talking about, except coal, china clay and a little ore, and that all we have to sell is our ability to produce goods. We cannot go on trying to foist on the rest of the world the commonplace things with which we have to content ourselves. We must encourage the industries of the country to produce for overseas consumption the kind of things that people overseas want, namely, goods embodying British craftsmanship. That is something which I believe is being slowly stifled as a result of the attempts made to try and force upon the craft industries of this country restrictions under which it is impossible for them to operate effectively.

2.24 p.m.

Mr. Frederick Mulley (Sheffield, Park)

I am sure that the House is grateful to the hon. Member for Southend, East (Mr. McAdden) for his excellent exposition of the problems facing British industry, and I suggest, although he did not mention it, that this debate has a constituency interest so far as he is concerned.

There is a good deal of holding back on the part of hoteliers and boarding house people in renewing cutlery, silverware and table hollow ware, which, I am told, are in many cases badly in need of renewal, because of the Purchase Tax on those articles. On a recent visit to Sheffield I was shown some teapots which had been sent in for repair from a hotel of high standing. It is a very bad advertisement for our tourist trade that the hotel industry, which naturally wants to save expense, should be putting off buying replacements in the hope that the Purchase Tax will be reduced.

My hon. Friend the Member for Brig-house and Spenborough (Mr. J. Edwards) posed the question whether the Government could put these industries on their feet again. I agree that this is not entirely a matter for the Government. The industries themselves can do a lot in that connection, but I would say that their future existence depends on very drastic Government action being taken in the field of Purchase Tax and, as has been indicated, in some other directions. I agree that the future prosperity of the industries depends on their adopting the kind of attitude envisaged in the Report of the Working Party and in doing the kind of things suggested by my hon. Friend. I suggest to my hon. Friend that it is not quite fair to regard the Working Party's Report as an indication of the present state of the industry.

In the matter of design there is a very great financial problem facing silversmiths. I am talking mainly about Sheffield silversmiths. Almost always when a die is made or when blanks are cast a very substantial amount of capital goes on the shelf. Clearly, in order to have an economic production, articles must be made by the dozen, or sometimes in larger quantities. When so much capital is tied up in various patterns and designs in a factory there is obviously a temptation to try to sell those designs for which dies have already been made instead of experimenting at a time when the economic situation is very precarious indeed.

I am sure that if the industry had a brighter future, interest in design would be shown more readily. The Sheffield people—and I suppose the Birmingham and other silversmiths are in the same difficulty—have to try to pick designs that will suit the overseas markets but which are not necessarily popular in this country. I am told that in the field of table silverware the Americans prefer a very heavily ornamented pattern, such as the King's pattern, whereas those people in this country who can still afford to buy silver on which there is 100 per cent. Purchase Tax are more inclined to choose simpler patterns, such as Bead.

The Sheffield silversmith probably has very large stocks in hand. Naturally, in such circumstances, and being unable to sell the articles already in stock, he is not going to embark on further experimental design, with all the cost that involves. I wish, in a friendly way, to challenge the Birmingham claim about the antiquity and standing of the industry. I think I can say that the words "Sheffield Made" are more attractive commercially than the words "Made in Birmingham."

While we in Sheffield are naturally interested in the Birmingham trade and want to see it put on its feet, because the same kind of measures that will help Birmingham will help Sheffield, we are proud of our association with the silver trade. Indeed it was Thomas Bolsover who, in 1740, invented the method of plating copper ingots by fusion with silver so that they could be rolled in one piece. He produced the world famous Sheffield Plate. Since then, of course, further manufacturing improvements have produced E.P.N.S., electro-plated nickel silver, as the substitute for solid sterling silver.

We in Sheffield are not only proud of the prestige that the high craftsmanship of the silver trade has brought to the city, but are also very conscious of the fact that the prestige of the silverware and cutlery industries has also a great commercial value for the other products of the city which represent a much more substantial value of output than those of the silver and cutlery trade. The hallmark of quality associated with Sheffield is due very largely to the high standards that have been maintained in these industries.

Many quotations have been made today, but I venture to repeat a quotation which the Parliamentary Secretary will recall I made in a previous debate. We in Sheffield are very proud of this quotation, because it is the standard at which we aim in our craft industries. Confucius said that there were two conditions for recognising a craftsman: How may I recognise a craftsman? First by the reputation of his ancestors for honesty and sincerity. Then by his ability to create something new with an experience that is old. That is the problem all craft industries are trying to meet today. While we are glad to have from the Parliamentary Secretary the figures as to the state of the industry at present, he will be the first to agree that, because of the Coronation and other factors, those figures do not give the complete picture of the very serious problems the silver and cutlery industries, and I have every reason to suppose the jewellery industry, are facing.

Last night I happened to see the television newsreel. The first item was a sequence of craftsmen's operations on the Imperial State Crown, preparing it for Her Majesty the Queen for her Coronation. As I saw those delicate operations performed by, for the most part, elderly craftsmen I wondered whether, unless something is done now for these industries, there will in 20 or 30 years' time be craftsmen able to do highly skilled and important work of this sort.

As a reminder of the international and export value of the products of the silverware industry, I was impressed to see, in the National Museum in Dublin, which also contains many relics of 1916 and other bitter days, one of the finest displays in the world of British silverware from all parts of the United Kingdom. The Irish are just as proud to show this fine work from Sheffield, Birmingham and London as they are to point to their own historical relics of 1916, and other days. I thought it would be a very good thing to have a similar permanent exhibition in London.

I do not want to repeat the unemployment figures, or the fall in the number of troy ounces assayed, because we have already had estimates from different parts of the country on these points. I will only say that I have been given figures for Sheffield similar to those quoted by the hon. Member for Handsworth (Sir E. Boyle)—a 67 per cent. declina between 1947 and 1952. It has also been said that probably 25 per cent. of the Sheffield silver trades' labour force has gone and will never come back, and that about 50 per cent. of the remainder have suffered from short-time working and temporary unemployment in that critical last quarter of 1952, to which the Parliamentary Secretary referred.

While there is a temporary holding of the position, I think that is due to special factors such as the attempt to get work for the Coronation, and also a certain amount of contracting for armaments and ammunition trades. At no time can one get into a trade the really desirable new entrants if the economic outlook of that industry is extremely black.

As a trade union official said to me, the best craftsmen are naturally the most intelligent workers in the industry; the most intelligent workers in the industry more quickly assess its economic future, and if they find it is not worth while, not only will they leave it themselves but they will advise all their friends and relations not to enter the industry for any purpose at all. We have seen what has happened to the British coal industry through similar reasons. Although in terms of the numbers employed these industries are small, they are only an aspect of a general problem which must always be kept under review.

The question of exports has been fairly fully discussed. In "The Times" of 18th February, Mr. Norman Atkin of Atkin Brothers (Silversmiths) Limited, one of the best Sheffield firms, estimated that 60 to 70 per cent. of the countries to which we formerly exported are now subject to restrictions. That is a very serious matter, and I hope that the Board of Trade will continually examine these problems and see what they can do to help. I am not at all sure that the Commercial Relations and Exports Department of the Board of Trade is as alive and alert as we should like it to be.

I will not develop this point in detail, but, while I have heard from several sources that the Board of Trade are very helpful when someone comes along and says, "I want to export to a certain country"—all the facilities are then made available—I do not think they are doing enough to encourage people to export for the first time, or to export for the first time to a new market. I know there are special difficulties, but the Board of Trade are not doing enough to make all their facilities available to small firms which are characteristic of the industries we are discussing.

The other main reason for the decline in the industry is Purchase Tax. As the Parliamentary Secretary has said, there is first a decline in export and then the subsequent effect of Purchase Tax. The goods that cannot be sold abroad cannot be sold on the home market because of the addition of Purchase Tax. In this field Purchase Tax is most inflexible. I had always thought Purchase Tax was meant to be a flexible weapon of economic policy, and that there should not be this annual review—that Purchase Tax had always to be considered as part of the Budget. I had imagined it would be possible in an emergency for Purchase Tax alterations to be made. So far, however, our appeals to the Treasury have met with no response.

The most surprising feature is that the Treasury have no records of the revenue gained from the 100 per cent. tax and the 33⅓ per cent. tax respectively, and have no means of breaking up the yield of Purchase Tax between the various categories under the general heading of jewellery, silverware and precious metals. It is playing blindman's buff with our finances, and ducks and drakes with the industry, to continue a tax, the estimated yield of which is only very approximate. I support the views expressed in earlier debates, that the 33⅓ per cent. tax should be taken off and the 100 per cent. tax reduced at least to 33⅓ per cent.

Speaking on behalf of the Sheffield silver trades, I would point out that they are not basically concerned with luxury goods. It is true, as we tell small children, that fingers and thumbs came before spoons and forks; but the spoon and the fork are basic essential commodities used in every household in the country, and it is quite impossible to buy a fork or a spoon—or a knife for that matter—made in the cheapest possible quality, without paying Purchase Tax at 33⅓. These are among the few basic essentials of domestic equipment still remaining subject to 33⅓ per cent. tax, which is having a disastrous effect on the Sheffield industry.

The case for the 100 per cent. tax is, of course, the other side of the argument, which we have heard put so persuasively and fully by hon. Members today. It involves the question of retaining craftsmanship and maintaining the high quality standards of the industries, not only for their own sake, and not only for the prestige of the country, but because of their important export potential.

The Board of Trade are not without responsibility in this matter of Purchase Tax, and we are expecting the Board of Trade to make very strong recommendations to the Chancellor of the Exchequer on this matter. It is not good enough for the Board of Trade to sit on the side lines of this argument between the trades and the Treasury. The Board of Trade, as the sponsoring Department, have a responsibility, and I hope that the Parliamentary Secretary and his right hon. Friend will say—I do not expect them to do so in the House, but privately—that they are going to fight on our behalf for the good of these industries.

The cut-glass industry, which I suppose has also the same kind of problem, recently had a reduction of tax from 100 per cent. to 66⅔ per cent. We maintain that that should also have applied to silver and jewellery. I believe that there ought to be a bigger reduction than to 66⅔ per cent., and I suggest that it should be reduced at least to 33⅓ per cent. I believe that if such a reduction in the rate of tax were made in respect of silver and 100 per cent. taxed cutlery and similar articles, the actual yield in terms of tax to the Treasury would be greater. There would be a bigger sale on the home market and less temptation to Purchase Tax evasion. I have been told by manufacturers that they sometimes get people to see them who ask them to make a certain quantity of "second-hand" articles.

Of course, the reputable firms are at a disadvantage because they will not have anything to do with that class of business. The Assay Office is unlikely to oblige by giving one a secondhand hallmark in respect of silverware. It is much more in the field of jewellery that this evasion of tax goes on. I think that there is substantial evidence, as the hon. Member for Handsworth has said, that a good deal of revenue is lost to the Treasury because of the very high rate of taxation.

My hon. Friend the Member for Aston (Mr. Wyatt) spoke of the great anomalies of Purchase Tax, and I support what he said. It seems odd that a paper-knife should be subject to 100 per cent. tax when, if the same thing is made and invoiced as a letter-opener, it is subject to 33⅓ per cent. tax. There is a whole range of things which differ in rate of tax if they are sold separately. Two pairs of scissors, which is the usual sewing set for a lady, illustrates this problem. A pair of scissors more than 8 inches long is free of tax. A pair less than 8 inches attracts tax at 33⅓ per cent. Put the two pairs of scissors in a case, itself subject to tax at 66⅔ per cent., and the whole lot are subject to tax at 100 per cent.

All these are difficulties which the Sheffield and other trades are having to face today. The question of design is very much influenced by Purchase Tax considerations, as the hon. Member for Aston pointed out. A manufacturer cannot think of an attractive design for an article which he wishes to sell without paying several visits to the Department of Customs and Excise to see what kind of view they have with regard to its rate of tax. In many cases, articles have been changed in design solely on account of Purchase Tax, and that, of course, is a very bad thing for the future of the industry because the subtleties of Purchase Tax are not appreciated by overseas customers.

We cannot sell scissors separately for overseas customers. We must put them in a case, and it is no good cutting off half an inch to get within the tax schedule, because that is not appreciated by the overseas customer. Consequently, many articles have to be made separately for the overseas and the home trade. That naturally affects the position of the prices at which our exports can be sold, and consequently the volume of exports is reduced.

There are two other aspects of Purchase Tax and employment concerning the ancillary trades which I should like to mention, but there are other Motions on the Order Paper upon which hon. Members wish to speak, and so I will not say too much about them. The mother-of-pearl and ivory industries which are to be found in Sheffield are ancillary industries to the cutlery and silverware trades. I think that it is absurd to suggest that mother-of-pearl and ivory are luxury goods. The handle of a knife made of mother-of-pearl or of ivory makes the article come within the range of 100 per cent. tax, whereas a handle made of horn attracts only 33⅓ per cent. tax.

No matter how valuable a pearl shell or an ivory tusk may be, when it is cut up only certain parts of it can be used for such things as knife scales or handles to small tea knives and forks and articles of that kind. At the moment, a great amount of pearl shell is wasted because it is impossible to use it for buttons and the other purposes for which it was formerly used, because the Purchase Tax rate makes it impossible for those articles to be sold.

If only half of a pearl shell can be used, naturally the whole cost has to be covered and a mother-of-pearl handle is twice the price which it would otherwise be. At the moment the pearl people are fairly well placed because of the vogue in the United States for cutlery and silverware with mother-of-pearl handles, but that is only a temporary situation. If we could offer people these articles at lower prices, as would be possible if the whole shell could be disposed of by making buttons and a certain number of mother-of-pearl scales for handles for knives for the home market, the basic price of our exports would be reduced and their volume increased.

Finally, I should like briefly to refer to the question of the Development Council and the wider problems of the industry. I do not want to go over the ground already covered in a previous debate. We cannot go back on the dissolution of the Development Council that has already taken place. But I think it important to say that, in my belief, the industries themselves recognise that the removal of Purchase Tax is only the first step of a very big ladder which they have to climb to get the industries into the economic position which we should all like to see, and enable them to guarantee the future of the workpeople.

Any industry made up of a large number of small firms is a very difficult industry from the point of view of engaging in export publicity, selling arrangements and the use of films, which I believe to be a very important means of selling exports. All these matters are best dealt with by a large firm or by a number of firms in association. While the Development Council may not be the best means of doing this, I believe that some form of joint endeavour on the part of the people in the silver industry and in the jewellery and other industries must be made if they are to play their full part in achieving our export and economic objectives. If they showed a little more enterprise it would be for their own good and for the good of the country.

An amusing illustration of this is furnished by the consequences of the row which occurred last summer when the Sheffield hall-mark, the Crown, was taken as an official Coronation emblem. The Sheffield Assay Master was a little offended by this, and there was a lot of publicity in the newspapers. Many Sheffield firms were astounded to receive orders which were the result of the publicity about the controversy. If the industry used a little more enterprise, helped at each stage by the Board of Trade, I believe that its prospects would be better.

The hon. Member for Hands worth quoted the words of Marcellus from "Hamlet": What, has this thing appear'd again…? I was amused by his quotation against himself when he was trying to explain his luck in the Ballot. I am obliged to my hon. Friend the Member for Derbyshire, South-East (Mr. Champion), who is also a considerable Shakespearian scholar, for reminding me that we can say to the hon. Member for Handsworth that we do not view him as Hamlet viewed the "thing" and say "Alas, poor ghost!", and that we are glad that he was here to Speak his speech, trippingly on the tongue. The House is grateful to the hon. Member for making such a persuasive, well-informed and agreeable speech on the subject. If his luck in the Ballot holds, I hope we shall find him introducing another Motion of a non-party, national character and that we shall again have a real Private Members' discussion.

2.53 p.m.

Mr. Harmar Nicholls (Peterborough)

I congratulate the hon. Member for Sheffield, Park (Mr. Mulley) upon ensuring that Sheffield has its fair share of the debate. He said, with friendly rivalry, that too much emphasis had been placed upon Birmingham. I am sure he meant that in a friendly manner because, after all, the subject of the debate is the Birmingham jewellery industry.

I join with the hon. Member in congratulating my hon. Friend the Member for Handsworth (Sir E. Boyle). It is true that a Private Members' debate on a Friday depends on the luck of the Ballot, but there is no luck about the subject which the fortunate hon. Member chooses. My hon. Friend is to be congratulated upon choosing a subject which is of such vital importance to Birmingham rather than some of the more attractive and picturesque subjects which we have found on the Order Paper from time to time.

Dr. Horace King (Southampton. Test)

The hon. Member has not shown much interest in the subject.

Mr. Nicholls

One does not have to be on the Floor of the House to listen to a debate; it is sometimes more comfortable and more convenient to be elsewhere. The hon. Member should withdraw any suggestion that I have not shown interest in the proceedings.

I agree that the Government must play their part in reducing Purchase Tax as soon as that is economically possible. Quite apart from what the Government might do, the industry itself must get the best it can out of existing conditions. When I was in Canada during last summer I met some jewellery retailers who said they found that the American jewellery designs were easier to sell than some which came from Birmingham. The desire of the Canadian market was for a certain type of design. As the hon. Member for Sheffield, Park said, once one has prepared a special design and incurred the cost of having the die manufactured, it is very expensive to put that on one side and to start another. But that is a risk which the industry must take; it must be imaginative and vigorous in taking such risks.

The jewellery industry should consider, in the case of Canada, bringing a Canadian designer or two to this country and manufacturing to Canadian design instead of the industry merely going to Canada to find out the sort of design which is required there. With this partnership of the Canadian designer and the British manufacturer we should be more certain of producing a design in keeping with the tastes expressing themselves in Canada. This would greatly help exports. Canada is keen to extend Canadian industry, and if we could advertise articles as of Canadian design and British manufacture, it might well be that wider markets would be open to us. I feel that this is a constructive suggestion in view of the importance of exports in relation to the problems facing the industry.

Hon. Members have urged the Government to recognise the importance of reducing Purchase Tax, to remove the stupidities in Purchase Tax grading and to minimise Customs and Excise difficulties. Help is required in that direction, but the industry must remember that the real improvement must come from itself, for it has the day-to-day contacts with the markets. If we can get the Government to recognise the urgency of this, and if we can get the Birmingham industry, which has always been modern when its. heart has been in the job, to join with Canadian designers in a vigorous approach to its problems, I am sure that the difficulties facing the industry will be lessened.

2.58 p.m.

Mr. M. Follick (Loughborough)

People who buy specifically British goods buy them for quality. It is no good talking about having a big mass-production market for export. Through the long epoch of Free Trade we had to rely on quality because we could not compete with quantity. Britain built up a tremendous export trade exclusively on quality, and even today when we produce high quality articles, no matter what the price is, we sell those articles. Even when no other British car sold there, the Rolls Royce always sold in the United States. We must get back to that very high quality standard for those who want the highest quality and are prepared to pay for it.

We have heard about imitating Gablonz jewellery, but that is not our trade; our trade is high quality trade of the very finest craftsmanship and handwork. We have at present, and have had for some time, a big trade with America in Victorian jewellery, comprising all sorts of Victorian knick-knacks, such as bracelets, necklaces and brooches, which fetch tremendously high prices.

The limiting date for the free import of antiques into the United States is 1830, and that has applied for the last quarter of a century. I appeal to the Parliamentary Secretary to ascertain whether it is possible for a slightly more recent date to be fixed. After 1830 and going into the 50's, 60's, 70's and 80's of the last century, large quantities of Victorian jewellery were manufactured in this country, and the export trade would do a greater volume of business if that date were brought forward a little.

On the question of antiques, people from the United States come to this country and buy our antiques more than anything else. I mean such things as trays, tea and coffee sets and suchlike. The Americans have also an affection for our modern plate and table-ware, not imitations of Canadian designs or anything like that, but typical British products. When the soldiers came from the United States during the war, the first things they went to look for were small items like salt cellars, pepper pots, mustard pots and so on. I do not know how many I bought and gave to them as presents, but they were the sort of presents that they like to take back to the United States. I recommend the Parliamentary Secretary to do what he can to see that these typically British products become well-known in the United States, because the Americans are fond of them.

There is one important point I should like to bring to the attention of the Board of Trade. We are including cutlery in this debate, and so I can deal with it. I do not know why it should be, but in this country we do not manufacture tailors' cutters' shears. Every pair of shears used in this country today comes from the United States, and they cost dollars. Surely Sheffield can turn out tailors' cutters' shears as well as any place in the world. Go to any tailor's cutting shop today and it will be found that the shears are of American manufacture.

I promised this morning that I would bring this matter before the House today. Why cannot this country, which leads the world in cutlery, make tailor's cutters' shears? I would suggest to the Parliamentary Secretary that a high rate of tax should be put on the import of tailor's cutters' shears so as to force the Sheffield people to make them. If that were done, we would be taking from the United States—

Mr. Speaker

I do not think that tailor's cutters' shears can be classed as jewellery or even as an ancillary trade.

Mr. Follick

With every deference to your great knowledge on this point, Mr. Speaker, may I point out that we are allowed to discuss cutlery and tailors' shears are cutlery. Those are the few points I wanted to bring before the House, and I will now conclude what I had to say.

Mr. Mulley

I will see that the point put by my hon. Friend is fully studied in Sheffield.

Mr. Follick

Thank you.

3.2 p.m.

Mr. William Shepherd (Cheadle)

We have had a very interesting debate and, apart from the contribution by the hon. Member for Loughborough (Mr. Follick), the speeches have been within the scope of the actual Motion. We have had some little difficulty before in discussing the affairs of this industry, but I think today we have had a good debate because the difficulties surrounding it have been discussed in full. Naturally there has been a good deal of unanimity between both sides of the House on the problems facing the industry and what should be done.

We have had admirable speeches from my hon. Friend the Member for Hands-worth (Sir E. Boyle), who opened the debate, and from those who followed him. We have also had helpful speeches from both Front Benches, particularly the assurance of my hon. and learned Friend the Parliamentary Secretary that there would be assistance granted for the re-establishment or reviving of the design centre. The hon. Member for Brighouse and Spenborough (Mr. J. Edwards) made what I thought was an admirable speech, but he pointed out, perhaps a little unfairly, to my hon. Friend the Member for Handsworth that we should not concern ourselves too much with what the Government should do, but should devote our attention in some respects to what the industry itself ought to do. My hon. Friend was very conscious of that, and I thought he made that point very strongly.

In criticism of what the hon. Gentleman said, I say that it is not fair to state that the British jewellery industry can. even by the most profound effort, get itself into the position where it can design costume jewellery as well as the people on the Continent. It is one of those extraordinary things in which design reflects national characteristics. Until we change those we cannot change the design element.

Let me give the House an example of a trade that I know something about, the boot and shoe industry. While it is true that British men's shoes are the best designed in the world, that is not true of women's shoes. The Italians are, without dispute, the best designers in the world in regard to women's shoes. It is largely a question of national characteristics.

Mr. H. Strauss

Before my hon. Friend develops that point any further, may I suggest that he visits the shoe industry of Norwich?

Mr. Shepherd

I am sorry if I have caused some concern to my hon. and learned Friend. I have no doubt that the statement I have made will cause controversy, but those who take an objective view would, I think, agree that supremacy in women's shoes lies with the Italians.

There has been a tendency to underrate the real seriousness of the position in the trade, because we have lumped together the jewellery trade, the electroplate trade and the silversmith trade. If we take the figures lumped together we do not get a very disheartening result, but if we take the figures which relate to the silverware industry, we get a discouraging picture. We see an industry which had a proud position going down very badly, and not merely from some false peak due to a post-war boom. It is true that 1947 saw a post-war boom. If we take the Assay Office figures for Birmingham, for example, in 1947 the figure was 1,500,000 troy ounces, but let us remember that in 1937 it was 2,500,000. In 1952 it was only 500,000. That shows that this is not a drop from a fictitious post-war boom but a serious deterioration in the state of one of our most honoured industries.

It is clearly the duty of the Government to do all they possibly can for this trade. In Birmingham, as hon. Gentlemen know, one of the most respected firms recently had to re-organise financially and seriously to contract its activities. In London, firms that have employed 50 or more craftsmen, now have two or three, and they are engaged mainly in repair to odds and ends of jewellery that people want to improve and make fit for use again. Despite what the Parliamentary Secretary said, the situation in the silverware trade is serious. Many firms have not made new dies since the end of the war. That is the state of slump into which the trade has got.

Many hon. Members, particularly the hon. Member for Aston (Mr. Wyatt), have stressed the importance of Purchase Tax in this industry and the contribution it is making to the decline of the industry. I do not think that it can be denied that Purchase Tax has had a crippling effect upon silverware. It would be true to say that if the rate were reduced from 100 per cent. to 33⅓ per cent. the Chancellor would be unlikely to lose. That is an argument which the Parliamentary Secretary might employ with his right hon. Friend the Chancellor of the Exchequer.

It has reached the stage now that it is almost prohibitive to buy silverware articles. I do not know If the House even now realises what the increase in cost amounts to. For example, a silver tea set which before the war sold at about £100 would cost roughly £400 today, and to that figure must be added another £400 Purchase Tax. This means a total figure of between £750 and £800. There are not enough millionaires even in the party opposite to sustain a substantial demand for such things.

Lieut.-Colonel Marcus Lipton (Brixton)

The Government Hospitality Fund could buy them.

Mr. Shepherd

That is a good suggestion which I believe has been made already. It has also been suggested that we might buy some of this silverware for our Embassies overseas to show people what we can produce. The 100 per cent. Purchase Tax was put on, very properly, to discourage the trade, but now we want to encourage it. This debate will lose any value it might have unless the Parliamentary Secretary impresses upon the Chancellor the need for drastic action at this time.

There is room for hope, because the Treasury have not been as heartless in this case as they often appear to be. They have for some time made a concession on the question of tax. As the House may know, articles of special merit of which not more than five are to be made, if approved by a committee, can be sold to the value of £20,000 per annum without any tax. Therefore the Treasury have conceded the point that in the case of this industry we should pay special regard to artistic merit.

Mr. Mulley

May I make it clear that this is not a new concession? There has always been a concession for a very small quantity of goods of exceptional artistic value. However, I am told by the trade in Sheffield that it is much more difficult to get that exemption now than it was two or three years ago.

Mr. Shepherd

I hope I did not create the impression that it was a recent concession, because that is not so. Probably the reason why it is more difficult to get a certificate now is that the artistic merits of the articles coming forward do not justify it. It is important to realise that Purchase Tax is not the only handicap. If we take the view that the abolition of Purchase Tax will solve the problem, we shall be doing a disservice to the industry, because I am by no means satisfied that it has done all it could have done, or shown the amount of internal statesmanship which it needs if it is to succeed.

Therefore I want to say a word or two about the all-important question of design. Before doing so, I shall refer to a serious matter in connection with this trade which has not had any real ventilation in this House but which is of great consequence to the industry, the export of antique silver from this country. I am sorry to say that the Board of Trade do not keep any record of the export of antique silverware, but I am afraid that the export figures given include an alarmingly high percentage of it.

The homes of this country are being stripped of silverware to be sold to the United States of America. I do not mind that in some part—I think that the Americans are entitled to have part of these works of art, and we certainly need the dollars which they bring; but I am not at all sure that we ought to allow the completely unimpeded flow of these works of art into the United States of America. I was very distressed to find from an inquiry I made this morning that the Waverley Committee do not have this aspect within the terms of their review. If that is so, we ought to try to bring the question of antique silverware within the review of the Waverley Committee.

The loss of this silverware to this country is real and it cannot be replaced. It also has the effect of damaging the prospects for the sale of our modern silverware. The price is lower than the present-day cost and the attraction is very much greater. I hope that the Government will look into this question, which is a serious one from the viewpoint of the nation and of the industry, to see whether the time has not come when some embargo or limited licence should be imposed so that we do not lose all our valuable Queen Anne and Georgian silver.

I want finally to refer to the question of design, which to my mind is paramount. It is not merely a question of our design having failed in the last few years; our design has failed in the last 50 years, and this is a criticism of the whole industry. It is a criticism of Sheffield, of London and of Birmingham. [An. HON. MEMBER: "And the public."] As one of my hon. Friends suggests, it is, perhaps, a criticism also of the public. But not during the whole of this century has there emerged any coherent design in British silverware, and our present lamentable show in many parts of the world arises not from a failure in many other directions but from the failure of this country to produce a design which will attract world-wide attention and which will even be deserving of this country.

We have a great tradition. The Queen Anne and the early Georgian silverware is, I think, the finest in the world. It is lamentable that in the whole of 50 years we have done nothing but put a few bits here and a few bits there and have reached no new school of design which would attract the attention of the world, so much so that—let us face it—we are today being hopelessly outclassed.

A small country like Denmark is producing much more attractive silverware than we are. and the Germans, who have a heavy Teutonic mind in these matters and on the whole have not produced silverware to attract the world, have now started to produce most attractive silverware. During the whole of this century we have not succeeded in getting a design which would fit in with modern needs and be successful in world markets.

As the hon. Member for Brighouse and Spenborough said, the position of the Research and Design Centre is worse than ever. They have, I understand, five people engaged in what must be very despondent circumstances. Although I do not suggest that a design and research centre is entirely the answer, I feel that we have got to a point where only an effort by the industry as a whole will evolve some new design.

Mr. Godfrey Nicholson (Farnham)

Will my hon. Friend pay tribute to the efforts of the Goldsmiths Company— which have not been mentioned so far— as they have been doing very good work?

Mr. Shepherd

I think that if my hon. Friend refers to HANSARD he will see that several hon. Members have referred in very glowing terms to the work of the Goldsmiths Company. As the House know, they were charged with the duty of maintaining the quality and craftsmanship throughout the centuries.

Mr. J. Edwards

It may be of interest to the hon. Member for Famham (Mr. Nicholson) to know that I was at pains to show how much initiative had been shown by the Goldsmiths Company. I did. however, say that I could not understand why they permitted this rot to set in.

Mr. Shepherd

I think that expresses the view of the House. I was going on to say that in view of the fact that the Goldsmiths Company—before the Development Council was formed—took a substantial initiative and involved themselves in considerable expense in setting up a centre, it seems almost unbelievable that they should have allowed the matter to get into the present state. All the odium which attached itself to the Development Council has attached itself to the centre. We ought to draw the attention of the right hon. Member for Huyton (Mr. H. Wilson) to the damage which sometimes arises from using compulsion when voluntary methods are clearly better.

I want to appeal to the industry in connection with design. It is no good going on as we have been in the design field of the silverware trade for the last 50 years or more. We were paying designers and others in the past £5 a week, and I understand that today the figure is something like £10 or £12 a week. One cannot get a man who will revive designs in the silverware of this country for £10 or £12 a week; it is just an impossibility. If we are to get anywhere, there has to be an entire change in outlook.

The other day I was talking to one of the most successful Sheffield manufacturers, and I raised this issue with him. He said, "We have got along without these chaps up to now and will do so in the future." That may be the view of Sheffield people because we know that Yorkshiremen are the most stubborn in the country, but it is also true that unless we can get better paid people into the design field of this industry we shall never succeed against the lead which the Danes and the Germans have got, nor against the highly paid people in the United States of America. The United States today, with their production resources and the money they can put into the cost of preparing designs, are turning out some really beautiful work.

If once more we are to get into the lead and establish a school which means something, very substantial efforts have to be made by the industry itself. We must remember that fundamentally design must spring from the industry. It cannot be imposed from without. Therefore. I suggest that while we want the Chancellor of the Exchequer and the Board of Trade to help the industry in very considerable measure, it will depend on the efforts the industry makes for its own salvation.

I am very grateful to my hon. Friend for the way in which he moved this Motion and for giving us an opportunity of putting our views on this not unimportant issue, for nothing which deals with craftsmanship and produces objects of beauty is unimportant. It is a tragedy today, when we are thinking more in aesthetic terms than perhaps for 100 years, that this industry—one of the most important in this field—should be in so deplorable a condition. There are some things which the industry can do, and I hope that the industry will take note of what has been said here today and try to do them. I hope it will get together and make a research and design centre a living reality and invest it with some vitality.

I hope that my hon. and learned Friend will be able to reverse the judgment that he cannot at the moment restore the use of nickel. We should be at a point now at which we should jump the fence; at any rate we are very near that point and I hope that that fence will be jumped as soon as possible. I also hope there will be no delay at all in supporting the design centre with Government funds.

Lastly—and very important—I hope the Board of Trade will make, if they have not already made, the strongest possible representations on the question of Purchase Tax. If an industry can bear a tax. then there may be a case for continuing it, but here we can see that the tax cannot be borne without grievous loss to the industry and to the country. So I hope that my hon. and learned Friend will do all he can to see that the Chancellor is made fully aware of these circumstances.

This is an industry of which most of us interested in it are very proud. It has a wonderful record. Its craftsmen are among the best in the world. It deserves our attention and our sympathy, and I am sure the House will join in wishing it prosperity in the future.

Question put, and agreed to.

Resolved, That this House notes with concern the declining prosperity of the British jewellery, silverware and ancillary industries, which have contributed materially to the level of trade and employment in the city of Birmingham; and this House asks Her Majesty's Government to give urgent attention to those causes which are preventing these industries from maintaining that level of high-quality craftsmanship on which their prospects, both at home and overseas, depend.