Clause 3.—(CUSTOMS DUTY ON MECHANICAL LIGHTERS.) (Hansard, 19 May 1953)

§ Mr. E. Fletcher
I beg to move, in page 3, line 7, to leave out subsection (4).
Clause 3 deals with the question of Customs Duty on mechanical lighters and, like Clause 1, is another Clause of the Finance Bill which the Financial Secretary passed over in discreet silence when he moved the Second Reading of the Bill.
The Clause as printed is one of the most of obscure Clauses I have ever read in any Bill presented to Parliament, but before making some observations on its form I want to say something on its substance, because it will be appreciated that the whole subject of duty on mechanical lighters has assumed an entirely new importance since we had the Budget speech and, indeed, since this Bill was introduced. Since then we have had the momentous Report of the Monopolies 1936 Commission dealing with the monopoly of the match-making industry, and that Report has some very pertinent remarks to make about the only form of competition in regard to matches, namely, mechanical lighters, and in particular about the Customs Duty now being loaded on to mechanical lighters.
Therefore, the first thing we want to know is whether in representing this Clause the Government have had regard to the recommendations and observations of the Monopolies Commission in their Report. The Committee will be familiar with the fact that the Monopolies Commission have revealed what is a glaring abuse of monopoly power. They have pointed out that the arrangements in the match-making industry, which they describe in detail, form a complete and integrated monopoly and that the system as a whole operates, and is likely to operate, against the public interest regarding both the supply of matches and machinery for match making. We are all waiting to hear what the President of the Board of Trade intends to do about it, and it is against that background that the Committee this afternoon have to consider the Chancellor's recommendation for increasing the duty on some forms of mechanical lighters and depriving others of the exemption that they at present enjoy.
In Section 201 of their Report, the Monopolies Commission say: Competition from lighters does not seem to have seriously affected the position of the monopoly, though it has no doubt restricted the possible expansion of sales of matches…. Lighters last for a good many years, and it is not possible to say how far the present level of sales exceeds the demand for replacements and represents a continuing encroachment on the market for matches. This is the important passage: The duty charged on lighters is heavy, and is at a flat rate per lighter, irrespective of quality and price, and this discourages the production of cheap, simple lighters of the war-time utility type. It is also apparent from the Report that the British Match Corporation had a good deal to say about it. Were they instrumental in making suggestions to the Chancellor with regard to the duty on mechanical lighters, because it is quite evident to me from reading the Report that this monopoly is very concerned regarding what duty is charged on 1937 mechanical lighters? In paragraph 150 they say: We are told by B.M.C. that 'match manufacturers are confident of competing successfully against mechanical lighters provided that the two articles are taxed fairly in relation to each other.' It would appear, therefore, that this monopolistic body has a very direct concern to see that there is no reduction in the duty on lighters. Perhaps the Financial Secretary will tell us, when for the first time he comes to explain this mysterious Clause in the Bill, what exactly is behind it, because so far we have not heard a word of explanation about it. I see that the right hon. Gentleman the President of the Board of Trade has just come in, and I am sure that the whole Committee will welcome his appearance. I only wish he had been here a few moments ago, but I shall not go over what I then said. I am hoping that perhaps in the course of the debate he will tell the Committee what steps he is proposing to take with regard to the Report of the Monopoly Commission on the abusive monopoly which has existed for so long in the match-making industry.

§ The Temporary Chairman
Will the hon. Gentleman help me? He is seeking to delete subsection (4) which seems to provide for the making of regulations by the Commission and does not seem to have anything to do with raising or reducing the duty on lighter wheels. The first subsection seems to deal with that. I wonder if the hon. Gentleman would address his remarks clearly to subsection (4).

§ Mr. Fletcher
I should very much like to do that, Mr. Bowles, in the hope that, having done so, and if we still have the President of the Board of Trade with us, I can then come back to the point I am making.

§ The Temporary Chairman
Not on the Amendment which the hon. Gentleman has moved, but perhaps on the Motion "That the Clause stand part of the Bill."

§ Mr. Fletcher
As I understand it, subsection (4) is intended to remove any existing exemption from duty on imported wheels for striking a flint. 1938 The Financial Secretary nods his head. "Imported wheels for striking a flint" are one part of mechanical lighters, and, therefore, one of the instruments which compete with matches. My complaint about subsection (4) is that it is designed to remove exemption from one of the few existing instruments that can compete with this vicious monopoly which we find in the match-making industry and about which we are all awaiting an early pronouncement by the President of the Board of Trade regarding his intentions.
I shall now direct my remarks to the effect of the subsection as distinct from its intention. So far, I have only attempted to submit to the Committee what I think is the intention of the subsection, and I very much doubt whether the subsection as it stands carries out the intention of the Government. It says: So much of subsection (1) of section two hundred and twenty-one of the Customs and Excise Act, 1952 … as relates to imported wheels for striking a flint shall cease to have effect"— and these are the words to which I take great objection— and any regulations in force under that subsection on the date on which this section comes into force shall have effect accordingly. One might naturally inquire what Regulations are in force in Section 221 of the Customs and Excise Act, 1952. I sought guidance on this point in the Library, but after several days of research I was told that there were no such Regulations. That struck me as being rather mysterious, so I put down a Question to the Chancellor which he was good enough to answer this afternoon. I asked the right hon. Gentleman: What Regulations are now in force under Section 221 of the Customs and Excise Act, 1952. They are the Regulations which, if we adopt Clause 3 (4), are going to take effect accordingly. In reply, the right hon. Gentleman said: No Regulations have so far been made under that Section. He then went on to use words which I thought were very ambiguous and very disingenuous. He said: The Mechanical Lighters Regulations, 1928, and the Mechanical Lighters (Amendment) Regulations, 1934, have effect as if so made. With great respect, that is absolute nonsense. I have never heard such nonsense. 1939 This really is reducing legislation by reference and delegated legislation by delegated sub-reference to the point of absurdity.

§ Mr. Ellis Smith (Stoke-on-Trent, South)
The Financial Secretary used to say that.

§ Mr. Fletcher
As the Financial Secretary used to make that point in language far better than I can, I am sure that I shall have his sympathy. At any rate, we must have an explanation of what this means. It cannot be the case that the Mechanical Lighters Regulations, 1928, and the Mechanical Lighters (Amendment) Regulations, 1934, have effect under Section 221 of the Act of 1952. They were not made under that Act. There is nothing in that Act which says that regulations made in any other Act shall have effect as if they were made under the 1952 Act, and if there were it would not have any result.
The absurdity and the obscurity of this kind of legislation goes even deeper, as will be found if one looks at the Regulations of 1928 and the 1934 Amendment Regulations. In the Mechanical Lighters Regulations, 1928, we find not a single word about imported wheels for striking a flint. At the moment that is the only thing that we are dealing with. On the other hand, there is a reference in the 1934 Regulations, paragraph 2 of which states: Imported parts of mechanical lighters, being wheels for striking a flint (hereinafter referred to as imported part or parts) may be received by licensed manufacturers of mechanical lighters without payment of duty…. Therefore, in the Regulations made in 1934 it is provided that wheels for striking a flint may be imported without payment of duty. Is it intended that in future imported wheels for striking a flint shall be imported without payment of duty, or is it intended in future that they shall be liable to duty? That seems to me to be a question which ought to be answered one way or the other. If, as I assume, it is intended that in future they should not be duty free, then one would have thought it necessary so to provide. This subsection certainly does not so provide, because all it says is that the Regulations made under the Act of 1952 shall have effect accordingly. These Regulations 1940 which the Financial Secretary apparently had in mind were made under Section 6 of the Finance Act, 1928 and Section 5 of the Finance Act, 1933.
If we proceed with the rest of the subsection we notice that it apparently occurred to the Chancellor or the Financial Secretary, or at any rate to somebody interested in the matter, that it might be convenient for some members of the public who imported wheels for striking a flint to know where they stood in this matter. That is elementary justice. People who import articles into this country want to know whether they are liable to duty or not.
The subsection goes on to say: … no duty of customs shall be charged on such wheels delivered without payment of duty by virtue of those regulations before that date…. That seems to suggest that under the existing law there is no liability to a penalty but, as a corollary, there is liability to a penalty if people go on importing these wheels for striking a flint without paying duty. If that is the intention, my first criticism is that it is essential to give effect to that intention in clear, precise and unambiguous language. But that is only my first criticism.
My major criticism of the subsection is that it is a perverse proposal, and that as a matter of policy, at a time like this when the Report of the Monopolies Commission draws attention to this ugly abuse of monopolisic powers, which caused some steps being taken in the public interest, it is absurd that anything whatever should be done by the Treasury to increase the duty on mechanical lighters which, as the Report points out, is already high, and which articles are the only form of competition which can have any curb at all on the monopolistic powers of the match industry. For those reasons I hope that I shall have the sympathy of the Financial Secretary and that he will accede to the proposals contained in this Amendment.

§ Mr. Boyd-Carpenter
The hon. Member for Islington, East (Mr. E. Fletcher) dealt with two issues—the somewhat complex procedural issue, and the issue of the merits of the subsecton. I shall try to address myself in succession to those two points.
In the first place, as the hon. Gentleman will recall, at Question time today, 1941 during the course of the supplementary questions to my right hon. Friend to which he has already referred, he asked that steps should be taken to make available copies of the Regulations. He asked that they should be placed in the Library. I understand that that has been done, and I hope that it has been of convenience to him and to other hon. Members who are interested.
Then the hon. Gentleman asked how this subsection which he seeks to delete could refer to Regulations as having been made under the Customs and Excise Act, 1952, when, in point of fact, they were made, as he rightly pointed out, in the years 1928 and 1934. The answer is that Section 316 (1) of the Customs and Excise Act, 1952, says so. It says: Any order, regulation, direction, form or other instrument having effect immediately before the commencement of this Act"— that is to say, these Regulations— under any enactment repealed by this Act relating to any matter with respect to which the Commissioners or the Treasury have under this Act power to make orders or regulations or to give directions or impose conditions or restrictions shall, unless and until revoked or varied by the Commissioners or, as the case may be, by the Treasury and so far as it is not inconsistent with the provisions of this Act, have effect as if made, given or prescribed under that power. As a consequence, Parliament provided that these Regulations made under the earlier legislation should be continued under the Act of 1952. That is a not uncommon provision in Acts, as this was, of a consolidating nature, although it is not a consolidating Act as such. It is a fact that the Regulations which cease to have effect under subsection (4) are those originally made in 1928 and 1934.
The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) indicated that from time to time I have expressed some doubt or dissent as to the complexity of provisions of this kind. I do not, to borrow a Scottish word, resile at all from anything that I have said on that subject, but it is the fact that when we are, as 1952 Act was doing, repealing a whole mass of legislation it is necessary to preserve in effect the Regulations previously made, since otherwise it would be necessary to make an enormous mass of new Regulations perhaps having precisely the same effect.

§ Mr. Ellis Smith
The Financial Secretary is now answering himself.

§ Mr. Boyd-Carpenter
If I am so doing I think I am doing it more convincingly than was ever done from the benches opposite. Be that as it may, it is the fact that by this provision we are doing away with these Regulations and, therefore, assuming that the whole position is somewhat complicated, the present Bill clears up this particular complication by dispensing with those Regulations. I hope I have the hon. Member's sympathy on the procedural side, at any rate. We are cutting a small clearing in the jungle.
So much for the procedurals; now for the merits.

§ Mr. Hugh Dalton (Bishop Auckland)
Procedurals?

§ Mr. Boyd-Carpenter
So much for the issue on procedure.

§ Mr. Dalton
Hear, hear.

§ Mr. Boyd-Carpenter
I am glad I carry the right hon. Gentleman with me as to that. Under this Bill it becomes a dead issue because the Regulations are to go.
The substance of the change, as the hon. Member for Islington, East quite correctly stated, is to withdraw the privilege of duty-free importation of these wheels by manufacturers of lighters. I ought to explain why we think it right to withdraw that privilege. The other provisions of this Clause completely alter the basis on which duty is paid on these wheels. Under the system which came to an end—under this Clause—on 1st May, 1953, the amount of duty payable on these wheels was the same as had been paid on a complete lighter—in general. 7s. or 5s. That was part of the system which was provided some years ago to prevent the evasion of Import Duty by the importation of lighters in parts.
The Clause as a whole alters that provision, to the extent of not making parts of lighters—other than the main case or body—pay the full rate of duty which would be due on a complete lighter. The merits of that will have to be argued at another stage, but that is the effect, and the result is that the duty payable on a wheel, instead of being 7s. or 5s., becomes the duty payable under the Import Duties Act of 1952—an ad valorem duty of 10 per cent.
As the average cost of these wheels is l½d. the average amount of duty 1943 payable becomes .15 of a penny. In those circumstances the need for a system of duty-free importation of these wheels is infinitely reduced. The duty is reduced from a substantial sum to one that is purely nominal, and it does not seem necessary to maintain the administrative machinery which was necessary to work the system of duty-free imports. Consequently—and we have discussed this matter with the trade interests concerned, who do not dissent—it means that the administrative system which was necessary in the interests of our own manufacturers, in order to deal with a rate of duty of 7s. or 5s., becomes wholly unnecessary when we are dealing with a rate which is less than one-sixth of a penny.
6.45 p.m.
That is why this exemption is being withdrawn. It is sometimes necessary to have these provisions for duty-free importation, but they are justifiable only in circumstances in which a substantial amount is involved. When duty becomes as small as this it is not worth the trouble of the importer or the administrator to operate the system.

§ Mr. John Strachey (Dundee, West)
As a lay Member of this Committee I must admit that I have been left a good deal more bewildered by the Financial Secretary's speech than I was before. As my hon. Friend the Member for Islington, East (Mr. E. Fletcher) said, the main effect of this Clause—which he admitted was very obscure—was substantially to increase the duty on this part of a lighter. He did not feel that the subsection in question had that effect, but he thought that was its intention. As far as I understood what the Financial Secretary said, the effect of the subsection is exactly the opposite. He said that it infinitely reduces the duty payable on this particular part of a lighter. I should have thought that nothing could more fully substantiate my hon. Friend's contention that the subsection was obscure to the point of being incomprehensible.

§ Mr. Boyd-Carpenter
I am sorry if I failed to make myself clear. I said that the effect of the Clause as a whole was to reduce the duty, but the effect of the subsection which the hon. Member for 1944 Islington, East seeks to delete is to remove the right of duty-free importation. One matter is the effect of the Clause as a whole and the other is the consequential effect of the subsection.

§ Mr. Strachey
I follow that, but the effect of the subsection, as I understand it, is to remove the application of duty from one category to another—from the category of duty which was payable under these Regulations to a duty which is applied ad valorem and which would be a very much smaller amount. I wanted to ask the simple question why, if the duty under this subsection is now reduced to this extremely low figure—a very small fraction of a penny—the import duty should not be left out altogether, and the import of this part of the lighter made duty-free.
The Financial Secretary told us that the duty would be very small and it would certainly not be worth while to continue the old procedure. Why should not it be left out altogether? Whether that would be the effect of deleting this subsection I do not pretend to know, but surely that would be the simple thing to do? If the intention of the Financial Secretary and the Government is to give these parts of lighters duty-free entry into the country we should support them. As my hon. Friend the Member for Islington, East has said, at this particular moment, when we have had these very striking revelations on the alternative method of lighting a cigarette—by matches —an effective reduction to infinity of the duty payable on this part of a lighter is one we could support.
Is it clear, however, that that is the effect of this subsection? If it is, I imagine that my hon. Friend might reconsider his Amendment, but he was under the impression that the effect of the subsection was the opposite. We now understand from the Financial Secretary that there is a great reduction in the duty payable on this part of of a lighter. Why could not these parts be made duty-free?

§ Lieut-Colonel Lipton
I must confess that I share the misgivings of my right hon. Friend the Member for Dundee, West (Mr. Strachey) about this subsection which my hon. Friend the Member for Islington, East (Mr. E. Fletcher) seeks to delete. If I understand the Financial 1945 Secretary correctly, the position seems to be this. If the present situation is allowed to continue, it is possible to import parts of a lighter for assembly in this country, and by virtue of assembling those parts in this country reap a considerable advantage compared with those who do not import the parts but make the whole lighter and assemble it in this country.

§ Mr. Boyd-Carpenter
indicated dissent.

Lieut.-Colonel Upton
The Financial Secretary nods his head.

§ Mr. Boyd-Carpenter
No, he does not. He shakes it.

§ Lieut-Colonel Lipton
It seemed to me that he shook it in a vertical direction.

§ Mr. Boyd-Carpenter
No, horizontally.

§ Lieut.-Colonel Lipton
I accept his indication that he was dissenting with the proposition I was putting forward.
If that is not so, we are driven back to the other consideration on which my right hon. Friend spoke. This subsection seeks to obtain .15d. in respect of each wheel imported for the purpose of constituting a component part of a lighter made in this country. The individual item of .15d. is so small that I think the Financial Secretary might have told us the global figure. What does he expect to achieve by way of income as a result of imposing a duty of .15d. on each wheel imported into this country? He did not disclose that in the course of his remarks. It may be that some high question of public policy is involved which persuades him that this information is not to be divulged. However, it places the Committee at a very considerable disadvantage, and in the absence of any further explanation which would enable me to appreciate what the Financial Secretary is trying to do, I am compelled to say that I shall support this Amendment as strongly as I can.

§ Mr. E. Fletcher
It will have become apparent to the Financial Secretary from the speeches he has heard that he has not explained the purpose of this subsection to the satisfaction of the Committee. My right hon. Friend the Member for Dundee, West (Mr. Strachey) certainly did not understand the Financial Secretary's explanation; and after the speech 1946 of my hon. and gallant Friend the Member for Brixton (Lieut-Colonel Lipton) we are driven, in order to try to understand this Clause, to interpreting whether the Financial Secretary is nodding his head vertically, horizontally or diagonally. It does make things very difficult. For my part, the position is now even more confused than it was at the beginning.
Could we try to get one or two of the most elementary aspects of this subsection clear? I think we are all agreed that the intention, and perhaps the effect, of this subsection is that in future imported wheels for striking a flint will not be duty free. At the moment they are duty free; they pay nothing at all. In future they will not be duty free. As I understand it, the Financial Secretary, in justification of removing the exemption, says that the duty will be very small; that it will be only ⅕d.; and therefore does not matter very much.
If it is as simple as that, and if the duty being imposed is negligible, why impose it at all? What is the necessity for it? Why has it suddenly become administratively necessary? It cannot be a duty reason. It cannot assist the Revenue to have a duty of ⅕d. For what reason has it suddenly become administratively necessary to have a duty of ⅕d. on wheels for striking a flint? We have had no answer to that question, and I do not think we can part with the matter until we have some explanation.

§ Mr. Boyd-Carpenter
I will endeavour to clarify the matter further for the hon. Gentleman's benefit. The subsection he seeks to delete is one under which the importation of these wheels can be duty free when it is being effected by a manufacturer of a lighter. Generally speaking, and apart from that exception, these wheels have been subject to duty under the old position, and though at a very small rate they will continue generally to be subject to duty. Subsection (4) deals with the provision which gave to manufacturers an exemption from duty when they imported these wheels for the purpose of manufacturing the complete article. The argument I was attempting to adduce earlier was that the necessity for that provision, which was a substantial necessity when the rate of duty on the article was 7s. or 5s., was quite clearly infinitely less necessary when the 1947 rate of duty had been reduced to something less than ⅙d. That is the position.
It is not, therefore, quite a question, as the hon. Gentleman suggested, of "Why impose a duty at all?" The duty is part of the general ad valorem 10 per cent. under the Import Duties Act. It is a question of the exception, and it is the exception to liability for duty, whose real purpose has ceased to exist owing to the change in the amount of duty, which we propose to remove.

§ Mr. Jay
We have now finished with the wheels we were discussing on subsection (4), but these wheels are only wheels within lighters. Subsection (4) is a subsection within a Clause, and we are now discussing the main Clause, which, unless I completely misunderstand it, continues the Customs Duty on mechanical lighters. In subsection (1) we read that: subject to the provisions of this section, the duty of customs … shall be charged on mechanical lighters imported incomplete as well as complete. It shall be charged on all imported mechanical lighters.
Since that is what the Clause substantially does, I think we are entitled to ask the Government, as did my hon. Friend the Member for Islington, East (Mr. E. Fletcher) briefly in moving his Amendment, whether a new light has not been thrown on this matter by the report of the Monopolies Commission on the subject of matches. This duty on mechanical lighters, which I think is agreed to be a heavy duty, was originally imposed, and has been maintained, mainly for protective purposes in order to achieve an equality, a counter balance as between the duty on matches and the duty on lighters. Its purpose, I think the Financial Secretary will agree, was to prevent what would at that time, before we had the Commission's Report, have been regarded as unfair competition between the two. We have now, however, thanks to the Report of the Monopolies Commission, a number of new facts established on which, no doubt, the President 1948 of the Board of Trade will give us his views later tonight. We now know that this match combine is a monopoly.

§ The Temporary Chairman
I think it would be quite out of order to discuss that on this Question, "That the Clause stand part of the Bill." I do not know for certain whether this Clause increases the duty or not, but if it does the right hon. Gentleman may refer, as he was a few minutes ago, to the idea that the countervailing duty may be unfair.

§ Mr. Jay
I was not simply going to discuss the question of matches, Mr. Bowles. I was going to ask the Committee whether it is desirable now, in view of these facts, to have a countervailing duty on mechanical lighters, which is substantially the effect of this Clause. It could have been argued, no doubt, before we had this additional information, that if we were to have a tax on matches—and there is a heavy tax on matches—we must have a corresponding tax on mechanical lighters; but surely that argument is considerably weakened, for the producers of matches have other advantages which are peculiar to themselves.
So far as I know the manufacturers of mechanical lighters are not combined together in any particular monopoly or ring, and have not been found to be indulging in any particular restrictive practices, but we have now been informed—I summarise the facts very briefly—that the British match industry is what the Commission calls a "complete and integrated monopoly." We should also all agree, I think, with the view of the Commission that competition is desirable with this match monopoly to protect the public interest. I should have thought that that would have been the view of hon. Members on the opposite side of the Committee, who have often lauded the values of competition, and in particular the President of the Board of Trade, who made many brave speeches about private monopolies in former Parliaments.
These facts have all been established. I do not think any of us are in any doubt that mechanical lighters are, perhaps, the most powerful competitors with matches. If it is the case that there is a monopoly in the match industry, and that we should 1949 all like to see greater competition, and if it is also the case that this duty on mechanical lighters was imposed to prevent or at least to restrain competition with matches by mechanical lighters, is there not at least a serious argument in these circumstances, and unless and until the Government take some other action of which we have no knowledge at present, for reconsidering whether we really wish to continue the tax on mechanical lighters at all?
I hope, therefore, that the Financial Secretary will tell us whether the Government, who may have seen the Commission's Report before we did but who may, nevertheless, not have seen it before taking their decisions on the Budget, have now reconsidered this duty in the light of the Report of the Commission, and whether they are going to take any other action which may make this duty unnecessary; or whether they do not propose to take any action at all. In the light of this very authoritative Report from a Commission who have clearly rooted out these facts very thoroughly over a long period of time, and given a clear and convincing and unanimous Report which makes it quite clear that the present situation in the match industry is thoroughly undesirable from the point of view of the consumers and of the national interest, I can hardly believe that the Government intend to take no action at all.
I do hope, therefore, that either the Financial Secretary or the President of the Board of Trade will give us their view on whether or not this duty should be continued. I feel the Committee is being asked by this Clause to continue a form of indirect but nevertheless definite and special protection, by means of an import duty, for the present match monopoly. I have very grave doubts whether the Committee ought to do that, and, therefore, if we cannot be given any light or guidance on the Government's intentions my hon. Friends may feel that they ought to divide against this Clause.

§ Lieut.-Colonel Lipton
It is a fact revealed in the Monopolies Commission's Report on the match industry that for seven years from 1921 to 1928 there were no duties on lighters. The duty was abolished in 1921 and reimposed in 1928. It is obvious that this country and its financial resources were able to survive 1950 the period during which there were no duties on lighters whatsoever. In 1928 the duty on lighters was reimposed, since when the duty has increased by 12 times. At the same time as the duty on lighters was increased twelvefold the duty on matches was increased by only three and a half times.
It seems quite obvious that mechanical lighters are subjected to a far higher degree of taxation than has been imposed upon matches. That, in my view, and, I think, probably in the view of many of my hon. Friends, is a most unsatisfactory state of affairs, particularly in the light of the information that has now been made available to the country of the very favourable position, from the point of view of match manufacturers, in which the match industry finds itself.
The other unsatisfactory feature of the present duty as applied to lighters is that the duty charged on lighters is heavy, and it is a flat rate per lighter. The duty being a flat rate means that the duty is the same quite regardless of quality and price, the effect of which, as pointed out in the Commission's Report, is that the production of cheap, simple lighters of the wartime Utility type has been discouraged to the disadvantage of the public as a whole, and to the disadvantage of cigarette smokers and pipe smokers who in other respects make a very substantial contribution to the revenue. In respect of lighters they are subjected to what is a most unfair burden, a burden which may not have been exposed to the extent that it has been but for the publication of the Monopolies Commission's Report on the match industry.
I do hope that we may have some explanation from the Financial Secretary about his intentions in the matter, because those of us who are in the habit of using mechanical lighters and who make a substantial contribution to the Treasury through imposts on the tobacco we smoke in cigarettes and pipes ought to receive some consideration now. I do hope that the Financial Secretary will be able to give us some information which will deter hon. Members on this side from voting against the inclusion of this Clause.

§ Mr. E. Fletcher
I am prepared to concede that when the Budget was framed the Chancellor was not aware of what was in the Report on matches. I am prepared to concede that this was looked at 1951 purely as a revenue matter. It may be that the Treasury were justified, but in fairness to the public they must now appreciate that since these revelations have burst upon the country a new situation has arisen. The public are rightly concerned. They are incensed by the feeling that they have been victimised by the match makers for years. There is a great deal of feeling on both sides. I hoped that it would have been shared by hon. Gentlemen opposite.
If this Motion was not approved the Government would be given an opportunity to reconsider the whole position in the light of that Report. We do not put this forward as a contentious argument intended to embarrass the Government. The revenue aspects of this matter have been superseded by other aspects in which the public interest is concerned.

§ Mr. Dalton
We want to strengthen the hands of the President of the Board of Trade.

§ Mr. Fletcher
That is so. We want the matter looked at in the light of the alarming revelations of the Monopolies Commission. We hope that the Government will give an assurance either that the Clause will be withdrawn or that the whole matter will be inquired into afresh in the light of that Report.

§ Mr. Boyd-Carpenter
I do not think that the proposals in this Clause raise the issue of the recent Report of the Monopolies Commission about which on an appropriate occasion my right hon. Friend the President of the Board of Trade will no doubt have something to say. This Clause simply reduces the duties payable not on complete lighters but on certain parts of them. I explained earlier that for some years it was thought necessary to impose on all parts of lighters the same rate of duty as that which would fall on a complete lighter. That was to prevent evasion of the import duty by the importation of parts of a lighter with subsequent assembly in this country.
The Clause modifies the position to a certain extent. It provides that the body or such main part of a lighter as may be prescribed shall continue to be subject to the provision and to carry with it the full rate of duty, but that other parts, the ordinary small parts of a lighter needed for replacement purposes, shall 1952 not be chargeable with duty as if they were complete lighters but shall be subject only to the 10 per cent. ad valorem duty to which they were subject as a result of the Import Duties Act, 1932.
Perhaps I should explain why we think this is desirable. Protection against evasion by the importation of parts is maintained by providing that the body of the lighter, without which one cannot assemble one, shall still carry the full rate of duty plus such other parts as it might be necessary to prescribe from time to time, but by exempting from this rate of duty, though leaving them still subject to the 10 per cent., the spare parts needed for repairs and maintenance. They include those wheels which the Committee discussed earlier.
It was thought that in the interests of international trade, especially trade with Switzerland, whence many of these lighters are imported, a system under which the smallest spare part suffered the full rate of duty was unfair and involved an excessive interference with international trade. It meant that if anybody imported one of these lighters a spare part was unobtainable save on payment of duty equivalent to the duty on the whole lighter. In view of the desirability of removing unnecessary obstructions to international trade, and to European trade in particular, and as it is not now necessary for the purpose of preventing evasion, I suggest to the Committee that it is sensible now to impose on these spare parts only the small rate of duty due under the Import Duties Act.
7.15 p.m.
That is the purpose and effect of the Clause. To some extent I had to foreshadow it in discussing the Amendment, since the subsection to which the Amendment related would have been even more incomprehensible without some reference to the general effect of the Clause on a whole. That is the effect. This is not a very great matter. The revenue involved is trifling, but it is as a small contribution to the freeing of trade retrictions that the proposal is presented.

§ Mr. Jay
If we approve the Clause will there still remain a heavy Customs duty on imported mechanical lighters? Will that still be the case?

§ Mr. Boyd-Carpenter
It is the case if the Committee approve the Clause but, 1953 subject to what may be said to the contrary, my reading of the position is that if the Committee decided that the Clause should not stand part of the Bill, Section 6 of the Finance Act, 1928, would still operate to impose the duty over the whole of the spares as well as on whole lighters.