DYESTUFFS (IMPORT REGULATION) BILL. (Hansard, 13 March 1934)

§ LORD TEMPLEMORE
My Lords, I beg to move that this Bill be now read a second time. The object of this Bill is to place on a permanent footing the prohibition of importation of synthetic organic dyestuffs and intermediate products used in their manufacture, which was enacted by the Dyestuffs (Import Regulation) Act, 1920. That Act was originally passed for a period of ten years only and would have expired on the 14th January, 1931, had it not been prolonged by successive Expiring Laws Continuance Acts. The Act of 1920 aimed at the establishment of a healthy dyestuff industry in this country in order that the serious shortcomings which the War period had shown to exist in the home sources of supply might be remedied. Whereas in 1913 the annual output of dyestuffs in this country was about 9,000,000 lbs., it increased rapidly during the War period, and in 1922 had reached about 24,000,000 lbs. If the industry had remained unprotected after the War, the powerful dyestuffs organisations abroad would have been enabled to crush the comparatively weak industry in this country. Under the protective effect of the prohibition of importation, except under licence, the industry has grown by leaps and bounds, and in 1929 the output reached nearly 50,000,000 lbs.
110 In more recent years, this figure has somewhat decreased owing to the depression in the consuming industries but has remained very near to 50,000,000 lbs. per annum. Whereas in 1913, something less than 22 per cent. of our total consumption of synthetic dyestuffs was made in this country, in 1922 the percentage had risen to 79 per cent.—although the number of varieties was still comparatively small—and at the present day amounts to about 90 per cent. of our consumption, with a very large increase in the number of varieties of dyestuffs manufactured. A large number of special dyestuffs which are used in small quantities, running into, perhaps, 1,000 to 2,000 varieties, are still imported, so that the variety of dyestuffs made by the British industry is still insufficient for consumers' needs and continued protection is necessary. As regards intermediate products, which are substances intermediate between coal tar distillates and the finished dyestuffs, whereas in 1913 practically none was made in this country, at the present time imported intermediates are little more than 1 per cent. of the total output of dyestuffs in this country. It will be seen that the Act of 1920 has had in large measure the effect for which it was designed—namely, to build up in this country a dyestuff industry which will enable our consumers of dyestuffs to obtain their requirements from the home manufacturer. It has, at the same time, had beneficial action in other directions. It has promoted very considerably the output of the chemical engineering industry in this country. Chemical plant for dye-making not previously obtainable here is now readily procurable, and practically all machinery and plant necessary for the manufacture of dyestuffs can now be obtained without difficulty from British chemical engineering manufacturers.
The establishment of a healthy dyestuff industry has also served the very vital purpose of enabling this country to have ready to hand an organic chemical industry available at short notice for the output of munitions of the various types required for purposes of national defence. Your Lordships may say that all these advantages have been gained at the expense of the consumer—what about the price? I hear the noble Lord, Lord Rhayader, say, "Hear, hear." I have great pleasure in telling your Lordships 111 that, although the output of dyestuffs has been so vastly increased during the period of operation of the Dyestuffs (Import Regulation) Act, 1920, prices have declined very materially from those which obtained immediately after the War. Whereas the average price of all dyestuffs made in the United Kingdom in 1913 was about ls. Perlb., and in 1920 about 4s. 4d.per lb., at the end of 1928 it was ls. 6½d. per lb. Since that date further reductions took place, but during 1932 prices again rose to the 1928 level. Early in that year an agreement was reached between the chief Continental suppliers of dyestuffs and the largest manufacturers in this country. The price increase which occurred appears, however, to have been merely an increase from a level to which prices had been reduced in 1928 in the hope of obtaining more business—a hope said to have proved vain. It is understood that prices have not varied since 1932, and I may say that these prices compare very favourably with the prices obtaining in Germany.
The Act of 1920 provided for the constitution of a Licensing Committee to advise the Board of Trade as to the grant of licences for the importation of dyestuffs, colours and intermediate products. In addition, it provided for the establishment of a Development Committee to advise the Board of Trade in respect of the efficient and economical development of the dye-making industry. The Development Committee, in a Report made in 1932 on the dyestuffs industry in this country, recommended by a majority that the Act should be continued on the existing basis for a period of three years. A minority, however, representing the colour users on the Committee, were unfavourable to any extension of the existing prohibition, on the grounds mainly that the existing Act had sufficed to build up a healthy dyestuff industry and that in this country the agreement arrived at between the chief British dye-makers and those of the Continent made further protection unnecessary. In view of the conflicting advice which the Board of Trade received from the Development Committee, the question of the future of the dyestuffs industry was, in December, 1932, referred by the Chancellor of the Exchequer to the Import Duties Advisory Committee who were invited to consider the position which would arise on the 112 expiry of the existing Act, whether it should be continued and, if so, for how long and under what conditions, or, alternatively, if it should be discontinued and, if so, what the position should be with regard to import duty on the products previously covered by it.
The Committee presented their Report in July, 1933, in Command Paper No. 4411. Their main recommendation was that the prohibition of importation of dyestuffs and intermediate products should be continued indefinitely, but that colouring matters which are within the Act of 1920 should no longer be prohibited from importation. It was considered that these could be adequately dealt with under the import Duties Act, 1932. The Committee further recommended that dyestuffs should no longer be subject to the general ad valorem duty of 10 per cent. but that intermediate products, in general, should remain liable to this duty. They recommended further that any complaints from responsible bodies of consumers of exploitation in respect of prices charged for dyestuffs or intermediate products should be referred to an independent body for consideration and that that body should have power to investigate the position and publish their findings. The Import Duties Advisory Committee were themselves prepared to undertake that task. The present Bill gives effect to the recommendations of the Import Duties Advisory Committee apart from those relating to questions of import duty, and, except in one or two simple matters relating to administration, does not go beyond those recommendations. The recommendations relating to import duties are such as the Import Duties Advisory Committee are themselves in a position to initiate. As the result of such action on their part, synthetic dyestuffs have already been placed on the Free List, and an application is at present before the Committee to place certain intermediate products used by dyers instead of dyestuffs on the Free List in addition.
Coming to the Bill itself, Clause 1 removes the limitation of ten years on the operation of the 1920 Act and provides for its continuance as a permanent measure. The method followed in the clause is the normal method for continuing indefinitely an Act which has previously had a limited operation. It was followed, as your Lordships will 113 remember, in the case of the Summer Time Act, 1925. Clause 2 defines in some detail the substances which are within the prohibition on the one hand and those which are excluded on the other. Clause 3 gives effect to a recommendation of the Import Duties Advisory Committee for amending the constitution of the Development Committee. Whereas under the Act of 1920 the constitution of the Development Committee was defined as being simply a Committee of persons concerned in the trades of dye maker or dye user and of such other persons not directly concerned in such trades as the Board may determine, under the new Bill the Development Committee has for a nucleus the Licensing Committee which will advise the Board on the issue of licences; and in addition, representatives, first, of the textile industry; secondly, of the heavy chemical industry; thirdly, of chemical science; and fourthly, of the two Government Departments (namely, the War Office and the Board of Trade) which are mainly interested in the dyestuff industry.
Clause 4 is an entirely new clause, which has no counterpart in the principal Act. It is an important clause for the protection of the consumer of dyestuffs and gives effect to the recommendation of the Import Duties Advisory Committee that they should have power to investigate complaints by substantial consumers when their interests are prejudiced by the prices charged. Provision is made that a report of the Committee following such a complaint shall be made to the Board of Trade and be laid before both Houses of Parliament. It is provided, also, that the Import Duties Advisory Committee shall have, for the purposes of the inquiry, the powers of obtaining information conferred upon them by the Import Duties Act, 1932. Clause 5 lays down provisions as to the future printing of the principal Act when this Bill is passed; and Clause 6 contains merely the short title.
The proposals in the Bill are put forward by the Government as being required for the continued protection of the dyestuff industry, an industry which is important for national defence as well as providing essential material for some of our largest export trades. The Bill also provides for the continued expansion of the industry, while giving consumers adequate protection against any possible abuse by the industry of its exceptional 114 position. This Bill was passed by another place on the 18th December last on Second Reading by a majority of 173; it passed through Standing Committee without amendment and was read a third time on the 5th of this month by a majority of 155. It is considered by the Government to be a necessary and not unimportant part of their policy of providing reasonable protection for the industries of this country, and I confidently recommend it to the acceptance of your Lordships. I beg to move.

§ LORD MARLEY
My Lords, the Opposition are not opposing this measure, but we would like the noble Lord, if it is possible, to give a little more information. I thought he very cleverly slurred over the question of price in a rather remarkable manner, by omitting to give us the actual price level per lb. to-day as compared with the price level in 1913. Of course, he realises that the high level of 4s. 4d. in 1929 and 1930 was a purely fortuitous price level, which has no relation to actual facts. If, therefore, we may have some idea about the price level to-day as compared with 1913, I think that will assist the House.
Then he mentioned an exceedingly interesting point, the use of this industry for the provision of munitions of war. The question arises whether the Government have any arrangement with the industry whereby the industry can in case of war be taken over and the production transferred to munitions of war. It would be interesting to know whether there is any agreement between the Government and the industry which is so efficiently protected by Government action, whereby the industry can actually be secured for the purposes of Government production in war time, and whether there is any limitation on the prices of munitions of war in order to prevent the taxpayer being defrauded by the protected position of this industry securing a very high price level for products of national importance in war time. I do not know whether there is any agreement, or whether it may be necessary in Committee to put in some clause dealing with that subject. The Opposition would be very glad to have any information upon that point.
115 Furthermore, could the noble Lord give us some information as to the monitions which would be involved in matter? It is not a question of national interest; it is a question for the information of the House, because we are asked to make permanent a temporary measure, and we want to know, broadly-speaking, what are the munitions of war involved in this industry. It is important to know that. The noble Lord only mentioned the War Office as being interested. I would like to know why the Air Ministry and the Admiralty are not interested. It would appear that most munitions of war are equally important for all three of the Services. If there is some peculiar production which only the Army is interested in perhaps the noble Lord would give us that information. To sum up we would like a little more information about the price-level; we would like to know what are the arrangements between the Government and the industry when the industry is taken over for war-time production; what are the munitions of war produced; and why the Air Ministry has been excluded from those interested in this matter.

§ LORD MOUNT TEMPLE
My Lords, I hope the Government will not give the noble Lord any information as to what use in time of war they propose to make of this measure. I think it is most important from the point of view of national security that such information should be kept inside the Government Department. I hope, therefore, that though the Government may give the noble Lord information as to prices, they will give him no information on the point I have mentioned.

§ LORD TEMPLEMORE
My Lords, I will try to answer a few of the questions that the noble Lord, Lord Marley, asked me. He said I rather skated over the question of prices. I do not think I did, but I should like to repeat what I said: Whereas the average prices of all dyestuffs made in the United Kingdom in 1913 was about 1s. per lb., and in 1920 about 4s. 4d. per lb., at the end of 1928 it was 18. 6d. per lb. Since that date further reductions took place, but during 1932 prices rose again to the 1928 level. I believe, as a matter of fact, it was 1s. 6d. per lb., and prices, I said, compared favourably with the prices in 116 foreign countries. As a matter of fact I did not give what the price was in Germany, for instance, where in 1913 it was 10d. per lb., and in 1931. 1s. 9d. per lb. so that the proportion of increase is considerably more in Germany than it is in this country.

§ LORD MARLEY
The point I tried to make was this. The noble Lord told us that in 1932 there had been a 50 per cent. rise in prices over 1913, which he did not explain. He then omitted to mention 1933 or the beginning of 1934. I cannot see why the statistics should be fifteen months old.

§ LORD TEMPLEMORE
I think I am correct in saying that the prices now remain what they were in 1932.

§ LORD MARLEY
Fifty per cent. above 1913?

§ LORD TEMPLEMORE
Yes.

§ LORD MARLEY
That is a substantial rise.

§ LORD TEMPLEMORE
It is, of course, a rise, but the point I tried to make was that it was not as substantial as the rise in certainly one foreign country.

§ LORD MARLEY
The noble Lord had not quoted the price in Germany.

§ LORD TEMPLEMORE
No, I omitted it partly to shorten my speech, but I have now given it to the noble Lord. I think the noble Lord asked what agreement there was to take over in connection with the manufacture of munitions of war. I am afraid I have not been provided with that information, and I am not in a position to tell the noble Lord. As regards the munitions involved, I am told that they include all high explosives. I do not know the reason why the War Office only is represented on the Committee which I mentioned, and not the Admiralty and the Air Ministry, but it is a fact, I think, that at present only the Board of Trade and the War Office send representatives to that Committee. I have answered to the best of my ability the questions put to me by the noble Lord opposite.