New Clause. — (Allowances for a spirit used for the manufacture of per- fumery).

Orders of the Day — Finance Bill. – in the House of Commons at on 8 July 1924.

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If any person proves to the satisfaction a the Commissioners of Customs and Excise that any spirits in respect of which the duties imposed by this Act have been paid have been delivered to him and used solely in the manufacture or preparation of perfumery, he shall, subject to such regulations as the Commissioners of Customs and Excise may prescribe, be entitled to obtain from the Commissioners repayment of the sum of thirty-seven shillings in respect of every gallon, computed at proof, of spirit so used.—[Sir K. Wood.]

Brought up, and read the First time.

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I beg to move, "That the Clause be read a Second time."

1.0 A.M.

It is my privilege to explain to the Committee what I conceive the purpose of the Amendment to be. I would refer to a 'Memorandum which no doubt many Members of the House have received from a trade, which I have no doubt many of them would desire to encourage at the present time. This Clause is for the purpose of assisting, if possible, the perfumery manufacturers of this country. They complain very much of the prejudicial effect on their industry of the existing high duty on the spirit used in the manufacture of their products. They state the British perfumery trade is burdened by serious disabilities as the result of this excessive duty and the position is intensified by the adverse conditions which the industry has to contend with in competition with foreign manufacturers. They state that the loss of alcohol in process of manufacture is considerable, amounting on the average to 10 per cent. As far as their home trade is concerned, all these losses have to be borne by the British manufacturers. Therefore the suggestion is that they should be entitled to be repaid the sum of 37s. on every gallon of spirit so used. I hope the Chancellor of the Exchequer will consider sympathetically the request made by this important industry and accept this new Clause.

Photo of Sir George Clayton Sir George Clayton , Widnes

I should like to speak in support of what has been said of the great disadvantages the British manufacturers of perfumery work under as compared with manufacturers in France. In France they manufacture perfumery with the alcohol duty free, but we in this country have to pay the full Excise Duty on the alcohol used in the perfumery manufacture. Then, as the hon. Member has said, when the French perfumery comes into this country it is charged excise on the alcohol the perfumery takes, whereas in this country we have to pay the full duty on the alcohol used in the manufacture and about 10 per cent. of the alcohol is lost in the manufacture. There is thus another disadvantage. The case of the perfumery industry presents a similar case to that of the early days of the dye industry. The first dye was discovered in this country, and the first manufactory of dyes was put up in this country. But it was driven out because the Government at that time would not allow the manufacturers duty free alcohol which was necessary for its manufacture. Germany gave that facility to their manufacturers. Consequently the first factory in this country was dismantled and the industry went to Germany. I am sure the Chancellor of the Exchequer is not anxious to drive any other industry out of this country, and I ask him to make some concession on that account in order to maintain in this country what is a struggling industry.

Photo of Mr Philip Snowden Mr Philip Snowden , Colne Valley

The hon. Member who was unexpectedly called upon to father this Amendment did not put forward the Motion with any great enthusiasm, and had he understood it a little more, he would probably have had even less enthusiasm. The hon. Member who has just sat down conveyed the impression, by his reference to the competition the industry is supposed to suffer at the hands of France, that by the heavy duty, something over 70s., on a gallon of spirit, the British manufacturers are at a disadvantage with their French competitors. But he ought to be aware of the fact that there is a heavy import duty on the French perfumeries which come into this country in competition with the English manufacturers. There is a specific import duty of £6 3s. 5d. per gallon, and that fact disposes of the contention that the British perfumeries, notwithstanding the heavy duty on spirit, are placed at a disadvantage. There is no foundation either for the assumption that the British perfumery trade is disappearing through French competition. As a matter of fact, in recent years the imports from France have fallen. I have not seen the circular which the hon. Member quoted, but no doubt reference is made to the alleged disappearance of the British trade. If it is not, then the statement has been made by the supporters of a reduction in the Spirit Duty. Had there been a falling away in the demand, it must be explained by other reasons, perhaps a lessened capacity of the British people to spend money on expensive luxuries.

Photo of Mr Philip Snowden Mr Philip Snowden , Colne Valley

This is a retail trade. The cost of the Amendment would be a million pounds a year and it would simply be defending a luxury trade. In these circumstances I do not think any case has been made out for the Amendment and I am sorry I cannot accept it.

Question, "That the Clause be read a Second time," put, and negatived.