Second Schedule.

Orders of the Day — Finance Bill. – in the House of Commons on 23rd June 1925.

Alert me about debates like this

Photo of Mr John Whitley Mr John Whitley , Halifax

I understand that it is the desire to have a short general discussion on the Silk Schedule on the first Amendment on the Paper—to leave out Part I—and, in addition, I am anxious to reserve an opportunity for an Amendment standing in the name of the hon. Member for Leicester (Mr. Pethick-Lawrence) which deals with the aggre- gate of the values of all the components. It has been represented to me that that is a special point and should have some attention. So I hope that will not be covered in the discussion previously taken.

Photo of Captain William Benn Captain William Benn , Leith

Might I ask you about discussing the Second Schedule? You will observe the Part II of the Schedule deals with drawbacks and the question of duties. I presume we shall be able to discuss that on the Chancellor of the Exchequer's new Schedule.

Photo of Mr John Whitley Mr John Whitley , Halifax

That would be in Order. That rather takes away from what I understood was desired to be raised on Part I of the Schedule.

Photo of Captain William Benn Captain William Benn , Leith

I beg to move to leave out Part I.

We have now got to the Second Schedule, which is really the operative part of this Silk Duty. I suppose, although I do not know what manuscript Amendments the Financial Secretary may be drafting of a financial or any other sort, we may take it that for the time being this is the final proposal of the Government with regard to silk. As the Chancellor of the Exchequer has the usual daily crop of Amendments on the Order Paper, one need not deal in detail with the new points which have arisen. Therefore, my observations shall be more of a general character in connection with the Schedule which we are discussing, and in order that the discussion may be order I propose to move to leave out Part I of the Schedule. I need not repeat the arguments that have been raised in earlier Debates except to invite the Financial Secretary, or, it may be, the Chancellor of the Exchequer himself, when he comes later to intervene, to explain to us clearly what it was that induced him to sacrifice £900,000 of revenue in a full year in order to turn a revenue tax into a protective tax. We have never had an answer to that question. I think we are certainly entitled to an answer before we finally part with this Bill, as we may do to-night. That is a general question. I would like to ask on a particular point now—and I will not take up the time of the House at any great length. I refer to page 22 of the Bill. The hon. Member for Macclesfield (Mr. Remer) will be interested, I feel sure, in what I have to say on this point. At the head of page 22 we read: any other articles made wholly or in part of artificial silk. 11.0 P.M.

We understood that when this tax was introduced it was a Silk Tax. It was proposed and urged always as a Silk Tax. It was defended as a Silk Tax. The hon. Member for Macclesfield has been engaged for years to my knowledge in securing a protective tax on silk. I want to say a word about made-up articles It is quite possible that from 1st July there will be involved considerable alteration in the trade of many exporters from all over the world to this country. It is quite possible that they may make a pool and send word to those concerned not to put a trace of silk into the goods, forwarded otherwise they will have a heavy tax to pay. On the other hand it is possible that the articles we receive from abroad may have a considerable element of silk in them, some larger some smaller, and if that occurs then I say that this part of the tariff on page 22 which levies an import duty on the goods is a shameless departure on the part of the Government from the undertaking given at the election not to impose a general tariff. After all, what does it mean? It means that any article with a trace of silk is considered as dutiable. It has been said that the Chancellor has based himself largely on the experience of the United States. They have worked a Silk Tax there, and if they can do it in the United States, we can do it. But when we pointed out to the right hon. Gentleman that in the United States and elsewhere articles with less than 5 per cent. of silk content came in free he would not adopt the suggestion. He will not adopt it, on the ground, which I am sure, without offence, and certainly without any departure from the truth, I can call the very flimsy ground, that 1 per cent., or a half of 1 per cent., or a tenth of 1 per cent., of silk in the article will adversely affect the interests of the home manufacturer who has got to pay Excise Duty on this microscopical quantity of silk. I can assure hon. Gentlemen that these are not mere debating points, but that they are points which are exercising the minds of traders. If a small quantity of silk is left in the article, as is the case to-day, what happens? In the case of myriads of articles—umbrellas, clothing, bags, and the hundreds and hundreds of things one can see in the warehouses in Cheapside— the Chancellor is going to charge an import duty of 2 per cent. not on the silk, which we give him leave to tax, but on the total value of the article—a minimum of 2 per cent. and a maximum of 33 per cent. To show that I am not giving fantastic examples, I will give the names of the firms who are interested in the matter, and who have supplied me, through the London Chamber of Commerce, with the particulars. I have no special interest in the merchant, but I have a special interest in the welfare of the consumer, and I am well aware that if this charge is put on it will be passed on by the merchant to the consumer, and it is in the interest of the consumer as a citizen that we are entitled to speak in this House.

Take the case of shoes. Under the Schedule the Chancellor is levying a duty of 2 per cent. on the value of shoes. I have a letter, which was sent to the London Chamber of Commerce, signed by the Saxone Shoe Company, Upsons, Limited, Messrs. Lilley and Skinner and the London Shoe Company. These people import shoes. [Interruption.] Yes, they are committing the crime of importing foreign goods, which is the way in which we receive payment for our exports. I think it is about time that a nation of shopkeepers ceased to regard it as a crime to carry on foreign trade. These people import. Let us have it out. They are merchants importing foreign goods. Now the worst is known. These four firms state they import shoes, and the average value is 16s. a pair, and the value of the silk in the shoe is not more than one-eighth to one-quarter per cent. of the article. The shoes would be taxed at 2 per cent., say 4d., which may represent 6d. or even 1s. when it comes to the retail price in the shop. What leave has the House of Commons given the Chancellor of the Exchequer to impose a duty of 6d. or 1s. on a pair of shoes from abroad? People make a great mistake if they think this is some high-falutin' argument about silk. It is an argument about every article of imported clothing, and many other articles as well. Take the case of artificial silk stockings —artificial silk, not real silt. The difference between the Excise Duty and the importer's duty is 2s. 10d. That is to say that, per dozen, there is that amount of Protection, which means to say that the home manufacturer will raise his price in accordance with the Customs Duty, and the consumer will pay so much more for his stockings.

Photo of Mr John Remer Mr John Remer , Macclesfield

Is it 2s. 10d. per dozen?

Photo of Captain William Benn Captain William Benn , Leith

I will give the hon. Member the full particulars. The retail price is 1s. 11d. a pair or 23s. per dozen; the weight of artificial silk in them is seven ounces per dozen valued at 2s. 6d. per dozen, and the Excise Duty per dozen is 6d. The 2s. 10d. per dozen is the measure of the protection. Some hon. Members will be surprised to learn that this is not a Silk Duty but a general tariff on clothing which happens to have a trace of silk in it. Then there is the case of Fred W. Millington, of Manchester. These people import an article known as men's cotton fleece vests and pants for working men's wear. They are ordered from the United States and as the winter is coming on the sale of these goods begins about this time. By the time these goods are delivered there will be a demand for winter clothes. What are the facts about these articles? This firm tell me that there is in these goods a thin braid and one little trace of silk, the proportion being about one-twentieth of 1 per cent. That is the amount of silk in these particular articles, which are of the commonest use by the poorest class of consumer. This consignment of goods from America with one-twentieth of 1 per cent. of silk in them is going to be taxed 2 per cent. on the value of the article. The whole suit, which may cost 10s., may suffer a tax when it gets to the retail shop of 6d. I want hon. Members opposite to understand that under the guise of a tax on luxuries our working people are paying 4d. or 6d. extra on the ordinary commodities they wear. I consulted people in the trade, and I find it amounts to 2d. on the c.i.f. price and 4d. or 6d. on the retail price. If the hon. Gentleman thinks that is exaggerated, I will make it 4d. It is a speculative figure, but that does represent taxes on workmen's clothing I have not the least doubt.

That is the main burden of the charge against this part of the Schedule. The Financial Secretary said we must tax on the value of the article. Why not tax the silk content of the article? The right hon. Gentleman cannot answer. I know he thinks his perfect answer is going to be, "We cannot tell when an article made up like that comes, what the silk content is—it is too complicated." When the exporter applies for a drawback he has to find out somehow what the silk content is. Yet the Financial Secretary cannot find it out for the purpose of getting rid of this objectionable part of the Schedule. I am certain if these Schedules could have been debated in the light of day, when the Debates were reported, the serious objections that would have been raised would have destroyed the whole proposal. I do not think the Treasury would have dared to thrust this thing through if they understood the chaos it would involve and the hardship upon poor consumers of a number of articles. Whether anything can be done at this stage beyond amending the grammar of the Bill, I do not know. I suppose not, but I think anyone would be lacking in his duty if he did not make, as I make, an emphatic protest against the latter part of this Schedule.

Mr. GUINNESS:

The House has already had to-day one fairly full discussion on the Silk Duty, and I do not think at this hour it will be the general desire that we should again traverse that very wide ground. The hon. and gallant Gentleman has put two specific points which I think deserve an answer. He has asked why it is we sacrifice £900,000 of revenue as compared with the first estimate given in the Budget speech on the Silk Duties, and he has suggested that we have done so because we want to bring about not a revenue tax but one of naked Protection. If he will examine the two Schedules he will see there is no such deep and, from his point of view, vicious explanation of the change to be drawn. The reason of the possible decrease in revenue we now anticipate is that we have very much lightened the duty all round. In consultation with all sections of the trade, we have re-cast the grading of the various levels of import duties and excise duties, and we have sacrificed a considerable amount of revenue in bringing down the burden on artificial silk. By far the greater part of our remissions are on artificial silk. Concessions on real silk only amount to about £150,000 out of a total loss of £900,000.

It ill-becomes hon. Members opposite, who have been continually harping on the false issue that we are taxing the necessary clothes of the poor, to criticise us because we have met, to some extent, their criticism by reducing the yield we expect to get from the duties on artificial silk. Before I leave that, I should point out to the hon. and gallant Gentleman that, quite apart from these arguments in favour of reducing the duty on artificial silk used specially by the poorer classes of the community, it was pointed out, by those with far closer experience of the silk trade as a whole, both real and artificial, than we can ever hope to rival, that, as originally proposed, the duties on artificial silk were of such a weight as to be likely to transfer the demand from artificial silk to real silk. As we did not want to disturb the trade more than we could help, we tried, by means of turns, to compensate the home producer for any possible loss, and we have tried, in recasting these duties and lightening the burden on artificial silk, to prevent any unfair disturbance of the present distribution of demand as between the real and the artificial article. Those are the two main reasons that account for the changes which we have made in the Schedule relating to these duties. The other point which the hon. and gallant Gentleman again raised this evening, is that we are taxing made-up articles ad valorem and not on the specific basis. The hon. and gallant Gentleman knew what my answer was going to be, because we had this matter out the other night. The answer is that it is the only basis on which you can tax these made-up articles. I am sorry to have to repeat it—

Photo of Captain William Benn Captain William Benn , Leith

May I draw the attention of the right hon. Gentleman to page 24 of his Bill, where it is provided that a made-up article may claim drawback on the basis of the silk content as estimated by the Commissioners. If you can estimate the silk content for a drawback, why cannot you estimate the silk content for a duty?

Mr. GUINNESS:

Those are British made-up articles, and there you have evidence, just as in the case of mixed textiles. You have the definite evidence of the manufacturer as to the amount of silk that went in; but you have not any evidence in the case of articles, of a widely divergent character, brought in in large quantities from abroad. With regard to the question as to how you are to tax these made-up articles except on an ad valorem basis, you would destroy them if you tried to apply specific duties by weight, because they would have to be dissolved into their component parts and their value would be destroyed.

Photo of Mr William Mackinder Mr William Mackinder , Shipley

If it is possible to find out the quantity of silk in an exported tissue containing silk made from imported goods, is it not equally possible to find out the quantity of silk in the imported article?

Mr. GUINNESS:

No, it is not, because in the one case you have the evidence of the manufacturer in this country. He can support his statement by receipts for the duty he has paid, and he can show—it has all been worked out in very great detail— the exact silk that he used in the particular article for which he is getting a rebate.

Photo of Mr William Mackinder Mr William Mackinder , Shipley

What becomes of his through ticket?

Mr. GUINNESS:

The through ticket is an additional method of avoiding any grievance to this trade. Surely, the hon. Member, who has made very interesting contributions to our Debates, not, as he has several times told us, from the political point of view, but from his great interest in the textile industry, cannot grudge this industry a concession which they themselves have asked for, to facilitate the supply for foreign markets of these articles containing silk without having to lock up their capital in paying duty? I cannot understand the hon. Member's attitude in objecting to an arrangement of that kind. Let me come back to the point of this ad valorem duty. It is impossible to weigh the silk contents of these made-up goods, but it is quite easy to estimate the value of their component parts, and that is why we have been bound to have an ad valorem scale to arrive at the method of reckoning what duty shall be charged on the various values of goods.

Photo of Mr William Mackinder Mr William Mackinder , Shipley

If it is impossible to find the amount of silk in the goods that are imported, how is it possible to distinguish between an article containing 5 per cent., an article containing 10 per cent., and an article containing more than 20 per cent.?

Mr. GUINNESS:

I have fold the hon. Member, I should think for the tenth time, that we cannot tell the amount of silk in an article that is brought in made up, but we can tell the value, and I should have thought that was a perfectly simple distinction.

Photo of Mr William Mackinder Mr William Mackinder , Shipley

The Schedule on page 22 gives different taxes for different percentages of silk in the made-up goods. The right hon. Gentleman says they cannot distinguish the percentages, yet they are making a scale of taxes for the various percentages. If it is impossible to distinguish the percentages, how can you make the various scales for the varying percentages of silk in the goods?

Mr. GUINNESS:

The hon. Member is misrepresenting what the Schedule says. It does not charge according to the amount of the silk. It is charged according to the value of the silk. If he cannot appreciate the difference between amount and value it is not because I have not done my best to explain it.

Photo of Mr William Mackinder Mr William Mackinder , Shipley

You cannot get the value unless you get the weight.

Mr. GUINNESS:

Surely the hon. Member does not pretend that Customs officials are in the habit of weighing all these diverse articles which they have to value. When he decides what is a reasonable price to pay for a suit of clothes does he have it weighed? To come back to this ad valorem scale, it is true there are more or less arbitrary steps, but the method by which we have arrived at these steps is that in each case the top level of value covered by the step is equivalent to the maximum that would be paid if the silk were imported made up and were liable to a specific duty by weight, and the reason of that is quite simple. We do not want to give encouragement to import these goods made up rather than in their unmade-up form. We do not want to discourage the making-up industry in this country.

Photo of Captain William Benn Captain William Benn , Leith

That is to say the purpose of the arrangement is to protect the making-up trade in this country.

Mr. GUINNESS:

No, it is not. It is to avoid protecting the making up trade in foreign countries. I can easily understand the Free Trade attitude of the hon. and gallant Member, but I cannot understand his new attitude of inverted Protection, protection for the foreigner as against the British manufacturer. The second point of the hon. and gallant Member was that it was not reasonable to charge a duty of 2 per cent. ad valorem where the silk ingredient was insignificant. If we do not do that, we should be giving inverted Protection to the foreigner, because the British producer in competition with the foreigner would be using duty-paid material. He could not claim any rebate. He would also have the handicap that he would have to face the loss by waste on the duty-paid material, while the foreigner would be free. He would not have paid duty on his materials, nor would he have paid duty on silk which did not exist in the imported article which had been lost in the waste. That is the reason why we cannot limit our ad valorem scale to articles with a considerable content of taxable material. The foreigner can do that because he has no Excise Duty. We alone have this system of revenue duty with a countervailing Excise, and where you have that, if you are going to be fair to your own people, you must, even in the case of the most insignificant dutiable ingredient, insist that a corresponding duty should be paid by the foreigner. I do not think it would be fair to the House to pursue further all the details of the Schedule. We shall get to them on the various Government Amendments later on. I hope the House will let us come to a decision on the Schedule.

Photo of Mr David Reid Mr David Reid , Down

The Financial Secretary spoke about protection for the foreign manufacturer. Some treatment of foreign tissue for the foreign market is carried on in my constituency, and the people who carry on that industry allege that a duty of 5s. 3d. and the drawback, which is in the second part of the Schedule, does give an advantage to the foreign manufacturer. These people have asked me and other hon. Members who represent the North of Ireland to put their views to the Government. At the end of last week a copy of a Bill was circulated in which the Financial Secretary to the Treasury will find that on silk tissue, wholly undischarged, the amount of duty is 4s. 4d. Previously it had been at a higher rate. I have received a letter from the gentleman who acted as negotiator on behalf of the other members of the trade, written on the 20th June, in which he said: I have great pleasure in telling you that the Government have made a concession in the new Schedule, bringing in undischarged tissues at 4s. 4d. per pound instead of 5s. 3d. This meets our case, and removes the handicap under which we were suffering compared with the foreign manufacturer. So that you may consider our agitation at an end. This morning, however, another Bill was circulated, to be substituted for the Bill previously issued, and in that the duty on silk tissue undischarged is 5s. 3d. The complaint I make is that it is not fair to this House nor to Members of this House that the Government, in negotiation with a certain set of manufacturers, should circulate a copy of a Bill showing that the concession which these manufacturers asked for had been granted, that these people should stop their agitation, if I may call it so, cease their demand, or any attempt to negotiate further, on the ground that the concession has been granted. Then, when it is too late, another copy of the Bill is circulated in which the concession is withdrawn. I think it very difficult in these circumstances to justify what has happened, and it puts hon. Members of this House in a very false position in representing their constituents. We are entitled to ask for some explanation as to why this should be done. To my mind it is rather like what one might expect from a certain class of company promoter, but it does not seem to me the kind of thing that should be done. If a genuine mistake has been made, it seems to me that the Report stage of the Bill should be postponed, to enable negotiations to be completed.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

The last speaker has made a most valuable last-moment contribution to the discussion. It shows the danger of juggling with taxes. When you try to make a scientific tax you are bound to have complications of this kind. If I mistake not, a great deal of the silk to which the hon. Member refers is imported from Japan and is printed in the North of Ireland. There is a large trade there in finishing imported Japanese silk and producing beautiful fabrics not only for the home market but for export. Another matter to which I would draw attention is the pitfalls from which the Government could not escape in trying to meet the difficulties with regard to made-up fabrics. We were told that the whole purpose of these duties was to produce revenue, and the Chancellor of the Exchequer when introducing the Budget emphasised his contention that free traders need not be troubled because these duties had been carefully worked out on an Excise as well as a Customs basis. I do not think that the Government are trying to do anything wrong in making this special arrangement with regard to manufactured garments. I think that it is inevitable. I agree that it is impossible to separate out the value of the silk in made-up articles. I do not think that the custom house with all its ingenuity-could do it. What has happened is the inevitable result of tinkering with a great complex industry of this kind, but the result should be a warning to the Government against further experiments of this kind, because in trying to protect this industry or that they are disturbing the whole course of industry, and injuring not only the home trade and the consumer but also the export trade.

Mr. GUINNESS:

It is only through the indulgence of the House that I can speak again, but, in reply to the hon. Member for Down (Mr. Reid), I wish to explain what took place in connection with the schedule in reference to silk. It is true that negotiations had been going on as to the rate at which the particular class of imports should be taxed, and it was chiefly on the question of the discharged rate that the discussions took place. After the Bill left Committee, owing to a printer's error, a change was made, not in the discharged rate, but in the undischarged rate. The Government had nothing whatever to do with the change. It was a printer's error. It was brought to our notice by one of those who are interested, writing to thank the officials of the Board of Customs for having been good enough to make the change in response to the representations made. The mistake would, no doubt, have been discovered by the Parliamentary draughtsman, but it happened that this particular letter first drew attention to it. As it was a printer's error, it was put right, and the correction is in the new edition of the Bill. It had nothing whatever to do with the Government. We very much regret the mistake, but we could not avoid it.

Photo of Mr James Hudson Mr James Hudson , Huddersfield

The Financial Secretary cannot be allowed to get away with that explanation. The hon. Member for Down (Mr. Reid) has certainly done a good service to his constituency, and I am sorry to think that other hon. Members representing constituencies which

are concerned have failed to raise this extremely important point, and get some modification of the Government's attitude. The Financial Secretary has made the debating point that an attempt is being made to protect the foreigner against his British competitors. What are the facts? Take the import of wool tissues into this country. They amount to 2½ million square yards per month. A great many of these tissues have no silk content at all. But suppose it were the case that all of them had some silk content? What is likely to happen as a result of this proposal? You are refusing to count goods that come into this country with less than 5 per cent. silk content as purely woollen goods. On the other hand, the foreigner in many cases does meet you in this matter. On the last occasion when I spoke I gave a list of the countries concerned. If you add up the total amount of woollen tissues exported, you find that they are 18½ million square yards per month. So the debating point of the Financial Secretary comes to this: that he is resisting the very simple proposal we have made, that the Huddersfield Chamber of Commerce made to the Chancellor of the Exchequer by correspondence, and is doing so apparently in the interests of this 2½ million square yards of imports, and he is running the risk of making it difficult for Yorkshire manufacturers to export the 18½ million square yards that are sent monthly from this country. The Government are going to put a very serious obstacle in the way of our trade. I wish that the Financial Secretary had been pressed by Yorkshire and Lancashire Conservative Members in this matter. I state again that a large amount of responsibility for the obstacles that will be put in the way of trade will rest with Conservative Members opposite, who have absolutely betrayed the trading interests of their constituents.

Question put, "That the words proposed to be left out, to the end of page 21, line 26, stand part of the Bill."

The House divided: Ayes, 251; Noes, 130.

Division No. 206.AYES.[11.40 p. m
Acland-Troyte, Lieut.-ColonelAstbury, Lieut.-Commander F. W.Beamish, Captain T. P. H.
Agg-Gardner, Rt. Hon. Sir James TAstor, ViscountessBeckett, Sir Gervase (Leeds, N.)
Albery, Irving JamesAtholl, Duchess ofBellairs, Commander Carlyon W.
Alexander, Sir Wm. (Glasgow, Cent'l)Balfour, George (Hampstead)Bennett, A. J.
Amery, Rt. Hon. Leopold C. M. S.Balniel, LordSothell, A.
Applin, Col. R. V. K.Barclay-Harvey, C. M.Birchall, Major J. Dearman
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Barnett, Major Sir RichardBlades, Sir George Rowland
Blundell, F. N.Greenwood, William (Stockport)Percy, Lord Eustace (Hastings)
Boothby, R. J. G.Grenfell, Edward C. (City of London)Perkins, Colonel E. K.
Bourne, Captain Robert CroftGretton, Colonel JohnPhilipson, Mabel
Bowyer, Capt. G. E. W.Grotrian, H. BrentPleiou, D. P.
Brass, Captain W.Guest, Capt. Rt. Hon. F. E.(Bristrol, N.)Power, Sir John Cecil
Brassey, Sir LeonardGuinness, Rt. Hon. Walter E.Pownall, Lieut.-Colonel Assheton
Bridgeman, Rt. Hon. William CliveHacking, Captain Douglas H.Preston, William
Briscoe, Richard GeorgeHall, Vice-Admiral Sir R. (Eastbourne)Price, Major C. W. M.
Brittain, Sir HarryHall, Capt. W. D'A (Brecon & Rad.)Radford, E. A.
Brocklebank, C. E. R.Hanbury, C.Raine, W.
Brooke, Brigadier-General C. R. I.Hannon, Patrick Joseph HenryRawson, Alfred Cooper
Buckingham, Sir H.Harland, A.Rees, Sir Beddoe
Bullock, Captain M.Harrison, G. J. C.Reid, Capt. A. S. C. (Warrington)
Burman, J. B.Hartington, Marquess ofReid, D. D. (County Down)
Burton, Colonel H. W.Haslam, Henry C.Renter, J. R.
Butt, Sir AlfredHawke, John AnthonyRentoul, G. S.
Cadogan, Major Hon. EdwardHeadlam, Lieut.-Colonel C. M.Rice, Sir Frederick
Campbell, E. T.Henderson, Capt. R. R. (Oxf'd, Henley)Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Cassels, J. D.Henderson, Lieut.-Col. V. L. (Bootle)Roberts, Samuel (Hereford, Hereford)
Cayzer, Sir C. (Chester, City)Heneage, Lieut.-Col. Arthur P.Ropner, Major L.
Cazalet, Captain Victor A.Herbert, S. (York, N. R-, Scar. & Wh'by)Russell, Alexander West (Tynemouth)
Chadwick, Sir Robert BurtonHogg, Rt. Hon. Sir D. (St. Marylebone)Salmon, Major I.
Chamberlain, Rt. Hn. J. A. (Birm. W.)Hohler, Sir Gerald FitzroySamuel, A. M. (Surrey, Farnham)
Chapman, Sir S.Hope, Capt. A. O. J. (Warw'k, Nun.)Samuel, Samuel (W'dsworth, Putney)
Charteris, Brigadier-General J.Hope, Sir Harry (Forfar)Sandeman, A. Stewart
Chilcott, Sir WardenHopkins, J. W. W.Sanders, Sir Robert A.
Christie, J. A.Horlick, Lieut.-Colonel J. N.Sanderson, Sir Frank
Churchill, Rt. Hon. Winston SpencerHoward, Capt. Hon. D. (Cumb., N.)Savery, S. S.
Clayton, G. C.Hudson, Capt. A. U. M. (Hackney, N.)Shaw, Lt.-Col. A. D. Mcl.(Renfrew, W.)
Cobb, Sir CyrilHudson, R. S. (Cumberl'nd, Whiteh'n)Shaw, Copt. W. W. (Wilts, Westb'y)
Cochrane, Commander Hon. A. D.Hume, Sir G. H.Sheffield, Sir Berkeley
Cockerill, Brigadier-General G. K.Huntingfield, LordShepperson, E. W.
Colfox, Major Wm. PhillipsHutchison, G. A. Clark(Midl'n & P'bl's)Simms, Dr. John M. (Co. Down)
Cooper, A. DuffIliffe, Sir Edward M.Sinclair, Col. T. (Queen's Univ., Belfast)
Cope, Major WilliamJackson, Lieut.-Colonel Hon. F. S.Skelton, A. N.
Courthope, Lt.-Col. Sir G. L.Jacob, A. E.Somerville, A. A. (Windsor)
Craig, Capt. Rt. Hon. C. C. (Antrim)Jephcott, A. R.Spender Clay, Colonel H.
Craig, Ernest (Chester, Crewe)Kidd, J. (Linlithgow)Stanley, Lord (Fylde)
Craik, Rt. Hon. Sir HenryKing, Captain Henry DouglasStanley, Col. Hon. G. F.(Will'sden, E.)
Croft, Brigadier-General Sir H.Lamb, J. Q.Stanley, Hon. O. F. G. (Westm'eland)
Crooke, J. Smedley (Deritend)Lane-Fox, Lieut.-Col. George R.Steel, Major Samuel Strang
Crookshank, Col. C. de W. (Berwick)Leigh, Sir John (Clapham)Storry Deans, R.
Curtis-Bennett, Sir HenryLister, Cunliffe- Rt. Hon. Sir PhilipStott, Lieut.-Colonel W. H.
Curzon, Captain ViscountLloyd, Cyril E. (Dudley)Strickland, Sir Gerald
Dalkeith, Earl ofLoder, J. de V.Stuart, Hon. J. (Moray and Nairn)
Davidson, J.(Hertf'd, Hemel Hempst'd)Lougher, L.Styles, Captain H. Walter
Davidson, Major-General Sir John H.Luce, Maj.-Gen. Sir Richard HarmanSugden, Sir Wilfrid
Davies, Maj. Geo. F.(Somerset, Yeovil)Lumley, L. R.Sykes, Major-Gen. Sir Frederick H.
Davies, Sir Thomas (Cirencester)Lynn, Sir R. J.Templeton, W. P.
Davison, Sir W. H. (Kensington, S.)Maitland, Sir Arthur D. Steel-Thompson, Luke (Sunderland)
Dawson, Sir PhilipMcDonnell, Colonel Hon. AngusThomson, F. C. (Aberdeen, South)
Dean, Arthur WellesleyMcLean, Major A.Tinne, J. A.
Dixon, Captain Rt Hon. HerbertMacMillan, Captain H.Titchfield, Major the Marquess of
Doyle Sir N. GrattanMakins, Brigadier-General E.Tryon, Rt. Hon. George Clement
Drewe, C.Margesson, Captain D.Vaughan-Morgan, Col. K. P.
Edmondson Major A. J.Mason, Lieut.-Col. Glyn K.Wallace, Captain D. E.
Elliot, Captain Walter E.Merriman, F. B.Ward, Lt.-Col. A. L.(Kingston-on-Hull)
Elveden, ViscountMeyer, Sir FrankWarner, Brigadier-General W. W.
Erskine, Lord (Somerset, Weston-s.-M.)Mitchell, S. (Lanark, Lanark)Waterhouse, Captain Charles
Everard, W. LindsayMitchell, W. Foot (Saffron Walden)Watson, Sir F. (Pudsey and Otley)
Fairfax, Captain J. G.Moles, ThomasWells, S. R.
Falle, Sir Bertram G.Monsell, Eyres, Com. Rt. Hon. B. M.Wheler, Major Sir Granville C. H.
Falls, Sir Charles F.Moore, Sir Newton J.White, Lieut.-Colonel G. Dairymple
Fanshawe, Commander G. D.Moore, Lieut.-Colonel T. C. R. (Ayr)Williams, Com. C. (Devon, Torquay)
Fermoy, LordMoore-Brabazon, Lieut.-Col. J. T. C.Williams, Herbert G. (Reading)
Fielden, E. B.Moreing, Captain A. H.Wilson, Sir C. H. (Leeds, Central)
Fleming, D. P.Morrison-Bell, Sir Arthur CliveWilson, R. R. (Stafford, Lichfield)
Forestier-Walker, L.Murchison, C. K.Windsor-Clive, Lieut.-Colonel George
Fraser, Captain IanNail, Lieut.-Colonel JosephWise, Sir Fredric
Fremantle. Lieut.-Colonel Francis E.Neville, R. J.Womersley, W. J.
Galbraith, J. F. W.Newman, Sir R. H. S. D. L. (Exeter)Wood, E. (Chest'r, Stalyb'dge & Hyde)
Ganzoni, Sir JohnNicholson, O. (Westminster)Wood, Sir S. Hill- (High Peak)
Gates, PercyNuttall, EllisWoodcock, Colonel H. C.
Gibbs, Col. Rt. Hon. George AbrahamO'Connor, T. J. (Bedford, Luton)Worthington-Evans, Rt. Hon. Sir L.
Glyn, Major R. G. C.O'Neill, Major Rt. Hon. Hugh
Goff, Sir ParkOakley, T.TELLERS FOR THE AYES.
Grant, J. A.Ormsby-Gore, Hon. WilliamSir Harry Barnston and Major
Greene, W. P. CrawfordPennefather, Sir JohnHennessy.
NOES.
Adamson, Rt. Hon. W. (Fife, West)Attlee, Clement RichardBatey, Joseph
Adamson, W. M. (Staff., Cannock)Baker, J. (Wolverhampton, Bilston)Benn, Captain Wedgwood (Leith)
Alexander, A. V. (Sheffield, Hillsbro')Barnes, A.Bowerman, Rt. Hon. Charles W.
Ammon, Charles GeorgeBarr, J.Broad, F. A.
Bromfield, WilliamHore-Belisha, LeslieScurr, John
Bromley, J.Hudson, J. H. (Huddersfield)Shaw, Rt. Hon. Thomas (Preston)
Buchanan, G.Jenkins, W. (Glamorgan, Neath)Sitch, Charles, H.
Charleton, H. C.John, William (Rhondda, West)Slesser, Sir Henry H.
Clowes, S.Johnston, Thomas (Dundee)Smith, Ben (Bermondsey, Rotherhithe)
Cluse, W. S.Jones, Henry Haydn (Merioneth)Snell, Harry
Compton, JosephJones, Morgan (Caerphilly)Snowden, Rt. Hon. Philip
Connolly, M.Jones, T. I. Mardy (Pontypridd)Spencer, G. A. (Broxtowe)
Cowan, D. M. (Scottish Universities)Kelly, W. T.Stamford, T. W.
Crawfurd, H. E.Kennedy, T.Stephen, Campbell
Dalton, HughKirkwood, D.Sutton, J. E.
Day, Colonel HarryLawson, John JamesTaylor, R. A.
Duncan, C.Lindley, F. W.Thomson, Trevelyan (Middlesbro. W.)
Dunnico, H.Livingstone, A. M.Thorne, G. R. (Wolverhampton, E.)
Edwards, C. (Monmouth, Bedwellty)Lunn, WilliamThorne, W. (West Ham, Plaistow)
Edwards, John H. (Accrington)Mackinder, W.Thurtle, E.
England, Colonel A.MacLaren, AndrewTinker, John Joseph
Evans, Capt. Ernest (Welsh Univer.)Maclean, Nell (Glasgow, Govan)Varley, Frank B.
Fenby, T. D.March, S.Viant, S P.
Forrest, W.Maxton, JamesWalsh, Rt. Hon. Stephen
Gadle, Lieut.-Col. AnthonyMitchell, E. Rosslyn (Paisley)Warne, G. H.
Gibbins, JosephMorris, R. H.Watson, W. M. (Dunfermline)
Gillett, George M.Morrison, R. C. (Tottenham, N.)Watts-Morgan, Lt.-Col. D. (Rhondda)
Graham, D. M. (Lanark, Hamilton)Murnin, H.Webb, Rt. Hon. Sidney
Grenfell, D. R. (Glamorgan)Naylor, T. E.Welsh, J. C.
Griffiths, T. (Monmouth, Pontypool)Oliver, George HaroldWestwood, J.
Groves, T.Palin, John HenryWheatley, Rt. Hon. J.
Grundy, T. W.Paling, W.Whiteley, W.
Guest, J. (York, Hemsworth)Parkinson, John Allen (Wigan)Wilkinson, Ellen C.
Guest, Dr. L. Haden (Southwark, N.)Pethick-Lawrence, F. W.Williams, David (Swansea, East)
Hall, F. (York, W. R., Normanton)Ponsonby, ArthurWilliams, T. (York, Don Valley)
Hall, G. H. (Merthyr Tydvil)Potts, John S.Wilson, C. H. (Sheffield, Attercliffe)
Hamilton, Sir R. (Orkney & Shetland)Richardson, R. (Houghton-le-Spring)Wilson, R. J. (Jarrow)
Hardie, George D.Riley, BenWindsor, Walter
Harris, Percy A.Ritson, J.Wright, W.
Hayday, ArthurRoberts, Rt. Hon. F. O. (W. Bromwich)Young, Robert (Lancaster, Newton)
Hayes, John HenryRobertson, J. (Lanark, Bothwell)
Henderson, Right Hon. A. (Burnley)Robinson, Sir T. (Lancs., Stretford)TELLERS FOR THE NOES.
Henderson, T. (Glasgow)Robinson, W. C. (Yorks, W. R., Elland)Sir Robert Hutchison and Captain
Hirst, G. H.Saklatvala, ShapurjiGarro-Jones.
Hirst, W. (Bradford, South)Scrymgeour, E.

Mr. GUINNESS:

I beg to move, in page 21, line 27, to leave out "6s. 8d."

The next three series of Amendments standing on the Paper in the name of the Chancellor of the Exchequer deal with rates for noil yarn and tissue. The House will remember the discussion on noil yarns last week, when the hon. Member for East Middlesbrough (Miss Wilkinson) brought forward the case of noil tissues. We were then receiving representations, contrary to our original information, that noil tissue and noil yarn were imported in considerable quantities. When the Bill was originally framed, we understood that most of this yarn and tissue were manufactured from waste in this country, and we have, therefore, in this series of Amendments, substituted a rate on noil yarn of 1s. 5d. the 1b. for the original rate, where it was not specially treated, and on noil tissue a special rate of 1s. 7d. the lb. The reason for this is evident when the House realises that imported noils are only charged duty of a 1s. a pound; therefore, as the waste is only 20 per cent., clearly that fact makes a lower rate of duty absolutely necessary. The other tissue covered by this series of Amendments is that class of silk which is produced in the East. It is unloaded by immersion in rice. The rice removes the gum from the silk but some of the rice remains in the tissue, and, therefore, if habutai is charged at the same rate as discharged tissue, it means that the importer is paying for rice in addition to silk. This would be obviously unfair in the industry, and it is important to our British trade because there is a considerable industry in dyeing and treating this habutai in this country. You cannot dye it until you have washed out the rice content, and the British dyer would be seriously handicapped if he had to pay, not only for silk, but also for rice which would be of no value. He would be in a very unfair position as compared with the foreign dyer, who would then be able to send it into this country with the rice washed out. For these reasons, and because these duties are concessions to opinions which have been pressed in the House, I hope, without further debate, we may be allowed get these Amendments.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Middlesbrough East

When the Chancellor of the Exchequer has gone so far to meet the point I raised as to reduce these duties from 7s. 9d. to 1s. 7d., I feel the only gracious thing to do is to say, "Thank you very much" and leave it at that. Yet—I want to bring in a "but"— though I appreciate what the Chancellor of the Exchequer has done, I desire to say that he is placing a burden on a perfectly innocent trade. Even the tax as at present suggested, the 1s. 7d. a, pound, will mean an increase in price. That is to say, if it amounts to 4d. per yard bearing tax and when profits are made on the money that is necessarily held up, it means, roughly, 110 to 120 per cent. on the retail price, which will bring this material that is being sold by firms like Selfridges and Pontings at 9¾d.—it will, even with the reduction, bring it to Is. 8½d I will not weary the House or the Chancellor of the Exchequer by again going over the details I gave on a former occasion, but I just want to remind the right hon. Gentleman of this: that the higher rate of tax on any other material containing silk works out at an average of 24 per cent. on the selling price. If we have a 24 per cent. tax on these noil tissues it means that a firm like Pontings or Selfridges sell this tissue at 1s. 1d. per yard. If the duty is raised, then the price works out at 1s. 8½d., and it means that these tissues will simply not be sold, the reason being that they will then be brought to a price higher than that at which much better material is now selling —and they are not taxed. The very cheap and more inferior article will be raised to such a price that people will not buy it, because they can get better quality at the price.

I should like to suggest to the Chancellor of the Exchequer that what he is doing is really reducing the source of revenue that he means to get. If he charges even this 1s. 7d. per lb. he will not get the amount of revenue that he would get if he brought his tax down to the rate of crepe de Chine. Further information has come to me since I last spoke, and I find I understated the amount when I said it would be £10,000,000 Actually it is more like £15,000,000 Taking that figure, and making the duty 7½d. per lb., that, roughly, gives a revenue to the Chancellor of £104,000 a year. I suggest that if the right hon. Gentleman takes the lower figure, it will mean, at least, that this material can be sold, and it will be very much better, even from the revenue point of view, than if he puts on this tax of 1s. 7d. I do not want to seem ungracious, but as the right hon. Gentleman has made this alteration, I wonder if he could possibly take what I have said into consideration?

Mr. GUINNESS:

I can only speak again with the permission of the House, but I should like the hon. Member to know the reason for what we have done. She said that the cost of these noil tissues is 10d. per lb. There is a great deal of discrepancy about the figures. The hon. Member gives a figure of 2s. per lb.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Middlesbrough East

Are we talking about the same thing?

12 M.

Mr. GUINNESS:

I think so. No doubt the duty will not work out at an ad valorem rate, and the explanation is that our prices show the actual wholesale rate in the country. We are informed that instead of being 10d. per lb., it varies from 2s. 8d. to 4s. per. lb. wholesale; and for these reasons we consider that the rates which we now propose to apply to this are reasonable rates.

Photo of Captain William Benn Captain William Benn , Leith

I think the hon. Gentleman is mistaken even on the figures that the hon. Member for East Middlesbrough (Miss Wilkinson) gave. I would like to draw the attention of the House to this sloppy document, full of mistakes and full of Amendments. Let me take as an illustration this noile. Would the House believe that in the document as drafted now there is a Customs duty of 7s. 9d. on this material and a drawback of 1s. 7d. The Chancellor has probably never noticed it. I was certainly surprised when I found it out. I looked to see if he had altered the drawback, and I found he had not. The proposal as brought forward and before it was altered at the instance of the hon. Member for Middlesbrough actually charged a Customs duty of 7s. 9d. and only gave 1s. 7d. drawback. So much for the interest of the Chancellor of the Exchequer in the export trade! Now he has reduced the Customs duty from 7s. 9d. to the present figure of 1s. 7d. and has left the drawback where it was. But these are details. We are merely taxing the people! It is true we are doing it at midnight, and that it really does not matter, since it forms a convenient plat- form for the Chancellor of the Exchequer to make his displays.

I have only got the figures supplied to me by the trade, and I am basing myself on those, but I have taken the greatest pains to see that the sources of my information are authoritative and well-informed. What is the real charge against this sort of tax? It is that it is a tax which is graded in inverse ratio to the capacity to pay. It does not charge the dear stuff more and the cheap stuff less, but it charges the cheap stuff more and the dear stuff less. There is ninon at 4 per cent., Japanese silk at 20 per cent., and other grades up to 26 per cent. You cannot get out of that so long as you tax material by weight instead of by value. That is what we have repeatedly pointed out. I have an easy way of escape from the tax. Throw the whole lot overboard and save the money on warships. [Interruption.] Yes, we had Free Trade then, and if the Liberal Government had not found the money I do not know what might have happened when the clash with the Germans came. I have only one further point, and that is as to the right hon. Gentleman's controversy about the rate of percentage of this tax. With a cost per 1b. of 2s. 5d. and a tax of 1s 7d., the rate of tax is 65 per cent. It is perfectly true that the Chancellor was proposing a tax of 317 per cent., and he has reduced it to 65 per cent. I do not think that deals with the difficulty, but inasmuch as it is an improvement I presume no one will divide against the Amendment. Still, it is necessary to point out, whatever the hour and whatever the impatience of hon. Members may be, that this system, even if it works, will impose great hardship, and it is doubtful whether it can work at all.

Amendment agreed to.

Further Amendments made:

In page 21, line 27, at the end, insert the words.

Not being noil yarnthe lb.6s.8d.
Noil yarnthe lb.1s.5d.

In page 21, line 30, leave out "7s. 9d."

In page 21, line 31, at the end, insert the words

Noil tissuethe lb.1s.7d.
Tissue known as habutai not dyed or printedthe lb.6s.6d.
Other tissuesthe lb.7s.9d.

Photo of Mr Frederick Pethick-Lawrence Mr Frederick Pethick-Lawrence , Leicester West

I beg to move, in page 22, line 8, column 2, to leave out the word "value," and to insert instead thereof the words "aggregate of the values of all the components."

This proposal arises out of the Amendment which was carried during the Committee stage and was proposed by the Chancellor of the Exchequer. This is my first and probably my only attempt to endeavour to obtain a scientific tariff. The position is that the proposal as originally proposed in the Budget contained two columns. The first gave the percentage of silk in the value of the article, while the second gave the percentage of duty on the value of the article, and the word value was used in the same way in the two columns. The tax was not of a scientific kind because it varied between considerable limits. In the case of an article wholly of silk the percentage was 33⅓ while with an article in which the percentage of silk was 20 per cent., the tax was 166⅔ on the value of the silk in the article. In the second paragraph this varied from 50 to 200 per cent., and below 5 per cent. it was still more varied. When the Chancellor of the Exchequer moved his Amendment to alter the meaning of the word "value" in the first column he made this discrepancy very much greater than it had been before. He explained that it was possible to have an article in which the value might well be ten times the value of all its component parts. That is rather a large variation, but if that is so it is possible for the tax on a piece of silk in an article of 20 per cent. of the aggregate value of the component parts to be 1,600 per cent. of the silk which is being imported. That is a very strange result arising out of these tariff proposals. In the case of articles under the second paragraph it is possible for the tax to be 2,000 per cent. of the value of silk in the article imported, on the assumption that the value as a whole can be 10 times the aggregate of the component parts. Personally, I think his own assumption is rather an exaggerated one, and it is only an extreme case, but it must be perfectly clear that under these proposals, if you are going to take a different definition of value in column 1 of the Schedule from what you take in column 2, it is perfectly possible to get a tax on imports which amounts to several hundred per cent. of the value of the silk imported. I do think that that goes a very long way from the scientific tariff which the Chancellor professes to attain. I can understand a tariff which tries to exclude all foreign articles; I can understand a scientific tariff; but I cannot understand a tariff which imposes arbitrarily, according to the amount of silk in an article, a tariff that may be 33⅓ per cent., and may run up to several hundred per cent. I believe that if you are going to have an arbitrary tariff of that kind, you will increase the incentive to smuggling, you will not get your revenue, and you will create a position which the traders and the people of this country will very much resent.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

With great labour over long weeks, with the advice of the officials of the Customs and Excise Department, in constant consultation with representatives of many branches of the trades affected, and under the continuous pressure and guidance of debate in the House of Commons, we have arrived at a certain Schedule of Duties. We have been reproached even with the degree to which we have been led to vary and modify our proposals to meet the suggestions from various quarters of the House and different branches of the trade; but in the result we have reached a conclusion, and that conclusion is embodied in the Schedules which are now before the House. The hon. Member for West Leicester (Mr. Pethick-Lawrence), applying the keen energy of his mathematical mind to these problems without being troubled by any of these consultations with the interests concerned, has evolved an alternative plan, and has presented to the House as his contribution the scientific tariff which has figured so much in the legislation of other countries and which he apprehends may some day he introduced into our own. I accept with every acknowledgment his labours, and I speak of them with respect and recognise them with gratitude, but I am sure his own sterling good sense would make him realise that it would be quite impossible at this stage of the Finance Bill to scrap the whole process and sacrifice the whole results of the process by which we have arrived at the present Schedules, and substitute the Schedule which He suggests. For good or ill, the Silk Tax must go forth on its career, on the responsibility of His Majesty's Government, and I really think that, on the whole, the hon. Gentleman, having regard to the views expressed by his party and the views he has expressed on the general structure of the duties, will be well-advised not to claim with undue insistence a position of direct responsibility in regard to these duties.

Photo of Captain William Benn Captain William Benn , Leith

The Chancellor of the Exchequer has not said a word about the Amendment. The Amendment was not offered in a jocular way. It is put forward on behalf of people who are trying to carry on their trade and whose business is being hampered by the right hon. Gentleman and on behalf of the consumers. He has not met a case of that kind by a few jocose remarks. He has to address himself to the Amendment and, if he can, he has to produce arguments to rebut the arguments of the hon. Member for Leicester (Mr. Pethick-Lawrence), one of the Members of this House who was responsible for postponing his return to this House. He must not allow memories of old bitterness to prejudice him against this proposal. He must examine the proposal on its merits. May I explain some of them? Made-up articles are subject to tariff. It is not simply a tax on silk, but a tax on, it may be, gloves, coats, boots, umbrellas or hats. It is a general tax that we are imposing. The question is, what rate of duty are you going to impose in your general tariff? By this change the Chancellor of the Exchequer is imposing 30 per cent. and so forth. He is pushing a whole lot of articles into the higher rate of duty. Then he gets up here and says that this Schedule is the result of long deliberation, consultation with all the interests concerned, and guided by the debates in the House. That is nonsense. It is a thing that was produced here by the Chancellor of the Exchequer himself a few days ago, in the middle of the Committee stage. It was not in the original Bill. There was nothing about the aggregate value of the components in the original Bill. In order to press all these things into the higher rate of tariff, in order to satisfy the Protectionist hunger of the hon. and gallant Member for Bournemouth (Sir Henry Page Croft) and others, he has done this by Amendment. It was not in the original balance of the scheme. He has not given any justification for such taxation. It is simply part of a general protective scheme. The Chancellor of the Exchequer knows perfectly well where he stands and how long he can stand there, and on what conditions. He knows that he has to make his peace with the Protectionist Members of the party opposite. [HON. MEMBERS: "Divide!"] It is not my fault that this comes on at this time of night,

and I intend, and we intend, to exercise the right of criticism. There has been no justification for this change. It was introduced spontaneously by the Chancellor of the Exchequer, and it will have the effect of largely increasing the Protective character of the tariff.

Question put, "That the word "value" stand part of the Bill."

The House divided: Ayes, 203; Noes, 88.

Division No. 207.]AYES.[12.20 a.m.
Acland-Troyte, Lieut.-ColonelGadie, Lieut.-Col. AnthonyMurchison, C. K.
Agg-Gardner, Rt. Hon. Sir James T.Ganzoni, Sir JohnNail, Lieut.-Colonel Sir Joseph
Amery, Rt. Hon. Leopold C. M. S.Gibbs, Col. Rt. Hon. George AbrahamNeville, R. J.
Applin, Colonel R. V. K.Glyn, Major R. G. C.Newman, Sir R. H. S. D. L. (Exeter)
Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Goff, Sir ParkNicholson, O. (Westminster)
Atholl, Duchess ofGrant, J. A.Nuttall, Ellis
Balfour, George (Hampstead)Greene, W. P. CrawfordO'Connor, T. J. (Bedford, Luton)
Balniel, LordGreenwood, William (Stockport)Oakley, T.
Barclay-Harvey, C. M.Gretton, Colonel JohnOrsmby-Gore, Hon. William
Barnett, Major Sir RichardGrotrian, H. BrentPercy, Lord Eustace (Hastings)
Barnston, Major Sir HarryGuinness, Rt. Hon. Walter E.Perkins, Colonel E. K.
Beamish, Captain T. P. H.Hall, Vice-Admiral Sir R. (Eastbourne)Pielou, D. P.
Bennett, A. J.Hall, Capt. W. D'A. (Brecon & Rad.)Power, Sir John Cecil
Bethell, A.Hanbury, C.Preston, William
Blundell, F. N.Hannon, Patrick Joseph HenryRadford, E. A.
Bourne, Captain Robert CroftHarland, A.Raine, W.
Bowyer, Capt. G. E. W.Harrison, G. J. C.Rawson, Alfred Cooper
Boyd-Carpenter, Major A.Hartington, Marquess ofRees, Sir Beddoe
Brassey, Sir LeonardHawke, John AnthonyReid, Capt. A. S. C. (Warrington)
Briscoe, Richard GeorgeHenderson, Capt. R. R. (Oxf'd, Henley)Reid, D. D. (County Down)
Brocklebank, C. E. R.Heneage, Lieut.-Col. Arthur P.Remer, J. R.
Brooke, Brigadier-General C. R. I.Hennessy, Major J. R. G.Rice, Sir Frederick
Buckingham, Sir H.Herbert, S. (York, N. R., Scar. & Wh'by)Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Bullock, Captain M.Hogg, Rt. Hon. Sir D.(St. Marylebone)Roberts, Samuel (Hereford, Hereford)
Burman, J. B.Hohler, Sir Gerald FitzroyRobinson, Sir T. (Lancs., Stretford)
Burton, Colonel H. W.Hope, Capt. A. O. J. (Warw'k, Nun.)Ropner, Major L.
Butt, Sir AlfredHope, Sir Harry (Forfar)Russell, Alexander West (Tynemouth)
Campbell, E. T.Hopkinson, A. (Lancaster, Mossley)Samuel, Samuel (W'dsworth, Putney)
Cayzer, Sir C. (Chester, City)Horlick, Lieut.-Colonel J. N.Sandeman, A. Stewart
Cazalet, Captain Victor A.Howard, Capt. Hon. D. (Cumb., N.)Sanders, Sir Robert A.
Chadwick, Sir Robert BurtonHudson, Capt. A. U. M. (Hackney, N.)Sanderson, Sir Frank
Chapman, Sir S.Huntingfield, LordSavery, S. S.
Charteris, Brigadier-General J.Hutchison, G. A. Clark(Midl'n & P'bl's)Shaw, Lt.-Col. A. D. Mcl.(Renfrew, W.)
Chilcott, Sir WardenIliffe, Sir Edward M.Shaw, Capt. W. W. (Wilts, Westb'y)
Christie, J. A.Jacob, A. E.Sheffield, Sir Berkeley
Churchill, Rt. Hon. Winston SpencerJephcott, A. R.Shepperson, E. W.
Cobb, Sir CyrilKidd, J. (Linlithgow)Simms, Dr. John M. (Co. Down)
Cochrane, Commander Hon. A. D.King, Captain Henry DouglasSinclair, Col. T.(Queen's Univ., Belfst.)
Cockerill, Brigadier-General G. K.Lamb, J. Q.Skelton, A. N.
Courthope, Lieut.-Col. Sir George L.Lane-Fox, Lieut. Col. George R.Spender Clay, Colonel H.
Croft, Brigadier-General Sir H.Leigh, Sir John (Clapham)Sprot, Sir Alexander
Crookshank, Col. C. de W. (Berwick)Lister, Cunliffe-, Rt. Hon. Sir PhilipStanley, Lord (Fylde)
Curzon, Captain ViscountLloyd, Cyril E. (Dudley)Stanley, Col. Hon. G. F. (Will'sden, E.)
Dalkeith, Earl ofLoder, J. de V.Steel, Major Samuel Strang
Davidson, J.(Hertf'd, Hemel Hempst'd)Lougher, L.Stott, Lieut.-Colonel W. H.
Davidson, Major-General Sir John H.Luce, Maj.-Gen. Sir Richard HarmanStrickland, Sir Gerald
Davies, Maj. Geo. F.(Somerset, Yeovil)Lumley, L. R.Stuart, Hon. J. (Moray and Nairn)
Dawson, Sir PhilisLynn, Sir R. J.Styles, Captain H. Walter
Dean, Arthur WellesleyMaitland, Sir Arthur D. Steel-Sugden, Sir Wilfrid
Dixon, Captain Rt. Hon. HerbertMcDonnell, Colonel Hon. AngusSykes, Major-Gen. Sir Frederick H.
Doyle, Sir N. GrattanMcLean, Major A.Templeton, W. P.
Drewe, C.MacMillan, Captain H.Thomson, F. C. (Aberdeen, South)
Edmondson, Major A. J.Makins, Brigadier-General E.Tinne, J. A.
Elliot, Captain Walter E.Margesson, Captain D.Titchfield, Major the Marquess of
Elveden, ViscountMason, Lieut.-Col. Glyn K.Tryon, Rt. Hon. George Clement
England, Colonel AbrahamMerriman, F. B.Vaughan-Morgan, Col. K. P.
Everard, W. LindsayMeyer, Sir FrankWallace, Captain D. E.
Fairfax, Captain J. G.Mitchell, S. (Lanark, Lanark)Ward, Lt.-Col. A. L.(Kingston-on-Hull)
Falls, Sir Charles F.Mitchell, W. Foot (Saffron Walden)Waterhouse, Captain Charles
Fanshawe, Commander G. D.Moles, ThomasWatson, Sir F. (Pudsey and Otley)
Fermoy, LordMonsell, Eyres, Com. Rt. Hon. B. M.Wells, S. R.
Fielden, E. B.Moore, Sir Newton J.Wheler, Major Sir Granville C. H.
Fleming, D. P.Moore, Lieut.-Colonel T. C. R. (Ayr)white, Lieut.-Colonel G. Dairymple
Forestler-Walker, L.Moore-Brabazon, Lieut.-Col. J. T. C.Williams, Com. C. (Devon, Torquay)
Fraser, Captain IanMoreing, Captain A. H.Williams, Herbert G. (Reading)
Fremantle, Lieut.-Colonel Francis E.Morrison-Bell, Sir Arthur CliveWilson, Sir C. H. (Leeds, Central)
Wilson, R. R. (Stafford, Lichfield)Wood, E.(Chest'r. Stalyb'dge & Hyde)TELLERS FOR THE AYES.
Windsor-Clive, Lieut.-Colonel GeorgeWoodcock, Colonel H. C.Captain Hacking and Major Cope.
Wise, Sir Fredric
NOES.
Adamson, Rt. Hon. W. (Fife, West)Harris, Percy A.Ritson, J.
Adamson, w. M. (Staff., Cannock)Hayday, ArthurRoberts, Rt. Hon. F. O. (W. Bromwich).
Alexander, A. V. (Sheffield, Hillsbro')Hayes, John HenryRobertson, J. (Lanark, Bothwell)
Ammon, Charles GeorgeHenderson, Rt. Hon. A. (Burnley)Robinson, W. C. (Yorks, W. R., Elland)
Barr, J.Henderson, T. (Glasgow)Scurr, John
Batey, JosephHirst, W. (Bradford, South)Shaw, Rt. Hon. Thomas (Preston)
Beckett, John (Gateshead)Hore-Belisha, LeslieSitch, Charles, H.
Benn, Captain Wedgwood (Leith)Hudson, J. H. (Huddersfield)Slesser, Sir Henry H.
Bowerman, Rt. Hon. Charles W.Hutchison, Sir Robert (Montrose)Smith, Ben (Bermondsey, Rotherhithe)
Bromfield, WilliamJenkins, W. (Glamorgan, Neath)Spencer, George A. (Broxtowe)
Buchanan, G.John, William (Rhondda, West)Stephen, Campbell
Clowes, S.Johnston, Thomas (Dundee)Sutton, J. E.
Cluse, W. S.Jones, Henry Haydn (Merioneth)Taylor, R. A.
Compton, JosephJones, T. I. Mardy (Pontypridd)Thorne, W. (West Ham, Plaistow)
Cowan, D. M. (Scottish Universities)Kelly, W. T.Tinker, John Joseph
Dalton, HughKirkwood, D.Varley, Frank B.
Day, Colonel HarryLawson, John JamesWalsh, Rt. Hon. Stephen
Dunnico, H.Lunn, WilliamWatson, W. M. (Dunfermline)
Evans, Capt. Ernest (Welsh Univer.)MacLaren, AndrewWatts-Morgan, Lt.-Col. D. (Rhondda)
Fenby, T. D.Maclean, Nell (Glasgow, Govan)Welsh, J. C.
Forrest, W.Maxton, JamesWestwood, J.
Garro-Jones, Captain G. M.Mitchell, E. Rosslyn (Paisley)Wilkinson, Ellen C.
Gibbins, JosephMorris, R. H.Williams, T. (York, Don Valley)
Graham, D. M. (Lanark, Hamilton)Murnin, H.Wilson, C. H. (Sheffield, Attercliffe)
Grenfell, D. R. (Glamorgan)Oliver, George HaroldWindsor, Walter
Groves, T.Paling, W.Wright, W.
Guest, J. (York, Hemsworth)Parkinson, John Allen (Wigan)
Guest, Dr. L. Haden (Southwark, N.)Pethick-Lawrence, F. W.TELLERS FOR THE NOES.
Hall, F. (York, W. R., Normanton)Potts, John S.Mr. Warne and Mr. Charles.
Hall, G. H. (Merthyr Tydvil)Richardson, R. (Houghton-le-Spring)Edwards.
Hardie, George D.Riley, Ben

Mr. GUINNESS:

I beg to move, in page 22, line 42, at the end, to insert the words

"Tissue known as habutai if dyed or printed in Great Britain or Northern Irelandthe lb.7s.9d."
This Amendment is designed to adjust the drawback rate on habutai in view of the lower import duty to which the House has just assented, and to allow habutai the same rate considered as a discharged material. The reason for this is that it is only fair that in the rebate we should allow for the loss of material represented by the washing out of the rice.

Amendment agreed to.

Mr. GUINNESS:

I beg to move, in page 25, line 10, at the end, to insert: 6. Where it is shown to the satisfaction of the Commissioners that any yarn or tissue of silk or artificial silk is being imported solely for the purpose of undergoing a process in Great Britain or Northern Ireland the Commissioners may, subject to such conditions as they think fit to impose for securing the re-exportation of the goods, allow the goods to be imported free of duty.7. If, on the importation into Great Britain or Northern Ireland of any article wholly or in part of silk or artificial silk, it is shown to the satisfaction of the Commissioners—

  1. (a) that the article was produced abroad by means of some process from an article exported from Great Britain or Northern Ireland, and that con- 1480 sequently the case does not fall within the provisions of Section eleven of this Act; and
  2. (b) that the article is liable to duty at the same rate as the duty payable on the exported article from which it was produced; and
  3. (c) that any drawback paid on the exportation of the said article has been repaid;
the duty charged on the re-importation of the article shall, if chargeable by reference to the weight thereof, be charged only upon the amount by which the weight of the article on re-importation exceeds the weight at exportation and, if chargeable by reference to value, shall be charged only on the amount by which the value of the article at re-importation exceeds the value at exportation.8. The Commissioners may make regulations for relieving from any duty of customs or excise chargeable in respect of artificial silk, any artificial silk which is to be used in the manufacture of tissues in part of artificial silk and in part of other fibre, if those tissues are intended for exportation.

Photo of Captain William Benn Captain William Benn , Leith

On a point of Order, Mr. Deputy-Speaker. The next Amendment is put as one under the Chancellor of the Exchequer's name. It is, in fact, an Amendment which covers three separate paragraphs—Nos. 6, 7 and 8— dealing with totally different matters. I do not know whether you leave it open to the House to consider each of these matters separately, if necessary, as they are quite separate issues.

Photo of Mr James Hope Mr James Hope , Sheffield Central

It is open to the hon. Member to move to leave out any part.

Mr. GUINNESS:

I will say a word or two on each of the paragraphs, namely, 6, 7, and 8. Paragraph 6 is to deal with the drawbacks in relation to bringing silk into this country for dyeing and processes. Where it is going to be re-exported the Customs will allow its temporary admission without payment of duty. Paragraph 7 is a temporary arrangement which will only take effect during the first few months where a converse process has taken place and where duty has already been paid on goods which are re-imported. They will not be subject to a second charge for duty. Paragraph 8 is a provision which the House has discussed on former occasions for the through ticket.

Photo of Captain William Benn Captain William Benn , Leith

I may more conveniently raise some questions on the three together. I have got yesterday's Order Paper and I notice that paragraph 7, which is a temporary Measure for the re-import of things sent abroad, was covered by a provision of Clause 10 of this Bill. I find the Clause has nothing to do with the subject. I was somewhat perplexed to find on the Paper to-day that the Chancellor of the Exchequer has amended his own Amendment, and that it now turns out to be Clause 11.It is a small matter. [HON. MEMBERS: "Hear, hear!"] It is a small matter, but it had to be taken in connection with this Amendment. You have reprinted editions when everybody is understood to be suited. When you find that in a solemn matter like finance the Chancellor of the Exchequer has to go through his own Amendments and alter them, I think it would have been better to take a little more time to consider the whole question. That may be only a matter of sloppiness and does not really affect the Amendment and the tax one way or the other. I want to ask about the rebate repayable under paragraph 7. Does it mean that if silk went abroad for process and came in as part of a made-up article and duty was charged on the value of the made-up article would it, if re-exported with some added ornament, have the tax re-imposed ad valorem, on the price of the whole article? Would paragraph 8 apply if artificial silk was used in made-up articles intended for exportation? There is no reason why you should treat tissues more favourably than made-up articles. I would like to know whether the Chancellor has considered this point and whether it is logical.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

So far as No. 8 is concerned, it was not intended that the through ticket should apply to anything but tissues. It is not contemplated that the through ticket will be applied to the made-up articles. They would be covered by provisions dealing with the entrepôt trade. So far as No. 7 is concerned, that, I think, speaks for itself. If an article is re-imported into this country after going through a process, either in weight or in value, then allowance is made and the charge is made on the difference.

Amendment agreed to.

Mr. GUINNESS:

I beg to move, in page 25, line 15, at the end, to insert: 10. Subject to such conditions for safeguarding the Revenue as the Commissioners may impose, the rates of drawback specified in Part IV of this Schedule shall, in respect of yarn and tissues of artificial silk exported by any person who makes an application in that behalf to the Commissioners, have effect during such period, not being less than twelve months, as may be specified in the application in substitution for the rates of drawback set out in Part II of this Schedule.11. In calculating the amount of the drawback payable in respect of any tissue wholly or in part of silk or artificial silk, being tissue from which a portion of the surface has been burnt or cut away in the process of manufacture, the Commissioners shall make such allowance as seems to them proper in respect of any loss of weight due to the burning or cutting. The first of these paragraphs provides for the case where a trader chooses to be dealt with under the individual rates instead of the average rates. He has to make his choice for a period of not le3S than 12 months and he will not, of course, be able to choose whatever rate appears to him the best for a particular transaction. Paragraph 11 allows the Commissioners to make reasonable allowance for the loss of material in certain fabrics like carpets, or for pile fabrics, where the pattern is burned in, to allow for the quite exceptional loss of material which is burned.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Middlesbrough East

May I ask the Financial Secretary if he has considered the number of staff necessary to carry out all these allowances, drawbacks, arrangements and various through tickets?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I would not like to say that no additional human being would be employed, but I am bound to say that, from the beginning right up to the last moment, the Customs assure me that they do not contemplate any appreciable addition.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Middlesbrough East

They must be having a very slack time.

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

May I ask for a little more explanation of the loss of material by patterns being burned in?

Mr. GUINNESS:

I would have thought the description was clear. I believe there are certain tissues which are partly of silk and partly velvet. In a certain number of these cases the altered surface is brought about by a species of chemical burning which involves considerable loss of tissue. It is not fair that the manufacturers should have to pay on this material which has been lost.

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

May I repeat my question in a different form? A rebate is to be made for material that is lost owing to a process of burning-in. I know something about patterns; I have had something to do with them; but never have I known patterns burnt in, and I am really anxious to know what new developments are taking place, because if we get these new developments we might increase our trade.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

There is a perfectly definite case of these silk fabrics which are treated by a process of partial burning, and a momentary impression is given at a certain period of the combustion. That impression exercises its peculiar charm on a certain section of the feminine population. It is very wasteful in material, and the weight of the product is greatly reduced by the process, and it would be manifestly unfair if we made no allowance for essential and necessary waste which occurs during the carrying out of what is, after all, a very remarkable chemical development.

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

Am I to assume that the Chancellor of the Exchequer really means, not a pattern burnt in, but floating threads burnt off?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

You must not get into metaphysics.

Photo of Miss Ellen Wilkinson Miss Ellen Wilkinson , Middlesbrough East

May I ask the Chancellor why he says it is unfair to the manufacturer to make him pay on material that is burnt out, and yet he considers it fair to make the housewife pay on tin that is washed out?

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

I should be trespassing on the indulgence of the House if I made too many speeches on the Report stage.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

When the Chancellor comes down at the last moment and moves Amendments proposing something that even he himself does not understand, I think for the protection of the traders concerned we want to be quite clear what he intends to do and how he intends to do it. The House might study the wording of this Amendment. It proposes that the Commissioners shall make such allowance as seems to them proper in respect of any loss or waste due to burning or cutting. Are they to do that in every individual article? Are the Commissioners solemnly to sit and consider the great variety of tissues and silk that go through these various processes, and consider what allowance is to be made in each individual case? If not, what are the regulations going to be? If they are to be in the form of regulations, the House has a right to see those regulations and approve them. It is almost unprecedented for the Commissioners to have a free hand to make regulations as they think fit, without these regulations being placed on the Table of the House. In the present form, the Chancellor of the Exchequer, whatever he may say, will find he is landed with a great horde of officials to carry out these very wide powers the Commissioners are asked to exercise.

Amendment agreed to.

Mr. GUINNESS:

I beg to move, in page 25, line 26, at the end, to insert: 14. Section one hundred and six of The Customs (Consolidation) Act, 1876, so far as it relates to the case where goods are found to be of less value for home use than the amount of the drawback claimed, shall not apply to articles of clothing used only as models for trade exhibition.

Photo of Captain William Benn Captain William Benn , Leith

I cannot pretend to admire very much the explanations that we have had, but it seems a pity to forego the entertaining formality of hearing what the Front Bench has to say.

Mr. GUINNESS:

The meaning of paragraph 14 is to secure that drawback can be claimed on models of clothing which are re-exported, after being considerably deteriorated by wear and use in this country. The reason that this is necessary is that Section 106 of the Customs (Consolidation) Act, 1876, provides that drawback cannot be obtained on articles which are of less value for home use than the amount of the draw-

PART IV.
Alternative Scale of Drawbacks in respect of Artificial Silk.
Article.Rates of drawback.
In respect of material contained in the goods being material on which a Customs duty was paid.In respect of material contained in the goods being material on which an Excise duty was paid.
s.d.s.d.
Singles yarn made from staple fibre or other waste, Double or twisted thread advanced beyond the stage of singles yarn—the lb.1207
Made from staple fibre or other wastethe lb.1308
Made from singles yarnthe lb.2312
Tissues—
Made from staple fibre or other wastethe lb.1409
Made from singles yarnthe lb.2413

This new Schedule is to allow the trader the choice between taking the average rates of the drawback or taking his drawback on the individual rates which he has paid for the articles which are used as ingredients in what he is exporting. The matter has been discussed on former occasions; it was dealt with by the Chancellor of the Exchequer in the Committee stage; and I have already explained to-night that it has got to be settled by a trader for not less than a year, and he cannot take this individual rate on one transaction and the average rate on another.

Photo of Captain William Benn Captain William Benn , Leith

This is probably the last opportunity, until this Bill is repealed, of discussing these drawbacks, and I want to offer a few valedictory words. The Chancellor of the Exchequer, first of all, told us that this is drawbacks we are dealing with, and that he will not require more officials. The hon. Member for East Middlesbrough (Miss Wilkinson) made the apt comment that they cannot have very much to do now. It does not require any additional staff or any additional buildings. Yet we hear—not from the Chancellor but from the newspapers—that additional premises are being taken for this purpose; and the Chancellor, in an unrestrained outburst of rhetoric, said all this great work and all this great

back claimed. If we did not suspend the operation of that Clause it would mean that the concession which we consider right and reasonable for these trade models would be of no effect.

Amendment agreed to.

Mr. GUINNESS:

I beg to move, in page 26, line 6, at the end, to insert:

machinery must be put to some use in extracting money from the taxpayer. This is an alternative scale of drawbacks, and I should explain in a word, as far as I can understand it, how the drawback system works, because it is obvious that, if there is not a satisfactory drawback system, then all this taxation of the Chancellor will operate greatly to the detriment of a large and an important export trade. I understand that under Part II, if the article is exported in the form in which it was imported it simply gets the same that it paid when it goes out. That is to protect the entrepôt trade. That is comparatively simple. If, on the other hand, it was made here from dutiable articles—silk, artificial silk and so on—the same drawback is given equal to the duty paid upon the silk content. So that for this purpose, as we pointed out earlier in the Debate, the Customs will know the silk content, though they allege that for import purposes it is impossible to know the silk content.

I will come to the new alternative Schedule. It must be understood that people who calculate their claims for drawbacks may have a great number of printed materials paying different rates. They may have imported it from the Dominions or abroad. If from the Dominions, it will be five-sixths of the duty, and if from France, Switzerland or elsewhere, it will be in a different category. The exporter, having made all these calculations, makes an application to the Chancellor of the Exchequer for the money, but he cannot quote a market-price if he cannot calculate on getting the drawback. The man who is thus perplexed will refuse to waste time trying to make the calculation in order to appeal to the Customs to get the drawback, and will give it up as hopeless. That is what happened with a great many of the McKenna drawbacks. I am told it is waste of time to ask for the drawback. There is one further point, and it is this. All these calculations are based upon the silk content, but there is no provision made for duty which has paid ad valorem. Suppose, for example, a man imports electrical machinery. There is a considerable trade done in this in this country. Supposing he does as many do, he buys his wire from abroad—a silk-covered insulated wire —he will pay on that wire not merely a tax on the silk which insulates the wire, but he will pay a tax upon the whole value of the copper and the silk. I have given the Chancellor of the Exchequer some examples given to me by an importing firm. In this case the man can only get back what is to be the estimated Customs Duty on the silk wire. That is not fair. Take a man in the millinery trade who imports a portion of a frock—a made up article on which he pays 33⅓ per cent. and then re-exports it. He does not get back the duty value on the article. All he gets is the silk content that is in the article. The Chancellor of the Exchequer is an optimist; the Financial Secretary is an optimist; all the officials of the Customs are optimists. The only pessimists are the people in the trade. I do say that where the Chancellor of the Exchequer said in his speech, "I am convinced that it will work smoothly and promptly," I challenge him to repeat that assertion to-day. They all think that it will hamper trade and that it will mean losses, great and small, inflicted on their trade by this unnecessary tax. These are some criticisms of the working of the drawback system, especially in regard to the made-up articles. I would like the Chancellor of the Exchequer not to ignore this as a piece of destructive criticism.

1.0 A.M.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

The actual Amendment that has been moved deals with the question of the drawbacks which should be given to manufactures into which yarn or tissue enters which is imported from abroad or manufactured in this country, paying either Customs or Excise. The hon. and gallant Member seems to me that he gave very good reasons to the House why we should adopt at. If you take the case of the average ordinary merchant or manufacturer exporter, you will find that a broad average can be struck. We have struck a balance in this respect, and arrived at a figure which we know will be the normal rate of drawbacks irrespective of whether the silk content is derived from home manufacture or foreign importation. Such a man using only imported material would lose if he adopted the average rate, therefore, we have provided an alternative rate of drawbacks. That is the choice. It may involve a little more trouble and consideration, but that is the sole object of the Amendment. I am quite sure it will work with extraordinary ease. I defy the hon. Gentleman, with all his ingenuity, to find a more simple remedy.

Photo of Colonel Sir Joseph Nall Colonel Sir Joseph Nall , Manchester Hulme

I merely rise to ask the Chancellor to make a statement. I think there are certain anomalies in this and the other Schedule which is the alternative. The ease with which these drawbacks may be worked largely depends upon the trades concerned and the Customs officials. With regard to the setting up of an advisory committee, on which manufacturers and possibly other interests will be represented with the Customs officials, so that many questions which may arise as matters of routine may be settled without reference to headquarters, I want to ask the Chancellor if it is his intention to institute such a committee?

Photo of Mr Thomas Shaw Mr Thomas Shaw , Preston

May I ask, before the right hon. Gentleman replies, whether it is the intention that the Customs officials should check the statements of the merchants? I am not asking in any quibbling spirit, but I know some of the technicalities. If it is the case that the Customs have to check the merchants, I am sure the Chancellor will find he will have to have a very large staff indeed. It is one of the most difficult things imaginable to find out an article which is composed of four or five materials.

Photo of Mr Winston Churchill Mr Winston Churchill , Epping

In answer to the right hon. Gentleman. The earlier discussion on this question opened up a very searching problem. The combination of merchants and Customs officials enables us to carry on our very large Customs import work by a Customs staff which does not exceed 1,000 people. It is certainly a proposition to which I will give most earnest and sympathetic attention. We have no other wish than to co-operate in the most convenient manner, and it is in the interest of the Government to bring these duties into operation with the minimum of friction and with the greatest advantage to all those concerned.

Photo of Sir Percy Harris Sir Percy Harris , Bethnal Green South West

I think it is a most valuable suggestion that there should be a committee in Manchester, but there should also be a committee set up to deal with the much more complex question in London. The textile trade in London is very complicated, especially the made-up trade and the millinery trade. If there is to be no difficulty and friction, there should be an advisory committee in London which would be very valuable. With reference to one point about the particulars already furnished to the Customs, in the past it has been merely for information purposes. It has been a rough and ready classification. When it is for tax purposes the classification will have to be much more accurate and will involve much more work for export and Customs.

Amendment agreed to.