Clause 2. — (Charge of Customs duties on articles to which this Act applies.)

– in the House of Commons on 19th November 1931.

Alert me about debates like this

Photo of Mr George Hicks Mr George Hicks , Woolwich East

I beg to move, in page 2, line 32, at the end, to insert the words: Provided that no articles shall be deemed to be Empire products unless at least seventy-five per cent. of the extent to which they have been manufactured is the result of labour within the British Empire, anything to the contrary in the said Sub-section (1) notwithstanding. I am inclined to believe that the Amendment will receive very sympathetic consideration from the other side of the Committee. The history of the preferences has been brought up on a number of occasions and at the various colonial conferences, in particular in 1907 and again in 1917, when the Imperial War Conference passed the following Resolution: The time has arrived when all possible encouragement should be given to the development of Imperial resources, and especially to making the Empire independent of other countries in respect of food supplies, raw materials and essential industries. With these objects in view this Conference expresses itself in favour of

  1. (1) The principle that each part of the Empire, having due regard to the interests of our Allies, shall give specially favourable treatment and facilities to the produce and manufactures of other parts of the Empire;
  2. (2) Arrangements by which intending emigrants from the United Kingdom may be induced to settle in countries under the British flag."
Imperial Preference was, I understand, actually introduced into the tariffs of this country by Section 8 of the Finance Act, 1919, which was intended to prohibit by regulation what proportion of the value of goods resulting from labour within the British Empire should entitle the goods to be deemed to have been manufactured in the British Empire, and to make an Order, in the case of any class of goods manufactured to a considerable extent in the British Empire, from materials not wholly grown or produced in the Empire, directing that the preferential rebate should be allowed only to such proportion of those goods as corresponded to the proportion of dutiable material used in the manufacture, which had been grown or produced in the Empire.

During the Debate last night the Solicitor-General in the late Government asked the President of the Board of Trade to give him a reply in regard to the question of the amount of British labour that would be employed or embodied in the commodities that would be regarded as coming within the scope of the Bill. He cited one particular case, that of the Kodaks, which, although supplied to us from Canada, were, as to 75 per cent., manufactured in the United States. In other words, Canada has imported from the United States 76 per cent. of the manufacture of this commodity, and 25 per cent. of it was added by Canadian labour, and it was then regarded as Empire goods. Therefore, we are desirous of having embodied in this Bill a very definite instruction that, so far as Empire goods are concerned, we should not merely have regard to the fact that there is a label upon the goods coming from a particular country. That is not what we mean or what we wish, and I hope hon. Members on the opposite side will not misunderstand us. Not only do we want the label, but we want the embodiment of the labour. In order to make the matter clear, we ask that at least 75 per cent. of the labour should be embodied in those commodities, in order that they might be classified as Empire products.

I hope that we shall be able to get a guarantee not only as to the British labour employed on the production, but as to British standards as well, in regard to trade union rates of pay, hours of labour and other conditions. Goods coming from a part of our Empire which has labour conditions not comparable with what we enjoy in this country, ought not to be used in ways unfavourable to labour in this country. I am certain that hon. Gentlemen on the other side have an excellent opportunity to express themselves in no unmeasured terms. If the President of the Board of Trade would like to amend this Amendment by altering the figure to 100 per cent., I will withdraw the Amendment. In the absence of that, I am demonstrating my modesty in asking him to accept the figure of 75 per cent. I am sure that the fairness and practicability of this proposal ought to appeal to every Member of the Committee. The President of the Board of Trade having shown his sympathy with the last Amendment put forward, I hope he will respond to the appeal that I am making.

Photo of Mr John Tinker Mr John Tinker , Leigh

I wish to support this Amendment. Hon. Members will notice that it deals with articles that are Empire products. Last night the President of the Board of Trade mentioned that this matter was under discussion. I listened very carefully to the Minister in his reply, and I admire the way in which he dealt with the matter. In 15 minutes he cleared away all the questions that had been put by all who had taken part in the Debate. A second point that impressed me was this: I have always looked upon him as an iceberg, but last night he got heated. Why, I could not say. It is said that when a man gets heated it is because someone has stirred him to the quick. It must have been someone on the Front Bench who had done that, but I admired that, because I do not like to see a man a mere Robot. Last night the right hon. Gentleman showed a certain amount of feeling.

This Amendment is for the purpose of trying to stop goods coming through the Dominions, or parts of the Empire, when they have not been produced largely by British labour. We want to protect the quality of articles in the Dominions. It is well known that unscrupulous persons attempt to get through the Dominions goods that they could not get through in the ordinary way, and that are not produced by British labour. It is for the purpose of preventing that, that we wish to include the figure of 75 per cent. Hon. Members on the other side ought readily to accept our proposition. Their idea is that this tariff is to give our Dominions a much better chance than they have had in the past. We are prepared to help on those lines, and we urge that hon. Members should accept this proposal. There may be some other points of view. Hon. Members may say, "It cannot be done." We want to know. We want a fuller explanation from the President of the Board of Trade than he gave last night. It was not satisfactory to us. This Amendment is designed to get to know what is the real position. I hope the President of the Board of Trade will tell us why he cannot accept the Amendment, which seems to us to be a fair and reasonable one.

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

The proposal which 18 embodied in the Amendment would disturb the arrangement that has been in force for a considerable time. In the Finance Act, 1919, provision was made that the proportion of value of manufactured goods which must be the result of labour in the British Empire, in order to entitle such goods to be regarded as Empire products, shall be prescribed by regulations made by the Board of Trade. Thereupon, regulations were made by the Board of Trade which have remained in force ever since 1919. They provide that the proportion prescribed in the case of articles is 25 per cent., with only one exception, which, I think, comes under the heading of optical glass. That 25 per cent. which was under discussion, and has been under discussion, more than once. I could not make an alteration in a matter of this kind without having conversations with the Dominions. In these circumstances, I hope hon. Members will not press their Amendment.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I think that the right hon. Gentleman has not appreciated the vast difference between the present Bill and that to which he has referred, and under which the 25 per cent. rule was made. Preferences were being made in comparatively small commodities, and there was no vast difference between goods coming from a foreign country and goods coming from a Dominion. It was a matter of degree only. The present Bill is dealing with prohibition, and if you are going to give free entry to goods from a Dominion as against the prohibition from foreign countries, you have an entirely different set of circumstances. In this case, by persisting in 25 per cent., it means allowing every kind of manufacturer in America to send his goods to Canada, where they are finished, and then to import them into this country as finished articles. I cited the example of the Kodak because it was a case in which the Board of Trade took special measures which caused a good deal of trouble with Canada. It was found necessary, because of the wholesale evasion that took place under the 25 per cent. rule, to make the special regulation. We submit to the right hon. Gentleman that where you are dealing with a prohibited Bill, and not merely a Bill which is putting on Customs Duties, you are merely opening a path for foreign goods lightly finished in some Dominion, which I am certain is not the desire of the right hon. Gentleman or anyone in this Committee to allow.

If the Bill is left without any special regulation as regards Dominion produce, whatever it may be, it will be necessary, if an alteration is desired later, to alter the 1919 Act, which will mean that we shall be unable to differentiate between this Act and the 1919 Act. If we say 75 per cent. in this Measure, it will have to be 75 per cent. in the 1919 Act, because that is the procedure laid down in the Bill. Unless there is procedure laid down in the Bill, we shall be anchored to whatever is suitable to the 1919 Act. We submit that, seeing that the Bill is aimed at such an entirely different object, prohibition, there must be some safeguarding certainty which is going to prevent wholesale evasion. If it is not done at this moment, it never can be done.

We are not taking up this point in any way as a party matter. We ask the right hon. Gentleman to consider whether it would not be wise to take this opportunity to put in any figure he likes, we do not care as long as it is really substantial, something more than half, before it is too late, before foreign countries discover that there is a path open for wholesale evasion of the prohibition which it is intended to lay down in this Bill.

8.0 p.m.

Photo of Mr George Balfour Mr George Balfour , Hampstead

It is not often that I find myself in agreement with arguments advanced from the opposite benches. I believe that the argument advanced on this occasion is perfectly sound. If we are to allow in, free of duty, goods which are, as in the case of Canada, coming from the United States, I think it is quite futile to assume that we are giving preferential treatment in that case to our Dominion. In fact, we are giving a means of escape to those on whom we wish to impose the duty. While I do not wish to press my view at the moment, I hope the President of the Board of Trade will give very serious attention to this matter between now and Report and, if possible, devise some words which will give effect to the proposal.

Lieut.-Colonel Sir FREDERICK HALL:

Like the hon. Member for Hampstead (Mr. Balfour) it is not often that I see eye to eye with hon. Members of the Opposition. I congratulate them on their unwillingness to allow things to come into this country which are produced under conditions which they would not permit in this country; but that is a proposition which cannot be applied to one case only. Still, if hon. Members above the Gangway are prepared to admit that goods made under the conditions of labour which would not be permitted in this country shall not be allowed to enter we shall have gone a long way towards agreement. I am prepared to accept converts any time. It is always better to come in even if you are a little late than not come in at all. I appreciate the point of view put forward by the President of the Board of Trade. He may find a little difficulty in accepting the proposed Amendment, but I hope he will realise that we do not want these goods to come into this country by subterfuges. We do not want goods which have been made to a large extent by any foreigner, American or anybody else, to come into this country through one of our Dominions, as Dominion stuff. I hope the President will consider this matter between now and Report. I am not hopeful that anything very much can be done; and it must be remembered that this Bill is only to last for six months. I should be averse to passing this Measure without some such provision as this, if it was going to be permanent legislation, but in the case of a Measure which has to be got through quickly it is not always possible to put in every safeguard you want. At the same time, I hope something on this line will be done later on. We do not want goods which have been produced in foreign countries to come into this country in this way.

Photo of Lieut-Colonel Leo Amery Lieut-Colonel Leo Amery , Birmingham Sparkbrook

I am sure that the President of the Board of Trade will be profoundly grateful to the hon. Members of the Opposition in desiring to strengthen his Measure. There is a great deal to be said for a reconsideration, ultimately, of what should be the minimum qualification for preference in the Empire. In some Dominions the figure is fixed at 50 per cent., and there is a good deal to be said for making the qualification for Empire preference here 50 per cent. I am sure that the President of the Board of Trade will give that matter every consideration. But we are dealing at this

Division No. 11.]AYES.[8.9 p.m.
Attlee, Clement RichardCocks, Frederick SeymourDuncan, Charles (Derby, Claycross)
Batey, JosephCove, William G.Graham, D. M (Lanark, Hamilton)
Bevan, Aneurin (Ebbw Vale)Cripps, Sir StaffordGrenfell, David Rees (Glamorgan)
Brown, C. W. E. (Notts., Mansfield)Daggar, GeorgeGriffiths, T. (Monmouth, Pontypool)
Buchanan, GeorgeDavies, David L. (Pontypridd)Grundy, Thomas W.
Cape, ThomasDavies, Rhys John (Westhoughton)Hall, F. (York, W. R., Normanton)

moment not with the fiscal legislation which we hope to see very shortly, but with a purely temporary emergency Measure, the duration of which is nominally six months. I think it would be a shock to the House of Commons if anything like that time should intervene before our tariff is in operation. I should imagine that it is only a question of a few weeks, and I do not think that during those few weeks there is going to be a vast transference of industries for finishing these goods in the Dominions and sending them here. Time and space preclude it in the case of every Dominion except perhaps the Irish Free State and Canada.

I doubt whether there is time for foreign industries to set up the necessary finishing factories to add the extra 25 per cent. to certain types of article before they are sent into Great Britain. I admit that if there was time enough, and if the inducement was high enough, something of that sort might happen; and in that connection I hope the right hon. Gentleman will not view his Measure in the same way as the late Solicitor-General views it, as a Measure to introduce prohibitive duties. I imagine that the 100 per cent. represents the maximum figure for dealing with certain extreme cases, and I hope that we shall get the reduction in our adverse trade balance by import duties fairly widely spread rather than by picking out a few instances for actual prohibition. While it is desirable between now and February that the President of the Board of Trade should consider the whole question as to what should constitute preference, I feel no inclination to press now for a change in the old-established proportion which has regulated preference and which I think it would be undesirable to change without consultation with the Dominions. Obviously, there is not time to do that.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 45; Noes, 306.

Hall, George H. (Merthyr Tydvil)Lunn, WilliamThorne, William James
Hicks, Ernest GeorgeMacdonald, Gordon (Ince)Tinker, John Joseph
Hirst, George HenryMcEntee, Valentine L.Watts-Morgan, Lieut.-Col. David
Jenkins, Sir WilliamMcGovern, JohnWilliams, David (Swansea, East)
John, WilliamMaclean, Neil (Glasgow, Govan)Williams, Edward John (Ogmore)
Jones, Morgan (Caerphilly)Maxton, JamesWilliams, Dr. John H. (Llanelly)
Kirkwood, DavidMilner, Major JamesWilliams, Thomas (York, Don Valley)
Lansbury, Rt. Hon, GeorgeParkinson, John Allen
Leonard, WilliamPrice, GabrielTELLERS FOR THE AYES.—
Logan, David GilbertSalter, Dr. AlfredMr. Charles Edwards and Mr. T. Groves.
NOES.
Agnew, Lieut.-Com. P. G.Crossley, A. C.Hutchison, W. D. (Essex, Romf'd)
Alexander, Sir WilliamCruddas, Lieut.-Colonel BernardInskip, Sir Thomas W. H.
Allen, Sir J. Sandeman (Liverp'l, W.)Davies, Edward C. (Montgomery)Jackson, Sir Henry (Wandsworth, C.)
Allen, Maj. J. Sandeman (B'k'nh'd, W)Davies, Maj. Geo. F. (Somerset, Yeovil)James, Wing-Com. A. W. H.
Allen, Lt.-Col. Sir William (Armagh)Denville, AlfredJamleson, Douglas
Amery, Rt. Hon. Leopold C. M.S.Dickie, John P.Jennings, Roland
Anstruther-Gray, W. J.Donner, P. W.Joel, Dudley J. Barnato
Applin, Lieut.-Col. Reginald V. K.Doran, EdwardJones, Lewis (Swansea, West)
Apsley, LordDower, Captain A. V. G.Kerr, Hamilton W.
Aske, Sir William RobertDrewe, CedricKirkpatrick, William M.
Atholl, Duchess ofDuggan, Hubert JohnKnatchbull, Captain Hon. M. H. R.
Atkinson, CyrilDuncan, James A. L. (Kensington, N.)Knebworth, Viscount
Baillie, Sir Adrian W. B.Dunglass, LordLamb, Sir Joseph Quinton
Baldwin, Rt. Hon. StanleyEales, John FrederickLatham, Sir Herbert Paul
Balfour, Capt. Harold (I. of Thanet)Eastwood, John FrancisLaw, Sir Alfred
Bainiel, LordEden, Robert AnthonyLaw. Richard K. (Hull, S.W.)
Barclay-Harvey, C. M.Edmondson, Major A. J.Leckie, J. A.
Barrie, Sir Charles CouparElliston, Captain George SampsonLeech, Dr. J. W.
Barton, Capt. Basil KelseyEimley, ViscountLees-Jones, John
Beauchamp, Sir Brograve CampbellEmmott, Charles E. G. C.Leighton, Major B. E. P.
Beaumont, M. W. (Bucks., Ayiesbury)Emrys-Evans, P. V.Lennox-Boyd, A. T.
Beaumont, R. E. B. (Portsm'th, Centr'l)Entwistle, Major Cyril FullardLevy, Thomas
Belt, Sir Alfred L.Erskine-Boist, Capt. C. C. (Blackpool)Liddall, Walter S.
Bennett, Capt. Sir Ernest NathanielEssenhigh, Reginald ClareLlewellin, Major John J.
Bernays, RobertEverard, W. LindsayLlewellyn-Jones, Frederick
Betterton, Rt. Hon. Sir Henry B.Foot, Dingle (Dundee)Lyons, Abraham Montagu
Birchall, Major Sir John DenmanFoot, Isaac (Cornwall, Bodmin)MacAndrew, Maj. C. G. (Partick)
Bird, Ernest Roy (Yorks., Skipton)Ford, Sir Patrick J.Mac Andrew, Capt. J. O. (Ayr)
Borodale, ViscountFraser, Captain IanMacDonald, Rt. Hn. J. R. (Seaham)
Boulton, W. W.Fremantle, Lieut.-Colonel Francis E.MacDonald, Malcolm (Bassetlaw)
Bowater, Col. Sir T. VansittartFuller, Captain A. E. G.McEwen, J. H. F.
Bower, Lieut.-Com. Robert TattonGanzoni, Sir JohnMcKeag, William
Bowyer, Capt. Sir George E. W.Gibson, Charles GranvilleMcKie, John Hamilton
Boyce, H. LeslieGlossop, C. W. H.McLean, Dr. W. H. (Tradeston)
Braithwaite, J. G. (Hillsborough)Gluckstein, Louis HalleMacmillan, Maurice Harold
Briant, FrankGoldie, Noel B,Macquisten, Frederick Alexander
Broadbent, Colonel JohnGoodman, Colonel Albert W.Magnay, Thomas
Brocklebank, C. E. R.Gower, Sir RobertMakins, Brigadier-General Ernest
Brown, Ernest (Leith)Graham, Fergus (Cumberland, N.)Manningham-Buller, Lt.-Col. Sir M.
Browne, Captain A. C.Grattan-Doyle, Sir NicholasMargesson, Capt. Henry David R.
Burghley, LordGreene, William P. C.Marjorlbanks, Edward
Burgin, Dr. Edward LeslieGretton, Colonel Rt. Hon. JohnMartin, Thomas B.
Burnett, John GeorgeGriffith, F. Kingsley (Middlesbro', W.)Mayhew, Lieut.-Colonel John M.
Caine, G. R. HallGunston, Captain D. W.Millar, James Duncan
Campbell, Edward Taswell (Bromley)Guy, J. C. MorrisonMilne, Charles
Campbell, Rear-Adml. G. (Burnley)Hamilton, Sir R. W. (Orkney & Zetl'nd)Milne, John Sydney Wardlaw-
Campbell-Johnston, MalcolmHanley, Dennis A.Mitchell, Harold P. (Br'tf'd & Chisw'k)
Caporn, Arthur CecilHartland, George A.Molson, A. Harold Eisdale
Cayzer, Sir Charles (Chester, City)Headlam, Lieut.-Col. Cuthbert M.Moreing, Adrian C.
Cayzer, Maj. Sir H. R. (Prtsmth., S.)Heligers, Captain F. F. A.Morgan, Robert H.
Cazalet, Thelma (Islington, E.)Henderson, Sir Vivian L. (Chelmsford)Morris, John Patrick (Salford, N.)
Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Heneage, Lieut.-Colonel Arthur P.Morris, Owen Temple (Cardiff, E.)
Chamberlain, Rt. Hon. N. (Edgbaston)Herbert, George (Rotherham)Muirhead, Major A. J.
Chapman, Col. R. (Houghton-le-Spring)Hillman, Dr. George B.Munro, Patrick
Chapman, Sir Samuel (Edinburgh, S.)Hills, Major Rt. Hon. John WallerNail-Cain, Arthur Ronald N.
Chotzner, Alfred JamesHoldsworth, HerbertNathan, Major H. L.
Clarke, FrankHope, Sydney (Chester, Stalybridge)Nation, Brigadier-General J. J. H.
Clayton, Dr. George C.Hore-Belisha, LeslieNicholson, Godfrey (Morpeth)
Cooke, James D.Hornby, FrankNormand, Wilfrid Guild
Cooper, A. DuffHorobin, Ian M.Nunn, William
Copeland, IdaHorsbrugh, FlorenceO'Donovan, Dr. William James
Courtauld, Major John SewellHoward, Tom ForrestOman, Sir Charles William C.
Craddock, Sir Reginald HenryHowitt, Dr. Alfred B.Ormiston, Thomas
Cranborne, ViscountHudson, Capt. A. U. M. (Hackney, N.)Ormsby-Gore, Rt. Hon. William G. A.
Croft, Brigadier-General Sir H.Hudson, Robert Spear (Southport)Palmer, Francis Noel
Crooke, J. SmedleyHume, Sir George HopwoodPatrick, Colin M.
Crookshank, Col. C. de Windt (Bootle)Hunter, Dr. Joseph (Dumfries)Pearson, William G.
Crookshank, Capt. H. C. (Gainsb'ro)Hurd, Percy A.Peat, Charles U.
Croom-Johnson, R. P.Hurst, Sir Gerald B.Penny, Sir George
Cross, R. H.Hutchison, Maj.-Gen. Sir R. (M'tr'se)Perkins, Walter R. D.
Peters, Dr. Sidney JohnRussell, Hamer Field (Shef'ld, B'tside)Templeton, William P.
Petherick, M.Russell, Richard John (Eddisbury)Thorn, Lieut.-Colonel John Glbb
Peto, Geoffrey K. (W'verh'pt'n, Bilston)Rutherford, Sir John HugoThomas, James P. L. (Hereford)
Pickering, Ernest H.Salt, Edward W.Thompson, Luke
Pickford, Hon. Mary AdaSamuel, A. M. (Surrey, Farnham)Thomson, Sir Frederick Charles
Pike, Cecil F.Samuel, Samuel (W'dsworth, Putney)Thomson, Mitchell-, Rt. Hon. Sir W.
Potter, JohnSandeman, Sir A. N. StewartThorp, Linton Theodore
Powell, Lieut.-Col. Evelyn G. H.Sanderson, Sir Frank BarnardTodd, Capt. A. J. K. (B'wick-on-T.)
Procter, Major Henry AdamSavery, Samuel ServingtonTryon, Rt. Hon. George Clement
Pybus, Percy JohnScone, LordWallace, Captain D. E. (Hornsey)
Raikes, Hector Victor AlpinSelley, Harry R.Ward, Lt.-Col. Sir A. L. (Hull)
Ramsay, Alexander (W. Bromwich)Shakespeare, Geoffrey H.Ward, Irene Mary Bewick (Wallsend)
Ramsay, Capt. A. H. M. (Midlothian)Shaw, Captain William T. (Forfar)Ward, Sarah Adelaide (Cannock)
Ramsay, T. B. w. (Western Isles)Smiles, Lieut.-Col. Sir Walter D.Warrender, Sir victor A. G.
Ramsbotham, HerswaldSmith, Sir Jonah W. (Barrow-In-F.)Watt, Captain George Steven H.
Ramsden, E.Smith, Louis W. (Sheffield, Hallam)Wayland, Sir William A.
Rawson, Sir CooperSmith-Carington, Neville W.Wedderburn, Henry James Scrymgeour-
Rea, Walter RussellSmithers, WaldronWells, Sydney Richard
Reed, Arthur C. (Exeter)Somervell, Donald BradleyWeymouth, Viscount
Reid, James S. C. (Sterling)Somerville, Annesley A. (Windsor)Whiteside, Borras Noel H.
Remer, John R.Soper, RichardWills, Wilfrid D.
Renwick, Major Gustav A.Sotheron-Estcourt, Captain T. E.Wilson, G. H. A. (Cambridge U.)
Rhys, Hon. Charles Arthur U.Southby, Commander Archibald R. J.Withers, Sir John James
Roberts, Aled (Wrexham)Spears, Brigadier-General Edward L.Womersley, Walter James
Robinson, John RolandStanley, Lord (Lancaster, Fylde)Wood, Major M. McKenzie (Banff)
Rodd, Rt. Hon. Sir James RennellStones, JamesWorthington, Dr. John V.
Rosbotham, D. S. T.Storey, SamuelWragg, Herbert
Ross, Ronald D.Stourton, John J.Young, Rt. Hon. Sir Hilton (S'v'noaks)
Ross Taylor, Walter (Woodbridge)Strauss, Edward A.
Runciman, Rt. Hon. WalterStrickland, Captain W. F.TELLERS FOR THE NOES.—
Runge, Norah CecilSummersby, Charles H.Lord Erskine and Mr. Harcourt Johnstone.
Russell, Albert (Kirkcaldy)Sutcliffe, Harold
Russell, Alexander West (Tynemouth)Taylor, Vice-Admiral E. A. (Pd'gt'n, S.)

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

I beg to move, in page 2, line 32, at the end, to insert the words: (3) No articles delivered in pursuance of a contract or order entered into or given before the fifteenth day of November, nineteen hundred and thirty-one, shall be chargeable with duty under this Act. There is a very important practical point involved in the Amendment, and I hope that this time we shall get some answer from the Government, because we know that, whatever may be the Government's feelings with regard to sacred-ness of contracts made with working men, they are very impressed with the sacred-ness of business contracts. The point here concerns the position of those persons who have entered into contracts for the importation of foreign goods. I should preface my remarks by saying that under the present law it is not a crime to import goods from abroad, and that quite a large number of persons in the City of London and elsewhere have habitually got their living by importing goods from abroad and selling them, and that the custom has been in many cases to make contracts for those goods a considerable time ahead.

Instances have been given to me of buyers 'who have gone round on the Continent and have placed orders for goods to be delivered for the winter season. They have entered into those contracts at prices, and the goods are to be brought to this country. Some of them are actually in transit and others are about to be sent here. On this side, too, they have entered into contracts to sell those goods to retailers. A sudden imposition of taxation is going to be placed on those goods. The question is, who is to pay that impost? It is obvious that, the contract having been concluded, the impost will not be paid by the foreigner. The importers cannot recover it, because in many cases the goods have been delivered or they have to take delivery of them, and they have contracted to hand them over to retailers in this country. They are, therefore, going to be saddled with a loss, and I am informed by persons engaged in this trade that the result is going to be very heavy loss and that it will probably mean bankruptcy. I know that Sir Josiah Stamp, who is one of the advisers of the Government, said that it would be a good thing for the country to have some healthy bankruptcies. We are going to have a number in the City of London if the Bill goes forward in its present form.

Let me give some instances. There are the goods ordered at the Leipzic Fair. They were ordered in March and are due for delivery at Christmas. What is going to happen with regard to those goods? There is now a very large consignment of goods that left Japan on 23rd September and is due in London next week. What is going to happen in that case? It may be said that this is a risk, that importers have to take, the kind of risk that always occurs when there is a change in fiscal duties, in the case, say, of the importation of sugar. In that case the importer may find that the duties have been put up. But the point is, first of all, that the imposition of these duties is something quite out of the common run as regards time. The persons who in the summer contracted for these goods did not anticipate the political events that have occurred in this country, and we must not blame them, for they were only business men. Even the right hon. Member for Epping (Mr. Churchill), and, I think, the right hon. Member for West Birmingham (Sir A. Chamberlain) did not anticipate this, because they had arranged long autumn lecturing tours in the United States. Therefore we must not blame business men for lack of foresight. They could not expect that there would be a change of fiscal policy at this time of the year.

The second point is that, whereas, in the ordinary case such duties are within a fairly narrow compass and have always in the past been intended just to raise revenue, we have it from the spokesman of the Government that this is not really a tax for raising revenue at all. In fact, they rather resent the suggestion that this is taxing the subject. They say, "No, it is nothing like that. What we are after is not that the tax should be paid, but that the goods should be prohibited." What is going to happen in regard to these goods that have been ordered, the goods that are in transit and the goods that are in bond in this country is that they are not going to be saleable at all. Where it has been a case previously of putting an extra 2d. on tea or sugar, or whatever the article might be, the goods could be sold. The prices of those commodities in this country were to be raised and the intention was that those taxes should be paid by the consumer. But that is not the intention of this Bill. The intention is that these goods should not be sold at all. Unless we have some provision such as this Amendment proposes, the bonded warehouses of London are going to be crammed with unsaleable goods. Merchants are going to be landed with goods which they have bought and paid for or for which they have contracted, in many cases, to pay for at certain rates, and they will have to take delivery of those goods and will have to bear the burden of this tax.

Let us remember that this tax may be anything up to 100 per cent. The goods may be of any kind because the peculiarity of this Bill is that it is not entirely protective. We are told that its main object is the prevention of importation; that it is part of the Government policy for redressing the balance of trade and therefore it is not a question necessarily of goods that are being brought here in competition. It is a question of excessive importation. The policy of the Government is to keep down foreign imports. Then what is going to be the position of quite a large number of firms in this country? I have it from responsible traders in the City of London that they do not know exactly what is going to happen, but the fear is that there are going to be a large number of bankruptcies as a result of procedure such as I have indicated.

In this Amendment I have inserted the date 15th November. That would be in accordance with the ordinary practice when dealing with taxes of this nature, namely, that you do not impose the tax until notice has been given to the persons concerned that the tax is going to be imposed. Therefore I have put in a rather late date. If the right hon. Gentleman considers that 15th November is too late a date I am willing to accept an earlier date, but let us remember that these goods which are to be taxed are being brought into this country in pursuance of contracts made in June and July, before there was any possible contemplation of such a Measure as this being passed. I ask that this matter should be seriously considered. I do not think that anyone can say that this trade is illegitimate in any way. I have no doubt that most of the importers are loyal supporters of the National Government. The mere fact that they find themselves ruined only means that they and many others will be ruined by their rash action in. voting for the National Government, but, in their particular case, we see at once the effect of rash and hurried legislation which plunges a rough hand into the complicated business of the City of London and the great trading centres of this country.

8.30 p.m.

This proposal is going to have repercussions all through the business world, and as the representative of a riverside constituency I may point out that it is going to have very serious repercussions on the work of the Port of London and at the docks and wharves. You are going to have what you had previously at the time of the Safeguarding Duties—a hold-up of the work on the riverside. I should not be in order in elaborating the general effect of this tax, or in drawing attention to the fact that, previously, the whole Port of London was held up for three days while a search was being made for dolls' eyes. The particular point clearly is that, unless you have some provision of the kind I propose, then as a result of this legislation, the bonded warehouses are going to be crowded with goods which cannot be used, and the result will be to intensify the effect which other parts of this Bill are going to have. That is to say, a great deal of our trade will go to Antwerp and Rotterdam. I hope that the President of the Board of Trade and the Parliamentary Secretary will recognise that this is an important practical point and will see that they ought to take whatever steps they can to ensure that numbers of traders are not going to be ruined by this rushed legislation.

Photo of Colonel Harry Nathan Colonel Harry Nathan , Bethnal Green North East

The Mover of the Amendment has I think made his statement in terms of studied moderation. On more than one occasion I have heard the Lord President of the Council quote with approval a dictum of the late Lord Melchett to the effect that a business man could conduct an industry under almost any fiscal system, as long as it was certain. This Bill, without the Amendment which has been proposed from the benches opposite, will not merely involve the business of this country in a state of uncertainty but will reduce it to a state of chaos. I wish to bring to the notice of my hon. Friend the Parliamentary Secretary certain matters which have come to me in the ordinary way of business relating to questions arising under this Bill.

I deal first with the question of contract pure and simple and I put it in this way. Many merchants have entered into obligations towards foreign exporters in every quarter of the globe for the purchase of goods for import into this country, not merely for sale and consumption in this country, but for introduction here, to be the object of some manufacturing process, and then to be sold either here or abroad. The President of the Board of Trade, in making his statement in relation to this matter on the Address last Monday, remarked upon the very narrow margin of profit that exists in so many industries and that makes all the difference between profit and loss. It needs a very small duty, in a large number of cases, to mark that difference, but under the circumstances of this Bill, without this Amendment, the English importer who, in perfect good faith, without being able in any way to anticipate the introduction of such a Bill as this or the crisis which alone justifies it, may, months ago or indeed two or three years ago, have entered into forward contracts for delivery over a period or into similar contracts for sale over a, period. Such things happen in the ordinary daily conduct of business, not merely in the City of London, but in this country as a whole.

The imposition suddenly of this duty will have a marked and crippling effect upon the conduct of his business. He does not know where he is from one moment to the next. This is not a case where there was long warning of the proposal to introduce a radical change into our fiscal policy. The change is introduced at very short notice, the Bill is rushed through the House of Commons, and the charging Orders are becoming operative within a week of the first day when the mere mention of this Bill, before it was even introduced, was made in this House and in the country at large. The trade of this country cannot be conducted in those circumstances, and it may well be that it will involve a considerable number of cases of bankruptcy.

I wish to direct the attention of the Parliamentary Secretary to another aspect of the matter, which is perhaps even more germane to the problems with which we are confronted. The object of the Bill is to exclude certain imports called abnormal imports, and for that purpose a duty ranging up to 100 per cent. is to be imposed upon those objects. The importer has one of two alternatives before him. He may take the goods and pay the duty, in which case he is in the position of having increased the cost of the article which he had hoped to sell at a profit or, it may be, which he had already sold at a price, and instead of making a profit, he makes a loss. What does the Parliamentary Secretary think will happen as regards that loss? It is a deduction from the profits of the importer. It will thereby reduce, by the amount of the loss, the profits upon which Income Tax and Super-tax would otherwise be payable, and, by reason of that fact, it will gravely prejudice the Revenue, already in a position of jeopardy, and, if there be an adverse Revenue balance, it will increase that adverse Revenue balance.

Let me assume that the importer refuses to take the goods. He is then liable to an action for damages for breach of contract. I will assume that it is an English contract—and I am using that term in the technical sense that it is a contract enforceable in the courts of this country—and he is sued in this country for damages by the foreign exporter. He will have no defence to the proceedings, damages will be awarded against him, and the amount of those damages in relation to the subject matter of the action may be very large. Those damages will be awarded against him in sterling, but he will have to pay them to the foreign exporter in the currency of the country of that foreign exporter; or the foreign exporter, having received them in sterling, will have to transfer them into the currency of his own country. That means the sale of sterling, which means that the already precarious position of sterling in the foreign exchange markets of the world will be made even more precarious.

I should have thought that the dangers involved by this Measure, and its repercussions upon the Revenue in relation to taxation, and upon the exchange in relation to damages, would in themselves have been formidable arguments in favour of the Amendment. I appreciate that, as a result of the course of the General Election campaign and of the result of the General Election, there may have been some importers who, immediately prior to the introduction of the Bill, but after the General Election, and after its course became clear, may have given orders to an unusual extent for imports of goods from abroad, but that cannot apply to a date as far back, let me say, as the dissolution of the last Parliament; and I invite the Parliamentary Secretary to make this concession, and to accept this Amendment with the modification that, instead of the date being the 15th November—which was, I imagine, the date of the introduction of the Bill, though I have not checked that date—it should be made either the 15th October or, for that matter, the 15th September. That will not overcome the difficulties, but it will mitigate them, and it will mitigate also the evils, the disastrous effects, which will ensue to this country in its most critical aspects of Revenue and exchange if something like this Amendment is not accepted by the Government.

The Parliamentary Secretary may very well answer me by saying that that would be contrary to the usual practice of the Customs authorities. He may say that when, in the ordinary event, under normal conditions, contracts are made, those who enter into them take the risk of whether or not a tariff will be imposed; but these are not normal circumstances, nor is this a tariff in any ordinary acceptation of the term. The object of the Bill is not to bring goods in subject to a tariff; the object is to keep them out altogether. This Bill is unusual to the point of being unique and, indeed, revolutionary, in the conditions of its introduction, in the manner in which it has been pressed through the House, and in the provisions which it contains. The unique character of the circumstances relating to the Bill and the circumstances in which the country finds itself at this juncture, which indeed is the only justification for this Bill, would justify the Government at this time in applying a rather different usage than that which is adopted in the normal course.

There are great quantities of goods which are already physically in this country, though in law perhaps they are not, namely, goods in bonded warehouses and lying there uncleared. What is the position to be with regard to those goods? They have been brought to this country, unloaded and placed in bonded warehouses, it may be recently, or during the past few months, or even some years ago. They are in the bonded warehouses with the obligation upon the owner to pay the applicable Customs duty when he wishes to remove them, and he can keep them there as long as he wishes, provided that he pays the prescribed amount of dues. This is a practical question which I had put to me in the City of London by men of business whom it affects most closely.

What is to happen in regard to those goods in bonded warehouses? Are they to be subjected to this additional duty? It is quite true that goods in bond in the case of an ordinary tariff are liable to bear any additional tariff, and are also susceptible to the advantage of any reduction in the tariff. But this is not a tariff in the ordinary sense of the term. The object of the Bill is not to impose a tariff, but to keep goods out. These goods are already here. What does the Parliamentary Secretary propose to say about that? I hope that he will make some such concession as I have indicated with regard to contracts, and that he will look with the utmost diligence, as I am sure he will, into the highly complex question of goods in bonded warehouses. I have pointed out the difficulties that arise in regard to contracts; the difficulties in regard to goods in bonded warehouses are no less great, and I hope that the Government will make some concession in this regard.

Photo of Mr Leslie Hore-Belisha Mr Leslie Hore-Belisha , Plymouth, Devonport

My hon. Friend the Member for Limehouse (Mr. Attlee) moved this Amendment with studied moderation, and my hon. and gallant Friend the Member for North-East Bethnal Green (Major Nathan) has supported it with restrained indignation. What is the proposal of the Amendment? Here we have a Bill, the object of which is to restrict abnormal importation. My hon. Friend moved an Amendment which suggests that goods should come in in spite of our desire to restrict them, and not only come in, but come in duty free because at some previous date an order has been placed for these goods. How are the Customs authorities to verify whether an order has been placed? The proposal of my hon. Friend would of course nullify the whole object of the Bill; not only would it do that, but it would nullify and render anomalous the whole of our Customs procedure. What my hon. Friend is proposing is an abrogation of the Customs procedure not only of this country, but of all other countries.

When foreigners put a tax upon us, as the French did upon our goods the other day, they have no regard to previous contracts; nor do we when we come to our budgetary proposals, or when we institute taxation in any other way, have regard to anything that has been arranged between the importer and a seller previous to the imposition of the tax. It would be quite unworkable to do it. It is not done in any other case, and my hon. Friend has not made out a sufficiently strong argument to make an exception in this Bill in what is the current established procedure. After all, we have fewer tariffs in this country, and we have changed them less frequently, than in any other country, and our importers are better treated than importers in any other country in the world.

My hon. and gallant Friend the Member for North-East Bethnal Green drew a very sorrowful picture of the ruination of the importer. As no taxes have been imposed yet, it would be difficult to justify the accuracy of the picture he has painted. As no duties have been imposed, he does not know whether duties will have the serious effect that he contemplates. If importers have made longstanding contracts for periods which he describes as being as long as three years, and they have not had the common sense to put provisions in their contracts allowing them the opportunity of being released in the event of tariffs being imposed, they have been very badly advised. Certainly they have not been advised by my hon. and gallant Friend, because he would not allow any of his clients to enter into a three years' contract to import goods without protecting them in every possible way. Having described the plight of the importer, he goes on to say that the position of sterling in the world may be compromised—

Photo of Mr Leslie Hore-Belisha Mr Leslie Hore-Belisha , Plymouth, Devonport

But it would not be so adversely affected as will be the population and industries of this country if we continue to allow this abnormal importation. Though the interests of a few importers may have a small injustice done to them, we have a prior duty to regard the interests of the country as a whole. It is for that reason that I feel compelled to resist the Amendment.

Photo of Mr Valentine McEntee Mr Valentine McEntee , Walthamstow West

I regret that the President of the Board of Trade is not present to hear the arguments that have been used. I remember a statement made by the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) yesterday, that the President would no more pass a bad argument than he would a bad coin. I think that the implication of that is that the right hon. Gentleman would not do anything that was harsh or unjust, and I feel that had he been in his place, he might have taken a different view with regard to the Amendment from that taken by the Parliamentary Secretary. A grave injustice will be done to a large number of people who have made contracts believing that this country, having been Free Trade for a great number of years, would remain so, and believing politicians who have up to now sat on the Front Bench when they have said that Free Trade was the only policy that would safeguard the interests of this country. Having listened to all those speeches, and probably believing them, they would have come to the conclusion, when making their contracts, that their interests were perfectly safe in the hands of right hon. Gentlemen like the present President of the Board of Trade.

The British have always been looked upon abroad as people whose word was their bond, and when they have made contracts to import goods over a period of years the people abroad expect that those contracts will be honoured and the money paid. If this Amendment is not accepted—and I am hopeful even yet that it may be—many men who have entered into contracts, and who are not rich men but in comparatively poor circumstances, will find it extremely difficult to pay for the goods they have ordered. Even if they are in a position to borrow money, that borrowing may for a number of years to come leave them on the verge of bankruptcy; and if they cannot borrow because they cannot offer the security demanded they will be compelled to break their contracts, and in that case become subject to an action at law which may ruin them. Perhaps by making sacrifices they can find the money for the goods at the price which they have agreed to pay; but then they may also be in the position of having made contracts with retailers in this country. If they sell to the retailer ruin stares them in the face, and if they do not sell to the retailer they will be breaking their contract with him, and again will be liable to an action at law. It should be remembered that, after all, the importer is a British subject. The British Government can impose taxes only on British subjects. It is amusing to hear Members talking sometimes about taxing the foreigner. No tax can be levied till the goods arrive in this country, and the importer is a British subject. The hon. and gallant Member for North-East Bethnal Green (Major Nathan) raised the question of bonded goods, and I am rather sorry the Parliamentary Secretary made no reply to his point. It is an extremely important point, and has been brought to my notice as well as to that of the hon. and gallant Member.

9.0 p.m.

Another point to which I wish to draw attention is that this will be a variable tax. People will not know from month to month, or week to week, or even from day to day, what the tax is going to be. It may be 20 per cent. one day, and a week hence it may be raised to 40 or 50 per cent., or even higher. What is to be the position of men who have entered into contracts under such fluctuating conditions? When the 20 per cent. tax is put on they may make an arrangement with the persons from whom they have bought the goods or with those to whom they are selling them, only to find that within a week or a month the tax has been doubled or trebled, and the arrangements have to be made all over again. We ought to show common fairness and common honesty in dealing with these people who, after all, are British subjects. We cannot tax the foreigner; we are taxing our own people upon goods for which they have paid, or which they will be called upon to pay for when they arrive. It is an unfair imposition on our people, and cannot do much good to the Government or those supporting the Bill. I still hope that further consultation between the Parliamentary Secretary and the President of the Board of Trade may produce a concession which will prevent such a great in- justice as is being done to our people by the introduction of revolutionary methods which nobody could have contemplated even a few weeks ago.

Photo of Mr Eugene Ramsden Mr Eugene Ramsden , Bradford North

I was very glad to hear the Parliamentary Secretary announce that it was his intention to resist this Amendment. This Measure will mean that the foreigner is to get a dose of the medicine to which he has treated our own people on so many occasions. I have some knowledge of the export trade, and very frequently indeed foreign Governments, when imposing tariffs, take exactly the same action as we are proposing to take, that is to say, they put up the tariff barrier without any notice whatever. This is the only practical way in which to deal with the abnormal imports from which we are suffering.

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

If it were a matter of the foreigner being given a dose of his own medicine, I should agree entirely with the hon. Member for North Bradford (Mr. Ramsden). It may sound uncharitable, but I think there is much to be said for our giving him something back. Unfortunately, the point made by my hon. and gallant colleague the Member for North-East Bethnal Green (Major Nathan) is a different one. The case he raised did not concern the foreigner who dumps stuff into our country, but the case of our own nationals who, foolishly perhaps, very unpatriotic-ally, but, still, in the course of business, have made contracts which they will have to carry out. When the contract was made the present emergency was, probably, quite unforeseen, but the importer is compelled under pains and penalties to take the balance of the goods which he has contracted to buy. It is for such cases that my hon. and gallant Friend asked sympathy from the Parliamentary Secretary. I know that the Parliamentary Secretary is of a sympathetic nature. Also, he is new to his job, and I am sure he is anxious to learn, and perhaps he will realise that there is no more experienced and able international lawyer, no one with better knowledge of international business relationships, than my hon. and gallant Friend. When he puts forward constructive proposals they deserve, I think, a little more sympathetic consideration than the few brief words with which the Parliamentary Secretary brushed them aside.

This is not an ordinary tariff. If this were an ordinary tariff such as the French or the Germans or the Americans impose there would be a lot to be said for the Parliamentary Secretary's argument. Traders would have to treat it as an ordinary commonplace business risk. But this is not a tariff at all. This Bill, as I understand it, is to deal with abnormal imports, with forestalling. This is not a tariff at all, but it is a proposal to prohibit imports coming into this country in abnormal quantities, and it makes an allowance for a 100 per cent. tariff. I remember that a prohibition of this kind was suggested during the War, and, although we were told that it might be possible in law to carry out that object, it would not be possible to prohibit completely those goods which would infringe the most-favoured-nation clause. This Bill is tantamount to imposing prohibition.

The President of the Board of Trade was asked how much revenue he expected this Bill would bring in, and he told the House that it was not intended to bring in revenue. What we say is that if there has been abnormal importations, or speculation, or an attempt to rush goods into this country in anticipation of the tariffs, we do not want to handicap or limit the Government's powers in any way; but we do say that where there is an ordinary contract, and where it is clear that there has been no attempt to forestall, then the same protection should be given to those contracts that was applied in similar circumstances during the War. During the War, to achieve this object, we adopted a system of licences, but that was subjected to abuse, and I do not think that a system of licences would meet this particular case. I am sure that the President of the Board of Trade, and the Parliamentary Secretary, desire to make this a workable Measure to achieve their purpose, but I do not want the Government, in a time of trade disorganisation, to inflict needless hardships upon business men. Where a good case can be made out for these importations there should be something provided on the Report stage to deal with them.

This country is known throughout the world for its business probity and com- mercial integrity. It is the trading centre of the world, and we do not want to place our merchants in an impossible position, and probably force some of them into bankruptcy when the only object of the Government is to restore our trade balance, and put our credit into a sound position. We do not want, in aiming at that purpose, to inflict an injustice within the four corners of an Act of Parliament, and we should protect reasonable and bona fide contracts, made under our law, and covering a series of years. I suggest that, between now and the Report stage, the President of the Board of Trade should see if he cannot suggest some words to put right what is essentially a weakness in this particular Clause.

Photo of Mr Edward Williams Mr Edward Williams , Ogmore

It seems to me that the Liberals are just beginning to realise and appreciate the implications of this Measure, and we are delighted to have their support. I think hon. Members who have taken part in this Debate have proved beyond doubt, by their arguments, that it is practically impossible for business to be conducted in this country except upon a contract basis. Hon. Members are aware that an immense number of orders are given by a large number of firms in this country quite six months ahead, and contracts are entered into for delivery. Such contracts are frequently made with manufacturers in Germany. In the case of articles like finished steel, mining appliances, conveyors, and steel props, the orders are given months ahead, and this has been conclusively proved to be the case in the tin-plate industry of South Wales, and other industries. If continuity of employment is to be secured the importation of steel bars, and such other raw materials as come under Class III, is essential to carry on the business of the country. I would like to reinforce the statement which was made by the hon. and gallant Member for North-East Bethnal Green (Major Nathan) by a statement which appeared in to-day's "Manchester Guardian" which reads as follows: Following the abandonment of the gold standard the London Chamber of Commerce issued the following notice:It has been brought to the attention of the Chamber that foreign concerns which have entered into contracts to supply goods for pounds sterling have in certain oases refused to deliver unless buyers are prepared to meet the difference in exchanges. British houses which have contracted to pay for goods in foreign currency must obviously do so, even though it involves them in lose, and foreign suppliers should similarly be held to their contracts. The names of foreign suppliers failing to meet their engagements should be reported to the Chamber.As a consequence foreign suppliers have for the most part held to their contracts and have delivered their goods, which, having been sold on this market in sterling, has involved them in considerable losses. English customers, however, wishing to avoid tariffs have expedited the delivery of these goods, and this largely accounts for the cry of dumping, as goods have been delivered in two months which normally would only have been delivered in five. I trust that whoever replies for the Government will meet the point which has been placed before the House so clearly by hon. Members sitting below the Gangway. Certainly the Parliamentary Secretary to the Board of Trade treated very flippantly the arguments that were advanced. We want, particularly in the case of an Amendment of this kind, serious attention to be directed to the dislocation that will occur in business. The argument as to licensing, particularly by the French in regard to coal, is no answer to the arguments that have been advanced in this case. I trust that not only the two Liberals who have spoken, but every Liberal in the House, will realise the implications of this Bill, and will come into the Lobby in support of the Amendment.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

Perhaps, now that the right hon. Gentleman has returned, I may put to him the point on which we particularly desire his observations with regard to this Amendment. We have in mind two classes of cases which are of particular importance. First, there is the class of case where already large quantities of goods are lying in bonded warehouses in the various ports of this country. Those goods are lying there awaiting removal as and when the purchaser requires them, when he will pay the duty which at present exists. Take, for instance, silk goods. I understand that there are very large quantities of silk goods in the bonded warehouses of the Port of London. Those goods have not yet paid duty. If the right hon. Gentleman puts a duty on any of those classes of goods which already bear some duty, will those goods which are now in the bonded warehouses, and have been there for a considerable time, have to pay the fresh duty, in addition to the present duty, when they are removed from bond; and will the people who have them in bond be given any notice in order that they may clear them before the fresh duty comes upon them? They are merely being kept there as a matter of convenient trade practice which has grown up over a long period of time under the present system.

That raises another question of great importance, namely, whether the right hon. Gentleman has made any arrangements at the ports for further warehouse accommodation, in order that all these Class III goods which are taxed may be kept there in bond for the convenience of the merchants of the country, to be dealt with in the usual way as bonded goods. The second point is this: During recent months, contracts have been entered into, which are binding upon merchants, manufacturers and others in this country, for the supply of goods to be delivered from time to time. Some of those deliveries are still due. Those merchants and manufacturers cannot get out of these contracts; they are bound by them. Is it the intention of the right hon. Gentleman that persons who have entered into ordinary bona fide trading contracts, having nothing to do with dumping, or abnormal supply, or acceleration, or anything of the kind, are to be penalised upon contracts which they cannot get out of? If the duty is going to be put on in such a measure as to be prohibitive, they will be left with the goods, having to take delivery of them, but the duty will be so high that they cannot re-sell them. I suggest to the right hon. Gentleman that it is essential for the merchants and traders of this country that some provision should be made to deal fairly with these cases, and that in any case the Bill should only affect fresh orders placed after people have some knowledge that there is a possibility of this Bill coming into operation. I ask the right hon. Gentleman to let us know what steps he proposes to take as regards these two matters, and to accept this Amendment, because it will deal fairly with the second case that I have put.

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

I understand that in my absence the Parliamentary Secre- tary has replied at considerable length on the latter point raised by the hon. and learned Gentleman. With regard to the first point, as to bonded goods, I am told by the Customs authorities that we have all the necessary accommodation that we are likely to require, and I would point out that during the last few weeks there has been a very heavy importation, which has been amply provided for by the warehouses on the Thames, at Harwich, Hull and elsewhere. There is no practical difficulty, therefore, as regards such goods as may come into bond. As to whether goods already in bond and subject to duty will also have to bear in addition whatever duty may be imposed by Order, I am afraid that the answer is in the affirmative. It must be so of necessity. It has been found in general revenue practice in the past that you cannot adjust your duties in that way, but that you must take the total duty that is payable, and that total duty in this case has in a great many instances been already anticipated.

Many people have been acting on the assumption that some such legislation as this would be likely to come. There would be no forestalling if there had not been that assumption. Whether or not they knew that it was going to happen in this form is, of course, quite another matter. It may have surprised some people. But, after all, they were doing as is always done by importers at Budget time; they were taking certain taxation risks; and in a great many contracts provision is made for safeguarding against these very risks. I am informed that, while it is not exactly common form, it is commonly done. Of course, one sees these things referred to from time to time, as well as in one's personal experience. We have followed here what has been the practice of the Treasury and of this House in the past with regard to all budgetary taxes—

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

I know that it is not, but what difference does that make? A principle which is sound in the month of May is equally sound in the month of November. We have followed what has been the practice of the Treasury and of this House in the past, and I am afraid we cannot vary it.

Photo of Mr Valentine McEntee Mr Valentine McEntee , Walthamstow West

Am I right in assuming, from the speech of the right hon. Gentleman, that, if there is already something in bond on which a duty of, gay, 33⅓ per cent. has to be paid, and an additional 100 per cent. duty is put on, the tax will be one of 133⅓ per cent.; or will the first tax be taken into consideration in fixing the additional tax?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

I cannot undertake that it would be taken into account. The Act, when it is passed, will provide for the giving of powers to impose a duty up to 100 per cent. I cannot undertake to say that the amount will be 70 per cent., or 60 per cent., or what it may be. At this moment that is not for me to say; it will appear when the Order is published.

Photo of Mr Valentine McEntee Mr Valentine McEntee , Walthamstow West

The point that I have in mind is this: If the limit under the Bill is 100 per cent., and some article on which a tax is already imposed happens to have an additional tax imposed

Division No. 12.]AYES.[9.27 p.m.
Attlee, Clement RichardHall, F, (York, W. R., Normanton)Maxton, James
Batey, JosephHall, George H. (Merthyr Tydvil)Milner, Major James
Bevan, Aneurin (Ebbw Vale)Hicks, Ernest GeorgeMorris, Rhys Hopkin (Cardigan)
Brown, C. W. E. (Notts., Mansfield)Hirst, George HenryParkinson, John Allen
Buchanan, GeorgeJenkins, Sir WilliamPrice, Gabriel
Cape, ThomasJohn, WilliamSalter, Dr. Alfred
Cocks, Frederick SeymourJones, J. J. (West Ham, Silvertown)Thorne, William James
Cove, William G.Jones, Morgan (Caerphilly)Tinker, John Joseph
Cripps, Sir StaffordKirkwood, DavidWatts-Morgan, Lieut.-Col. David
Daggar, GeorgeLansbury, Rt. Hon. GeorgeWilliams, David (Swansea, East)
Davies, David L. (Pontypridd)Lawson, John JamesWilliams, Edward John (Ogmore)
Davies, Rhys John (Westhoughton)Leonard, WilliamWilliams, Dr. John H. (Llanelly)
Duncan, Charles (Derby, Claycross)Logan, David GilbertWilliams, Thomas (York, Don Valley)
Edwards, CharlesLunn, William
Grenfell, David Rees (Glamorgan)McEntee, Valentine L.TELLERS FOR THE AYES.—
Griffiths, T. (Monmouth, pontypool)McGovern, JohnMr. Cordon Macdonald and Mr. Duncan Graham.
Grundy, Thomas W.Maclean, Neil (Glasgow, Goven)
NOES.
Agnew, Lieut.-Com. P. G.Bowater, Col. Sir T. VansittartClarry, Reginald George
Allen, Sir J. Sandeman (Liverp'l, W.)Bower, Lieut.-Com. Robert TattonClayton, Dr. George C.
Allen, Maj. J. Sandeman (B'k'nh'd, W)Bowyer, Capt. Sir George E. W.Cooke, James D.
Allen, William (Stoke-on-Trent)Boyce, H. LeslieCopeland, Ida
Allen, Lt.-Col. Sir William (Armagh)Braithwaite, J. G. (Hillsborough)Courtauld, Major John Sewell
Applin, Lieut.-Col. Reginald V. K.Broadbent, Colonel JohnCraddock, Sir Reginald Henry
Apsley, LordBrockiebank, C. E. R.Croft, Brigadier-General Sir H.
Aske, Sir William RobertBrown, Ernest (Leith)Crooke, J. Smedley
Atholl, Duchess ofBrowne, Captain A. C.Crookshank, Col. C. de Windt (Bootle)
Atkinson, CyrilBuchan-Hepburn, P. G. T.Crookshank, Capt. H. C. (Gainsb'ro)
Bailey, Eric Alfred GeorgeBurghley, LordCroom-Johnson, R. P.
Baldwin, Rt. Hon. StanleyBurgin, Dr. Edward LeslieCross, R. H.
Balfour, George (Hampstead)Burnett, John GeorgeCrossley, A. C.
Balniel, LordButler, Richard AustenCruddas, Lieut.-Colonel Bernard
Barclay-Harvey, C. M.Butt, Sir AlfredDavidson, Rt. Hon. J. C. C.
Barrie, Sir Charles CouparCaine, G. R. HallDavies, Edward C. (Montgomery)
Barton, Capt. Basil KelseyCampbell, Edward Taswell (Bromley)Davies, Maj. Geo. F. (Somerset, Yeovil)
Beauchamp, Sir Brograve CampbellCampbell, Rear-Adml. G. (Burnley)Denville, Alfred
Beaumont, M. W. (Bucks., Aylesbury)Campbell-Johnston, MalcolmDickie, John P.
Beaumont, R. E. B. (Portsm'th, Centr'l)Caporn, Arthur CecilDixey, Arthur C. N.
Benn, Sir Arthur ShirleyCastle Stewart, EarlDonner, P. W.
Bennett, Capt. Sir Ernest NathanielCayzer, Sir Charles (Chester, City)Doran, Edward
Bernays, RobertCazalet, Thelma (Islington, E.)Dower, Captain A. V. G.
Betterton, Rt. Hon. Sir Henry B.Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Drewe, Cedric
Birchall, Major Sir John DenmanChamberlain, Rt. Hon. N. (Edgbaston)Duggan, Hubert John
Bird, Sir Robert B. (Wolverh'pton W.)Chapman, Col. R. (Houghton-le-Spring)Duncan, James A. L. (Kensington, N.)
Borodale, ViscountChapman, Sir Samuel (Edinburgh, S.)Eales, John Frederick
Bossom, A. C.Choriton, Alan Ernest LeofricEastwood, John Francis
Boulton, W. W.Chotzner, Alfred JamesEden, Robert Anthony

upon it, under this Bill, of 100 per cent., or 90 per cent., or 80 per cent., will it be possible to impose a tax exceeding 100 per cent., although, apparently, the limit under the Bill is to be 100 per cent.?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

The only powers which are taken under this Bill are for duties not exceeding 100 per cent. Whatever duties there may be in respect of other legislation is quite another matter. As far as this Measure is concerned, it only refers to powers up to a limit of 100 per cent. I need hardly point out that goods that are in bond now have not paid duty. They may be removed in the course of this week or to-morrow—one cannot tell. That really is entirely left to the discretion of the owner of the goods.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 47; Noes, 297.

Edmondson, Major A. J.Leech, Dr. J. W.Roberts, Aled (Wrexham)
Ellis, Robert GeoffreyLees-Jones, JohnRobinson, John Roland
Elliston, Captain George SampsonLeighton, Major B. E. P.Rosbotham, D. S. T.
Elmley, ViscountLevy, ThomasRoss, Ronald D.
Emmott, Charles E. G. C.Liddall, Walter S.Ross Taylor, Walter (Woodbridge)
Entwistle, Major Cyril FullardLlewellin, Major John J.Runciman, Rt. Hon. Walter
Erskine-Bolst, Capt. C. C. (Blk'pool)Llewellyn-Jones, FrederickRunge, Norah Cecil
Essenhigh, Reginald ClareLyons, Abraham MontaguRussell, Albert (Kirkcaldy)
Everard, W. LindsayMabane, WilliamRussell, Alexander West (Tynemouth)
Foot, Dingle (Dundee)MacAndrew, Maj. C. G. (Partick)Russell, Hamer Field (Shef'ld, B'tside)
Foot, Isaac (Cornwall, Bodmin)MacAndrew, Capt. J. O. (Ayr)Russell, Richard John (Eddisbury)
Ford, Sir Patrick J.MacDonald, Rt. Hn. J. R. (Seaham)Rutherford, Sir John Hugo
Fraser, Captain IanMcKeag, WilliamSalt, Edward W.
Fremantle, Lieut.-Colonel Francis EMcKie, John HamiltonSamuel, A. M. (Surrey, Farnham)
Fuller, Captain A. E. G.McLean, Dr. W. H. (Tradeston)Samuel, Samuel (W'dsworth, Putney)
Ganzoni, Sir JohnMacmillan, Maurice HaroldSandeman, Sir A. N. Stewart
Gibson, Charles GranvilleMacquisten, Frederick AlexanderSanderson, Sir Frank Barnard
Gillett, Sir George MastermanMagnay, ThomasSavery, Samuel Servington
Glossop, C. W. H.Makins, Brigadier-General ErnestScone, Lord
Gluckstein, Louis HalleManningham-Buller, Lt.-Col. Sir MSelley, Harry R.
Glyn, Major Ralph G. C.Margesson, Capt. Henry David R.Shakespeare, Geoffrey H.
Goldie, Noel B.Martin, Thomas B.Shaw, Captain William T. (Forfar)
Goodman, Colonel Albert W.Mayhew, Lieut.-Colonel John M.Simmonds, Oliver Edwin
Gower, Sir RobertMillar, James DuncanSmiles, Lieut.-Col. Sir Walter D.
Graham, Fergus (Cumberland, N.)Milne, CharlesSmith, Sir Jonah W. (Barrow-in-F.)
Grattan-Doyle, Sir NicholasMilne, John Sydney Wardlaw-Smith, Louis W. (Sheffield, Hallam)
Greene, William P. C.Mitchell, Harold P.(Br'tfd & Chisw'k)Smith-Carington, Neville W.
Gretton, Colonel Rt. Hon. JohnMoore, Lt.-Col. Thomas C. R. (Ayr)Smithers, Waldron
Griffith, F. Kingsley (Middlosbro', W.)Moreing, Adrian C.Somervell, Donald Bradley
Gunston, Captain D. W.Morgan, Robert H.Somerville, Annesley A. (Windsor)
Guy, J. C. MorrisonMorris, John Patrick (Salford, N.)Soper, Richard
Hall, Lieut.-Col. Sir F. (Dulwich)Morris, Owen Temple (Cardiff, E.)Sotheron-Estcourt, Captain T. E.
Hanley, Dennis A.Muirhead, Major A. J.Southby, Commander Archibald R. J.
Hannon, Patrick Joseph HenryMunro, PatrickSpears, Brigadier-General Edward L.
Hartland, George A.Nail, Sir JosephStanley, Lord (Lancaster, Fylde)
Headlam, Lieut.-Col. Cuthbert M.Nail-Cain, Arthur Ronald N.Stones, James
Hellgers, Captain F. F. A.Nation, Brigadier-General J. J. H.Storey, Samuel
Henderson, Sir Vivian L. (Chelmsford)Nicholson, Godfrey (Morpeth)Stourton, John J.
Heneage, Lieut.-Colonel Arthur P.Normand, Wilfrid GuildStrauss, Edward A.
Herbert, George (Rotherham)Nunn, WilliamStrickland, Captain W. F.
Hillman, Dr. George B.O'Donovan, Dr. William JamesSugden, Sir Wilfrid Hart
Hills, Major Rt. Hon. John WallerOman, Sir Charles William C.Sutcliffe, Harold
Hope, Sydney (Chester, Stalybridge)Ormiston, ThomasTaylor, Vice-Admiral E. A. (Pd'gt'n, S.)
Hore-Belisha, LesliePalmer, Francis NoelTempleton, William P.
Hornby, FrankPatrick, Colin M.Thompson, Luke
Horsbrugh, FlorencePearson, William G.Thomson, Sir Frederick Charles
Howard, Tom ForrestPeat, Charles U.Thomson, Mitchell-, Rt. Hon. Sir W.
Howitt, Dr. Alfred B.Penny, Sir GeorgeThorp, Linton Theodore
Hudson, Capt. A. U. M. (Hackney, N.)Perkins, Walter R. D.Todd, Capt. A. J. K. (B'wick-on-T.)
Hudson, Robert Spear (Southport)Peters, Dr. Sidney JohnTouche, Gordon Cosmo
Hume, Sir George HopwoodPeto, Sir Basil E. (Devon, Barnstaple)Tryon, Rt. Hon. George Clement
Hunter, Dr. Joseph (Dumfries)Peto, Geoffrey K. (W'verh'pt'n, Bliston)Wallace, Captain D. E. (Hornsey)
Hurd, Percy A.Pickering, Ernest H.Ward, Lt.-Col. Sir A. L. (Hull)
Hurst, Sir Gerald B.Pickford, Hon. Mary AdaWard, Irene Mary Bewick (Wallsend)
Hutchison, Maj.-Gen. Sir P. (M'tr'se)Pike, Cecil F.Ward, Sarah Adelaide (Cannock)
Inskip, Sir Thomas W. H.Potter, JohnWarrender, Sir Victor A. G.
Jackson, Sir Henry (Wandsworth, C.)Powell, Lieut.-Col. Evelyn G. H.Watt, Captain George Steven H.
James, Wing-Com. A. W. H.Procter, Major Henry AdamWells, Sydney Richard
Jamieson, DouglasPurbrick, R.Weymouth, Viscount
Jennings, RolandRaikes, Hector Victor AlpinWhiteside, Borras Noel H.
Johnston, J, W. (Clackmannan)Ramsay, Alexander (W. Bromwich)Wills, Wilfrid D.
Johnstone, Harcourt (S. Shields)Ramsay, Capt. A. H. M. (Midlothian)Wilson, G. H. A. (Cambridge U.)
Jones, Lewis (Swansea, West)Ramsay, T. B. W. (Western Isles)Windsor-Clive, Lieut.-Colonel George
Ker, J. CampbellRamsbotham, HerswaldWithers, Sir John James
Kerr, Hamilton W.Ramsden, E.Womersley, Walter James
Kirkpatrick, William M.Rawson, Sir CooperWood, Major M. McKenzie (Banff)
Knatchbull, Captain Hon. M. H. R.Rea, Walter RussellWorthington, Dr. John V.
Lamb, Sir Joseph QuintonReed, Arthur C. (Exeter)Wragg, Herbert
Law, Sir AlfredReid, James S. C. (Stirling)Young, Rt. Hon. Sir Hilton (S'v'noaks)
Law, Richard K. (Hull, S.W.)Remer, John R.
Leckie, J. A.Renwick, Major Gustav A.TELLERS FOR THE NOES.—
Lord Erskine and Mr. Blindell.

Mr. MACLEAN:

I beg to move, in page 2, line 35, at the end, to add the words: so, however, that the total duty charge-able shall not exceed one hundred per cent. of the value of the article. The Sub-section as it stands will be taken to mean that, if any article comes into the country which already has a duty chargeable upon it under some other Act, such as a Budget Duty, it will be possible under this Bill to impose an additional tax up to 100 per cent. That is giving the Board of Trade greater powers than was anticipated, even by themselves, when they first put forward the idea of this Bill. In addition to making the article more expensive, the fact that you are increasing the tax by a further 100 per cent. might mean that, where an article is already being taxed 50 per cent., if the Board of Trade consider it advisable for prohibitive purposes, or necessary because of the excessive quantities of the articles that are being imported, to put the full limit of this tariff upon it, you might easily find it being taxed 150 per cent. That is putting a very unnecessary burden upon certain articles which are very necessary to the life of the nation.

A London evening newspaper the other day referred to a particular commodity which it said was being dumped here in excessive quantities, and tried to make out that it would be advisable to keep it out of the country altogether, to take only imports from the Colonies and to depend for the remainder of our consumption upon the home manufactured supply. If that advice were taken into account, if the President of the Board of Trade listened to the voice of Fleet Street instead of the voice of the electors outside, he would be imposing an excessive tariff, and he would place upon very large numbers, not only of people who might be better able to pay the excessive price but of people who have to watch very carefully every penny they spend so as to get the greatest possible value for it, who compose the very large majority of the people of this country, a very grave hardship indeed, amounting in most cases to actual prohibition.

The Amendment should make itself agreeable to the right hon. Gentleman. We have objected to the tariff throughout the whole of the Debates on the Bill, but on this Amendment we are conceding the point which he has been putting forward and which has already been established. The House has given him the right to go to the limit of 100 per cent. We are asking that it shall not give him permission to go beyond that limit, that 100 per cent. is the maximum to which he is to be allowed to go, and that he is not to be permitted to impose a heavier tax than was contemplated when the Bill was first introduced. I put this to the right hon. Gentleman as a business man whose business in the main, in his early days at any rate, was concerned with shipping and with importing and exporting articles to and from this country. He should understand the point. I expect, therefore, that he will see the force of not imposing an additional tax beyond the 100 per cent. already agreed to, but will concede the point and accept the Amendment.

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

The hon. Members proposal would, I fear, be quite unworkable in a great many instances. Many duties that are now payable are specific duties and are not ad valorem. It would be extremely difficult to translate a specific duty into an ad valorem amount so as to reach the calculation which his Amendment would render necessary. The hon. Member can quite well see that if we had to translate each specific duty into its ad valorem equivalent we should have to make a fresh calculation and work on a fresh principle on nearly every category of goods and indeed on very large varieties in each category which in itself would be an impracticable way of assessing duty. There is one group of duties where it is obvious it would be quite unworkable—the case of spirits where the existing duty obviously is in excess already. [Interruption.] I quite agree. That is a good example anyhow of the fact that you cannot take existing duties into account and at the same time operate on the basis of 100 per cent., which will be the provision of the Act.

Let me point out how far this would be contrary to the principle of the Bill itself. If the existing duties are not sufficient to prevent these goods from coming into the country in their normal quantities there can be no harm from the point of view of the exclusion of these goods in regarding that exclusion as being in exactly the same category as any other budgetary duties, and the amount necessary to prevent abnormal quantities coining in being added to it. If the existing duty is to prevent such things being imported, obvously there will be no abnormality with which we have to deal. Therefore, it follows that the best arrangement we can make is to follow past practice, and the additional amount which will be imposed under this Bill will be the fairest way as between the owners of different categories of goods or different articles and will in itself be used simply with the object of dealing with abnormal imports and nothing else.

Mr. MACLEAN:

In the case of the kind just illustrated by the right hon. Gentleman, is it not looking upon the duty already imposed upon the article as part of the value of the article and therefore unfair to have the imposition of a new tax?

Amendment negatived.

Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.