HC Deb 10 March 1915 vol 70 cc1500-14

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a second time."


I desire to make a very strong appeal to the Government not to proceed with this Bill in the hurried way which is contemplated at the present moment. It appears to me, so far as my study of the position has enabled me to judge that the Bill is perfectly unnecessary and that the existing law gives everything that is useful in the Bill. It bristles with restrictions which can only have the effect of throwing great additional burdens upon shipping and upon the conveyance of goods, and nothing has contributed so much to the rise in prices throughout the country as the difficulties imposed by the Government with regard to mercantile transactions and the transport of goods. The Bill is technical, and the best way to make the House familiar with it is to throw out what I believe to be a sketch of its origin. There is a War Trade Committee, and it is a very mysterious body. It is not one of the Departments accustomed to deal with trade in this country. We have the most excellent Departments for dealing with trade that exist in any country in the world. The Customs Department is one of the most perfect, and no Department of the Crown has excited so much of my admiration. We have also got a very effective body in the Board of Trade, but in the present emergency, so far as I can make out, both these great Departments have been pushed aside and a body has been constituted by the Government, without the House knowing anything about it, called the War Trade Committee, and I believe it is in their interests or on their behalf that this Bill is put forward. That is a very unhappy origin for the very sweeping and drastic proposal which the Bill conveys.

This Department, instead of being situated at the docks as is the Customs Department, is situated here amidst the cathedrals of Westminster, and the very great difficulty of getting at the Department is one of the greatest objections to it. It is more closely connected with the Office of Works than it is with either of the trade Departments in the country. It is under the control of a Noble Lord whom we knew very well in this House, Lord Emmott. I have no reflection to make upon the Noble Lord, but I think that he is a little out of his element. I would like to say that the chief official of the Department, Sir Nathaniel Highmore, is a Civil servant in this country. I have nothing whatever to say against him. I believe that he is a gentleman of great ability and courtesy who is doing his best in very difficult circumstances to struggle through the very heavy burden put upon him, and he and the very able Department he is working with have my sympathy in the great difficulties in which they are trying, and I believe almost vainly trying, to deal with this matter. That was the origin of the Bill. It is curious that we should have a Bill dealing with trade brought up hurriedly and that there should be no Department connected with trade represented on the Front Bench. Who is going to deal with the Bill?


I am.


My right hon. and learned Friend the Attorney-General is going to deal with it. He is the handyman. He is as ready to deal with intricate matters of trade and commerce as he is to give a highly technical opinion on such matters as we have been discussing. I do not think it is desirable that this question dealing with trade should be dealt with by the Attorney-General instead of by someone representing the Board of Trade or the other Department I have mentioned. The first Clause of the Bill deals with the question of goods put upon ships for ships' stores, and provides that no goods shall be put upon ships for slips' stores without them passing the Customs. That is the law at the present time. The whole system of Clause 1 has been in strict operation since the War commenced. It applies not only to goods liable to Customs Duty, but to any goods that have been prohibited. I have made some inquiry and endeavoured to find out, and all the provisions of the first Clause are in fact at present in complete and smooth operation with regard to every ship. It says that more shall not be put on board ship than is required for the number of the crew and the length of the voyage. But that is already provided for under the Customs Consolidation Act, 1876.


In what Section?


I cannot give the Section. It may be that I am talking to a lawyer, but I am at the same time dealing with him as a business man of common sense, and I do not think there is any necessity for pleading technicalities. The right hon. and learned Gentleman must take it from me that no stores can be put on board ship except what are passed by the Customs authorities. The first Clause is, in fact, a sort of reflection on the Customs authorities of this country, and a perfectly unnecessary reflection. From that point of view, the broad criticism I make on the Bill as a whole is that, where there is anything good in it it is already the law at present, and what is new in it is very objectionable and ought not to be allowed to pass. The Bill bristles with penalties, but the Customs already have authority to inflict any necessary penalties, and things work quite easily at the present time. There are no ships in bur ports except British ships, or the ships of friendly countries, and, in my opinion, they ought not to be treated in a more hostile and unfriendly manner by the Government than is necessary. If further difficulties are placed on these ships, and if the owners are threatened with penalties and delay, the only result will be to increase the price of goods, and to cast a great additional burden on the community. Clause 2 deals with pre-entry of ships' stores, and here again the proposal is already the law and is in full operation.

The Clause, therefore, is unnecessary. Clause 3 imposes an obligation on shipowners. I am not a shipowner, and have no great sympathy with them, seeing that they are charging very high freights, but the Clause imposes a penalty on them if the ship leaves port without due clearance. That, in my opinion, is wrong. I do not think shipowners do this thing. A ship is not a thing that can run away. If it does anything wrong in one port the matter may easily be put right afterwards, and we do not need this new provision in order to deal with these matters.

Clause 4 is the pith of the Bill. It brings a very important and new law into operation, and it really requires the attention of all business men in this House. I am sorry that the method of bringing this Bill forward has prevented it receiving the attention which is due to it. I believe if I can produce an effect on the minds of hon. Gentlemen present, the consideration of the Bill will be postponed, as, in my opinion, it ought to be. Clause 4 deals with exports which have been approved of by the Committee and the Customs to be sent to a foreign country. It lays down a new law with regard to bills of lading and invoices. The Government very properly has now adopted in some foreign capitals the practice of having some firm or agent to assist them in watching that goods exported from this country to that particular port do not pass to any of the enemy countries. In some cases the Committee which has control of these matters in this country gives a name—a banker's or a trader's name—and says the goods may be sent to another country provided that they are consigned to a particular firm thus named. But Clause 4 comes in and says that the name of the firm or bank must be put in all invoices, and also in the bill of lading. Let us look first at the invoices. The provision is impracticable, because the firm named was not the buyer of the goods. The services of the firm are only utilised to see that the goods do not reach a wrong quarter.

Then the rule with regard to the bill of lading involves an important alteration of the law, and ought to receive attention. It is that the name of this firm exercising this surveillance, or some other firm appointed by the Government, shall be put in the bill of lading. If that is done it will destroy the bill of lading as a security. The usual form of a bill of lading is to ship goods to the order of the consignee and on these goods advances are made, the bill of lading being the security. If anything occurs at the last moment the goods can be sent back, and they do not go out of the control of the consignor or bankers. I can only say if this provision is insisted upon with regard to both the bill of lading and the invoices a very great barrier will be imposed and big difficulties put in the way of the export trade of this country. I think hon. Members will agree with me that this is a proposal which should be studied and possibly amended, and such a great change in our present practice ought not to be made hurriedly at the end of these sittings. The matter ought indeed to be carefully looked into.


Cannot the consignor's name also appear in the bill of lading?


If the consignor's name can be put in, well and good, but an Amendment will be required to effect that, because the Bill as it stands will not permit it. It simply says—

"The name of the person, or place, or both, as the case may be, shall be inserted in all invoices, bills of lading, manifests and other documents relating to these goods, and if this requirement is not complied with as respects any document, the person by whom or on whose behalf the document is made out shall … be liable to a penalty of £100."

It is clear from these words that the goods must be definitely consigned to a particular man or place. That is a total change in our law. I do not think the bank would make advances on a bill of lading in that case. They want to include the name of the consignor, so that in case of necessity the goods may be brought back.


What you mean is that the consignor has nobody to draw upon, and therefore the bank will not discount the bill.


The bank will make advances on the order of the consignor of the goods. I admit that the matter is a little technical, but the House may take it from me that there is a substantial change being made in the law with regard to the bills of lading, and that it is a change which will put further barriers in the way of trade. Probably the next most important Clause is Clause 5, embodying provisions as to declarations as to the ultimate destination of exported goods. The word which the House must follow in this case is "ultimate"—the ultimate destination. The Government is very properly here laying down a provision with regard to goods which they allow to be exported, after having made all possible inquiries in this country. It may be these goods are sent to Italy, or Holland, or Denmark, and the object is to secure that they shall not pass thence into an enemy country. But this particular provision of the Bill is a terrible one. It alters what has hitherto been the whole procedure of the Government. The course adopted up to the present time by the Government has been to issue a paper in which particulars have to be given to the Government of the goods exported. The Government then either approves or disapproves. If they disapprove they black-list the exporters, who cannot export any more goods. This Clause throws on the exporter the duty of seeing what is to be the ultimate destination of all goods, and penalties are imposed for any default. It is an obligation which ought not to be thrown on exporters from this country.

While I admit that every assistance ought to be given to the Government by exporters in seeing that no goods reach the enemy country, or any country which practically, for the purpose of trade, may be at war with this country, I would point out to the House the great difficulty the exporter has in dealing with the matter, whereas the Government has every facility for dealing with it. At the present time no goods of any kind can be exported without the permission of the Committee or the Customs. It would appear to be quite reasonable that wherever the Government gives permission for the export of goods, the Commercial Attache, or the Embassy, or the Consul at the place to which the goods are consigned, should watch the buyers of the goods. They can get information which the merchant cannot possibly obtain. They can watch the buyers, and if they find anyone is not keeping the undertaking which has to be given—and it is a most solemn undertaking that the goods shall not reach an enemy country, but shall be distributed and consumed solely in the country to which they are exported—if they find anyone giving a false declaration, it should be their duty to report the firm, so that their names can be crossed off our lists and no further goods be permitted to be sent by them. That is the system which has been at work up to the present, and I believe it is the only practicable system. But it is to be now entirely altered, and the consignor is to be liable to the tremendous penalty of three times the value of the goods, or, £100 as the Commissioners may think fit, if he does not carry out this new provision. Three times the value of the goods is a big penalty, as the goods may be worth from £10,000 to £20,000, and I think it is a very questionable proceeding to authorise the imposition of such a penalty in this hurried manner.

There is another point. Sub-section (2) of Clause 5 provides that if the Commissioners suspect anything, the consignor must prove to their satisfaction the ultimate destination of the goods. This whole provision is based on suspicion. I have not had a large experience in these matters, because I am not largely engaged in export trade, but I have had some little experience, and I would point out that one difficulty here is that the Commissioners come to varying decisions; they approve of firms at certain times and afterwards they disapprove of them, because they may have heard something in regard to them. Very often they found their suspicions on a very curious basis. There was some experience of that in a case which arose in regard to the export of goods to a man named Smith in Sweden, that being also the name of his correspondent in this country. The Smith to whom the goods were exported was blacklisted in this country, but when inquiries came to be made it was found that it was a different Smith, and also that the Smith to whom the export was made had died eight years ago, and that there was now no Smith at all in the firm to whom the goods were sent. That was the ground of suspicion in that case.

In fact, all the provisions of Clauses 5 and 6 are based upon suspicions, which, it is said, must be reasonable suspicions. I submit respectfully that that is a very small foundation on which to impose such drastic penalties as are embodied in the Bill. Clause 6 refers to the importation of goods. There, again, the whole thing is based on mere suspicion. Everyone in this country is bound to assist the Government to the utmost of his power to prevent anything that will assist the enemy from reaching him. There is a sphere of work into which the individual exporter or shipper cannot go. The Government has machinery for reaching that, and the Government is utilising that machinery at the present time. The object of this Bill is to throw the whole thing back on to the exporter. I am not familiar with the exportation of jam, marmalade or biscuits. Who can tell that small goods of that kind will not get into Turkey? Is there to be a penalty of £10, £20, or £100 because a pot of jam happens to get into Turkey and its ultimate destination cannot be proved? Nothing can be done until the Commissioners of Customs give authority.

If this Bill be passed the exporter will be liable if a single box containing Palmer's biscuits gets into Germany or Turkey, and for anything he knows these heavy penalties will be imposed. Although everything ought to be done to assist the Government to bring this dreadful conflict to a successful issue for this country, these penalties are very sweeping and drastic and we ought to have a little more time to consider them. Certainly some Amendments must be moved, but how can they be moved if the Bill is pressed through? A very clever and able Department of the Customs is now attending to all these things quite satisfactorily, and I appeal to my right hon. Friend not to press this Bill, with its very onerous and far-reaching Clauses, at this time.


I desire to commend certain considerations to my hon. Friend. I am not going to discuss the Bill in any technical way, because I do not know what the technical effect will be, but it is quite clear that the broad, general effect is to increase the regulations and restrictions of the Customs House. We do not want that at all. I do not dispute the necessity for the Bill, but a great deal will depend upon its administration. I would ask the Government to let us clearly understand that they are not going to be pedantic in the administration of the new rules. Everybody who has some experience of what is going on in our ports knows that a certain amount of the difficulties there is attributable to the increased stringency in the Customs regulations brought about by the War. If those regulations are necessary to the safety of the country nobody would complain of them. I should like an assurance that no new regulations will be imposed, and that the existing regulations will be relaxed in all cases where there is no reason to believe that substantial damage to national interests is being done. We do not want to have people made to toe the line of red-tape when there is nothing of any real substance that is wrong suspected to be going on. Throughout the commercial community the junior clerks as a class have volunteered very freely and readily to go to the War. That is precisely the class upon whom the work of carrying out these Customs regulations, so far as merchants are concerned, devolves. Their office staffs are short-handed at the present time. I would ask for an assurance that no regulation shall be imposed which is not really necessary as a matter of substance.


The right hon. Gentleman who spoke first (Mr. Lough) has given the House his view of this Bill. I quite understand that in doing so he is actuated by no desire whatever except to secure that the regulations which we make are not more than is necessary for the purposes of national defence and, at the same time, that they are, as far as may be, reasonable in themselves. There is no difference between my right hon. Friend and the rest of us about that. I hope I may also say this of him, that he is not an obstinate man, and if it can be shown to him that these regulations are quite necessary and in themselves quite moderate and reasonable in character, he is not going, simply because he made the speech to which we listened just now, to continue resistance to what may be a very necessary and urgent piece of legislation.

It is necessary that the House should understand what these Clauses do. They are quite few in number. They deal, it is true, with some rather technical matters. They are not enormous and novel interferences with our carrying trade; on the contrary, they deal with four or five quite limited and specific points, which, in the control and regulation of our export trade since the War began, have shown themselves to be matters which must be met. Let me take them one at a time, and I think I can show the House that they are really such as I have described. First of all, Clauses 1 and 2 of this Bill deal with the subject of stores. My right hon. Friend made compaint that it should be I, and not somebody else, who was to explain the Bill. After his explanation of Clauses 1 and 2 he will forgive me for saying that it is desirable that somebody in the course of this Debate who has some precise knowledge of what they do should explain them. Stores are different things put on board a ship in one of our ports declared to be for the purpose of victualling or otherwise providing the ship, as opposed to being commodities which are to be exported, that is to say, to a foreign country, or to be carried coast-wise, that is to say, carried from one port to another.

There you have three classes of goods—goods going to be exported goods going to be carried coast-wise, and goods going to be used as stores. So far as goods which are going to be exported or carried coast-wise are concerned, we have got, by the unanimous assent of Parliament, sufficient powers. We have found it necessary to prohibit altogether the leaving from these shores of certain goods for exportation, and, in the same way, for being carried coast-wise. We have found it necessary in several cases to make lists of commodities which cannot leave these shores for the purposes of export to certain named destinations. Stores, which are things put on board ship for victualling purposes or other provision, are not goods which are being exported and are not goods which are being carried coastwise, and they are not within our prohibition at all. What happens?

My right hon. Friend has told us that we are claiming in a great hurry to do something which in itself is a monstrous interference with legitimate trade. Let me give the House one illustration, and I will then ask hon. Members to judge whether the Clause is urgently needed or not. A week or two ago a vessel—a neutral vessel—left the port of Swansea with 400 gallons of petrol as stores and declared that she was going to Havre. She was not a motor boat, and I do not know why she wanted 400 gallons of petrol. She set out to sea with that petrol upon her victualling bill. There is, at this moment, no means by which we could prevent the petrol going. Where did it go? There were boats in that neighbourhood that wanted petrol, and they were enemy boats. Is it to be said that we are forcing something unfairly upon the House of Commons because we want to prevent that happening again, and because Clauses 1 and 2 of the Bill provide that nothing should be put on board any ship until the Customs authorities have proved and satisfied themselves that the goods are reasonably required by the ship for the purpose of taking the ship to the port to which it is going?


Is not that the law now?


With great respect, that is not the law now. If it were I should not be occupying our time in considering the Clauses framed to meet the point. It is the law with regard to goods which are being exported and carried coast-wise, but it is not the law with regard to stores. We find it is impossible to allow that to go on in the national interest. It ii not because a colleague of mine is the head of the War Trade Department—I believe he was the most suitable person to select for that post because he has had great business experience—but it is because we cannot hope to do what we ought to do in the national interest to prevent submarines being supplied with petrol and other things from this country that Clauses 1 and 2 are proposed in this Bill. I come to Clause 3. There is nothing peculiar about it. It provides nothing more than this: That a coasting ship, that is to say a vessel which leaves one of the ports of this country in order to go to another port in this country, is not to leave without having what is called "clearance," that is to say, a proper authority from the Customs, and that if it does so leave without getting that clearance it is to be liable to penalties, and that those penalties may be enforced in an obvious way. What is the necessity for that? It is this: In rimes of peace very little happens of any consequence if the vessel leaves, say, Liverpool, in order to sail to Cardiff, even although the vessel in all cases has not precisely complied with the ordinary practice of getting clearance before it goes.

7.0 P.M.

It is a very moot point whether in all cases under the existing law you really can penalise the vessel. In time of war you may find that one of these vessels, which ought to have cleared, goes on a coasting trip down the coast, and does not come into this country again, or in the course of its coasting voyage has been supplying the enemy at sea. I do not say it is a British vessel. It may be a neutral vessel of whom we have a certain suspicion. All we want by Clause 3 is a provision which, under a proper penalty, secures that coasting ships shall not leave one port to go to another without having previously got clearance from the Customs, the reason being that the Customs will not give clearance until they know what is on the ship. Under Clause 4 my right hon. Friend seems to think that we are interfering with the whole operation of British commerce. Really, it is nothing of the kind. In three sentences I will tell the House what is contained in Clause 4. We prohibit certain goods from leaving this country, but none the less there may be certain cases in which the merchant may say, "I want a licence to export such and such a quantity of goods of this class from this country." We say to him, "Where is the stuff going and who is the person to whom you are selling?" He says it is going to such a place, and here is the name of the man who is instructed to buy it from me, and I want to get a licence to send it out of this country and fulfil that bargain. If he makes a good case, and shows that he is sending it to a place, which we believe in the circumstances to be a safe place, and a consignee of whose position and good faith we are assured, he may get his licence. That comes from the War Trade Department. What happens? Having got his licence, he puts his goods on board ship. It is at that moment that he takes his bill of lading. You do not get a bill of lading until you put the goods on board. The bill of lading is the receipt for the goods. He takes the bill of lading sometimes not as a bill of lading which puts the captain of the ship under the duty of delivering these goods to the consignee whose name he has given to us, but simply puts the captain of the ship under the duty of delivering the goods to the shipper's order in a way which is familiar to every business man and, allow me to add, to every lawyer.

A lawyer may, at any rate, have some knowledge of this department of business. That may be all right if there is complete bona fides in the transaction, but the House can see in a moment that having got the goods afloat in the Channel or in the North Sea, or wherever it is, he may then proceed to make other arrangements behind our back contrary to the licence which we gave him, and those goods may actually go to the enemy, and therefore we want to provide, not in reference to any past transaction, not in reference to anything which has already taken place, but with reference to future licences, that if you come and say, "Please give me a licence to export these goods. I want it in order that I may export them to a particular person whom I name and to a particular place which I name," we want to say, "You, the licensee, must put in your bill of lading something which will make it certain that these goods do go to the place you name and the person you name, and if you simply take a bill of lading to your own order we do not regard you as export- ing those goods under that licence." Surely that is a perfectly reasonable and sensible provision in cases where it is safe to give a man leave to export generally But if a man gets the licence on the distinct representation that he wants it in order to send the goods to A. B. at a given place, to whom he has sold them, the proper thing is that we should so draw up his shipping documents that they go to A. B. and to the person to whom he sells them.

The next Clause is this. My right hon. Friend in his indignation I do not think observed what is really the key to the whole Clause. Clause 5 deals with this position. At first we found it necessary to take securities in the nature of bonds from those who declared the ultimate destination of the goods they were exporting in certain cases, and the condition of the bond would be that if the goods were found not to go to that destination, the money secured by the bond would be forfeited unless a reasonable explanation was offered by the man who had given the bond. That is the ordinary practice. That is the thing which the Customs do in many cases in reference to special classes of prohibited goods. But this happens. I would ask my right hon. Friend to observe this because so far from being careless of commercial interests the object of the Clause is to provide an alternative at the choice of the shipper himself, which we think in many cases will be less onerous to him.

If you accept a great number of bonds from shipping houses you so far tie up their credit or, at any rate, involve a liability or a risk of having to find substantial sums of money at short notice, that you may seriously hinder the working of their business, and that has been pointed out. This Clause is devised in relief of such people to give them an alternative if they please. If my right hon. Friend likes to go on giving a bond by which he will forfeit the money he deposits if the ultimate destination of the goods is not what he said, be it so. No one will prevent it. But we say as an alternative, you may have your goods and they may go forward without any bond at all, but it must be on this condition, that if we afterwards have good grounds for knowing that those goods have gone to another destination than the one you named, then you must come under a penalty unless you are prepared to come forward and do that which you have to do under your bond, namely, show that there is really an explanation of it, and that it is no fault of yours. That is all that Clause 5 does, and it is a concession—an alternative—to commercial men who might otherwise be seriously prejudiced by having to find large sums of money in case of a bond suddenly called in and realised.

There is only one other Clause. It is one that my right hon. Friend did not take so much interest in because it has not to do with export, but with import; but there may be others who are interested in it. It provides that where the Commissioners of Customs and Excise have reason to suspect that the country of origin of any goods imported into the United Kingdom is an enemy within the meaning of the definition, the goods may be seized as though they were goods enumerated in the list of goods which must not be imported. The reason for that is this: We have had arrangements for months by which if you want to import goods—let us say, from Belgium, or Norway, or Sweden, or some neutral which is neighbouring to an enemy? country—you may protect yourself against the risk of being charged with trading with the enemy or importing goods of enemy origin by providing yourself with a certificate which in a proper case the British Consul in the neutral country will give you that those goods are the produce of the neutral country where he is Consul. He can satisfy himself. He can probably see them being manufactured. He has excellent means of knowing whether the goods are in fact what they profess to be—namely, a neutral product.

If you do that you escape all further consequences, because it is the Consul's fault if he gives you a certificate which is not what the facts would warrant. But there are some people who will not do that. There are importers in this country—and I think it is a pity that it should be so—who would take the risk of importing goods from such a country as Holland or Norway without taking that patriotic precaution and seeing that they are certified to be of neutral origin by the Consul in that neutral country, and all we say to that is, "If you choose to do that for your own profit and convenience, and if it afterwards turns out that these are goods which, in fact, have an enemy origin, we really cannot allow you to go making your personal profit on the terms that you are helping to maintain the enemy whom we are fighting in the field," and those goods must come under a series of regulations well known in the Customs. That does not mean, of course, that they are forfeited, but they are detained, and he will have to come and show, if he can, that the suspicion which the Customs entertained is wrong and that, as a matter of fact, the goods have an innocent origin.

That is the Bill, and I ask the House to consider in which of the Clauses in that Bill is this interference with legitimate trade in time of war, which might have appeared to be the case from the speech of my right hon. Friend. I submit, on the contrary, that there are half a dozen Clauses every one of which is obviously most urgently required. The failure to pass them before we break up would obviously mean opportunities which might be taken advantage of to our national prejudice in the interval which might elapse. It does not in the least interfere with the general carrying on of commerce. They are entirely necessary provisions, and ought to be passed at once. My hon. Friend (Mr. Holt) made an observation which I think applies to a great deal of this emergency legislation. What is important is that, having got your powers, you should use them reasonably. I entirely sympathise with what he said, and I will make it my business to communicate what he said, and said, I think, with the general approval of the House, to those who have to administer this and similar Clauses. As to the powers themselves, we need them urgently, and I hope we may get them now.

Question, "That the Bill be read a second time," put, and agreed to.

Bill read a second time.

Question, "That the Bill be committed to a Committee of the Whole House," put, and agreed to.

Bill accordingly considered in Committee.

[Mr. WHITLEY in the Chair.]