§ Mr. H. WILLIAMS
I beg to move, in page 12, line 22, to leave out the word "solely," and to insert instead thereof the word "mainly."
I move this Amendment largely in order to make certain that the position is as satisfactory as I hope it is—
§ Major NATHAN
On a point of Order. May I ask, Sir Dennis, whether you would allow the discussion on the Amend- 240 ment which the hon. Member is now moving to include a discussion on the further Amendments standing in the names of some of my hon. Friends and myself—In page 12, line 24, to leave out from the word "Kingdom" to the word "or" in line 26; and, in line 29, to leave out the word "may," and to insert instead thereof the word "shall"—those Amendments being put formally when they are reached? That would give a discussion on the whole of this Clause.
No. Such a general discussion would have to be only on the Question, "That the Clause stand part of the Bill." As far as I understand the further Amendments to which the hon. and gallant Member refers, they are quite distinct from the Amendment which is now being moved, to which the discussion must now be confined.
§ Mr. WILLIAMS
There are certain trades carried on in London which involve the importation of goods from abroad for re-export. Those trades vary very much in their details. In some cases they may be merely transit trades; in others the goods come in, undergo some minor process, and then go out; or the goods may come in and undergo no process, but there may be a change of ownership during their passage through this country. The re-export trade is divided into many categories. This Clause as it stands would only apply if the goods were imported solely with a view to re-exportation. I am thinking of one industry from which I have received representations—not recently, but a long time ago—which handles Oriental carpets. The centre of the Oriental carpet trade, for sale purposes is in London, and a substantial number of people get their living in one way or another through the importation, sale in London, and subsequent re-exportation of these carpets, the product of certain Asiatic countries. Many of these carpets are sold in this country for use here, but, as far as I can make out, about three-quarters of those imported are subsequently exported again. Obviously, at the time of their importation, the people who import them do not know what is going to be the ultimate fate of any individual carpet—I am referring to carpets by way of illustration, but I have no doubt that a substantial number of other trades are in a similar position—and no one can say at the moment of importation that these carpets are being imported solely with a view to re-export.
I want to be satisfied that an industry like this will have the advantage of satisfactory drawback arrangements. I am not sufficiently skilled in Parliamentary drafting or in reading Acts of Parliament to know whether Clause 13 and the Second Schedule relate to the same subject, and I am rather wondering whether they do. Both of them relate to drawback, but they do not seem to relate 242 to the same kind of drawback. Clause 13 relates to drawback in respect of any duty, whether it be the 10 per cent, ad valorem duty, or an additional duty, or a combined duty; and in that case it is the Commissioners of Customs and Excise who can grant the drawback, or rather, make arrangements, in such circumstances, that the duty is not actually paid. It is not actually a drawback Clause. The Second Schedule relates to drawback where the goods have come in and have subsequently gone out, and the duty has to be repaid.
I raise this matter now, although it may be that the provisions of the Schedule will give me what I am trying to get by this proposal to substitute the word "mainly" for the word "solely." In the one case the drawback may be granted on the recommendation of the Committee, while in the other it may be granted by the commissioners. Perhaps the Minister who replies will explain exactly how this Clause is intended to work. I agree with the decision that the free port system should not be introduced in this country, but, that decision having been taken, it is essential that the arrangements for duty-free importation with a view to re-exportation should be satisfactory, or that, in those cases where drawback is involved, it should be granted. I am not certain whether, if the word "solely" is left in, we can have that system which is technically described, I believe, as constructive warehousing, whereby any ordinary trading establishment can be turned into a bonded warehouse of a somewhat unusual character. I hope that I have made this somewhat complicated matter reasonably clear.
§ Mr. MALLALIEU
There must be very few occasions when I shall be able to support an Amendment, or, indeed, any proposal on this subject, put forward by the hon. Member for South Croydon (Mr. H. Williams), and I therefore hesitate to let this particular occasion pass without rising to support his Amendment. I should have preferred to see the word "solely" merely left out, without substituting any other word for it, but, since that Amendment is not down on the Paper—
§ Mr. MALLALIEU
At Any rate, we are not at this moment dealing with that point, and, therefore, I would rather that the word "mainly" were substituted for "solely" than that the word "solely" should be left in. The particular instance that I have in mind is the importation of large lots of goods with a view to their exportation in small lots. This is a trade which brings considerable profit to certain parts of this Kingdom, particularly to London, and I am doubtful whether, under the wording of the Clause as it now stands, this trade could be continued. I should like either to have an assurance from the Minister that such a trade can be carried on under the existing words of the Clause, or to see this Amendment accepted. If that trade cannot be carried on in future, the profits of it will be lost, and such adverse balance of trade as there may be will be made even worse. Therefore, I support the Amendment.
§ Captain WATERHOUSE
I have had brought to my notice a case in the Midlands which bears out the arguments of my two hon. Friends who have just spoken. It is that of a very considerable firm of machinery makers in a large Midland city, who import from America machinery for making hosiery. This machinery comes to their works, they dismantle it, go through the bearings, attend to a certain number of gadgets, re-erect and paint it, and re-export it. I am told that these machines are very rarely bought by hosiery manufacturers in this country, although sometimes they are. It seems to me that, if the word "solely" remains in this Clause, it will be necessary for this firm to state, on importing each machine, whether that particular machine is to remain in this country or whether it is to be re-exported abroad. I am told that, largely because of the American patents which are involved in these hosiery machines, and because of the small number of them that are used in this country, it is impossible to hope that any manufacture of them could be economically set up here. The firm I have in mind, which has been operating for some 20 or 30 years, and others of similar standing, hold small stocks of these American machines, which are dismantled and re-erected. They come into this country as hosiery machines, they go out as hosiery machines, and, therefore, 244 they undoubtedly come under the general terms of this Measure; and if, as I hope will be the case, the Government will say that they are prepared to accept the word "mainly" instead of "solely," they will be rendering great assistance to this small but important number of machinery makers in the Midlands.
§ Mr. GIBSON
I hope that the. Government will give this Amendment favourable consideration. In the industry with which I am connected, there is a side-line in connection with which there are brought into this country every year from India very large numbers of goatskins and sheepskins. These go to the sales in London, which is the selling market of the whole world for this commodity, and the people in London cannot know the destination of these goods until they are actually sold. The great majority of them go to Germany, but the destination is not known until the sale is completed. Therefore, it seems to me that, if the word "solely" remains in this Clause, there will be a danger of this entrepot trade being lost to this country, with all the attendant financial benefits to our merchants in the City of London. For many years London has been the market of the world for the sale of this commodity, which comes entirely from India.
§ Mr. ALED ROBERTS
I desire to join in the appeal which has been made to the Chancellor of the Exchequer to include this Amendment in the Clause. In the City of Liverpool, from which I come and where my business is, I come across many cases where there would be a very adverse effect, where traders would be hit, and where the trade of the port would be hit, if this Clause were passed in its original form. I do not like the word "mainly," but I think it will probably upset trade a little less than the word "solely." Only yesterday I came across a branch of trade which would be very seriously hampered indeed if the Clause remained in its present form, and that is the importation of fruit. Hon. Members may not be aware of the exact procedure that takes place in such cases. The fruit is brought into a port, and it is impossible for the importer to say whether it is to be used solely or mainly in this country or whether it is to be exported. That cannot be said until the fruit has been put up to auction and it will mean very great difficulty for traders of that character in being able to 245 carry on their business properly. They will have to look up a great deal of capital and to have much larger staffs. I beg the President of the Board of Trade to accept this Amendment if it is impossible to delete the word "solely" altogether.
§ Sir STAFFORD CRIPPS
This Amendments shows the sort of difficulty into which traiffs bring everybody. The hon. Member opposite at one moment is rejoicing because Yorkshire is being protected, the next he is protesting because Holland is doing the same as we are, and now he is up in arms because a perfectly ordinary provision is put in the Bill which goes with any tariff procedure and which is necessary if the Bill is to be made to work. He wants the best of at least three worlds and he will want the best of some more by the time we come to the Schedules in order to get specific exemption or inclusion for vested interests. It does not matter to us whether it is "mainly" or "solely," except that "mainly" seems to mean nothing. I do not know how anyone will decide whether it is mainly with a view to exportation, but that is not our funeral.
§ The FINANCIAL SECRETARY to the TREASURY (Major Elliot)
The hon. and learned Gentleman truly says that this is not his funeral. His funeral has already taken place. We are now dealing with the second stage—resurgam for British trade and industry generally. The substitution of the word "mainly" for "solely" would not have the effect which the Mover and Seconder think it would have. Furthermore, it would tend to introduce an element of administrative impossibility into the proposals which the Government are now commending to the Committee. We want to deal with the entrepot trade under conditions which will allow the re-exportation of goods and will allow goods intended for re-export after transit through the United Kingdom to be imported free of duty. That is what the Clause deals with—the importation of goods free of duty. In allowing that privilege, we must guard against leakage in the ways which have been familiar to traders for many years. They have been familiar for many years in the main range of dutiable articles, and familiar for the last 17 years in the case of articles which have been imported subject to one or other of the 246 revenue duties which have been placed upon them. In so far as goods intended for re-export are not immediately reshipped, they can be placed in bonded warehouses free of duty and reshipped at a later date, or they can be retained for home consumption on payment of duty.
The hon. Member for Wrexham (Mr. A. Roberts) brought up the case of fruit. Fruit will not be carried into the interior of the country and then carried out again to the Continent. The fruit market will take place at, or as near as possible to, the quayside, and it should be possible to deal with it under the provisions of the Bill. It will not be necessary to bring in that fruit, have it pay duty and subsequently re-export it to the Continent, so that all that great range of trade which can be carried on through the use of the well-known facilities will not be injured by the Clause nor in any way helped by the Amendment. When the Customs desire to admit free of duty goods intended to undergo a process, the process must not change the form or character of the goods. Again, that is a well-understood term of art which has been operated on for many years. It is, however, necessary that these goods should be intended for re-exportation, and it would be impossible to allow a system under which casual decisions were taken afterwards as to whether or not the goods were to be sold in this country or were to be exported. It would mean pursuit by the Customs officials through every channel of trade of articles for sale which could not be identified except by the most meticulous survey. Therefore, the provisions against leakage must involve the provisions of this Clause, that goods are being imported solely with a view to re-exportation. In the case of Oriental carpets, obviously the dealers would not clear from the warehouse a great number of carpets and pay duty on them if they were intending only to sell a small proportion of them here. The market would be held under bonded facilities and only a portion of the carpets would be cleared.
§ Mr. H. WILLIAMS
These carpets are not mass-production articles. Each carpet has a separate individuality.
§ Major ELLIOT
I am myself an admirer of those carpets, and I admit 247 that each has as much individuality as a, picture. In spite of that, however, the dealer will not clear from bond a great quantity of articles which he does not see his way to dispose of. He will himself decide whether he will clear certain articles from bond or not. If they remain in bond, they will not be subject, to duty. If they are taken out, they will. It would be impossible to work a scheme by which the Customs, or anyone else, followed a single carpet throughout all the shops of the country in order to allow it finally to pass out of the country without having paid duty.
§ Mr. HARCOURT JOHNSTONE
I understood the right hon. Gentleman to say that in the case of fruit sold by auction, some for home consumption and some for foreign, no duty will be payable and that the goods will evade duty in some way. I am not quite clear how that will occur. Surely they will have to be cleared.
§ Major ELLIOT
In the case of articles which are not going into the bonded warehouses, there will be an auction with transhipment facilities. This fruit is by hypothesis going out again to the Continent on a ship. After clearance there is a long-established practice, under which goods intended for immediate re-exportation are allowed at present to be removed under bond from an import to an export ship, whether in the same port or at another port, and the Customs formalities are reduced to a minimum. There are facilities for re-packing and other operations in the transhipment sheds, and it would be possible to cover all the operations the hon. Member has in mind under these facilities, which are already granted and which it is not the intention of the Government to interfere with.
§ Mr. T. GRIFFITHS
It is very pleasing in some ways to see the hon. Member for South Croydon (Mr. H. Williams) so anxious about these merchants who deal in Oriental carpets. He will be probably on the carpet with the headquarters of the Conservative party. We have the Axminster and the Wilton carpet trades very greatly depressed, with men out of employment, and yet we have a man who has been on the platform for the last 15 248 or 20 years advocating the interests of people who are selling Oriental carpets.
§ Mr. GRIFFITHS
I simply wanted to point this out because, once this duty is placed on Oriental carpets, you have to make arrangements for it. That is the appeal the hon. Member has been making. Probably there will be a circular from our party pointing out the inconsistency of the Tory party and the propagandists.
§ Sir P. HARRIS
I want to support the speech of the Financial Secretary to some extent. I have had many years experience of trade in London. I think there has been a certain confusion of thought between goods in bond and goods that ought to get a drawback. I want to see greater elaboration when we come to the drawback Schedules. I am not satisfied at present with the provision for drawbacks.
The hon. Baronet must discuss that when we come to the question of drawbacks and not on this Amendment.
§ Sir P. HARRIS
I am merely suggesting that the hon. Member for South Croydon (Mr. H. Williams) is trying to do the right thing in the wrong way. The right way is when we come to the Schedules. The whole thing depends on whether there is adequate provision for bonded warehouses. I do not think there can be. I do not think it is realised how the immense extension of the amount of goods that are going to be taxable will cram our bonded warehouses to bursting. That is an inevitable result of rushing a tariff through in five days. If the hon. Member finds that the carpet trade is ruined, that is his fault. He will not get over it by suggesting that they should be on the free list. The proper way is to make full provision for drawbacks.
§ Mr. H. WILLIAMS
May I ask the right hon. Gentleman whether the Government are prepared to introduce the system known as constructive warehouses, whereby warehouses which are not normally bonded warehouses can be 249 used for the purpose? If I can get an assurance on that point, I shall be prepared to withdraw the Amendment.
§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)
My hon. Friend is, apparently, not aware that the system is in operation now.
§ 5.0 p.m.
§ Major NATHAN
I wish to refer to the point raised by my hon. Friend the Member or South Shields (Mr. H. Johnstone) with reference to fruit, vegetables and other perishable articles. I understand the position to be that certain cases of vegetables and fruit and the like are unloaded, taken to the warehouse, and that there the importer makes his decision as to which, if any, shall be re-exported. The warehouse is not a bonded warehouse. The second point I wish to put to the right hon. Gentleman is that fruit and vegetables are unloaded at the Port of London and that great quantities are then taken to the London Fruit Exchange in Spitalfields, which is outside the authority of the Port of London. At the London Fruit Exchange the goods are sold at auction, and whether they are to be retained in this country or re-exported, depends upon the nature and quality of the goods, the season during which they are sold, and the persons buying the goods at auction. Is the right hon. Gentleman quite sure that the answer which he gave to my hon. Friend the Member for South Shields in reference, at all events, to fruit and vegetables at the ports, is one which is borne out by the actual practice existing at the present time?
§ Captain BARTON
There are two points upon which, I think, the Financial Secretary to the Treasury has not stated the case properly. I understand that the Customs will demand the duty on every cargo of fruit and vegetables which comes into the country and will not let the cargo go from the quayside until the duty is paid in full. More than that, the Commissioners of Customs and Excise informed the constituents from whom I made inquiries that they would require that a deposit in cash should be paid by them to cover the value of the dues on the goods. In one particular case it was said that as much as £2,000 would be required to be deposited against the Customs dues. They would not take the 250 Customs dues out of the deposit, but would still require the dues to be paid by the importer either in cash or by certifying cheque before the cargo was released from the quayside. Duty is actually being demanded and charged by the Commissioners before the importer is entitled, or allowed, to handle the goods.
It may be that a, portion of the goods in all probability is required for re-export, but the importer cannot possibly tell, until he has had a chance of breaking bulk and testing samples to see if they come up to specifications, whether the fruit is in a sufficiently sound condition to stand the journey out, not only to Continental ports, but in many cases to Scandinavia and the Baltic. May I instance grapes, which are exported in large quantities. The stem of the grape has to be examined by the importer very carefully to enable him to satisfy himself that with regard to dryness and strength generally it will be able to stand a journey without the grape coming away from the stem by the time it arrives at its destination. That can only be done when the importer has had an opportunity of examining the fruit inside the warehouse. At the present time the importers of Hull, for whom I speak particularly, have absolutely no facilities for bonded warehousing at all. They have to take the fruit into their own warehouses where they make their examinations. I suggest, therefore, that some definite undertaking should be given, if the statement of fact as given to me is correct, that there will be special facilities afforded the fruit importer so as not to handicap him in regard to the re-export trade. It is not an inconsiderable trade, particularly as it furnishes a considerable percentage of the total re-export trade from the United Kingdom. If I can have that assurance from the Government, I shall be content, but it seems to me that at present every handicap is being put in the way of fruit importers in the desire to carry out the provisions of the Board of Trade.
§ Major ELLIOT
I think that it is a little hard on the part of the hon. and gallant Member for Central Hull (Captain Barton) to say that every handicap is being put in the way of the trade.
§ Major ELLIOT
I take full responsibility for every action of the Commissioners. The Commissioners do not act apart from the right hon. Gentleman and myself and everything which touches my brother touches the Tavannes in this case. The action of the Commissioners is the action of those instructed to carry out the orders of this House. You cannot separate them from action in this House, and the action of the Minister responsible to this House. The whole question hinges on the word "immediately." This is the case of perishable goods. We are more particularly being asked to deal with the case of perishable goods here because it is admitted that all goods not perishable which are dutiable must in some way be segregated or an interminable amount of work in connection with those goods will need to be carried out. But in the case of goods which are to be used at a very early date and which are for immediate re-exportation—and I take it that fruit is peculiarly goods designed for re-exportation—every possible facility will be given in respect of perishables for the breaking of bulk and for inspection by the importer in question because there you are dealing with something which is its own check. The practice has already been extended and will still further be extended in order to be used as much as possible for the good of the trade of this country.
There is no desire to hamper the trade of this country and particularly transhipment, but traders cannot have it both ways. If you are going to have a duty, you must take the rough with the smooth. It is necessary for the Committee to recognise and to face up to the fact; no useful purpose is to be served by burking it. We shall do our utmost in the future as in the past to ensure that the goods which are imported for transhipment purposes are safeguarded. The words say:the commissioners may, subject to such conditions as they think fit to impose for securing the re-exportation of the goods.Subject to those words, trade will be allowed to flow as much as possible. It does not mean that the goods should be put into bonded warehouse like wines and spirits. The commissioners are reasonable people and will operate the Clause in a reasonable fashion. They will operate it with a view to securing the 252 re-exportation of the goods in the case of perishable goods and it will not be as difficult as it may appear. I think that with this assurance it may be possible for my hon. Friend not to proceed further with the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. DINGLE FOOT
I beg to move, in page 12, line 24, to leave out from the word "Kingdom," to the word "or," in line 26.
The words which I move to leave out arewhich will not change the form or character of the goods.It is clear that there must often be articles which are not suitable for re-export until they have to a great extent changed their character. There is only one point which I hope the Minister will meet. What is to happen under the Clause as it stands in the case where yarns are imported into this country and then spun into cloth. I represent a constituency in which the flax industry plays a very important part, and I know that there is a good deal of apprehension in that industry, because it is felt that under the Clause as it stands there will be a tax upon their raw material, and that the manufacturers in the industry will be penalised. This difficulty has already arisen in another industry under the Abnormal Importations Act. My hon. Friend the Member for Colne Valley (Mr. Mallalieu) pointed out the other day that it has happened in the West Riding of Yorkshire where a duty has been imposed upon certain classes of worsted yarns coming, from Belgium. It is a form of yarn not made in this country, and the manufacturers of certain fabrics who need that kind of yarn have been penalised very heavily by the 30 per cent. duty upon the yarn. It would be unfortunate, surely, if we were to extend that form of damage to other industries, such as the flax industry. As the Clause stands, it simply means that in the case of yarns woven into any form of cloth it would be a tax upon the process of manufacture in this country. The Amendment is one which would improve the Clause and one which the Government might very well accept.
§ Major ELLIOT
There may be a little uneasiness on the part of hon. Members above the Gangway in regard to the hearty co-operation of hon. Members below the Gangway, who admittedly oppose the principles of the Bill. This Amendment would strike a blow at the Bill. I do not complain of that. It would enormously increase the exemptions given, and would either involve the country in a horde of officials, such as have never been conceived of in connection with the Bill, or would mean that the Bill would have to be washed out as impracticable. For many years traders in this country have been accustomed to operating under the provision regarding goods not altered in form or character by undergoing a process abroad. It would be extremely difficult to administer the Act if the Amendment were carried. Take the case of a piece of wood which is put into a cabinet, or take some small ingredient that is used in a composite article. How is it possible to believe that that ingredient can be detected by the Customs officers amongst all the other ingredients which make up the composite article.
We are told that yarn goods are exported to the Continent, undergo a process there and are reimported into this country. That system is not new. It has been considered for many years past and it has always been held that where the goods are altered in form and character they become in fact foreign goods and as such are liable to tax. It is not possible to alter that. Suppose a man made a machine abroad, and said he could prove that in that machine he had used a steel ingot which was purchased by him in this country. Suppose he said: "This machine was made out of the steel ingot that I bought from a British steel maker 18 months ago. How could we disprove that? Should we have to follow the steel ingot and sit on the top of it, so to speak, in the foreign works to ensure that that steel ingot and none other was transformed into that particular piece of machinery? The thing is administratively impossible. Take the case of textiles. A man might take a textile fabric to the Customs officer and say: "This textile fabric has been produced out of material which we had previously purchased in Great Britain." How are we to disprove that, unless we trace these articles through their various pro- 254 cesses until they come back again? If the goods are not altered in form and character we can recognise them, but if they are altered we cannot recognise them. Therefore, I hope the hon. Member will see his way to withdraw the Amendment.
§ Amendment negatived.
§ Mr. MABANE
I beg to move, in page 12, line 29, to leave out the word "may," and to insert instead thereof the word "shall."
I am hopeful that this small verbal Amendment may be accepted. It deals with a provision under which the Commissioners may subject to conditions that they may think fit to impose, allow goods for re-export to be imported free of duty. The Amendment seeks to make that a certainty. I have tried to discover why the word "may" is used. I cannot believe that it is used in order that the Commissioners may exercise their discretion as to whether it is desirable that goods shall be brought into this country for re-export, because I feel certain that it is common ground that in so far as our re-export trade can be maintained and developed, that should be done. We feel that it is important also to the traders that they should have certainty in regard to this matter. The word "may" standing where it does introduces an element of uncertainty into, commercial transactions. If the trader is contemplating a contract he will be unable, if I read the Clause aright, to know beforehand whether he will be allowed to bring his goods into this country or not. Therefore, I think it will be far better if instead of the Commissioners having apparently the power, whether that is the intention or not—
§ Major ELLIOT
It may perhaps shorten discussion if I say that as the result of legal ruling given in regard to public departments the word "may" in this connection is interpreted to mean "shall." When the hon. Member has had further experience of our Debates he will realise how often this question comes up. It is the definite opinion of the Department that it is the duty of the Commissioners to exercise the powers conferred on them by this Clause. The word "may" is not permissive but imperative. If we were to accept the Amendment, to strike out the word "may" and insert the word "shall," we 255 should be casting doubt upon the word "may" where it appears in other Clauses. There would be danger in doing that. It will be the duty of the Commissioners and it will be imperative upon them to exercise their powers under the Clause. It is the opinion of the Law Officers that in this case there is a binding mandate upon the Commissioners. Perhaps after that explanation it will be possible for the hon. Member not to press forward his Amendment.
§ Mr. MABANE
The Financial Secretary has completely met the point that I and my hon. Friends had in mind, and I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Dr. CLAYTON
I beg to move in page 12, line 32, at the end, to add the words:For the purposes of this section goods shall be deemed to be imported solely with a view to the re-exportation thereof if the goods are intended for re-exportation at or before or within seven days (excluding Sundays and holidays) after the time of the report of the ship at the Customs House.The purpose of the Amendment is to claim for the importers of goods a period of grace during which it shall be possible for them to deal with the re-exportation of goods without having to put them into bond. Clause 13 does not protect goods of this nature, (1) goods which after leaving a foreign port for a United Kingdom port are sold on the high seas before reaching the United Kingdom port, (2) goods which after being landed in a United Kingdom port are sold ex-quay and (3) goods which on reaching a United Kingdom port are taken to bonded warehouses and afterwards re-exported. None of these cases is covered by the Clause. The Dock and Harbour Authorities' Association, for whom I am moving the Amendment, are anxious to protect the entrepot trade in their respective ports.
§ Major ELLIOT
I think the words of the Amendment would actually restrict the facilities which are already in operation with regard to transhipment, bond, and re-exportation. There is no limitation to seven days now. Goods may remain in transhipment sheds for longer periods than seven days, and the periods can be extended as required. In regard to bonded warehouses which hold imported goods of which the importer does 256 not know the destination, those goods can remain in the bonded warehouses indefinitely. Therefore, on the grounds that the proposed Amendment would restrict the facilities for re-exportation and would limit the time, I would ask my hon. Friend not to press the Amendment.
§ Amendment, by leave, withdrawn.
§ Motion made, and Question proposed, "That the Clause stand part, of the Bill."
§ Major NATHAN
In replying to one of the earlier Amendments on this Clause the Financial Secretary made a very significant statement. He informed the Committee that if we are to have a duty we must take the rough with the smooth. It is a question in regard to these matters whether the rough may not be too rough to compensate for what the right hon. Gentleman describes as the smooth. I wonder if the right hon. Gentleman has appreciated the importance to this country of the entrepot trade. In the year 1931, which was a year of crisis and reduced commerce, the entrepot trade turnover was not less than £64,000,000. Normally, it is about £100,000,000. That trade will be seriously affected by the provisions which the Committee is considering to-day.
§ Sir S. CRIPPS
I should like to say a few words with regard to the meaning of the word "may." I had not the opportunity of doing so because the Amendment was withdrawn. I would ask the Financial Secretary to look at this question again. Whichever view is taken of the meaning of the word "may," I am certain that as it stands at present in the Clause, two views are quite open to be taken. It is not certain one way or the other. It is exactly the type of word that provokes litigation. Although that may be profitable for some people, I am sure the Financial Secretary does not desire to do anything so stupid as to increase their profits. I should have thought that in this particular provision where the Commissioners are given powers to make conditions such as they think fit to impose, it might well have been said that the word "may" gives 257 them the right either to allow these goods to be imported free or not, as they may decide. If it is meant that they must allow the goods to be so imported, on conditions, I suggest that it might be made quite clear that that is what is intended.
§ Mr. C. WILLIAMS
Whatever may be the opinion of the more or less legal authority we have just heard, the hon. and learned Member for East Bristol (Sir S. Cripps), it seems to me that the Commissioners can do exactly what they like, because they make the conditions, as is laid down in the clause. It does not matter whether or not this tiny technical legal point is met or not, and it seems to me that it is a waste of time further to discuss it.
§ Mr. GROVES
On a point of Order. Was not the hon. Member offensive when he referred to the "more or less legal authority"? I do not call it gentlemanly.
§ 5.30 p.m.
Sir J. SANDEMAN ALLEN
Great anxiety has been felt by many people as to the effect of this Clause on certain of our ports, but from what the Financial Secretary has said it is now quite clear that there need be no more anxiety on the part of those engaged in these particular areas. The fear was that the Clause did not give power to the Commissioners to set aside areas for this particular class of goods, but I understand that the Commissioners have full power to make whatever arrangements are necessary. The Government, I am sure, are fully alive to the needs of our trade in these matters and, while certain arrangements will have to be made, as long as they are reasonable and fit in with the scheme the traders at our ports can be reassured. The real way to help trade is to take a broad view of this question and to fit in as far as possible with the present system. I think it is perfectly clear now that there need be no anxiety in our shipping ports that there will be any unnecessary disturbance in the handling of goods.
§ Major NATHAN
When you called me to order just now, Mr. Chairman, I think you must have done so believing that I 258 was about to embark on some lengthy remarks as to the effect of this Clause on our entrepot trade. That is not my intention. My object is to point out that the provisions of this Clause are unsatisfactory and unworkable. I have heard with great respect the statement made by the hon. Member for West Derby (Sir J. S. Allen), but I must point out that within the last few days some of the great merchant firms in the City of London engaged in this business have placed before me in detail some of the difficulties with which they consider they will be confronted under the provisions of this Clause. They point out what is perhaps not commonly recognised, that less than one-third of the goods imported for re-exportation are exported without breaking bulk, and that at present there is not sufficient accommodation for dealing with the two-thirds of the imports which require not only the bulk to be broken but to be broken in very small parcels indeed.
Let me give a practical illustration from the case of one of the great merchant firms of the City of London. They are not only a firm of considerable importance in London doing a large business in this country, but they have factories in various parts of the world, in Czechoslovakia, France, Austria and Italy, and it has been their practice to collect in London parcels of goods from each of these quarters and assemble them here into consignments. Under the provisions of this Clause that practice will be wholly impossible or only possible at a greatly enhanced expense, because if the goods are to be placed in bonded warehouses the quantities derived from any part of the world may be so insignificant as to make it not worth their while to employ a staff to deal with these particular goods. The result will be to increase the price of the goods and deprive this country of its markets, or merchants will not think it is worth while to do this business at all, in which case inward and outward freights will be lost, to say nothing of employment. What actually happens at the moment is that these goods come from various parts of the world and can be assembled in a warehouse. They may be very small quantities from any particular country, but as under this Bill they have to be kept in bonded warehouses—
§ Major ELLIOT
Surely the hon. and gallant Member is wrong. They do not have to be kept in bond butsubject to such conditions as they may think fit to impose for securing the re-exportation of the goods.In the case of goods such as the hon. and gallant Member is describing it is clear that it would be unreasonable to say that they should be put in bonded warehouses; and the Commissioners would not propose it.
§ Major NATHAN
The objection to this Clause is that there is no precision as to the conditions which will be imposed; that is a matter left entirely to the Commissioners. As a matter of fact, not as a matter of opinion, this Clause is causing the utmost apprehension amongst the great merchant firms of the City of London. They realise that if we are to have such a Bill as this it is right to include some Clause which will stop a leakage, but they say that this Clause imposes disabilities which are unnecessary and makes the "rough" a great deal rougher than it might otherwise be. Take the case of articles which undergo a change in the form or character of the goods. There are all sorts of articles coming into this country which are components of other articles, which must necessarily alter their form and character and become unrecognisable. Take the electrical industry.
§ Mr. JANNER
It appears to me that on Report the Financial Secretary will have to seriously consider the question as to whether the word "may" should he altered—
When the hon. and learned Member for Bristol, East (Sir S. Cripps) called attention to this matter he was quite justified, but the hon. Member is not in order in putting forward the argument as to whether the word should be "may" or "shall" at this stage. That question has been decided.
§ Mr. NUNN
I only intervene because the remarks of the hon. and gallant Member for North-East Bethnal Green (Major Nathan) as to the parlous position of those engaged in the entrepot trade of this country have almost moved me to 260 tears. I would like to say, and I speak with a little authority because I spent many years administering a Customs department where the whole of the tariff was an ad valorem tariff on practically everything corning into the country, that when we are dealing with the Customs department which will have to operate this Bill we are dealing with the finest department in the world. When we hear all these fears expressed as to the way in which it will work this Clause we must remember that the Customs people are extremely sensible and considerate persons. There is not a single member of any business or trade who does not realise how earnestly they strive to make the regulations press as lightly as possible on the commercial community. The hon. and gallant Member need not be afraid because the Customs department is given ample powers; they will exercise them with the greatest possible consideration.