HC Deb 14 November 1947 vol 444 cc771-84

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

3.49 p.m.

Major Gates (Middleton and Prestwich)

On the subject which we have just been discussing, I would only add my hope that the Burmese people will duly appreciate the good wishes that have been showered upon them this afternoon.

I suppose that I have been lucky, in the seven and a half years in which I have been a Member of this House, in that I have always obtained satisfaction with regard to the hundreds of cases on behalf of individual constituents that I have placed before Ministers and Government Departments. Admittedly, in many cases the decision has been against my constituent, but, even when the decision has been adverse, I have always been able to satisfy myself that there was a valid and satisfactory reason for that adverse decision. This is the first occasion on which I have had to raise a matter on the Adjournment in order to discover the reason for an adverse decision against one of my constituents.

On 21st March of this year, one of my constituents wrote to me, in the normal course of business, seeking my assistance in regard to what appeared to be a serious injustice to him and to his business. It transpires that he is a director of a firm of timber merchants in Manchester, whose business was founded by his father as long ago as 1895, and the firm has traded in timber and plywood for over half a century. I gather that it is well known throughout the trade, both at home and abroad. The other two directors, I understand, are the writer's brothers, both of whom are ex-Service men.

When the Timber Control came into being at the beginning of the war, this firm received a licence to trade in timber and plywood, in common with other firms in the timber trade, but unfortunately—and this has been frankly admitted throughout—my constituents contravened some of the numerous regulations which were being issued with great rapidity in 1939 and 1940. They were charged with selling goods in excess of the maximum prices laid down. They were prosecuted in April and May, 1940, and they were severely punished. My constituent received 12 months imprisonment. He was ordered to pay the cost of the prosecution, amounting to £725, and each of his brothers was fined £1,000 each. There has been no concealment at all, but in his original letter my constituent complained that ever since May, 1940, his firm had been denied any trading quota by the Timber Control set up by the Board of Trade. Consequently, when all these brothers returned from their military service and were demobilised, they found that it appeared to be the determined policy of the Timber Control to force them out of business and prevent them from earning their living in their own established firm

On receiving a letter like that, several points occurred to me. I did not take the matter up with the Board of Trade immediately. I never do. I made some investigations. It occurred to me, for instance, that the learned judge, when imposing penalties for their misdemeanour, may have given some direction to the effect that it was undesirable that this firm should continue in business. It also occurred to me that the Board of Trade might have some automatic regulation whereby firms convicted of an offence in the courts of justice in this country, would thereby, automatically, be debarred from receiving quotas to trade. I investigated these two points and I found that the learned judge made no such direction and as far as I can discover—I am open to correction throughout this contention—the Board of Trade had no such regulation whereby that was automatically done to offending firms.

On the contrary, I found that contravention of the regulations had been widespread throughout the timber trade, whether wittingly or unwittingly I do not know. I accumulated a long list of well-known firms who had been prosecuted and convicted. I will not weary the House by reading out this list, but it is of interest to note that some of the fines were as high as £10,000, and that directors were sent to prison for terms of up to 20 months. Not only that, but a certain gentleman who occupied a high position in the Timber Control, was, at the same time, a senior director of a firm in the timber trade which was involved in charges on no fewer than 57 counts.

Therefore, I was able to satisfy myself that my constituents were by no means an isolated case. But—and this is my first point in this matter—they were isolated in this respect. As far as I can discover, they are the only firm in the timber trade which has been denied, subsequent to prosecution, any further trading quotas. All the other firms to which I have referred, and which were fined sums up to £10,000 and whose directors have been to prison, have, nevertheless, continued to receive their trading quotas. It therefore seemed to me quite proper and reasonable to ask the Parliamentary Secretary to state the reason for this adverse decision against my constituents. On 13th May, 1947, in reply to a letter of mine of 27th March, I received a letter from the Parliamentary Secretary to the Board of Trade which, in brief, merely stated: It would not be in the public interest to make any change in the position while supplies of timber and plywood are as short as they are at the present moment, firstly, because of the undesirability of expanding unnecessarily the number of people employed in distributing the limited quantities available, and, secondly, because of the importance of using such channels of distribution as are most likely to secure that the limited supplies are conserved for essential requirements. I found that reply unsatisfactory. First of all, it did not deal with any of the specific points and arguments which I had raised. Naturally, I had to admit that available supplies of timber and plywood were extremely scarce, and still are, but I submit that it could hardly make any difference if those scarce supplies were distributed through 1,000 firms or 1,001 firms. If the 1,001st firm is denied entry into that market with a trade quota, a great hardship, and even a great injustice, might arise through that exclusion. Secondly, I want to deal with that further phrase of the Parliamentary Secretary, the importance of using such channels of distribution as are most likely to secure that the limited supplies are conserved for essential requirements. That implies very clearly that the Board of Trade do not trust my constituents. I accept that, because, in certain circumstances, that attitude is, of course, perfectly defensible and justifiable. But it seems very extraordinary to me that the Board of Trade could swallow the camel of all the long list of firms which have been fined and whose directors have been imprisoned and yet trust them with quotas, whereas they strain at the single gnat of my constituents. Consequently, I brought these further considerations to the attention of the Parliamentary Secretary.

It being Four o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

Major Gates

Here again, in a letter dated 10th June, 1947, in reply to mine of 20th May, the Parliamentary Secretary said: It is clearly desirable that so long as the Government is distributing these materials, it should make use only of firms whose reliability is beyond question. This is a very different thing from trying to punish your constituents a second time for an offence for which they have already been convicted and punished. There is, of course, no question of that— I claim that this is begging the question with a vengeance. By being denied a trading quota, my constituents are undoubtedly being punished a second time. The Parliamentary Secretary added: —but it is a common experience that persons who have been convicted of serious offences find that their business prospects have been injured thereby. I suggest that it is not a common experience in the timber trade that firms do, in fact, suffer thereby. The Parliamentary Secretary had in his possession my long list of firms who have been tried and convicted, and who have not subsequently suffered by being denied their quotas. It is only my constituents who have suffered. If the Board of Trade had granted them their quota, and then their former business associates and customers had refused to have any dealings with them because of their reprehensible conduct, the Board of Trade would have had clean hands, social justice would have been done, and my constituents would have had nobody but themselves to blame.

I, therefore, challenge the Parliamentary Secretary to state what are the additional factors, which he is apparently withholding from me, that enable the Board of Trade to trust all the other convicted firms but not to trust my constituents. So far, that challenge has not been accepted. The Parliamentary Secretary merely claims, in a letter dated 18th July—and this is the gist of his letter—that the Board of Trade has a perfect right to exclude any firm it pleases without giving any reason. In effect, the Board of Trade professes to regard my constituents as unreliable, and that is that. For all I know, my constituents are unreliable. I have been extremely careful not to meet them in case. I should be prejudiced either for or against them.

I want to treat this case entirely as a matter of principle. For all I know, their history may be bad, and I fully admit that they may be unreliable; but the principle here is that I am trying to find out the precise reason for the treatment which they have received. They committed an offence; they were convicted and punished in an English court of justice, along with many others in the timber industry. But now a Government Department clearly and deliberately claims that it has the right to inflict an additional punishment over and above that which a learned judge saw fit to impose, by depriving them of their quota and driving them out of business without further trial and, so far as I know, without any additional evidence. I challenge that right, even if the Board of Trade do possess that right, as I am sure they do under the sweeping powers which His Majesty's Government now possess.

But I must point out to the House that no second trial in open court has taken place, and that no further evidence has been submitted or come to light; and yet the Board of Trade impose the second penalty. Further than that, I should like to draw the attention of the Parliamentary Secretary to the fact that the Timber Control do not any longer send my constituents the new directions as to the price lists and details of changes in the various schemes, and that many of these schemes are not published in the trade papers or by His Majesty's Stationery Office. Here again, the suspicion arises that the Timber Control may really be hoping that my constituents, who are still in the trade, will, therefore, by ignorance, infringe some other regulation.

Now I come to the second feature of this case which I find so extraordinary. I have demonstrated that the Board of Trade do not trust my constituents, and that, as far as I know, the Parliamentary Secretary is prepared to rest his case there; and I have admitted that there may be every justification for that attitude. However, we have the amazing situation that, simultaneously, two other departments of the Board of Trade have continued throughout this period, from 1940 onwards, to find my constituents reliable and trustworthy. The Paper Control set up by the Board of Trade have throughout granted them quotas to deal in wall boards, hard boards and insulated boards, which they are permitted to purchase outright from the national stocks of those materials.

Secondly, another department of the Board of Trade, the Import Licensing Department, have granted them import licences for many thousands of pounds' worth of special timber for the manufacture of gunstocks, without making any restriction whatsoever on their freedom to engage in the business and decide the prices; and they have also given my constituents complete jurisdiction over the disposal of the same. Moreover, that licence is still in force. So, in the face of such evidence, with two other departments of the Board of Trade showing the utmost confidence and trust in my constituents, how can the Parliamentary Secretary continue to contend that he is still justified in regarding my constituents as unreliable and untrustworthy, without further investigation and trial?

I claim that, failing an explanation to the contrary, I am justified in regarding this case as a deliberate instance of malicious victimisation. I warn the Parliamentary Secretary that unless some hitherto undisclosed explanation of this affair is forthcoming, I have every intention of attempting to make political capital out of it. The policy of His Majesty's Government is the public ownership and control of the means of production, distribution, and exchange. That policy may have its benefits, and the nation is engaged at the present moment in finding out whether it has; but it has this great disadvantage, I submit—that that control, that public ownership, means that the individual citizen is always at the mercy of the minor official who exercises that control. I suspect that that is what has happened in this case. Hitherto we have had in this honourable House a splendid tradition that Ministers loyally defend the servants in their Departments, but I suggest to the Parliamentary Secretary that on this occasion loyalty is not called for; in fact, it is unnecessary. I am not demanding anybody's blood; I do not want anybody dismissed for this. All I want from the Parliamentary Secretary is an admission that an injustice has been done, and if I can get that admission I should then like his assurance, speaking with all the authority and responsibility of the Government Front Bench, that that injustice will be remedied as soon as possible.

4.11 p.m

The Parliamentary Secretary to the Board of Trade (Mr. Belcher)

Let me begin by saying that there is no question here of a minor official having done something which the Minister responsible feels himself compelled to explain away. I should also like to assure the hon. and gallant Member for Middleton and Prestwich (Major Gates) that I have known about this case for a very long time, that I have taken a close personal interest in it, and that such decisions as have been arrived at are my decisions, and those of nobody else. I am very sorry that the hon. and gallant Member has felt it necessary to raise this matter on the Adjournment, for in replying to the case which he has made I find it necessary to go over a certain amount of history which I find distasteful. However, I think it is necessary to show that the Board of Trade are not moved by a spirit of vindictiveness in this case, and that we are merely acting with common prudence. I am certain that hon. Members in all parts of the House will agree with me when they have heard what I have to say about this particular firm and its activities.

The firm to which the hon. and gallant Member referred are, it is true, old-established timber merchants who, before the war, dealt mainly in imported hardwood and plywood. It is a family concern, having three directors—three brothers, Morris, Myer and Joseph Light-hill. At the beginning of the war the Timber Control was set up to ensure and safeguard the supply and distribution of timber which we required for numberless vital purposes directly related to the war effort, and of which supplies were limited by shipping and other difficulties. On the whole, the timber trade very willingly gave the Timber Control all the help it possibly could. The trade recognised—as did other trades—that the country was fighting for its life, and that private interests had to be subordinated to the national interest. However this particular firm—and I have checked up on all these facts—made it quite clear right from the beginning that they did not propose to co-operate with the Timber Control and with their fellow timber merchants. They began to take advantage of the threatening shortage of timber by selling hardwood—which by that time was subject to a maximum price control—at excessive prices.

It was not long before the Timber Control suspected that the firm were skilfully exploiting the emergency, and rumours of the Timber Control's suspicions reached the firm's ears. Thereupon, the firm instructed their solicitors to threaten a slander action against the Timber Control inspector chiefly concerned with their activities, in the hope, of course, that by this bluff they would spike the guns of the Timber Control before they went off. When the bluff was called, the slander action just disappeared. Later on, a prosecution was instituted, as a result of which the brothers Morris and Joseph Lighthill were fined £50 each for contravention of the Timber Regulations.

Whatever might have been their offences in' the hardwood field—and they were very unpleasant indeed, and must have been extremely irritating and galling to the decent people engaged in the trade—they pale into insignificance when compared with their activities in plywood. In the early months of the war they set about accumulating a stock of plywood. There was nothing wrong about that in the statutory sense, but at a time when we needed plywood very badly for the manufacture of, for instance, aircraft, this firm consistently refused to supply firms engaged in war work of the highest importance. By these means they increased their stock from 300,000 superficial feet in October, 1939, to over 3,200,000 superficial feet in March, 1940. It appears that by March of 1940 they judged that the fruits of their most unco-operative labour had ripened, and that the time had come to dispose of them in the black market. The exigencies of the war had resulted in such competition for supplies of plywood that unscrupulous people could name their own price, and that is just what this firm did. In the short space of a few weeks, the vast bulk of their accumulated stock was poured into the black market at prices anything up to three times the controlled price.

Major Gates

I am in complete agreement with the hon. Gentleman up to this point. My understanding is that they continued to deal with the merchants with whom they were accustomed to deal, and one of the points I was going to put to him was that, so far as I can discover, no action was taken against those merchants—these are wholesale hardwood importers who deal with the merchants—because the merchants had to sell at even higher prices, and so it could be argued that the offences of the merchants were even worse in degree than those of the wholesale importers. There was a second question—whether there were many other infringements of a similar nature, or is the Parliamentary Secretary contending that this firm is absolutely isolated in the way it behaved?

Mr. Belcher

I intended to deal with the second point in due course, because it was made by the hon. and gallant Gentleman when he was first speaking. I am concerned here with a firm whose case has been raised by the hon. and gallant Gentleman, and I am talking about their conduct. What happens to other people who are involved in these matters is not my particular concern this afternoon. What I am trying to show is the unreliability of the people in question. After a very considerable investigation into these plywood transactions—the hon. and gallant Member just now mentioned hardwood, but we are dealing now with plywood—in December, 1941, the three brothers, whose names I have mentioned, pleaded guilty to various counts on an indictment charging them with conspiracy to contravene the timber Orders. Myer Lighthill was sentenced to be imprisoned for 12 months and to pay a sum not exceeding 700 guineas towards the cost of the prosecution. Morris and Joseph Lighthill were each fined £1,000. The offences to which they pleaded guilty involved large scale black market operations in which plywood was invoiced at the correct maximum prices, and additional payments were made in cash. In the course of the trial, an excess profit of over £30,000 was mentioned, on which, of course, no Income Tax was paid. I believe that all parts of the House will agree with me that by a deliberate and carefully calculated exploitation of the national emergency at the most difficult time of the war, these people made a very substantial illegal profit at the trivial cost, so far as they were concerned, of impeding an important part of our war effort.

Major Gates

This is a question of fact. The Parliamentary Secretary is saying that no Income Tax was paid. My information is to the contrary. The amount of excess profit which he has just stated as £30,000 has been admitted, and it has been contended that the whole of that profit has gone in taxation. Can the Parliamentary Secretary substantiate from the Inland Revenue that that profit has not gone in taxation?

Mr. Belcher

It may be that at some date subsequent to the trial, recompense was made to the Inland Revenue, but, so far as I have any experience or knowledge of the transactions of people in the black market, when they are receiving in cash something over and above what they ought to be receiving, they do not normally lay themselves open to detection by telling the Income Tax inspector what they are doing. I am afraid that that must be regarded as being the case here. It has been suggested that this is just one of many firms who have similarly contravened the Timber Control Orders. It is perfectly true that a very large number of firms in the timber trade have at various times done those things which they ought not to have done, and, in consequence, have found themselves in court. There was mention of one particular firm, a firm which I know extremely well, which had committed 57 offences—the name is not Messrs. Heinz Bros.—and one of the leading members of that firm is a prominent member of the Timber Control. That is perfectly true. These were 57 offences, all caused by the failure of a branch of the firm to notify some remote clerk or person concerned with the activities of the firm of a change in a Timber Control Order, and when this matter was brought to court, only three of these cases were proceeded with, and, in the case of those three, the firm was dismissed under the Probation of Offenders Act. They were quite trivial matters.

There was the firm mentioned by the hon. and gallant Member which was fined £10,000. The fine indicates that the offence in that case was a serious one. So far as I know, this firm dealt entirely in home-grown timber and since their conviction the Home Timber Production Department have never sold them anything, so while it was not possible to withdraw or withhold a quota because they were not by the nature of their occupation entitled to a quota, since they were only buyers of home-grown timber, they have not been sold home-grown timber by the Department since their conviction and they have been treated in much the same way as the firm we are discussing today.

When it was decided to distribute the national stocks of timber to established timber merchants, the question arose whether it was in the public interest to entrust part of those stocks to the firm we are discussing. It was decided by the then Minister of Supply that in view of their fairly established unreliability—and I do not think that any hon. Member who has listened to me this afternoon could doubt that this firm was unreliable in the extreme—the Government could not for this reason include them among the holders of quotas for the distribution of timber. This- decision was made by suc- cessive Ministers of Supply from both sides of this House, and has been confirmed from time to time.

It has been suggested that this exclusion amounts to a deliberate attempt to inflict further punishment on a firm properly punished by the court. This is not the case. These people have been denied quotas purely on the ground that they cannot be regarded as reliable distributors of Government-owned materials, which are still as scarce and as vital to the well-being of the nation as they ever were, and of which the distribution must be as carefully controlled in the national interest as they were during the war. I have no doubt that it is a common experience of firms convicted of serious offences to find that their business prospects are injured thereby. It is also the case in the professions like medicine that if a man practising is convicted of a particular kind of offence, he is not allowed by that profession to continue to practise. There is nothing unusual in a Government Department refusing to use the services of people, who have been proved to be as unreliable as these people. I repeat that these people have been refused their quota simply because they have proved themselves to be unreliable distributors and for no other reason.

It has been suggested again that there has been unfair discrimination against Messrs. Lighthill, inasmuch as other firms have offended against these regulations and have not lost their quota. This is, however, merely evidence that we do not punish an offending firm twice, but, where we are satisfied that the firm can be regarded as a reliable distributor, we do not seek to withdraw or withhold a quota. The offences of this firm—and I now regard them as very bad indeed—stand out clearly as the worst of any timber merchants since controls began. In my view it is clear that there has been no change of circumstances at all to justify a reversal of the decision which, as I have said, has been endorsed by successive Ministers of Supply drawn from both sides of the House. The need for conserving our timber supplies is as great today as ever it was during the war, and its uses are hardly less important. Indeed, I would suggest to the House that it is altogether likely that a firm, which was prepared to make the most of our difficulties during the perilous years of war for their own profit, are even more likely to do it when we are fighting on a different front and when patriotic sentiment is probably less.

Finally, there is this further point—owing to the shortage of timber in relation to the very large number of existing quota holders, it has been necessary to refuse applications for quotas from a number of would-be new entrants who happen for one reason or another not to have qualified originally. Further, there are the existing quota holders who would like to have more than they have got. I would suggest—and I think that the House will agree with me—that in any case these people, who forfeited a right to a quota as a result of offences for which they were convicted in the courts, ought not to be placed in a more favoured position than existing respectable, responsible holders and would-be new entrants. For these reasons, I cannot hold that this firm should be given quotas of a scarce material of the utmost importance to the restoration of the national economy, and I feel certain that the House will agree with me.

Major Gates

Cannot the Parliamentary Secretary to the Board of Trade deal with my point? How is it, if this firm has proved so unreliable, that two other departments of the Board of Trade continue to have dealings with them?

Mr. Belcher

The two other departments mentioned are not dealing in timber or plywood. They are dealing in different materials altogether.

Major Gates

But it is the same firm and it has the same directors.

Adjourned accordingly at Half-past Four o'Clock.