HC Deb 28 May 1952 vol 501 cc1552-9

Goods imported into the United Kingdom of the categories specified in the Schedule (Agricultural implements and fertilizers to be imported free of duty) to this Act, being articles used as implements or fertilizers in agricultural production, shall be imported free of duty.—[Mr. Grimond.]

Brought up, and read the First time.

Mr. Grimond

I beg to move, "That the Clause be read a Second time."

The purpose of this new Clause is to exempt from import duty certain fertilisers, insecticides and agricultural implements. I am encouraged to think that I shall be supported by the hon. Baronet the Member for Gravesend (Sir R. Acland) who, in a previous incarnation, moved a similar Clause some time ago.

I must confess that I am not an out-and-out free trader. I can well understand that there will be times when it is necessary to control imports in the interests of the stability of the economy, and I quite concede that at this present moment, in the economic circumstances in which we find ourselves, it is certainly necessary to have some such restriction on imports. Nevertheless, I think it is generally acknowledged that it is in the interests of this country that there should be far greater freedom of trade than there is at this moment, and that if the world as a whole is to prosper, raise its standards of life and live in peace, we have to get rid of a great many of the present impediments to trade.

We have recently had some rather pungent examples of the vicious effects of trade restrictions. We have indulged in them ourselves and we have certainly suffered very much from what has been done by Australia and what is being done by America. The game of "Beggar My Neighbour" proceeds merrily, and I think we have to realise that in that game this country is particularly vulnerable.

There is a further point with regard to tariffs, which hon. Members will be relieved to hear that I do not intend to go into in detail, and that is that if we must restrict trade, it may be that a quota or licensing system would be a better way of doing it than the imposition of an import duty. I do not know what is the view of the Government on this new Clause. Whoever is going to reply—and I rather think that we may have a new spokesman from the Treasury Bench at this late hour—has very naturally not yet unmasked his batteries, and I do not know what form his counter-fire will take; but if he is going to argue that it is necessary to have the revenue from these duties he is admitting that the goods on which they are imposed are necessary for this country, that they are to be imported, and that the farmer is going to have to pay a higher price for them.

If, on the other hand, he argues that the retention of these duties is to protect home industries then, to that extent, he is arguing that these goods ought to be excluded, and it may be that the best way of excluding them is by some form of licensing. He may, of course, argue that in any case not much harm is done by these duties. If that is so, we should get rid of them, because if the best that can be said of them is that they do no harm, that seems to me to be a bad argument on the face of it.

I am aware that these duties are so venerable that their respectability is taken for granted. I am also aware that there are opportunities for anyone who objects to these duties to make out a case for their removal. But in these days the Treasury takes—rightly, in my view —direct responsibility for import duties. As these duties affect everyone in the extremely important question of food production, I do not accept the argument that they should continue until some interested party takes some objection to them. I do not think it is right that this sort of import duty should be determined by the pressure of various groups of people who have an interest in the particular commodities. I think it is the duty of Parliament to bring them into the light occasionally and have a look at them to see if they are still needed.

Whatever the reasons for these duties, the onus lies on the Government to make out a case for them, and it is for them to show that there is justification in continuing with them today. The particular groups with which this Clause is concerned fertilisers, farm machinery and implements, are subject to special reasons for examination. The whole of our attitude to agriculture, and our whole agricultural policy, has completely changed since most of these duties were imposed. Today we need to get as much food as we can from our own countryside, and to get it we are prepared to take special steps and give special help and assistance to the farmers. Surely, it is clearly in the interests of the country, the farmers and the consumers that the costs of agriculture should not be unnecessarily increased. Surely, at the present time while, we are exhorting farmers to produce more no one would want that.

The country is already paying out large sums in agricultural subsidies, and it is only recently, rightly in my opinion, that we accepted a large increase in the Annual Price Review. But I wonder if the country realises that while this money is being paid out on the one hand to farmers who are being asked for greater production, on the other hand we are continuing duties which can only result in putting up the price of the farmer's tools of the trade, or alternatively preventing them from obtaining them at all.

What is the case for £4 a ton duty on certain fertilisers, for 33⅓ per cent. on acetate of lime, for 20 per cent. on insecticides, or duties from 15 to 30 per cent on such things as ploughs, tractors, separators, shovels, forks, reapers and many other agricultural implements? There is also a particularly heavy duty on wire. Small farmers are finding costs extremely heavy. Taking the example of wire, the cost of fencing is an extremely big item for many farmers, and the fact is that these duties must increase the cost of farming, and particularly that of farmers trying to bring under cultivation hill and marginal land.

I would remind the Government that we have recently passed an Act by which a subsidy can be paid not only to the users of fertilisers but also to the producers. Yet, while we are prepared to pay a subsidy to the producers of fertilisers, we are retaining a duty on fertilisers. I must say that I think we should inquire whether the system of import duties is in any way now a useful part of our policy for agriculture or indeed trade. There is one other argument in defence of tariffs, and that is that they are necessary to protect weak or growing industries. But as far as the industries affected by these duties are concerned, they seem far from weak. The biggest firm of fertiliser manufacturers in this country is Fisons—a most efficient firm. Their profits rose in 1951 from £550,000 to £780,000. Ford's profits rose by £200,000 and the dividend was increased. I personally make no complaint about that. I do not say that the profits are excessive. They may in fact be no more than adequate compared with the fall in the value of money. But it is obvious that these are not weak struggling companies which need the protection of tariffs. Again, we should all like to see foreign implement makers prosper in this country, and I would do everything to encourage them. But do these import duties help, duties which were imposed long before such companies as Massey-Harris or Deeres came here? They came because they wanted to break into British markets and perhaps because we could not find dollars for implements made in America or Canada.

I certainly think that there is a case for saying that this Committee should scrutinise these sorts of duties and weigh up the effect on agriculture and, what is more, on consumers. It should further consider whether they are desirable as part of the trading policy of this country.

1.15 a.m.

Sir R. Acland

After the most able speech which has just been made, there is not much for me to say; but I happen to be the only surviving Member of this Committee who supported a new Clause moved in almost identical words by my father 15 years ago. Mr. Wedgwood Benn, as he then was, having left the Liberals, and joined the Labour Party, read some sentences on free trade in a pamphlet written by the then Sir John Simon. I mention that in passing, but it does seem to me that the principles behind this new Clause are as sound today as they were then, when the Conservative Party refused to accept them.

We do not know if the present Conservative Government are going to resist this Clause; but if it is resisted on revenue grounds, then I would say that we are paying out subsidies of different kinds; and if it is on the balance of payments issue and there is the question of machinery from dollar countries, I can understand it, although that position is surely better dealt with by some form of quota. If we are going to allow in goods from any foreign country at all, then those goods which we allow in should be those which help our own food production.

We do not have the complete monopoly in ingenuity in agricultural machinery, and to increase ever more and more our food production those producers should be able to send over goods without charge of duty so that our farmers can learn more, and produce more, and our manufacturers can learn from them. For these reasons, among others, I would support this Clause, and express the hope that we shall not have to move it again in another 15 years' time.

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

The hon. Member who moved this new Clause did so with commendable brevity and persuasiveness. I shall try to show him and, I hope, the Committee, why the new Clause for which he asks should not be passed. The hon. Baronet the Member for Gravesend (Sir R. Acland) who supported it, did so on the historical ground which he explained, and he would have carried more conviction had he not abandoned the Liberal Party.

The hon. Member for Orkney and Shetland (Mr. Grimond) said that he was not an out-and-out free trader, although he did give some of the recognised arguments for free trade; and I do not want to be tempted into giving some of the equally well-known arguments to the contrary if they are not necessary for a decision of the matter before the Committee.

The hon. Member who moved the new Clause said, quite rightly, I think, that, although the particular commodities referred to in the new Clause and set out in the new Schedule concerned agriculture, his argument was more general and applied to trade generally. We must, therefore, consider his proposal in the light of the general considerations which he admits are involved.

The first point about this new Clause is that it is unnecessary, since these or any other commodities can be added to the free list if such an addition is thought desirable. The duties on these commodities are imposed under the Import Duties Act, 1932, as modified by the Import Duties (Emergency Provisions) Act, 1939. The effect of that legislation is that an addition to the free list, that is to say, the list of goods in respect of which duties are not to be charged, can at any time be made by Treasury Order. Under the legislation as it now stands that is done by the Treasury in appropriate cases on the advice of the Board of Trade. In order to remove a duty on any of these articles it is not necessary to add any such Clause as this to the Finance Bill.

If, however, such a Clause is not necessary, I think the hon. Member will realise that it is also undesirable, for this reason. At the present time, before any change is made in the tariff, all persons concerned, consumers and producers, are given an opportunity of stating their case and making their representations. Surely that is a desirable thing, and it is certainly desirable that people should be treated alike.

The hon. Member would not think it fair that the producers and consumers of one particular set of commodities should be deprived altogether of the opportunity of making their representations and having their case heard and considered. That would be a very great alteration and, I think, an undesirable and unfair alteration in the principles on which the Departments have always acted in this matter. It is the view, I think, of both the principal parties in this country that changes in tariffs ought to be considered on their merits.

Sir R. Acland

Who does the hearing and considering of the case put forward by the parties represented? Is it a Treasury official or a Board of Trade official now?

Mr. Strauss

Under the original Act the Import Duties Advisory Committee carried out those duties, but now these matters are dealt with on the advice of the Board of Trade who give an opportunity to all concerned to make their representations.

The hon. Member for Orkney and Shetland asked my right hon. Friend the President of the Board of Trade on 13th March: … whether he will abolish the tariff on imported fertilisers. My right hon. Friend replied: I am always prepared to consider any application which may be made to me for the adjustment of tariff rates. In considering such applications, it is, of course, necessary to take account of the interests of both producing and consuming industries." —[OFFICIAL REPORT, 13th March, 1952; Vol. 497, c. 147.] I cannot think that that proposition can be disputed. To say that as regards a particular class of commodities the people concerned should be excluded from all consideration would be a great change and would have wide repercussions.

I would add, since it is a matter which the Committee would wish to bear in mind, that no application is now under consideration, because no application has been made, in respect of any of the articles mentioned in the schedule listing the articles to which the new Clause refers. It seems to me that, if there were a case from the point of view of the consumers such as the hon. Gentleman suggests, it is at least probable that somebody would have thought fit to make an application for a change.

Mr. J. Edwards

Will the hon. and learned Gentleman tell us the status of the persons or bodies who would make the application? What test would the Board of Trade apply if an application were made? Could they in some circumstances refuse, or can anyone who is interested make an application?

Mr. Strauss

I would not say anything which would prevent the Board of Trade from refusing consideration to an application that was clearly frivolous, but, apart from that, every responsible application is considered.

Therefore, on the ground that the Clause is not necessary to achieve the placing of the articles on the free list if that were desirable, and on the ground that, if it is not necessary, it is also not desirable, the Clause should be resisted. Whatever the views of the hon. Member for Orkney and Shetland are on the classic argument of free trade or protection, he will not wish to introduce an injustice by insisting on a new procedure for one class of articles which does not apply generally, especially since he has admitted in his speech that the case which he has presented applies to trade generally. For those reasons I ask the Committee to reject the Clause.

Mr. Grimond

I do not feel inclined to withdraw the Clause, grateful as I am to the Parliamentary Secretary for what he has said. Everything he has said about the methods by which the duties are determined made me more and more suspicious of what goes on in the dark corners of the Board of Trade. It may be that the interests concerned should have every opportunity of stating their views, but the producers, consumers and wider interests in the country should have even more opportunity of stating theirs.

While I fully accept that in certain cases import duties may be necessary, I think the bias lies against them, and I had hoped that the Parliamentary Secretary would have given some justification for these particular duties. I am not entirely convinced by the argument that anybody can object to them. The farmers are very largely concerned here, but because they are regularly recouped at the Annual Price Review for the extra costs involved they may be reluctant to make any undue fuss. In these circumstances, whilst I am grateful to the Parliamentary Secretary, I do not feel inclined to withdraw the Clause.

Question put, and negatived.