HC Deb 06 July 1954 vol 529 cc2113-24

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

10.9 p.m.

Mr. Ronald Russell (Wembley, South)

The subject I wish to raise is the smuggling of cars from the Republic of Ireland. I wish to make it plain at the outset that I make no complaint whatever against the Irish Government. In fact, there is nothing in this case which affects them in the least. In any event, the smuggling to which I am going to refer—or the after-effects of the smuggling, which is what I am complaining about—took place more than a year ago.

The core of the problem is this. In May, 1953, 24 cars were imported into this country from the Republic of Ireland via Belfast and Liverpool. They were sold by the persons importing them to certain dealers in this country, mostly in the London area, some of whom were my constituents. Before they completed the deal, my constituents took very great pains to find out if the cars had been cleared by the Customs, and they received several assurances which suggested that they had.

Three months later, when the Customs found that the cars had been smuggled, they promptly impounded them, and only released them on payment of the duty and the Purchase Tax. By that time, some of the cars had been resold, and the duty and the Purchase Tax had to be paid, not by the people who had imported them, but by my constituents and other dealers who bought them from these people, and by some of the persons to whom they had subsequently sold them. Therefore, these people have all been penalised very unjustly and have suffered a substantial financial loss through no fault of their own, and, in the case of the dealers, their reputation was also placed in jeopardy.

May I now go into detail and take the case of one constituent of mine? On 30th May, 1953, Mr. Ketteringham agreed to buy a car from two men named Johnson and Dempsey whom he had never met before. Knowing that cars which had been imported from the Irish Republic were subject to the payment of the duty and tax, he asked the police to check on the cars, and the police informed him that everything was in order. I know that the police have no responsibility in these matters, but were merely passing on information which they themselves had obtained, and that, whether it was right or wrong, no blame attaches to them.

They gave him the name of a Customs official with a Mansion House telephone number in order that he could double-check on the cars himself. That official told him that, provided that the cars had a United Kingdom registration book issued by a licensing authority in this country, they were clear of Customs Duty. One of the cars had such a book and the other had not, so Mr. Ketteringham completed the deal in respect of the one which had a registration book, which was issued by the Middlesex County Council, and did not do so in regard to the other car. That proved that he was trying to do all he could to keep within the law and avoid buying a car which had been illegally imported.

Mr. Ketteringham also wrote and telephoned the Customs in Liverpool, and the gist of the telephone conversation was this: "What are you worried about? How do you think you got the cars at all if they had not been cleared of duty?" In the letter which he received, in reply to his own letter, from the Assistant Collector of Customs at Liverpool, was this statement: I have to enclose a copy of Notice No. 115 which explains that goods released against an undertaking without payment of duty and Purchase Tax, or conditionally, are liable to forfeiture. Normally, cars covered by a registration book issued by a U.K. licensing authority, such as the Middlesex County Council, are outside the scope of this notice unless the book is endorsed to the contrary. Mr. Ketteringham took that to mean that, if a car had been issued with a United Kingdom registration book, it was in order and clear of duty, and, when I myself read the letter, I took it to mean exactly the same thing. However, not being as certain of legal phraseology as some of my hon. Friends, I asked my hon. Friend the Member for Spelthorne (Mr. Beresford Craddock) whether he took the same view, and my hon. Friend, with much greater legal knowledge than I possess, tells me that he does. Further, the Middlesex County Council also assured Mr. Ketteringham on the telephone that, if the registration book had been issued by them, he could buy the car with confidence. Subsequently, he bought eight cars from this man and other dealers bought other cars, making 24 in all from four men. The cars were seized and the duty and the Purchase Tax were charged to Mr. Ketteringham and other dealers and owners of the cars at the time.

The first point is that Mr. Ketteringham and the other dealers were very badly let down by the assurances given by the Customs which, to my mind, clearly mean that, provided the cars were issued with a registration book by a United Kingdom licensing authority and not endorsed, the cars were clear of duty. Secondly, surely the Customs in this country, when asked by the dealers to check on these cars, could find out from the Customs authorities in Northern Ireland whether the cars had been legally imported.

Of course, they were imported from the Republic of Ireland into Northern Ireland by being driven across the land frontier. I assume that a record is kept by the Customs houses on that land frontier of all cars brought from the Republic of Ireland into Northern Ireland legally. Therefore, if the numbers of the cars were given to the Customs in this country surely they could check with Northern Ireland to find out whether the cars had been imported by that land frontier. If there is no record, presumably they had been smuggled over by some by-road or when the Customs were not on duty. There seems to be a lack of liaison between the Customs in this country and in Northern Ireland.

Then there is the question of the duty and the Purchase Tax. Most of these cars were of British manufacture and were secondhand. One, I know, was a Jaguar of 1939 manufacture and another was a Standard of the same year. I am rather puzzled why British manufactured cars should be subject to Import Duty on reimportation into this country from the Irish Republic or anywhere else. I thought that the purpose of the Import Duties Act was to protect British cars against foreign competition. Surely, therefore, there is no objection to the reimportation of these cars which were originally exported.

Another point is whether secondhand cars, especially those of 1939, are subject to Purchase Tax. Purchase Tax had not been introduced in 1939, the year of manufacture of at least two of the cars. In any event, I thought that all secondhand goods were exempt. I am puzzled to know why it was necessary to seize the cars at all and to charge duty and Purchase Tax on them. I wonder if the Minister can give details of the duty and the Purchase Tax charged, and why.

Another question is whether it is possible, when the wrong persons are penalised in a case like this, to charge only a nominal rate of duty. I should also like to know what the rate of duty is and on what value of car—whether it is the original new value or whether it is the secondhand value as valued by the Customs when the cars were impounded. Also, have all the persons who smuggled these cars from the Irish Republic into Northern Ireland been arrested? I know that three were arrested. I wonder whether the fourth has since been arrested.

I was rather surprised to find from a report, I think in the "Belfast Telegraph" about last August, that the fines imposed on three of the men did not seem to bear any relation to the amount of duty charged by the Customs. I think that it is true that on cars smuggled by three of the men the total duty amounted to about £2,000. One of the men was fined about £500 and was given the option of 10 months' imprisonment; and he took the imprisonment. I have always understood that the penalty for smuggling or evasion of duty is very severe indeed and can even be twice or three times the amount of duty involved.

Surely it is desirable that steps should be taken to make sure that licences are not issued by licensing authorities in the United Kingdom unless proof is forthcoming that duty has been paid. In this case the wrong people seem to have been penalised, which is very unjust in any case, and particularly so as they took great pains to find out whether the cars were cleared of Customs Duty.

In Notice No. 115, to which I referred in a letter which I quoted just now, there are these words: Warning to buyers. Dealers and other persons buying imported goods otherwise than through recognised commercial channels are advised in their own interest to satisfy themselves, before concluding the purchase, that the goods are free from Customs restrictions and are not liable to be confiscated if sold. That is exactly what the dealers did. They took great pains to find this out for themselves. It seems to me that the only authorities who could have told them were the Customs and that the Customs lamentably failed to find out and to warn the dealers that the cars had been stolen.

To sum up, why was a misleading letter sent by the Customs which gave the impression that everything was in order when it was not? Secondly, should either duty or Purchase Tax have been charged at all on these second-hand British-made cars? Thirdly, what steps have been taken to ensure that this kind of mistake cannot recur?

10.21 p.m.

Mr. J. Beattie (Belfast, West)

I am very pleased that the hon. Member for Wembley, South (Mr. Russell) has raised the question of the smuggling of cars. He grades the cars as secondhand. I wonder whether it will be news to him to know that the same Customs and the same regulations operate on the border between the Six Counties and the Twenty Six Counties, in the case of cars. It might also be news to him to know that I can buy a secondhand car in Dublin and have no difficulty in bringing it across the border and carrying on my private business with it. I presume that the regulation which allows me to do that is a British regulation made by the Minister in charge of Customs.

I regretted hearing the complaint about Belfast traders smuggling secondhand cars. The Belfast motor traders are as honest men as one will find in the motor business in any country. I can assure the hon. Member that the secondhand motor car dealers in Northern Ireland have no cause or desire to participate in the smuggling about which he has complained.

Mr. Russell

I did not suggest that Belfast dealers were concerned. They were not Belfast dealers at all.

Mr. Beattie

The hon. Gentleman mentioned the Belfast dealers. I represent the heart of Belfast and there are large numbers of motor car dealers in my constituency. I know those dealers, and I know that they have no cause to engage in smuggling. They are able to buy secondhand cars in the Republic of Ireland and bring them to the North of Ireland. If any reflection is cast upon the British Customs authorities I am greatly surprised, because I have heard it stated in this House by the Minister concerned that they are the most highly efficient body of men that there could be on the border between this country and any other country.

I am sorry to bear from the hon. Member about the surcharging. If one wants a good secondhand car brought from the Republic one is at liberty to buy it in Belfast and bring it to the British Isles. That was the understanding so far as Northern Ireland was concerned, and I hope that it is not changed.

10.25 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

I do not think that the hon. Member for Belfast, West (Mr. Beattie) will expect me to follow him in the advice which he has given to my hon. Friends. If I may I will, having reserved my position on that advice, confine myself to answering the very large number of points which my hon. Friend the Member for Wembley, South (Mr. Russell) succeeded in compressing into a very limited space of time.

First, however, let me deal with the background. I will come to the court proceedings in a moment, but there is no doubt at all that the cars in question were smuggled. I am advised that it is equally the law in this country that smuggled goods are subject to seizure. In this case, in view of all the circumstances—and I would like the House to know this—the right of seizure was not insisted on; although, in law, it would have been possible for all these cars to have been seized and sold by the Customs and Excise. In fact, the seizure was waived and all that was insisted on was the payment of the Purchase Tax and import duties due. I think it is fair, when considering this matter, to bear that fact in mind.

I do not in general, although in one or two points, quarrel with the description of the somewhat complicated circumstances of this rather unusual case quoted by my hon. Friend. I join issue with him when he says that assurances were given by the Customs and Excise that these were not smuggled goods. I have not been able to find, either in the very clear and forceful representations made to me by my hon. Friend, or from my own inquiries, any justification for that statement.

My hon. Friend referred to a letter from the assistant collector at Liverpool, but I think that he will agree that that letter was attached to and related to a Customs notice regarding a totally different matter; that of the use of cars imported without payment of duty into this country legally in certain circumstances, for example, by tourists. The notice sent with the letter related to that, and if one reads the letter in that connection, and also the statement that normally cars registered in this country do not come within the terms of that notice, one will appreciate that what was intended to be conveyed related to a totally different context than that of admittedly smuggled vehicles.

If the matter was misunderstood—and I accept the statement of my hon. Friend that it was—I do not think that in the context there was reasonable grounds for misunderstanding. Of course, I appreciate that the official forms and notices are not always as easily comprehensible by traders as sometimes one could hope. There are a great many of these forms but no assurance—and I think this is important—was given that these cars could be regarded as being cars on which duty had been paid.

Mr. Beresford Craddock (Spelthorne)

I do not agree with that. I have gone over these documents, and the notice says that where a purchaser is in doubt that the car is clear of the Customs, the Customs themselves say that normally, in view of a licence having been issued by a British authority, it is all right. If that does not mean that this case is perfectly in order I am inclined to say, with respect, that words seem to have lost their meaning.

Mr. Boyd-Carpenter

The words are in a totally different context, but I cannot devote any more time to this matter if I am to answer the other questions which were raised. This related to the legal use of cars on which duty had not been paid, as my hon. Friend will see, and not, of course, to smuggled cars at all.

My hon. Friend the Member for Wembley, South asked why duty was payable at all in view of the fact that these were British cars. The cars confiscated did not include the 1939 Jaguar to which my hon. Friend referred. They are all of post-1940 manufacture; I have the schedule here.

These cars were exported to Ireland in separate parts. The technical term in the motor trade is C.K.D.—completely knocked down, a technical term rather reminiscent of the boxing ring. The import duty was assessed on the basis not of those parts which, as my hon. Friend rightly says, were of United Kingdom origin but on the basis of the car as a whole, due allowance being made for the fact that a large number of the parts were of United Kingdom manufacture. In fact, the import duty was not very severe.

My hon. Friend asked how the Purchase Tax is assessed on these vehicles. It is assessed on their current value at the time of the importation—not, therefore, on the value which they would have had as new cars but on a low, secondhand value. Relating, as it does, to British cars manufactured since 1940, I am afraid it is legally due.

My hon. Friend asks why the ultimate purchaser should be penalised. Apart from the fact that in law the 'ultimate purchaser could have been much more severely penalised by having the car seized, it should not at this stage be assumed that the ultimate purchaser will necessarily be penalised. As I understand the legal position, it is that a purchaser who purchased a car, as I understand these purchasers did, at a price which would be consistent with the duty and tax having been paid on it, has a remedy in law against the dealer from whom it was purchased. If he is found liable, the dealer has a remedy—at least, this is reasonable to assume—on the contract against the person who supplied him, the smugglers; and I will come, if I may, to the smugglers.

One of them, who I understand is the ring leader, has not been before a court because, although a warrant has been issued, he is resident in Dublin and is therefore, not within the jurisdiction of the courts of the United Kingdom. It would no doubt be quite possible, if a cause of action lay, to proceed in the civil courts against him, in the courts of the Republic of Ireland. Until at least the question of these mutual, complicated legal rights has been resolved, I do not think it is fair to say that the ultimate purchaser has been penalised. It is now a matter of the legal rights of a number of individuals involved in a somewhat complicated transaction, as between themselves.

My hon. Friend asked about the conviction of the other three people before the resident magistrate in Belfast. I understand that it would be completely out of order if I were to comment on the sentences which the resident magistrate, in his discretion and wisdom, imposed. My hon. Friend asked me to do so, but I do not think that would be proper.

I can tell the House what the sentences were. The first of the smugglers, a man called Dempsey, was fined £500 with an alternative of 10 months' imprisonment. He did not pay the fine and went to prison for 10 months. The second, a Mr. Mullen, was fined £300 with an alternative of 12 months' imprisonment. He did not pay the fine and went to prison for 12 months. The third, a Mr. Clifford, suffered a penalty of £150 with an alternative of three months' imprisonment. Equally, he did not pay the fine, and he went to prison.

To complete the picture, although a warrant has been issued for the arrest of the ringleader, at the moment he is in Dublin, and it has not been possible to exercise the warrant. I am sure my hon. Friend will appreciate that it would be wrong for me to comment on the level of the sentences imposed by the resident magistrate, who no doubt discharged his duty on the facts and the evidence of the case, which are not in detail before the House, in accordance with the proper standard.

My hon. Friend then asked about the question of the Middlesex County Council issuing a registration book, and he stated that the council had given some assurances in the matter. I am not, of course, in a position to answer for the Middlesex County Council. The question, however, has been considered from time to time as to whether registration of motor cars should be tied up in some way to protect the innocent purchaser, not only in respect of smuggled, but also of stolen goods.

A good deal of thought has been given to that aspect of the matter, but the view so far taken has been that it is not possible to put on to local authorities the very considerable amount of work that would be involved. Therefore, the registration book cannot be taken as evidence either that duty has been paid, or, indeed, that the vehicle is not a stolen one.

There is an interesting argument as to whether we should not extend that liability, but I have neither the time nor the opportunity this evening to develop it. Certainly the view so far taken is that it would not be reasonable to expect local authorities to undertake these obligations.

My hon. Friend asked about the Northern Ireland land frontier, to which the hon. Member for Belfast, West also made reference. There seems to be no doubt at all that the cars in question were brought over by night on side roads across the frontier. The frontier is very nearly 200 miles in length, and it is obvious that, from time to time, successful smuggling can take place across it. It is, therefore, all the more necessary for the House to remember in those circumstances that it is possible—and has been proved possible in this case—to catch up with the smuggled property at a later stage.

It would clearly be more satisfactory to all concerned if interception could be effected, as it may well be in many cases, on the frontier itself, but the Northern Ireland land frontier, as the hon. Member for Belfast, West well knows, has its complications from this point of view. It is, I think, perfectly clear that these vehicles were driven across the frontier by night on side roads.

I do not want to go into details as to the precautions taken because there may well be people outside this House interested to learn a certain amount about them, and I am not sure that it would be healthy for them to be supplied with gratuitous information on the point. I would only add that this case has drawn attention to the dangers of smuggling of this sort, and it may well be—I will not go further—that it might prove more difficult for anybody who desired to repeat this tiresome and unhappy performance.

As I say, my hon. Friend has described the case as it stands at the moment with great clarity, and one cannot help feeling sympathy for a considerable number of the people involved in the difficulties which the wrongdoing of the original smugglers has created. But, as I said, the mutual legal rights of the different parties have not yet been clarified, and, therefore, we cannot presume that wholly innocent persons will find themselves penalised.

However, it is important that it should be appreciated that smuggled goods can be under the law, and generally are, seized when found in this country. Indeed, that fact is one of the greatest protections of our whole system of protection that exists, and it cannot be too widely appreciated what are the very real dangers that arise from dealing in goods which have been brought unlawfully and improperly into this country without the payment of duty.

The Question having been proposed after Ten o'Clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-One Minutes to Eleven o'Clock.