SUGAR (Hansard, 21 November 1956)

§ Mr. G. R. Mitchison (Kettering)
I beg to move, That an humble Address be presented to Her Majesty, praying that the Sugar Surcharge Regulations, 1956 (S.I., 1956. No. 1652), dated 23rd October, 1956, a copy of which was laid before this House on 26th October, in the last Session of Parliament, be annulled. In doing the kindness that I propose to do the Joint Parliamentary Secretary to the Ministry of Food, I fear that I shall not get off so easily as I did the last time. The kindness is this: these are Regulations made under Section 11 of the Sugar Act, 1956. Section 11 of that Act is a purely enabling Section which allows the general provisions of the Customs and Excise Act, 1952—that is, the general Act—to be applied as and to the extent that the Ministry thinks fit. It was accepted during the passage of that Bill that an indication would be given of what all this meant. I see that on the Second Reading the Minister looked forward to hearing in Committee a lucid exposition of this subject from his right hon. Friend the Financial Secretary to the Treasury.
That was on Clauses 7 to 16. I may be wrong, but it seems to me that his hopes were disappointed. I feel certain the right hon. Gentleman will correct the if I am wrong. I feel equally certain that if he had made any exposition at all it would have been lucid, but I do not believe he made one. So far as I can make out, right hon. and hon. Members interested in that Bill got through it without really considering what they were doing in Section 11. In those circumstances it becomes of fascinating interest to see exactly what happens when we start to apply it. That is what these Regulations do. They start by dealing with exceptions and adaptations by general provisions of law, that is to say, attempting to apply as much as is thought fit of the Customs and Excise Act.
There is one thing which puzzles me. The Sugar Board, in favour of which all these arrangements about surcharge and surcharge payments are effected—those are the things which are to be the subject of Customs and Excise procedure—has two main duties. One is to deal with sugar or molasses and the other to deal with sugar or molasses used in the manufacture of imported composite sugar products 1891 which have become chargeable to sugar duty. I can understand that, but what I do not understand, if that is the business, is why Section 259 of the principal Act should be expressly excluded, because that is the Act which charges duty on manufactured or composite articles.
I am sure that there must be a quite simple explanation, but it looks at first sight as if sugar or molasses were chargeable with surcharge, and so was the mixture. I do not know what it is to be, but it will be something with sugar in it. When we come to deal with the sugar, we deal with it in one way, and when we come to deal with the mixture, with which the Sugar Board, the surcharge and the rest of it are equally concerned, we deal with it in another way. Perhaps the Minister would explain to me why it is necessary that Section 259 shall not apply.
Another thing that puzzles me is the position whereby the whole of the Customs and Excise can apply if nothing is said about it, or is it the position that none of it applies unless something is said about it? I feel sure that there must be some quite simple explanation, but I confess that I find it just a little bit difficult.
I am also, I confess, a little frightened, and I would like some explanation of it, about paragraph 5 of the Regulations. This contains a number of references to defrauding Her Majesty which appear in the principal Act, that is, the 1952 code, and they are to be construed as references to defrauding the Sugar Board. That means that they entail certain penalties. That is right enough, but what I cannot understand is how the rather peculiar selection is made.
Some instances of defrauding Her Majesty appear to be all right if they only result in defrauding the Sugar Board, and others are all wrong if the Sugar Board is defrauded. On what principle, and by what curious arrangement, is this done? For instance, one gets a rather similar point in connection with the previous paragraph. It is substantially the same thing.
I think we can leave the right hon. Gentleman to give us a lucid explanation of why some instances of defrauding are punishable as against the Sugar 1892 Board and others are not. It will take the Minister a little time, but I will not keep on too long on that side of the matter.
There is another thing that puzzles me just a little, too. The end of Part II of the Regulations says: Regulation 11 of the Manufacture in Warehouse of Cavendish or Negrohead Tobacco Regulations, 1952(f), shall have effect in relation to surcharge and to surcharge repayment … and then the consequences follow. If we look around we find that the trouble is really that the manufacturers must not receive into the warehouse for use in the manufacture of Cavendish or Negro-head Tobacco sugar or articles without the payment of duty.
That is a rather obscure sort of way of saying that the manufacturers of Cavendish or Negrohead Tobacco have not only got to understand the Sugar Act, but, what is worse, also the sugar surcharge Regulations. Would not it have been simpler in relation to the whole of this matter if, instead of this quite appalling concoction of miscellaneous Sections and subsections of the Customs and Excise Act, the Molasses (Food for Stock) Regulations, the Molasses (Spirits and Yeast) Regulations, the Beer Regulations, of all things, and, finally, in a sort of crashing finale, the Manufacture in Warehouse of Cavendish and Negrohead Tobacco Regulations, the Ministry and the Treasury between them had really pulled up their drafting socks and told people in tolerably plain English what they could do and what they could not do when bringing sugar or sugary things into the country?
Would not it have been simpler, too, if, instead of punishing people by a series of reference to some other Statute, they had told them in tolerably plain English what would happen to them if they did one of the things that they ought not to do?
I make that suggestion. I have been taking a little information on this matter, because I was afraid of putting my foot in it when I came to sugar and the Sugar Act—getting stuck in the molasses, as it were. I should like to suggest to the Parliamentary Secretary that quite a lot of the complications in these Regulations, as, indeed, was suggested during the discussion of the Bill, come from the curious 1893 structure of the sugar industry itself as constituted by the Government and reconciled under the Commonwealth Trading Agreement—

§ Mr. Speaker
We are not discussing the Act now. That has been passed.

§ Mr. Mitchison
If I may humbly say so, I thought it was possible that I was getting rather near the margin at that point.

§ Mr. W. A. Wilkins (Bristol, South)
I beg to second the Motion.

§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Harmar Nicholls)
I do not know whether to admire the hon. and learned Member for Kettering (Mr. Mitchison) or be terrified of him, but the emotion I have uppermost in my mind is one of relief that he was not on the Standing Committee when we had our long debates on the Sugar Bill. Goodness knows, that was a very technical Bill and we had enough problems to deal with there. If we had had the hon. and learned Gentleman putting his mind to adding to those problems, it would have been a formidable job.
When hearing him just now I wondered whether these Regulations are really as complicated as all that; but I suppose that it is the duty of a lawyer always to make it sound complicated. Otherwise, they might not feel that their standing in society was justified. I do not think that this matter is as complicated as the hon. and learned Gentleman tried to make out. It was obvious that, while he had made jolly good use of the short time that he had had to look at the proceedings on the various stages of the Bill, he had not gone far enough.
I know that I may not give him all the satisfaction that he wants, in view of the speech he made, but if I say the few words that I want to now, and if he will read them in conjunction with what was said on Second Reading, the Committee stage and Third Reading, I think he will find that all the points he made will have been answered. I am sure that he will have that satisfaction.
The real purpose of the Regulations is very simple. As was explained by the hon. and learned Gentleman, the duty now of purchasing the sugar and averaging it out, which was previously in the hands of my right hon. Friend, will now 1894 be in the hands of the new Sugar Board. It will do it by applying a surcharge on all sugar. The actual application of the surcharge procedure will be carried out by Her Majesty's Customs and Excise.
It was found, as was foreseen when we were discussing Clause 11 in Committee, that the documentation and the procedures which the Customs and Excise has for its normal duties did not quite fit in with this distinct job of applying the surcharge. The purpose of the Regulations now being prayed against is really to complete the process of bringing surcharge into line with Customs duty and into operation under Her Majesty's Customs and Excise. There is really no more in it than that. It was anticipated when we were in Committee.
The hon. and learned Gentleman mentioned the various Regulations. Regulation 1 enables the Commissioners to direct, as they do for Customs duty, the form of documentation to be used when goods are imported or removed from a bonded warehouse. They will recommend the forms of documentation that have to be complied with, and I can assure the hon. and learned Gentleman that we have reduced the forms to the very minimum. I do want him, in conjunction with a reading of the debates and of our proceedings in Committee, to understand this. I think that it will save time later.
Regulation 2 applies certain provisions, which now relate to the Customs duty documentation, to such documentation as may be required for Customs purposes. That is what I have described in general terms just now.
Then there is Regulation 4. In the ordinary course, drawback of sugar duty is not payable unless the duty can be shown to have been paid, but it is provided in the Act that surcharge repayment shall be made from the appointed date, notwithstanding that surcharge as such has not been paid. Regulation 4 makes it clear that the general provisos of the Customs law are not to stand in the way of this specific provision.
By Regulation 5, certain penalty provisions which now apply when Her Majesty is defrauded of Customs or Excise revenue are applied to cases where the Sugar Board is similarly being defrauded. These provisions were not general and, otherwise, there would not 1895 be power to act when the offence related to surcharge. It really brings the powers in relation to the surcharge into line with their other powers.

§ Mr. Mitchison
Before the hon. Gentleman leaves the Regulations, will he consider what he has been saying? He has been suggesting that the answer to this could be found in the debates. I can assure him that that is not the case. For one thing, the Regulations were not out at the time. What I really want to know is why Section 259 of the 1952 Act, which does not refer, at any rate primarily, to drawback at all, but to a charge of duty on manufactured or composite articles, should not apply in this case.

§ Mr. Nicholls
I do not think I said that the hon. and learned Gentleman would find the answer to that in the debates. I think that what I said was that if he read what I have said tonight in conjunction with the debates it might be that some of the points which he raised would be answered.
The general provision of Section 259 of the Customs and Excise Act relates to a charge of Customs duty on the ingredients of manufactured goods, and since, in Section 7 of the Sugar Act. surcharge is applied to such ingredients, the general provision is unnecessary, and is excepted by Regulation 3. I think that if he will look at Section 7 of the Sugar Act he will find that that is covered there, and that is why it need not have been entered into in more detail here.

§ Mr. Mitchison
That is a different explanation, and a better one.

§ Mr. Nicholls
I think that the hon. and learned Gentleman will find it an authentic one when it has to be operated after the appointed day. The real purpose is to give to the Customs and Excise the same powers to deal with its surcharge responsibility as it already has for its normal responsibilities. With that explanation I ask the hon. and learned Gentleman, with great confidence, whether he will not proceed with the annulment of the Prayer.

§ Mr. Mitchison
Having heard the singularly incomplete explanation which has just been offered on behalf of the Government, Mr. Speaker, I beg to ask leave to withdraw the Motion.