HC Deb 18 December 1957 vol 580 cc479-95

Motion made, and Question proposed, That the Clause stand part of the Bill.

Sir D. Eccles

The most important Amendment before us, as I am sure hon. Members will agree, is that on the Notice Paper to leave out this Clause. I am grateful to Parliament for giving me a clear lead on the way to handle applications for changes in tariff rates. This is a piece of machinery in regard to which, whatever else we want, we must have the co-operation of those who are to be affected, namely, industry.

There were three things that we might have done. First, we might have gone back to the Import Duties Advisory Committee and given to an outside body the power to recommend changes in an import duty. During the Second Reading debate I gave the Government's reasons why we must firmly reject a return to that Committee. I do not wish to weary the Committee by stating those reasons again I would simply say that in modern commercial negotiations the tariff has become a very powerful bargaining weapon. The Government must either keep control over tariff policy or see themselves severely handicapped in negotiation. I am confident that a Government drawn from any party, if faced with the multilateral commercial negotiations which have to be carried out nowadays, could not possibly accept a position where recommendations for increasing tariffs were outside their general purview. Therefore, we cannot go back to that.

Secondly, we might keep the whole job inside the Board of Trade. We did not propose this in the Bill, because there had been a purely informal understanding with industry that some sort of permanent machinery would be set up to replace the post-war system. I did not consult industry on the details of this machinery. I wanted first to hear the opinion of the House of Commons on the broad choice between a return to the Import Duties Advisory Committee and keeping the job inside the Board of Trade.

The third thing which it was open to us to do—and that is what I put into Clause 3—was to have an outside body confined to fact-finding in respect of tariff applications but given power to make recommendations on duty-free licensing and drawback applications. The House made quite clear on Second Reading that, whatever else hon. Members did not want, they did not like the half-way proposals in Clause 3. From the other side of the Chamber the right hon. Member for Battersea, North (Mr. Jay), the hon. Member for Loughborough (Mr. Cronin), and the hon. Member for Dunbartonshire, East (Mr. Bence), and from this side my hon. Friends the Members for Cheadle (Mr. Shepherd) and for Wembley, South (Mr. Russell) all urged me to drop the Import Duties Board as constituted in the Bill.

There were voices, particularly those of my hon. Friend the Member for Shipley (Mr. Hirst), the hon. Member for Middleton and Prestwich (Sir J. Barlow) and the hon. Member for Clitheroe (Mr. Fort) on this side, and the hon. Member for Islington, East (Mr. E. Fletcher) and the hon. Member for Ashton-under-Lyne (Mr. Rhodes) who wanted to go back again to I.D.A.C.

Mr. Geoffrey Hirst (Shipley)

No. I was not prepared to accept a Committee which was not independent. If it were otherwise I preferred it to go.

Sir D. Eccles

I am very glad to hear it. I thank my hon. Friend for his intervention.

After having heard the debate, I had a talk with the representatives of industry and I told them that, as there was no question of going back to an outside body with power to recommend, I was disposed to accept the advice to drop the Import Duties Board altogether. There are, of course, a few business men who believe that the old system would still work, but they did not press their case and the general view of representatives of industry whom I saw was that it was better to have no board than to have a fact-finding board only.

I am not, however, prepared to drop the Import Duties Board without making some improvements in the methods by which the Board of Trade has handled these tariff applications since the war. There is general agreement that the present system is open to criticism on two points. The public, and not least the applicants for a change, do not receive enough information about the reasons why applications are accepted or turned down and, secondly, there is concern over the length of time that the Board of Trade has taken to reach a conclusion on applications. I should hesitate to recommend the Committee to drop Clause 3 unless I could propose some means of meeting those criticisms.

Major Legge-Bourke

I think that my right hon. Friend should have made a little distinction in what he has just said. The criticism has not been of his Department causing so much delay but of what happens when the Department refers back an application and the time that negotiations on the G.A.T.T. take afterwards.

Sir D. Eccles

There have been cases where part of the circumstances governing the raising of a duty has been that we must get it through G.A.T.T. That is a very good reason why we cannot leave it to an outside body, but I assure my hon. and gallant Friend that we shall do our best to shorten the procedure and I will explain in a moment how we shall do it.

As to making public why the Board accepts or refuses an application, we must distinguish between two types of cases. Where an application for an increase in duty succeeds, the House of Commons will be asked to pass an affirmative Resolution. There will be an opportunity for a debate and the Government will have to give reasons for their actions. If hon. Members think that we have done wrong they can criticise us, and we shall have to give the background for the decision.

Then we have the more difficult case of an application for a change in duty which is refused. I have been unhappy over the silence which at present surrounds the reasons for such refusal. An applicant whose case has been accepted as prima facie worth investigating ought to know, unless there are security reasons to the contrary, why his application has failed. Therefore, I would propose that in future the Board of Trade writes to the applicant stating the reasons, and if the applicant wishes to publish the letter he will be at liberty to do so.

In some cases obviously he will not want to publish, because he will want to keep quiet about the reason why his arguments have not been found to hold water. But the choice will be his. He can publish if he likes. I do not want to put into the Bill an obligation to write letters of this kind which an applicant may or may not publish. Anyhow, for security reasons, we might not be able to give the applicant all the information; but we shall give him all that we can.

I shall ask the Committee to consider a new Clause laying upon the Board of Trade the duty to make an annual report to the House of Commons on the use of powers under the Bill. As this report is part of the alternative which I suggest to Clause 3, I may be allowed to say that, subject to security reasons and the giving away of information about a particular industry which that industry does not wish to see published, we will give as full a review as we possibly can of what the Board has done under the Bill.

I notice the Amendment to the new Clause which is on the Order Paper in the names of the hon. Member for Islington, East and the hon. Member for Loughborough. We shall be able to debate that when the time comes but, of course, it is the case that a considerable proportion of the information that we shall get—and we have not the power to compel any firm to give us this information at all on a voluntary basis—might be withheld, unless the firms felt that the information was of so confidential a nature that they would be protected from publication afterwards. We must keep out of the report those parts of the information which are confidential, but in the report we will certainly give details of every application that has been advertised and what has happened to it and, where possible, the reasons.

Then there is the problem of the time taken to consider tariff applications. I cannot give the Committee any definite time limit that we shall set ourselves in future, because these matters vary so very much. They are sometimes very complicated and it is very necessary that they should be carefully scrutinised, because so many people's interests are involved. Not only must we take evidence from both sides but the applicant must have a chance to rebut the objections raised to his request.

It may well be that more of this work could be done orally and less by correspondence. I am looking into that and I am hopeful that by one means or another we can cut the time taken without reducing the thoroughness with which a case is examined. I can give a general assurance to industry that the Board of Trade will welcome its representations on all aspects of tariff applications. If they prefer talking to writing, we shall be very ready to see them.

6.30 p.m.

Dropping Clause 3 would mean that the duty-free licensing and drawback applications will, as now, be dealt with inside the Board of Trade. We have today a consultative committee which helps us in this respect and which, I hope, will continue to do so. We do not need any statutory powers to set up such a committee, since we have one in operation already.

For all those reasons, I accept the view about Clause 3 which was put forward from both sides of the House during the Second Reading debate. The choice is clearly between going back to an independent committee, with sufficient powers to attract the right kind of people to sit on it, and keeping the job inside the Board of Trade where it has been done ever since the beginning of the war.

I am grateful for the compliments which have been paid to the Board of Trade from many quarters. En particular the farmers say they much prefer the job to be done inside the Board of Trade. It is unusual to get these testimonies, but tariffs affect a great many people and it is clearly necessary that we in the Board of Trade should look carefully at the way in which we do this work in the future, in order that industry may have confidence in the Government Department's fact-finding as well as in the decisions which in any case would have to be reserved.

I apologise to the Committee for speaking for so long and for causing hon. Members trouble by making a major change in the Bill, but what are Committees for unless one listens to those on both sides whose views, this time I thought, showed a remarkable consensus.

Mr. Jay

We must certainly congratulate the President of the Board of Trade on accepting our main Amendment to the Bill, even though the abruptness of his volte face is rather surprising. Although I hoped that my remarks during the Second Reading debate were reasonably persuasive, I never thought they were so brilliantly eloquent that the Government would immediately reverse the main proposal in their Bill. It is gratifying to hit the middle stump with one's first ball as it were. How much better if on some other and more controversial Measures the Government had shown the same spirit and had accepted the main Amendments of the Opposition. However, it is certainly a refreshing surprise to find that sometimes Government representatives listen to speeches in the House of Commons and actually alter their legislative Measures as a result.

On the substance of this dilemma the difficulty is really that in changing these import duties the Board of Trade and the Treasury must finally take the decision. On the other hand, industry, very reasonably, feels that it wants opportunity for consultation and argument and, in a sense, an appeal against what may be proposed. What really decides me in favour of the alternative of putting the main responsibility on the Board of Trade is the following, and it is a similar argument to that of the right hon. Gentleman. We must either have something like the pre-war idea of the independent Import Duties Advisory Committee—which I gather even hon. Gentlemen opposite do not now advocate—or straight Ministerial responsibility. I have felt from the beginning that there is no case for a hybrid board which is neither genuinely independent on the one hand nor fully accountable to Parliament on the other. That is the worst of both worlds.

I also agree with the right hon. Gentleman, as I think does almost everybody else, that we cannot go back to the old position because now it is not a matter of a straight 10 per cent. tariff all round, and some variations made on the ground of an individual argument of fact, and so on. It is more complicated. The entire level in each case is a matter of Government policy and of international agreements. Therefore, I do not believe that we can have the alternative of the independent board, and if we must have one or the other, that inevitably brings one back to the other alternative of placing responsibility on the Board of Trade.

It seems to me that this has two other advantages. First, Ministerial responsibility is absolutely clear and it follows presumably that we can ask Questions in the House of the President about what is going on, what he is doing and what he is going to do. Secondly, I would have thought that it must mean an economy and greater efficiency, for reasons which the hon. Member for Cheadle (Mr. Shepherd) put forward during the Second Reading debate. If we are to have this outside body, whose precise volume of business cannot be predicted, we shall probably have more manpower than is necessary, and we cannot switch it on to other business when not wanted as could be done if it were ordinary personnel within the Board of Trade.

I think also that we shall greatly simplify this Measure. It is not good legislation to have a Bill which devotes an entire Clause and a complicated Schedule to laying down the exact procedure, including what the deputy-chairman is to do when the chairman is not there, and all the rest of it. That is better left to organisation and administration than to legislation by the House of Commons.

The President has given us some new assurances. First, he is willing to write and inform the applicants of the reasons for rejection of their applications. Secondly, the Board of Trade is to make an annual report giving a certain account of its actions in this respect during the year. I am not sure what is to be the scope of it and I do not think that this quite meets the case put forward by industry for consultation and for an opportunity to make its case. If we are to reject the Import Duties Board there really is on the face of it a case for writing something into the Bill giving a statutory right to consultation, and an opportunity not merely for the applicants, but also possible objectors to the applications, to put their case before the Government.

I have received representations since the Second Reading debate from various bodies, including the Food Importers Association, which I am sure will be known to the hon. and gallant Gentleman the Member for the Isle of Ely (Major Legge-Bourke), though he may not sympathise with their precise arguments. Quoting from their letter, they make the case in this way: We feel that the public ought to be given as a right the facts behind proposed tariff changes and a reasonable interval to discuss them, particularly when such changes have an immediate effect on the cost of foodstuffs. Also, the Federation of Construction Machinery Importers, leaving aside the particular grievance about the tariff on construction machinery, say in general that the Bill as it stands will allow the Board of Trade and the Treasury— …without consultation with industry, to charge any import duty on any imported goods without the importer or the user having any right of appeal. I ask the right hon. Gentleman, would it not be possible to make it clear in the Bill that, before decisions are taken, an opportunity will be given either to the applicant or to anybody who wishes to raise objections at least to make their case to the Board? At this moment I do not profess to know exactly how that can be translated into legislative form. For instance, would it be possible to state in one of the early Clauses that there should be some form of consultation?

The main difficulty I see is that those who wish to make representations against a change may not be aware that some other interest has made an application to the Board. The first they may know about it, if I understand the Bill aright, is when the President lays an Order before the House of Commons.

Sir D. Eccles indicated dissent.

Mr. Jay

If that is not so, no doubt the right hon. Gentleman will explain to us later. The substance of what I was suggesting is that it should somehow be made known to the public that an application has been made and is under consideration. I can well see the difficulty that it is not easy for a Government to say, "We are considering making a change in such and such a tax. Would anybody like to come and have an argument about it?" I am sure that the President of the Board of Trade would be the first to point out the difficulties of the Government saying, "We are thinking of changing the Entertainments Duty in two or three months' time. Would anybody like to put forward their views?"

I see that difficulty. I do not think that we could lay a statutory obligation on the Government to say that such and such a change was under consideration. Would it be possible to make an announcement publicly whenever an application has been received for a change? If that is included in the Bill, I should be glad to have that assurance. It seems to me that that would be reasonable. If it is not, perhaps we can put down an Amendment on Report. If the right hon. Gentleman cannot undertake to do that, no doubt we could have a hand in doing it from this side.

We have a considerable time before the Report stage of the Bill—I imagine that we shall not consider it until some time after Christmas—and we should like to be assured that if we are removing what industry might have taken to be a safeguard in the form of this quasi-Import Duties Board—because Ministers and Governments change as we all know—there will be some written guarantee in the Bill that there will be an opportunity for consultation and representation for and against these changes.

Major Legge-Bourke

I shall be very brief. All I wish to say is a word of congratulation to my right hon. Friend for having, as it were, vindicated the hack benchers by this decision. It is not very often, and perhaps all too seldom, that we on the back benches feel that great decisions are taken because of what we say. I think that this a great decision and I would most warmly congratulate my right hon. Friend on taking it.

On Second Reading I suggested various ways in which the Import Duties Board, as proposed, might have been composed. The further one went into those the more complicated the matter seemed to become. If the Board were too small there would be some people who would feel that they were not properly represented on it, and if it were too large it would be chaotic and unwieldy. The arguments being what they are for ruling out the possibility of restoring the original board, I fully appreciate and accept.

So far as I know, those most responsible for negotiating horticultural tariffs are absolutely satisfied with the machinery which the Board of Trade is providing by which they can put forward their applications. As I tried to indicate in an intervention which I made while my right hon. Friend was speaking, their complaint is about the delay that ensues after the Board of Trade has looked into the application and decided that it should be put to G.A.T.T. That is where delay affecting the horticultural industry sets in. I cannot say whether or how it arises in other industries. I want once again to congratulate most warmly my right hon. Friend and to thank him for what he has done.

Mr. E. Fletcher

I, like the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke), do not propose to be more than a moment. I, also like him. would applaud the decision of the President of the Board of Trade. Speaking as one who criticised the proposals in the Bill, I believe that the President has taken a wise and courageous decision after listening to the criticisms which have been made on both sides of the Committee. As the hon. and gallant Member said, this decision taken by the President has vindicated the value of Parliamentary debate; in this instance discussion of a matter of considerable general importance to the trading community, industry, and the general public. It takes a certain amount of courage for a Minister to change his mind on a matter of this importance and we all admire the right hon. Gentleman for having had the courage to do so.

We are all convinced that the decision is the right one. As he said a moment ago, there were two alternatives to his original proposal in the Bill. One was to scrap the Import Duties Board altogether and the other was to arm it with very much greater powers and give it almost the status of I.D.A.B. Speaking for myself, I think that either of those proposals would have been better than that originally contained in the Bill. Of the two alternatives, I infinitely prefer the one which the President has accepted of scrapping the Board altogether. That decision is in accordance with the best constitutional theory. It removes a body which would have had a very anomalous position. It enables the public and Parliament to know where responsibility rests, and it will make for better administration of the Bill. I join therefore in the chorus of thanks to the President of the Board of Trade on this occasion.

6.45 p.m.

Mr. Shepherd

I detain the Committee for only a moment to say that I appreciate very much the action which my right hon. Friend has taken. I told him in rather crude terms during the Second Reading debate to take away his child and cut its throat, and very obligingly he has done so. I was concerned lest we appointed an Import Duties Board which would not have attracted the kind of men who would have commanded the confidence of industry, and which would have had a somewhat questionable influence, obviously making no impact on the problem, the members of the Board being put in an embarrassing situation. In scrapping the Board my right hon. Friend has clearly taken the right course.

When I spoke on Second Reading on the desirability of abolishing the Board, I referred to the drawback and duty-free imports. I suggested that the Board should be constituted for the purpose of dealing with those applications. I am not quite sure from what my right hon. Friend said today whether it is his intention to do just that. I hope that it is. There is no doubt that industry is much concerned about what it considers to be the unfair judgments which are made on matters of drawback and duty-free licences. I realise very clearly that in many cases an industry takes a jaundiced view of the refusal of its own application or the granting of somebody else's application. There is considerable doubt and disquiet about many of the decisions.

If the Government will set up an advisory committee which will take from the Board of Trade the undesirable duty of vetting each one of these applications, an advisory committee representative of people in commerce and industry, I think that the Government will at once not only rid themselves of a somewhat undesirable load of work but instil a little more confidence in the decisions which are taken. I hope that my right hon. Friend will make it clear that he is intending to enlarge the scope of the present consultative committee and give it a larger part in reaching these decisions. If he does that, I think that he will be doing something of value to industry.

I conclude by thanking him for being magnanimous enough to recognise that the original proposal was not best suited to the conditions in which we find ourselves, and I hope that the Board of Trade will continue to enjoy the good will and esteem of industry in general.

Mr. Geoffrey Hirst (Shipley)

My right hon. Friend knows from my interjection that I fully support in every way the decision that he has taken not to set up the Import Duties Board. References have been made on both sides of the Committee to my remarks on Second Reading. I shall not weary the Committee with an explanation of what I meant if I was not clear. It is sufficient just to state once again that I wholeheartedly accept the decision taken, and that I know it will be well received in a number of commercial and industrial organisations with which I have contact in the ordinary way of things.

However, as my right hon. Friend says, the Board of Trade is not left any less powerful. In fact, my right hon. Friend is more powerful in other matters. That worries me, because that perpetuates the exceptional powers which were given to the Board of Trade and the Treasury in 1939. I do not expect to win my case tonight, but I must say that I loathe like the plague legislation by delegation. Also, I do not like Statutory Instruments, affirmative or negative. One cannot amend them; one can only make a fuss about them; and rarely do one's efforts succeed to any extent.

I join most strongly, as I did on Second Reading, with the right hon. Member for Battersea, North (Mr. Jay), who was absolutely right in expressing the view, which I expressed on Second Reading, that industry feels that it still lacks the degree of confidence that it ought to have that there will be proper consultations before decisions are taken. This may be a very difficult matter, but, none the less, it deserves very close study.

The inevitability of discussions relating to the European Free Trade Area and the Common Market makes people nervous even if they accept what is proposed as in general good for the country. In these circumstances, any amalgamation or changing of legislation, while it may not, in the President's words, materially alter the position, contributes, to the state of nervousness of those people. If my right hon. Friend can do anything, by speech, or, if possible, by means of the Bill, to reassure industry that there will be full consultation, he will be doing something which will be vastly appreciated, and that in itself will add enormously to the statisfactory running of the machinery which must inevitably result from this kind of legislation.

I join my hon. Friend the Member for Cheadle (Mr. Shepherd) on the subject of the drawback and duty-free imported machinery. I understood my right hon. Friend to say that no special body was intended for that purpose and that the matter would be referred to the Board of Trade as hitherto. As to drawback—my right hon. Friend did not mention the other aspect—I am not sure that that is sound, and I should be grateful if he would look at it again.

As to duty-free imported machinery, a matter of which I have more knowledge than I have about the other, there is a case for some assistance for the Minister of State, Board of Trade. There should be some machinery. I would not necessarily suggest a committee quite as formal as may have been intended before it was decided to withdraw this Clause, but there should at least be some panel of assessors or experts upon whom the Board of Trade could call to assist in making a decision. I do not think the arrangement at the moment, trying to gather information from firms which compete with the brand of machinery which a certain firm wants to import, is satisfactory. However straightforward those firms may be, that process cannot give quite the confidence industry has a right to expect in this very vital matter. Certainly it does not lead to speed of decision. I sincerely hope that something will be done in this respect. I support what has been said by my hon. Friend the Member for Cheadle, all the more so because I understood my right hon. Friend to say distinctly that no such thing was contemplated.

Sir D. Eccles

Perhaps I might reply briefly to the debate. The right hon. Member for Battersea, North (Mr. Jay) asked me what the procedure would be and whether industry would have a fair chance of knowing what was going on. I think the answer is "Yes". We receive a large number of inquiries for changes in tariffs. Some of them are so far from being a case which one could take seriously—I was on the point of saying that they were frivolous, that they are not worth investigating.

However, when we think there is a prima facie case the matter is advertised in the newspapers and in the Board of Trade Journal and all interests are invited to make submissions for or against the proposal. I will certainly inquire whether industry considers that our present advertising of the applications is sufficient. I am very ready to consider whether there is any way in which we can assure the parties concerned that they will have full rights of consultation. My preliminary investigation leads me to think that what worries them is that they have, perhaps, not always had the chance to argue the case themselves. I do not know whether that is generally correct, but I believe that one or two feel that way. I undertake to look into the matter. I am not clear how anything can be done, but if there is something that we can put into the Bill, we will do it. I cannot give an assurance because I do not know enough about the position.

Mr. Jay

Can the right hon. Gentleman say whether the present practice of advertising applications results from some statutory obligation on the Board of Trade, or whether it is, as I supposed, a matter of administrative practice? If it is the latter, might there not be a case for making it statutory in order to satisfy industry?

Sir D. Eccles

If we made the practice statutory, we should have to advertise all the frivolous applications as well as the ones in respect of which we can see there is a case for investigation. It is precisely for that reason that I do not see how a provision can be put in the Bill.

Mr. Shepherd

My right hon. Friend said that the Board of Trade Journal publishes the intention. Is it not the case that every relevant trade paper advertises the intention and many of them make observations, and that a large number of national newspapers repeat the annoucement?

Sir D. Eccles

I thank my hon. Friend. I was under the impression that the advertisements went fairly wide. I am anxious to look at the arrangement and see whether it is all that it should be.

I turn now to the subject of drawback and duty-free imports of machinery. No one hears about a great many of these cases because they are successfully settled, but we get cases where the professional advice is in conflict. One se; of engineers may say, "This machine p, unique and ought to be imported duty free." Another set of engineers may say. "Something just as good could be made in the United Kingdom." I agree that it is occasionally very difficult to avoid considerable disappointment to those which want relief from duty.

Parliament has laid down that then: should be a duty on certain types of machines. Thus, if a certain citizen is to have a waiver from that duty, it is a rather serious matter, because it means that he is being allowed to escape a general tax which has been imposed by Parliament. That is why I think that in the long run these very difficult cases have to be decided by Ministers, since it is a matter of the remission of taxation. I should like to build up the present consultative committee. I am looking into the matter. I think it is a good idea. I merely wish to assure my hon. Friends who have spoken about the matter that we do not need statutory powers.

7.0 p.m.

We have a consultative committee today, but the problem is whether it can take any of the burden from Ministers and whether it is possible to give industry a greater measure of confidence in the farness and justice with which these very difficult questions are considered. They entail a great deal of money for some people, and there are naturally great hopes and great disappointments.

My hon. Friend the Member for Shipley (Mr. Hirst) said that he would like to get rid of delegated legislation. In that case we would be able to alter duties only once a year, in the Finance Bill, and that might not be in the best interests. From time to time we want to be able to act more quickly than that.

Mr. Hirst

Normally it takes nearly two years to get a negotiated tariff, so there would not be a terrible delay if the matter were put before Parliament.

Sir D. Eccles

It could conceivably add another year to that. The House will have a chance to debate these Orders when they are made, so there is an adequate safeguard.

I repeat that I am grateful to the Committee for the way in which it has accepted the proposal to drop Clause 3.

Question put and negatived.