HC Deb 30 January 1957 vol 563 cc1066-75
Mr. Remnant

I beg to move, in page 3, line 9, after "charged", to insert: on all such goods from the date of complaint to or investigation by, the Board of Trade". Certain speeches on Clause 1 and on some of the Amendments to it appeared to be relevant to this Amendment, so perhaps I might be even briefer with this speech than I intended to be. The objects of the Amendment are twofold: exploratory as to the meaning of the paragraph (c) and to show the alarm felt by industries at what they at present understand to be its meaning.

The first part of paragraph (c) refers to provisions directing that duty be charged for any period or periods. What exactly does my right hon. Friend mean by "for any period"? It is obvious that an appreciable amount of time must elapse after the original objection or allegation of dumping for the Board of Trade to check figures, and that much may happen in that short time. If the Amendment is inserted, or if the words "for any period" enable my right hon. Friend to backdate the Order to achieve the object sought by the Amendment, I shall be very happy to have an answer to that effect.

Let me give the sort of difficulty and the reasons for delay that I foresee. Who is to lodge the objection? Suppose there are importers, perhaps in a small way, who are not members of their association. Are they to be allowed to lodge an objection or an allegation of dumping with my right hon. Friend, or can these representations come only, as in certain other cases, through an association.

Does my right hon. Friend intend to rely on the Customs? If that be the case the suggested provision that the document should include the average domestic price in the country of origin would at least make known what was happening, although, obviously, those figures would need checking by the Customs or by my right hon. Friend's Department. Nevertheless, if these duties are to have a deterrent effect—I am sure my right hon. Friend does not wish to use them unless they are necessary—the mere fact of his having power to backdate any duty decided upon would obviously make an intending importer of goods below the corresponding price in the country of origin think twice before he did so.

There are two types of dumping that I have particularly in mind. I will refer to them as rush dumping and intermittent dumping. There was a very good example of rush dumping last year over new potatoes from France, which, I believe, were referred to by my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke). When it was seen that there was a chance to dump goods in this country quick action was taken by the French Government to take advantage of the opportunity offered. The damage done by that kind of thing does not end when the actual dumping stops, but proceeds into the future planting and production of potatoes.

Intermittent dumping is where the exporter from the other country, certainly in collusion with the importer in this country, seeks to slip two or three shipments of varying sizes in before anyone has awakened to what is happening. Over a year that can have a most unsettling effect, but, if it is known that the Board of Trade is likely to make a retrospective duty on those goods, I suggest to my right hon. Friend that not only would the dumper hesitate but may think the game not worth the candle. In these few remarks, to which I add every emphasis at my command, I commend this Amendment to my right hon. Friend.

Mr. J. Grimston

I wish to support entirely what my hon. Friend the Member for Wokingham (Mr. Remnant) has said. There is a very widespread feeling in industry that the investigation of a complaint into dumping may be protracted not be cause the Board of Trade is not keen to get on with the investigation, but because the Board finds it extremely difficult to get information to arrive at a proper answer. The dismay which industry feels at the possibility of delay would be greatly alleviated if words of this kind were accepted and if it could be made quite clear that obstruction on the part of the dumper would not enable him to escape the duty he would otherwise have to pay.

7.15 p.m.

Captain Duncan

This is the moment to say what I want to say on this subject, although I could have delayed doing so until we come to the Question "That the Clause stand part of the Bill."

I wish to support my hon. Friend the Member for Wokingham (Mr. Remnant) in the contention that speed is essential in the apprehension and prevention of dumping. We are not completely satisfied about the apparent contradiction between the speech of the President of the Board of Trade on Second Reading and the speech of the Minister of State on that occasion. The President seemed to contemplate speedy action when it was necessary. In the Second Reading debate, the President said: This is what would happen. Someone would lodge a complaint with the Board of Trade that goods were being imported at unfair prices and were likely to injure one of our sources of supply. I should add that the Board could take the initiative itself under this Bill. I doubt if it would do it very often, but it could. However the process was started, the Board would urgently consider whether a prima facie case had been made out."—[OFFICIAL REPORT, 22nd January, 1957; Vol. 563, c. 61.] I do not want to speak for long, otherwise I would quote more of that speech. The Minister of State said: The procedure that one would contemplate under the Bill would be something like the following. First, the industry or company affected would make an application to the Board of Trade asking for an order in regard to a specific matter. The Board of Trade would then furnish it with a document showing the relevant data to be established by the industry according to the criteria specified in the Act. The complainant would then assemble his evidence and submit it to the Board of Trade. It would then be for the Board of Trade to decide, first, whether a prima facie case of dumping had been established, and, secondly, whether there was any evidence of material injury which, as I have explained. would, in the case of G.A.T.T. countries, still be relevant."—[OFFICIAL REPORT, 22nd January, 1957; Vol. 563, c. 120.] There seemed to be a possible divergence of opinion in the Board of Trade. I do not think that there is a divergence, but I want an assurance from my right hon. Friend that there is not and that it is clearly understood by the Board of Trade that there will be cases, particularly in the horticultural industry, in which speed will be of the essence.

I think it was I, not my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke), who quoted the case of the French new potatoes last year. The fact that they were imported at that time completely upset the new potato market for the home grower. There was also the case of imported tomatoes, a year or two ago. The Tomato and Cucumber Marketing Board made urgent representations to the Board of Trade and action was taken under the powers which then existed.

I am told that in Spain today there is a potential production of over 2 million tons of tomatoes. If the Spaniards saw a chance of exporting tomatoes to this country at 1s. a lb. below our own costs, which might well be below the market price of tomatoes sold in Spain, they would do so. If they did, even under the existing tariff rate, it would be quite impossible for our tomato growers to make a living in this country. There would be material injury to an industry.

I give those two examples to show what might happen in future if the Board of Trade did not act speedily. if it waited to run through the process described by the Minister of State, the industry would be ruined before action was taken. Therefore, I ask that speed should be regarded by the Board of Trade as important and that the Board itself, particularly in the case of the horticultural industry, will take action without waiting for a complaint to be made.

Mr. Walker-Smith

I assure my hon. and gallant Friend the Member for South Angus (Captain Duncan) straight away that there neither was on Second Reading nor has been at any time any inconsistency between the views put forward by my right hon. Friend the President of the Board of Trade and myself. I also assure him that in asking for speed he is knocking at an open door because, as both of us said on 22nd January, and have reiterated in the course of today's proceedings, we are fully conscious of the necessity for speed and efficacy in the procedures of the Bill. I will in a moment deal in a little more detail with the points which my hon. and gallant Friend made.

My hon. Friend the Member for Wokingham (Mr. Remnant) asked me two questions of interpretation which perhaps I should answer first. He asked whether, as a matter of interpretation, the words "for any period" in Clause 2 (3, c) permitted retrospection beyond the date of the Order. The answer to that as a matter of construction is no, it does not. He also asked me whether it was open to individual members or traders to make application for an Order, or whether such right was confined to trade associations. The answer to that is that individual members may make such application and that this right is in no sense restricted to trade associations.

My hon. Friend explained that his motive in moving the Amendment was partly exploratory and partly to voice certain apprehensions felt by industry about urgent cases. The remedy which his Amendment suggests is that of substituting the date of complaint or investigation for the date of the Order as the starting point for the operation of the duty. It would not necessarily be a precise or easily identifiable date which he has in mind, but it would certainly be a retrospective date.

There are two main objections to retrospection, one in principle and the other of a practical nature. I do not think that in this Committee I need elaborate on the objections in principle to retrospective taxation, for I am sure that my hon. Friends would be the first to accept that retrospection in taxation is a bad principle. The practical difficulties are these: first, the effect on general trade would be out of proportion. This is an important but, we hope, exceptional procedure. If the Committee were to adopt the Amendment and the principle of retrospection we should have this position: as soon as a complaint is made--and we have to bear in mind that these complaints may be frivolous in some cases—the importers of the whole of that range of goods are immediately put at risk of a retrospective duty undefined both in amount and time. That is a very grave objection as this might affect the whole of our general trade.

The second practical difficulty is that Customs cannot collect the duty retrospectively on consignments on which no additional payment has been made at the time of importation. In other words, the precise method contemplated by the Amendment is not capable of practical operation. The Board, to give effect to this Amendment, would have to make a provisional Order specifying a provisional rate of duty which would have to be collected at the time of importation and which would be subject to later adjustment under Clause 3 on the conclusion of the investigation.

Mr. Remnant

Would not an alternative method be the employment of the surety bond covered by insurance?

Mr. Walker-Smith

I will certainly consider whether it would be a possible alternative to the provisional rate of duty which, I understand from that further suggestion, my hon. Friend thinks would not be a convenient method. My information is that from the Customs' point of view they would not find it easy and probably not find it practicable to operate a retrospective scheme of this sort; that is, of course, apart from the general objection to the principle of retrospection.

I ask my hon. Friend to have in mind that the recognition of the need for speed, especially in certain cases, does away with the necessity for a complicated retrospective provision of this sort. We fully accept the need for speed and the need for a proper defence against forestalling in appropriate cases. My hon. and gallant Friend the Member for South Angus quoted a part of what I said in this context on Second Reading on 22nd January. I was then indicating what would be the normal procedure where we had an application for a duty in what might be called a new matter, in which the Board had to make its decision on questions about which it has to be satisfied under Clause 1.

I then said this, as reported in column 122 of the OFFICIAL REPORT: In that context, and many other contexts, speed is of the essence. I used the same words then as my hon. and gallant Friend has used today. One has to bear in mind that if one has an elaborate procedure to assist the Board of Trade the procedure is slower, and the slower the procedure, the greater the risk of forestalling. What we have really tried to do here is to seek the highest common factor of a reasonable maximum speed to prevent forestalling with a fair and thorough examination of the issues."—[OFFICIAL. REPORT, 22nd January, 1957; Vol. 563, c. 122.]

Captain Duncan

That is the bit I do not like.

Mr. Walker-Smith

My hon. and gallant Friend is frank enough to say that it is that bit which he does not like. It is not an uncommon experience that litigants feel that the part of the case which is devoted to the evidence of the other side is in the nature of a waste of the time of the court. I was dealing with this procedure and with the general case, but the principle which I there enunciated is in no way incompatible with the power of the Board of Trade to make an Order at once if a strong prima facie case is made out sufficient to satisfy the Board under Clause 1; and in those cases the detailed investigation can be completed after the making of the Order.

Where the type of dumping is new, I think that the Committee will agree that the time factor must obviously take account of the necessity for a thorough examination; but, of course, some of the cases which have been referred to are not new cases in any real sense of the word. A good many types of dumping are recognisable as old acquaintances, although perhaps it would be an abuse of language in this context to call them old friends; they are recognisable as methods which we have met before.

My hon. and gallant Friend made special reference to the horticultural industry, to which I also referred on Second Reading. It was very appropriate that I should, as part of the horticultural industry is in my constituency. Where dumping is regular and seasonal, as it may be in the horticultural industry, then the Board of Trade could, for example, make an Order coming into force automatically every year at the relevant time if it appeared that dumping had been occurring at those times in those industries in previous years. In effect, therefore, the evidence of past practice would to some extent shift the onus on to the importers. The importers would not, I think, be prejudiced, because in a proper case they would then be able to go for relief under Clause 3 if they could establish that they were entitled to it.

I hope that my hon. Friends will appreciate that we are fully seized of the necessity for speed and effective action; and that in the methods that I have sought to spell out we could attain that in a way which is more compatible with our normal taxation principles than by introducing the principle of retrospection.

Mr. Remnant

May I thank my right hon. and [earned Friend for the assurance he as given, which, I am sure, will do much to dispel the apprehensions of traders? I know that we can rely on him to keep his eye on the problem so long as he is at the Board of Trade. We are content to leave the future in his hands. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.30 p.m.

Mr. Sydney Irving (Dartford)

I beg to move, in page 3, line 30. at the end to add: (6) The Board shall on the thirty-first day of December in each year make to the President of the Board a report on the effect of every order made under this section which has been in force during the year to which the report relates and the President shall lay a copy of every such report before each House of Parliament. From this side of the Committee we have given general support to the Bill because we believe that the President should have the powers to deal with unfair trading arising from dumping and subsidies. We also believe that he ought to use those powers speedily and effectively where required, but what we do not wish to see is this Measure becoming one of general protection.

The Amendment arises out of the fear that once a duty has been imposed it will stay long after the circumstances which justified it have changed. I am aware that Clause 3 allows an importer to claim relief, but he must do that within three months, and he is also under a penalty under a subsequent subsection. We believe that there should be some further obligation on the Board to keep under continuous review all the Orders that have been made.

The Bill makes no provision for regular review and makes only an indirect reference to cancellations and revocations. I think it was the hon. Member for Middleton and Prestwich (Sir J. Barlow) who explained how difficult it might be for the Board of Trade to make the necessary examinations in the first place, and we believe that it is quite obvious that industries themselves who are enjoying protection will not rush forward as soon as the circumstances have changed to ask for that protection to be taken off.

Therefore, we are asking that each year, as with effect from 31st December, a report shall be laid before Parliament giving the effect of every Order that has been outstanding in that year. In that way, the Board would be required to keep under continuous review all the Orders to see whether any of them could still be justified, and it would allow hon. Members an opportunity of debating those Orders and seeking perhaps to annul them if they felt that that was necessary.

Mr. Walker-Smith

I have much sympathy with the point of view put forward by the hon. Member for Dartford (Mr. Sydney Irving), who moved the Amendment. We have in this Bill tried always to make the operations of the Board of Trade subject to the control of Parliament, and I certainly do not dissent from his desire that Parliament should have an appropriate report presented to it. Therefore, in principle, we are certainly willing to accept the Amendment.

I should, however, explain that it would not be possible, with the best will in the world, to accept the form of words contained in the Amendment. They would require the Board to make a report to the President of the Board who, in turn, would lay it before Parliament. If the hon. Gentleman looks at Clause 10 of the Bill, he will see that Anything required or authorised by or under this Act to be done by…the Board of Trade, may he done by…the President of the Board,… and certain other named functionaries.

That being so, the effect of this Amendment would be to make the President report to himself, which clearly is not quite an appropriate proceeding. If the hon. Gentleman would be good enough to withdraw his Amendment—and, as I say, we accept the principle of an annual report—we will put down an appropriate Amendment on Report stage, embodying in appropriate language the principle which he wishes to achieve.

Mr. Irving

I am much obliged to the right hon. and learned Gentleman for accepting the substance of my Amendment, and I shall be happy to withdraw it on those terms. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.