Clause 8.—(CONSTRUCTION OF REFERENCES TO COUNTRY OF ORIGIN, ETC.) (Hansard, 30 January 1957)

§ Sir Ian Horobin (Oldham, East)
The Clause relates to an important matter. On a previous Clause we dealt, in effect, with certificates of origin where, in a general sense, there is some suggestion of fraud or incorrectness. Here we are dealing with problems arising from certificates of origin where there is no question of their concealment or anything of that sort, but where, in some cases, very great damage is done to the home trade by what is, in effect, a legal evasion. I have not tabled an Amendment, because this is a highly difficult subject. It would be almost impossible for anyone but the Department to draft an Amendment if one were required. If one were needed, it would have to be brought forward by the Government on Report, or in another place.
There are a number of places, in particular Japan, from where, for reasons which we need not go into, it is illegal under other provisions to import certain articles, including light engineering articles, some of which are represented in my constituency, such as sewing machines. We need not argue whether those provisions are right or wrong—personally, I am an unrepentant believer in keeping trade as free as possible—but I believe that everybody will agree that if, for reasons good or bad, the importation of certain articles into this country from another specified country has been declared to be illegal and stopped, people should not be allowed to import them by a mere evasion, legal though it may be, of the certificate of origin provision.
The hon. Member for Ashton-under-Lyne (Mr. Rhodes) and I both have knowledge of the sort of thing that happens. We find advertisements appearing, quite openly, in the Press—I have submitted certain of them to the Department —saying, for instance, that Japanese sewing machines are being imported provided with a certificate of origin in, for instance, Holland. That sounds almost incredible, but it happens. This sort of thing is being done on a large scale from Northern Ireland. The persons concerned are perfectly open about it. There is no 1085 question of concealment, and Clause 5 would not come into it.
These people are able to take advantage of the 25 per cent. provision. It is normally done by simply putting an attachment on the article. These people obtain, for instance, a sewing machine, which—I will not go into the reasons—it is forbidden to import into this country from Japan, and they attach to it a small motor. This motor can be detached quite easily if one does not want it, or if one prefers to replace it by a British motor. However, it enables advantage to be taken of the 25 per cent. provision. The article is then stated to have a certificate of origin from Holland or Northern Ireland. If we are to get into a free European market, as I hope we shall, the possibilities become obvious to every hon. Member.
I ask the President of the Board of Trade to look very seriously into this matter. It is comparable to some of those legal evasions of taxation of which we all know. It will become known on a large scale, because it is money for jam, but it puts the merchant and the producer who are playing the game at an impossible disadvantage in competition which Parliament, for one reason or another, has decided should not be tolerated. I do not need to occupy the time of the Committee with giving many examples of this, as I could, but it is a very serious problem which the Board of Trade should consider before the Bill is passed, to make sure that a certificate of origin is a certificate of origin and not a certificate of non-origin.

§ Mr. Rhodes
I should like to support what the hon. Member for Oldham, East (Sir I. Horobin) has said. This is an important matter, but I will content myself with asking one or two questions. If the Bill cannot be amended at a subsequent stage to give us what we want, could the result be achieved by an Order in Council on the separate occasions when it is needed? Trouble will arise on this issue if we neglect to do something about it during the passage of the Bill.
The hon. Member for Oldham, East mentioned some of the things that could happen. There could be confusion with Hong Kong prints processed in this country and then exported into the European free trade area, thus sabotaging 1086 everything we want to see in this new movement towards a common market. I ask the President of the Board of Trade to see what can be done about this before the Bill is passed. If it cannot be done by an Amendment, will he consider whether it cannot be done separately, as occasion demands, by an Order in Council?

§ Mr. Walker-Smith
As my hon. Friend the Member for Oldham, East (Sir I. Horobin) observed, this is a complicated matter. He has been good enough to send us details about the sewing machines question which we are now studying. He has raised the problem mainly in the context of Imperial Preference, which is also concerned with the certificate of origin and this 25 per cent. rule. It is an intricate point and does not really fall within the ambit of the Bill; but I will certainly be happy to discuss it with him in more detail in the context in which he has raised it and in general.
8.15 p.m.
What will emerge in the context of the European free trade area is still a matter of speculation, but it is right that we should have in mind all the considerations of our own national and industrial interests in any negotiations into which we enter. In this Bill we are concerned with the somewhat narrower context of anti-dumping and anti-subsidy. The definition of origin in Clause 8, with which the Committee is now concerned, is required for the specific purposes of enabling both the Board of Trade and the Customs and Excise appropriately to carry out the statutory duties laid upon them in ascertaining the country of origin for the purposes of making and operating the Orders to which the Bill refers.

§ Mr. Rhodes
That will not do. We are defining what we want by inserting the 25 per cent. rule. We now have some choice in the matter, whereas if we leave it we will not be able to please ourselves. I should like more flexibility and responsibility given to the Board of Trade to decide appropriate percentages to apply to different commodities coming from different parts of the world. If we do not do this now, we will find the mistake later. We will freely agree to a certain amount of flexibility if the President of 1087 the Board of Trade will promise that the percentage will be assessed in each case on the merits of the case.

§ Mr. Walker-Smith
I appreciate what the hon. Member had to say on this subject in the Second Reading debate. As far as we can see, it is most appropriate to take a percentage basis. For that we have a twofold precedent, as the hon. Member will appreciate, both in the Safeguarding of Industries Act, 1921, and in the Imperial Preference formula which we have been discussing in relation to what my hon. Friend the Member for Oldham, East had to say.
It is necessary to find a method which will enable us to catch goods which are dumped substantially in the state in which they originated, in spite of certain processes, but not to make the percentage such as to invite retaliation by other countries and injure our exports. What we do now may have some influence on other international arrangements in both the European free trade area and elsewhere. The hon. Member must have in mind in this, as in all other contexts, that we are a great exporting nation and we do not want to take action which will prejudice our legitimate export interests. Of course, we can return to this subject on Report.

§ Mr. Rhodes
We have had the percentage basis before in precisely the form mentioned by the Minister, in the Safeguarding of Industries Act, 1921. It never worked, was absolutely valueless and was later abolished. We should not rely on a precedent which was so valueless.