HC Deb 05 February 1958 vol 581 cc1299-309

Order for Third Reading read.

9.0 p.m.

The President of the Board of Trade (Sir David Eccles)

I beg to move, That the Bill be now read the Third time.

As I explained during the Second Reading debate, the chief purpose of the Bill is to clear away the great jungle of legislation relating to our protective tariff, and to replace it by a single comprehensive Measure. We were glad to find the House agreed that this is a job which badly needed doing: a new and common statutory foundation for our tariff will remove much of the present uncertainty and provide a stable legal background to tariff policy.

The Bill has two other important purposes. The first is to give authority to re-cast the present tariff in the Brussels Nomenclature form. The right hon. Gentleman the Member for Battersea, North (Mr. Jay) and I pronounce the ugly word "nomenclature" in different ways. To please him, I have now adopted his pronunciation. I consulted the Oxford Dictionary in the Library and found that my pronunciation was given first, but, believing that "manners" are something which he and I share from our school days, I have adopted his pronunciation.

The second purpose is to lay down permanent arrangements for dealing with tariff applications. The House has clearly shown that it agrees with our objectives and that the Bill, as amended, has been broadly acceptable.

On a matter of such importance to British industry, hon. Members have asked many questions, and the Minister of State and I have done our best to answer them, and we shall do our best to answer any more questions which are put to us today.

The only sensation that we had during our debates was a demand from the Liberal Party that we should reduce by half all our import duties, which would have injured a wide range of our industry and agriculture, now protected, for purely doctrinaire reasons. But this is a machinery Bill. It has nothing to do with changing rates of duty. Therefore, I suppose a subject of that kind is out of order on Third Reading.

When we brought the Bill before the House, we proposed an Import Duties Board for dealing with tariff applications. Such a Board carried out our old understanding with industry. However, after hearing the constructive views expressed on both sides of the House, we thought again.

The Bill as it now stands requires the Board of Trade itself to deal with applications for changes in the tariff and for relief from duty; functions which the Board have exercised since 1939. It is reassuring to us that so many hon. Members on both sides of the House have expressed their confidence in the way in which Government Departments—the Board of Trade and the Customs in particular—have carried out those responsibilities over the last nineteen years.

Broadly speaking, we intend, if the House gives us the Bill, to follow and improve our existing procedure. Perhaps I might rehearse briefly how that works. The Board of Trade receives an application for a change in duty, it may be for an increase or a reduction. After a preliminary sifting, we decide whether a detailed investigation should take place. In this process we weed out the "non-starters." Many tentative inquiries are dropped by the applicants themselves when we explain all the implications of a change in duty.

Every application for which there appears to be a case for examination is then advertised in the Board of Trade Journal which has a very wide circulation. A notice for publication is also sent to the trade papers concerned and to the national Press. Also we inform the trade associations who are interested. There never has been any suggestion that this publicity is not adequate to inform all those directly concerned that a case for a change is about to be prepared.

The Board of Trade proceeds to gather evidence for and against the proposed change. We study all the submissions made to us and, in turn, make a great many inquiries ourselves. The usual complaint about this procedure has been that because it was so thorough it took too long. When all the evidence has been sifted and the national and international implications of a change in duty have been considered, the Board of Trade either turns down the application or makes a positive recommendation to the Treasury. The Treasury will be aware that a recommendation is coming before it is made, and will make an order giving effect to the recommendation which is then laid before this House.

If in future the Board decides not to make a recommendation, we shall improve our present procedure. We shall, wherever possible, give the applicant the reasons in writing for the refusal, leaving it to him to publish them if he so desires. As I said on earlier occasions, we shall be constantly on the watch to make such improvements in this procedure as are practicable. I am determined to avoid delays while continuing to do the thorough job which is necessary. It is essential that this country, which has such a large interest in international trade, should set a good example in making changes in tariffs only after a really thorough examination. In the course of that examination, the Board of Trade is always ready to see applicants and others concerned, and we shall encourage them to give their evidence orally if they so desire.

I can give the House a little more information about the way the Departments would carry out responsibilities placed upon them by the Bill. Clause 4 requires the Board of Trade to report annually to the House on the exercise of the powers relating to import duties. These reports would describe the action the Government have or have not taken on tariff or drawback applications, and how powers to issue duty-free directions have been used. The first report would cover the financial year 1959–60, because that is the first full year of experience of the new tariff. The House will know that it cannot come into force until 1st January next year.

I cannot predict what volume of tariff applications we are likely to receive in the years to come. We publicly advertised 15 such applications in 1957. The corresponding figure in previous years was rather less, and I have no reason to expect any marked increase in that number in the future. On the other hand, the Board of Trade receive about 17,000 applications a year for duty-free licences under the various provisions which are reproduced in the Fourth Schedule. That is an administrative job of considerable extent.

In our debates, interest was shown in the Consultative Committee on the Duty-Free Entry of Machinery. The function of that Committee is to keep under review the broad policy and general rules of procedure followed by the Board of Trade in administering these provisions. The Committee also considers problems that arise from time to time and represents to us the views of industry. I am grateful to the Committee for the help it provides. The House may be interested to know that, on a rough computation, about two-thirds of the applications received are licensed.

The Board of Trade deals with drawback applications in much the same way as with tariff applications. Those which deserve serious consideration are advertised and the Board invites representations from all interested parties. There is, again, every facility for consultation and discussion, and I am always open to representations from industry if it is not satisfied with the opportunities that are given. We examine these drawback applications against the criteria which are now embodied in Clause 9, that is, mainly, whether the drawback will promote exports and is in the national interest.

The smooth and rapid progress which the Bill has had through the House is an indication that the preparatory work has been well done. This work has been going on for several years and it is remarkable that we should have been able to get, by consultation with hundreds of trade associations, such a consensus of agreement to what is a very substantial piece of tidying up. The Bill will also give us a modern and single tariff structure which will be of great value to traders and to my Department in its work in the field of commercial policy. Therefore I commend the Measure to the House with the confidence that, though modest, it will be of benefit to our industry and to our commerce.

9.12 p.m.

Mr. Douglas Jay (Battersea, North)

We can all wish well to this not very controversial Bill. We all agree that it will greatly lighten the labours of traders and administrators dealing with import duties. We have had only one serious disagreement in the discussion, and that was over the manner in which applications should be handled and the obligation that there should be on the Board of Trade to consult those affected.

Most of us know that the best way of doing the job of examining these applications in modern conditions is that the Board of Trade should do it itself. The President of the Board of Trade handsomely accepted, not merely my pronunciation of the word "nomenclature," but also the view of the House in totally abandoning his original idea of an outside Import Duties Board. That certainly shortened our discussion, and I believe it will also shorten the time taken to handle these applications.

The right hon. Gentleman was rather less reasonable in refusing to accept our suggestion that there should be a statutory obligation in the Bill that the President of the Board of Trade should advertise his intentions of making the Order beforehand, so as to give people a chance to put their case. I do not know why he was so unwilling to do that because both on Report and today he has given a pretty thorough undertaking. On Report, he gave the assurance: We shall not make a change of duty without having gone through the processes of advertisement and of collecting the views for and against."—[OFFICIAL REPORT, 29th January, 1958; Vol. 581, c. 436.] From what he said amplifying that today, I gather that what the right hon. Gentleman proposes to advertise in these circumstances is that there has been an application to the Board of Trade. Presumably, if there had been no application there would not be any advertisement. I think that the right hon. Gentleman went a good long way to meet our point of view. At any rate, he has given us a much more firm assurance on the record than anything we had on Second Reading or in Committee.

The Bill which provides both for raising and lowering tariffs. Therefore, I presume, it will no more satisfy the hon. Member for Bolton, West (Mr. Holt) at this stage than it did earlier. He pledged the Liberal Party, in a most notable speech, to the unilateral reduction, if not indeed abolition, of all import duties. I suggested that, owing to the violent disagreement he has with the benches opposite, perhaps a Conservative candidate might appear in Bolton, West at the next General Election. I do not know if there was any connection between that discussion and the subsequent appearance of a Liberal candidate at Rochdale. Perhaps there might be a connection between the two. I understand that the hon. Member for Bolton, West has already been to Rochdale, no doubt explaining his objections to the Bill and urging the people there of the benefits of having duty-free cotton imports, not merely from the Commonwealth, but from foreign countries also.

That might explain the remarkable fact that the Liberal candidate is not even a member of the Liberal Party. I can well believe that he would not wish to be wholly associated with the views of the hon. Member for Bolton, West if they remain today what they were in the early stages of the Bill. We on this side of the House do not share those extreme views, whether or not they are shared by the Liberal candidate at Rochdale, or, indeed, by the hon. Member for Huddersfield, West (Mr. Wade).

We think that the Bill as it stands offers, on the whole, a reasonable procedure for deciding import duty rates on the imports of each case as it comes up. Nevertheless, we shall look forward with interest to seeing the controversy between the hon. Member for Bolton. West and hon. Members opposite fought out, no doubt at the next General Election, in Bolton, in Rochdale and, perhaps, in Huddersfield also.

9.17 p.m.

Mr. Geoffrey Hirst (Shipley)

At least I have in common with the right hon. Member for Battersea, North (Mr. Jay) the fact that I do not share the views of the Liberal Party and its rather sweeping ideas which would not be very popular in my constituency and would leave plenty of room for under-employment if carried into practice.

I want to thank my right hon. Friend the President of the Board of Trade for introducing the Bill and for the magnanimous way in which he has treated the House to his views held on abolishing the Import Duties Board. I want to mention two items. One is in regard to import-duty-free machinery which I think is working better. I think there is a realisation in the Board of Trade, which I did not always find, of the importance of urging a decision as quickly as possible, but I think I shall not be alone in feeling that the machinery existing at the moment is not properly giving the full confidence to industry which might be given, and I think could be given, if something were added to the Consultative Committee in the form of assessors to cover the technical aspects of the problem.

The fact is that whatever consultative machinery my right hon. Friend has, it can, as he said, only be on general policy. When it comes to technicalities, applicants are to a very great extent in the hands of the firms which at present are protected and, therefore, inevitably have a special interest in advancing their claims that certain machines will not do a particular job. I do not find their arguments always necessarily as solid as they themselves think.

The only other question I want to ask is a much easier one, and I hope that when this debate is wound up I may at last have the answer. I asked on Second Reading that there shall be confirmation—which industry will be interested to have—that there will be adequate consultation before changes are made in the import duties system.

This is particularly important, because nobody should fool himself by denying that the Bill is being introduced in a period in which there are possibilities of vast changes in tariff policies throughout a great part of Europe. That must be in people's minds. Indeed, the Bill is introduced to clear the deck of some of the technicalities, and I applaud it on those grounds.

It was helpful to have the new Clause which my right hon. Friend tabled in Committee, which gives industry the impression that it will be given better information in the future than in the past. Industry is very grateful for that. It is to be told why a certain thing has not been done or why a certain course of action for which it hoped has not been followed. That is all very useful, but inevitably it is a form of post mortem. I do not decry it, but I again ask the question which I asked on Second Reading and which was not then answered. I ask that we should at least have the type of assurance, which I would accept and respect from the Treasury Bench, that there will be adequate consultation with industry before, and not only report after, a substantial change in policy.

I shall support the Measure in any event, but I should support it more happily if I could have that assurance.

9.22 p.m.

Mr. H. Rhodes (Ashton-under-Lyne)

We cannot let the Bill go without congratulating the President of the Board of Trade and his hon. Friends in the Department on this tidying-up Measure. It has done the job which was required of it. The more we examine it the more certain it is that it has been done.

The Import Duties Act, 1932, leaving, as it did, a morass of untidy bits and pieces after a swingeing 10 per cent. increase in the overall tariff aimed at countries with manufacturing industries who had been dumping here, was overdue. It took us a long time to make up our minds that it was necessary. In 1950 the Brussels Agreement was reached, and it has taken eight years to bring forward this legislation. It may be that in fact it has been brought forward in good time, because it requires time to do these things; there is a lot of work to be done.

I should like to put a point to the Minister about Clause 4. He said that under Clause 4 hon. Members will have an opportunity of listening to the case of the Government of the day and to what has been done during the past twelve months. I understand that Orders will be laid to enable this Measure to be brought into effect on 1st January, 1959. I took it from what the Minister said that a review will be made some time during 1960. Will he tell us what opportunity we shall have in the House to discuss it? If he would do so, I should be very pleased.

It seems to me that although vast changes have taken place during the last few years in the pattern in which commodities from all over the world are being used and worked by other nations who perhaps are advancing more rapidly than we are in certain of our older industries, the relationship between us and the Commonwealth can alter even more quickly than it has altered in the last year or two.

It was probably easy in 1931–32 to reach tariff agreements with the Commonwealth because they were having a very difficult time, too. Those were the days when the Commonwealth countries were mainly producers of agriculture products. Many of them now have their own manufacturers. A lot of them are now seeking a pattern of trade different from that which the had when the agreements were made in 1932.

It would be of assistance, therefore, to have an assurance from the President that he will study the pattern of consultation, not only with industry but with the House, and so give us an idea how the Government of the day are viewing the changes taking place in the Commonwealth, and in the industrial pattern generally in other countries. It would be of assistance, even if it meant that he had to have someone specially on the job at the Board of Trade doing nothing else but following up that line of thought.

I wish the Measure every success. I am sure that industrialists generally will find that it makes easier and tidier the job of seeking what they want, either in the reduction or the increase of tariffs.

9.26 p.m.

Mr. John Arbuthnot (Dover)

My right hon. Friend and his Department are rightly receiving congratulations from both sides of the House on this excellent little Bill. It will undoubtedly improve the general conditions that manufacturers find when they go to the Board of Trade to seek alterations in tariffs on machinery. I particularly welcome Clause 4, which provides for an annual report. We will now know each year the reasons for some of the decisions that have been taken; reasons which, to some of us, have sometimes seemed to be wrapped in a certain obscurity. There is no doubt that industry has felt a certain disquiet in the past because of a certain lack of knowledge as to how some of the decisions have been arrived at. I particularly welcome my right hon. Friend's assurance that if it is found necessary to turn down an application, each applicant will be given the reasons in writing.

My right hon. Friend referred to the Consultative Committee on the import of machinery. I am not in any way decrying the quality of the people serving on that committee, but many of the problems that will have to be dealt with will be problems of a particularly technical nature. I think that it would be a help, therefore, if the Consultative Committee could have powers of co-option for individual cases. Then, when particularly intricate problems arise, the committee could have, on that type of problem the experts who, because of its limited numbers, it could not otherwise expect to have.

This Bill is a step forward. We welcome my right hon. Friend's assurance that he proposes to follow, and improve—and I would accent the word "improve"—the existing procedure. I am sure that industry will look forward to that.

9.29 p.m.

The Minister of State, Board of Trade (Mr. J. K. Vaughan-Morgan)

I think that it is only right that I should reply to one or two of the comments that have been made. I must say that it cut me to the quick when my hon. Friend the Member for Dover (Mr. Arbuthnot) referred to this Measure as "this little Bill." To my right hon. Friend and me, who have been working on it for three months, it seems an absolute mammoth. I am also very grateful for the very kind remarks that have been made about the Bill, and I agree with what my right hon. Friend said earlier about the tributes paid to the work done by the Board of Trade.

I will deal in a moment with the point about the Consultative Committee raised by my hon. Friend the Member for Dover, but, first, I should like to refer to what was said by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). Perhaps I can explain matters best by saying that Clause 4 introduces a new report, which will be a review of this section of the Board of Trade's work throughout the year. That can be debated in the ordinary way in this House, and there would not normally be any special occasion for having a debate upon it. I would, however, remind the House that each of the changes will have to be implemented through the ordinary Parliamentary procedure, and each of them will be subject to debate in the House in the ordinary way. Some of the broader issues which the hon. Gentleman mentioned will arise in the course of an ordinary economic debate.

My hon. Friend the Member for Shipley (Mr. Hirst) again raised the question of adequate consultation before a change takes place. I can only repeat the words which my right hon. Friend has uttered, and give our assurance yet again that to the best of our ability we shall always see that that is done.

On the point raised by my hon. Friend the Member for Dover about the Committee which considers duty-free licensing, this deals only with policy and procedure. Although it is possible to do so, it is not in fact used to consider particular cases where an application for duty-free licensing is made. The co-option of experts, as he suggested, does not apply at all. When an application goes to the Board of Trade, it is for the Board of Trade—the Ministers—to seek out experts, as they do in practice. Some of his ideas seem to me to be perilously like the revival of the Imports Duties Board which was removed from the Bill at an earlier stage. I hope my hon. Friend will accept my assurance that we do seek out the experts in the manner that I have mentioned.

I want to say a brief word or two about the timing of this Measure. The Board of Trade and Customs have nearly completed the preparation of the new tariff, and, with a very few exceptions which are still under discussion, the tariff has been agreed in principle with industry. The House might like to know our plans for the introduction of the new tariff. The Bill provides for it to come into operation on 1st January, 1959, but if the Bill is approved we hope to be ready to lay before the House in June of this year the Order introducing the new tariff and to publish an advance print of the new tariff in July. Our aim will be to give traders and everyone else concerned as much opportunity as possible to become familiar with the new classification before it comes into operation and avoid danger of any delay at the ports next year.

Finally, I should like to say how grateful we are to hon. Members for the careful attention they have paid to this rather involved and large Bill.

Question put and agreed to.

Bill read the Third time and passed.