§ 6.7 p.m.
§ Mr. Douglas Jay (Battersea, North)
I beg to move, in page 2, line 31, at the end to insert:(5) The Treasury shall not make any order under this section until the expiration of two months after notification in the Board of Trade Journal that a recommendation has been made by the Board of Trade for the making of such order, and it shall be the duty of the Treasury and the Board of Trade during such period of two months to consider any representations made by any interested party with regard to the making of the proposed order.
§ Mr. Deputy-Speaker (Sir Charles MacAndrew)
I think it would be convenient if we discussed this Amendment together with the following Amendment in the name of the right hon. Gentleman to Clause 5, namely, in page 6, line 44, at the end to insert:(8) The Treasury shall not make any order under this section until the expiration of two months after notification in the Board of Trade Journal that a recommendation has 426 been made by the Board of Trade for the making of such order, and it shall be the duty of the Treasury and the Board of Trade during such period of two months to consider any representations made by any interested party with regard to the making of the proposed order.
§ Mr. Jay
If it is convenient, perhaps we might discuss those two Amendments with the Amendment to Clause 6, namely, in page 7, line 18, at the end to insert:(3) The Treasury shall not make any order under this section until the expiration of two months after notification in the Board of Trade Journal that a recommendation has been made by the Board of Trade for the making of such order, and it shall be the duty of the Treasury and the Board of Trade during such period of two months to consider any representations made by any interested party with regard to the making of the proposed order.The purpose of these three Amendments, of which the first two are the principal ones, is to give to industry, or to anybody else affected when an import duty is changed under the terms of the Bill, a clear chance to put forward their case, whether for or against the proposal the Government have in mind. We feel that they should have a chance to do that before a change in a duty becomes a fait accompli.
This need applies to Clause 1 and also to Clauses 5 and 6. Surely it is a reasonable request from those affected, whether they be importers, manufacturers or consumers, should at least have a reasonable period to put their case in these circumstances, and not have to wake up one day and read in the Press that an Order has already been laid by the Treasury before the House. As one of my correspondents from industry put it, all demands for changes in duties come from interested parties. That is quite natural and proper, and, broadly speaking, it is the truth. There is either a demand for more protection from a home producer or manufacturer, or a demand for relief from an importer or consumer.
I should have thought that in either case no one would dispute that it was reasonable to allow the other side to put its case before the Government. Indeed, as the President of the Board of Trade will agree, in the case of the Wilson Smith Report, which admittedly related only to the case of duty-free imports, although the argument is the same, there was a clear judgment in favour of allowing consultation.
427 In Committee, the President of the Board of Trade did not quarrel with our object. He said that there ought to be public notification that applications had been received for changes in duty. He said that that almost invariably occurred by way of notification in the Board of Trade Journal, but I am bound to tell him that representatives of industry who have written to us suggest that firms and trades want more definite assurance than they would get from merely one assurance, however sincerely meant, from one Minister.
As one of the correspondents said to me, Ministers can give assurances, but Ministers also change. Indeed, the last Minister who spoke on the Bill was the hon. Member for Wolverhampton, South-West (Mr. Powell) and he is no longer a member of the Government. We have now got to the Report stage of the Bill and, for all I know, before we reach Third Reading there may be three new Ministers at the Board of Trade. I mention that only to mark the moral that a mere assurance from a Minister is not as definite or as lasting as a provision written into the Bill.
We are asking only that the President of the Board of Trade should give a clear statutory undertaking that the Government will do what, in fact, he says they do already and intend to do in the future. We suggested in Committee that the solution might be that the Government should have to notify publicly, for some time before an Order was made to change the duty, that there had been an application.
The President then said that he did not want to have to notify applications, because some must be frivolous. The trouble is that if one is to have public notification, one must notify something, and if one does not notify an application because it might be frivolous, one has to find something else which the Government are obliged to notify. However, in view of that, we have suggested in the Amendment—and we do not maintain that it is the only full or perfect solution—that the obligation might be to notify not an application, but the recommendation made by the Board of Trade to the Treasury.
The Bill says that there has to be such a recommendation in all these cases 428 before an Order can be changed. We may fairly assume that there would be no such recommendation by the Board of Trade if the original application had been frivolous, and I think that that meets the objection of the right hon. Gentleman.
There are two other reasons for achieving our object in this way. The first is that it would cover cases where the idea of a change in the duty was initiated not through any outside application, but within the Board of Trade or some other Department of the Government. In such cases there will have to be a recommendation to the Treasury, and they would therefore be covered. There is also the reason that, on reflection, it occurred to us that it may be difficult, legally and statutorily, to define an application in this sense. Clearly, it would be easier to define a recommendation from the Board of Trade to the Treasury.
The objection may be advanced that if it is done in this way, if consultation is ensured in this fashion, by a public notification of the recommendation by the Board of Trade to the Treasury, there is the risk of forestalling changes in taxation and that the Government would be saying publicly that they were thinking of altering a duty—an import duty in this case, but it is a form of tax—which might risk forestalling and so on. Incidentally, I notice that this year the President was more cautious, at Question Time at any rate, than he was last year in the matter of forecasting changes in Entertainments Duty.
I doubt whether there is any great force in the objection to which I have just referred. It is apparently the Board of Trade's view not that public notification of its intention is dangerous, but that it is already doing that, so that there is no need of putting it into statutory form. If that is the case—and I accept the President's assurance that in the great majority of cases there is public notification already—presumably the danger of giving warning is not serious and would not have any more dangerous consequences if the warning were statutory instead of being merely voluntary. That danger is obviously inherent in any method by which the Government give the public any opportunity to put objections.
429 The substance of our case with these Amendments is that we think that traders and consumers should be given the clear assurance that they will have a chance to put their case. Having decided not to reinstate the Import Duties Advisory Committee, which was a kind of assurance to industry before the war that it could put its arguments, and also having, rightly as I think, abandoned the idea of an Import Duties Board, which would be semi-independent, but not really independent, it seems to us that there is all the more obligation for giving this assurance to industry.
However, we do not insist that this is necessarily the best way to do it. It is the best way we have been able to conceive, but if the right hon. Gentleman can contrive to do in it some other way, then at this late stage, so long as we have the reality of the assurance of consultation, we shall be satisfied.
§ Mr. Eric Fletcher (Islington, East)
I support the Amendment. Originally, it was the intention of the President of the Board of Trade to set up an independent Import Duties Board. In Committee, as the result of the Second Reading debate, he very wisely abandoned that original idea. Nevertheless, he conceded that it was most desirable that there should be adequate consultation with industry before changes in tariffs were made and before duty-free licences were issued or licences withdrawn. There is no dispute about the necessity of ensuring adequate consultation with industry.
I think that the right hon. Gentleman will also agree that there is no dispute about the necessity to satisfy industry that industry is adequately consulted. Conceding this desirability, in Committee the right hon. Gentleman said: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.—[OFFICIAL REPORT, 18th December, 1957 Vol. 580, c. 494.]Six weeks have elapsed since then and I imagine that in the interval the right hon. Gentleman has received a number of representations in the same way that we have on this side. I imagine that he is now convinced that every effort should be made to seek a way to satisfy industry that changes will not be made without proper consultation.
430 An essential preliminary to proper consultation with industry is that those concerned should know about any contemplated change before it is made. One suggestion put forward in Committee was that the application should be advertised, but the President of the Board of Trade said that he could not accept that, because he would receive a number of applications which were frivolous or, at any rate, not worth investigating. But there are others which are worth investigating and are investigated, and our concern is to see that all such applications are advertised and made known to the interested parties before the change takes place.
We are concerned not only where a change in tariff results from an application or suggestion emanating from an outside body, but where it emanates from within the Board of Trade itself. That is why, in an attempt to assist the Minister in giving statutory effect to the desire to ensure that industry is consulted, we have put down the Amendments in this form. The form of the Bill, following precedent, is that the Treasury makes the Orders, and does so upon the recommendation of the Board of Trade.
The form of words used presupposes that there is an independent consideration of the matter both by the Board of Trade and the Treasury. In fact, unless that is the case it makes nonsense of the form adopted in the Bill. Therefore, it does not seem unreasonable to meet the point made about not having to deal with frivolous applications by providing—as the Amendments seek to do—that there shall be an interval between the proposal of the Board of Trade to make the application and the actual making of the Order by the Treasury. If that were done we feel sure that it would meet the very real objections which are raised by industrialists.
As an illustration of the danger that exists I would point out that the Bill gives the Board of Trade and the Treasury power to alter tariff rates by Order. This can be highly dangerous in two ways, unless there is adequate consultation with industry. First, an unwise alteration of a tariff may well bring down retaliation by a foreign country upon British exports. Secondly, an inefficient British industry may be protected unwisely and for too long against its chief 431 competitor, to the detriment of consumers in the United Kingdom, who have to pay not only an inflated price for the foreign goods but also an artificially high price for the British goods thus protected.
In other words, the Bill gives very wide powers to the Board of Trade. We have decided not to re-create the Import Duties Advisory Council; we have decided not to have an Import Duties Board, and we have also decided to leave the full responsibility for making the tariff changes to the Board of Trade. We are merely concerned to see that before any such orders are made there is adequate public notice, so that those who are interested in various branches of industry can make their representations made known, either for or against the proposals. These are eminently reasonable Amendments and we hope that they will be accepted.
§ Mr. H. Rhodes (Ashton-under-Lyne)
As the matter now stands, advertisements will be inserted in newspapers and in the Board of Trade Journal about the recommendations being made, giving people the chance to make submissions. I notice that in Committee the President of the Board of Trade said:However, when we think there is a prima facie case the matter is advertised in the newspapers."—[OFFICIAL REPORT, 18th December, 1957; Vol. 580, c. 493]What does "we" mean in this case? Is it the consultative committee to which the President referred later in Committee, or is it the President of the Board of Trade and the officials of the Department, who come to a conclusion about a prima facie case, begin their investigations, inform the trade about it, and bring the results of their investigations before the consultative committee?
§ The President of the Board of Trade (Sir David Eccles)
I am grateful that this point has been raised. There is no doubt that adequate consultation is very important. It was in my mind a great deal when I asked the Committee to abandon the Import Duties Board. As the House will remember, there were two points which troubled us about the procedure for making a change in duty. One was that there should be sufficient consultation with industry and consumers, and the other that we should not take too long in coming to a decision.
432 To a certain extent those two points are in conflict, because the more that we consult the longer the time taken. None the less, we must arrange, first and foremost, to have sufficient consultation. The Amendments—the spirit of which I fully understand, but which, I think, would not be helpful—would increase the time by two months. I should not object to that if it helped us to come to the right decision in the end.
§ Mr. Jay
The right hon. Gentleman should appreciate that although, if the Amendments were accepted, there would be an obligation upon the Government to issue a public statement at that stage, there would be nothing to prevent them doing it earlier.
§ Sir D. Eccles
If I go through the procedure the right hon. Gentleman will see that that is not the correct position. We receive many applications for changes in duty because, as the right hon. Gentleman has said, there is an interest in this matter and people want to see various duties changed. Some of those applications are patently not worth pursuing, and I can tell the hon. Member for Ashton-under-Lyne (Mr. Rhodes) that the President of the Board of Trade is responsible for rejecting those which I have described as frivolous. We should not want anyone to waste time and money in putting up a case against an application which was manifestly not going to come to anything; so those applications do not see the light of day. Quite often, the people who make them are quite glad that they do not see the light of day, when they hear the reasons we give for turning them down.
All those applications which we regard as worth the trouble of an investigation are advertised in the Board of Trade Journal—which has a circulation of between 14,000 and 15,000, and is very widely read—in the trade Press associated with the product concerned, and also in the national Press. From that moment onwards interested parties, for and against, begin to put in their submissions, and the Board of Trade makes inquiries of all types of organisations and persons whom it thinks may be interested.
Since the war, we have taken a very long time in carrying out these investigations—never less than a year and sometimes more than two years—and that is because the most thorough examination 433 has been made. It is really essential for the efficiency of this business that the Board of Trade should not make a recommendation to the Treasury until it has assured itself that all the relevant arguments for and against have been collected, sifted and a decision taken upon them. Without that, we would not have done our work properly.
Therefore, the time when we should satisfy industry that the consultation has been adequate is before we make the recommendation for the change in the duty. I am concerned that this should be done as well as possible. We have had no representations from industry such as the right hon. Member for Battersea, North (Mr. Jay) has had that we should adopt this kind of procedure contained in the Amendments. What industry said to us before the Committee stage—we have had no representations since, so far as I am aware—was that it was felt that at times it would have been more satisfactory if representatives of industry could have come and put their case orally. I believe I mentioned in Committee that I was very willing to investigate that and to give them every opportunity to state their case—always, of course, having in mind that we must not take too long because, if so, the processes are frustrated.
The right hon. Gentleman said that the publication of the recommendation that we had made to change a duty would not affect forestalling any more than the publication of the application. At least, I think that that is what he said. But when the application for a change in duty is widely published, nobody knows whether we are to accept it or reject it. On the other hand, if we published the decision of the Board of Trade to recommend to the Treasury an increase of so many per cent. in the duty, that would be a fair warning for every foreign exporter to rush his goods to this country, and he would have two months in which to do it. Industry tells me that it would not like that at all. Therefore, I feel that on the forestalling point we must take that matter into consideration.
There is then the other kind of change which is not an increase in duty and which would, of course, not cause forestalling. In the case of a change where the recommendation is to reduce a duty, imports are held up and the trade has to 434 wait for a period of two months. I know that is not very long, but again it is not satisfactory to do it in that way. I assure the right hon. Gentleman that anything we can do—and I believe we can improve our methods of consultation—we will do, but the only efficient way is to do it before we come to the decision, itself. Otherwise, we should probably have to take the whole case over again.
There is one other point. I believe that the hon. Member for Islington, East (Mr. E. Fletcher) asked me about changes in duty initiated by the Board of Trade. The Board of Trade does not initiate changes in rates of tariff. Those are the result of trade agreements and are mostly reductions in duty. These trade agreements are published, and that constitutes a warning to all and sundry that the Government have agreed with other Governments for mutual benefit to change rates of duty, but I should like to assure the hon. Gentleman that that is not the only notice that industry will get of a change of duty of this kind.
The Board of Trade does not go into commercial negotiations without consulting the industries concerned and telling them that, in our opinion, it might be necessary and wise to alter certain rates of duty which affect their business, and they have every chance to discuss that with us before the commercial negotiation comes to its conclusion. After all, the purpose of having a commercial agreement is to benefit British industry, and therefore we try thoroughly to find out what British industry would wish us to do.
For these reasons, I feel that while the idea behind these Amendments is perfectly sound—that industry ought to have the maximum opportunity to make its views known—the giving of the two months' warning to all and sundry either to forestall a change in duty by rushing imports here or alternatively to hold up importing, is an objection which really must be sustained.
§ Mr. Jay
If I may have the leave of the House to speak again, I should like to ask the President of the Board of Trade these questions. He says that one of his main anxieties is that this procedure would lengthen the period too far. But did he not say that it was never less than a year, and often as long as two years, 435 before these investigations were completed? In those circumstances, would it really make such a great difference if a period of at least one year were lengthened by two months? If that is what is on the right hon. Gentleman's mind, would it not largely meet the point if the period were made one month rather than two months? Would that not go a long way to meet the difficulty about forestalling?
If it is the intention of the right hon. Gentleman, as he says, that there always shall be public notification of these cases, is it really technically impossible to get over the legal drafting difficulty of putting it in the Bill?
§ Sir D. Eccles
I agree that two months is not very long if the procedure has already taken two years, but, still, it is something. As the right hon. Gentleman will remember, there was considerable
§ pressure during the earlier stages of the Bill to shorten the period of time occupied by these investigations. I think that they take too long and I am anxious, if I can, to shorten them.
§ I do not know how to define an application which has passed the net and, therefore, it cannot be put in the Bill, but I do give the right hon. Gentleman the assurance that we shall not make a change of duty without having gone through the processes of advertisement and of collecting the views for and against. In any case, when any action is to be taken—and that is what is important—the interested parties will get good notice and plenty of opportunity to put their case.
§ Question put, That those words be there inserted in the Bill:—
§ The House divided: Ayes 157, Noes 197.