§ Motion made and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]
§ 9.59 p.m.
§ Mr. Peter Smithers (Winchester)
In matters of administration, it is relatively simple for civil servants and Government employees to carry out precise instructions when they have to do so. The case to which I wish to draw the attention of the House tonight comes within that difficult field where a wide discretion must be exercised by employees of the State. I do not think that there is any sphere in which discretion and its exercise are more important to successful administration than in the Report of Customs and Excise, and although in one sense——
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]
§ Mr. Smithers
As I was saying, although, in one sense, Customs officers are very strictly bound by the book, in another sense, as any hon. Member who has ever passed a Customs examination knows, they have a lot of latitude in the way in which they carry out their duties. If the Customs officer exercises his duties strictly in accordance with the absolute letter of the law, and upon the assumption that he must prevent every abuse of the facilities for exit from and entry into the country, however remote the possibility of abuse may be—if he takes that sinister view, tourism disappears, and travel becomes a miserable, unhappy and infrequent business.
If, on the other hand, he takes too benevolent a view of mankind, the system of Customs and Excise is open to abuse by those who would like to make a living out of the difference in price levels between here and abroad. What, in fact, the Customs and Excise does—and, if I may say so, with great skill, and with a certain element of humanity and humour—is to steer the middle course between these extremes, and, I think, it shows a wide tolerance to the traveller.
1227 The case that I want to mention tonight falls into a category where the exercise of discretion is particularly difficult, and I want my hon. and learned Friend to consider whether, in the circumstances that I shall relate, new instructions should be issued to those concerned which might be more in accordance with the real needs of our situation. What I have to relate is a sad little story. It is the story of Robin Smith, an American schoolboy who was at school at the Country Day School, St. Louis, Missouri, United States of America.
The boy's father is a rather enlightened person, or, at least, so it seems to me. He took the view, when his son was 17 years of age, that it would be a good idea if he came to England for a year at school. He made inquiries of the English Speaking Union, which thought it a good idea, and as the English Speaking Union had not long before arranged for a Winchester College master, Mr. Mallett, to tour the United States to study American education, Robin's father was put in touch with him, and inquiries were made whether Robin could spend a year at Winchester. The answer was in the affirmative.
It was arranged for Robin to spend a year at Winchester College and, as a matter of fact, for another American boy to do the same. Everybody felt that this was a happy thought and, although the idea was purely private, and the visit experimental, people doubtless hoped that similar visits to English schools by American students for limited periods would take place in future. To the boy, of course, this was a great event, and I think that the House will agree that to go from the relative physical luxury of the Country Day School, St. Louis, to the medieval austerity of Winchester—not to mention the intellectual austerity of Winchester—was quite a courageous undertaking.
Naturally, in the Smith family in Missouri, great preparations were made for this visit. Robin, as a schoolboy, already possessed a small camera. It was not a very elaborate affair. It was valued at about 10 dollars when new, the secondhand value doubtless being little or nothing. He also possessed, an invaluable asset in life with which some hon. Members may have been blessed—a generous grandmother. In June last year his 1228 generous grandmother decided to give Robin a new camera so that when he came to England he would be able to take good photographs and show them to his family and friends when he got back. She bought him a Rolleicord, the value of which was about 100 dollars. This also, I think the House will agree, was a happy idea. Since there are two Treasury Ministers on the Front Bench, perhaps I may point out to them that this boy with his camera on his return would produce propaganda for Britain in the United States, without any expense whatever to the Treasury.
In August last year, Robin sailed for Southampton. He did not get rid of his old camera; being a schoolboy he thought it was rather nice to have both. He brought both cameras with him, and it did not occur to him that his arrival with a new camera as well as his old one might lead the authorities to suspect some plot on his part to defraud the Revenue. He landed in Southampton on 5th August. He came rather early for school because his parents thought that it would be a good idea for him to stay with distant relatives in Hampshire for a little while before term began in order to pick up the "feel" of this country before being plunged into Winchester College. On 5th August, when he landed, he declared both his cameras as being for his own use, which they were.
The Customs and Excise authorities demanded £35 4s. in duty on the new camera, covering Purchase Tax and Customs Duty, and told him that this would be refunded if he left with the camera within the year. Robin did not pay the £35 4s. The first good reason for not doing so was that he had not got the money; schoolboys do not travel around with such large sums of money as that, even if they have it in the bank.
The second reason was that he was not sure whether he would be leaving England within a year. Although he was coming for a scholastic year, his trip to England was very expensive for his family to undertake, as it did, at its own expense. They were not very wealthy people, and they had felt that, at the end of his scholastic year, he might very well get value for money and spend his summer holidays in England before returning to study in America in the autumn. Robin knew that he could not truthfully promise that he would leave the country within 1229 a year. The Customs accordingly took away the camera and Robin went to school, in due course, without it.
Robin got in touch with me after a little while, on the advice of English friends, and I raised the matter with the Board of Customs and Excise. I should like to quote from Sir James Crombie's letter of 29th October:As you know, for various reasons (including, of course, the high rates of duty and Purchase Tax to which they are subject), used cameras command very high prices in this country. If, therefore, we did not take reasonable precautions of this kind to secure the Customs charges legally due, there would be a very considerable incentive for visitors to take advantage of these high prices, by disposing of their cameras while in this country. Our experience confirms that we should not be justified in waiving this precaution even in the case of a schoolboy, as, for all we knew, he might well have been the agent for importing a valuable article intended, for instance, as a present for someone else.I do not think that Robin Smith, when he set off from the United States, thought of himself as likely to be treated as an "agent" by the Customs; but that appears to have been the fear in the mind of the Customs when this 17-year old schoolboy presented himself with the camera which Granny had recently given him.
I understand that, if somebody in this country had given an undertaking that Robin Smith would export the camera within a year, he could have had it back, without depositing the money, on the faith of that undertaking; but, as a truthful boy he could not give such an undertaking because, without adopting a ruse, which he was unwilling to do, he could not promise that he would be leaving the country within a year. Therefore, I raised the matter with my hon. Friend the Financial Secretary to the Treasury and I received from him a letter, in which he said that if Robin Smith's camera, for instance, had been in use abroad for a considerable time it would have been admitted duty-free without further ado.
On the other hand, my hon. Friend's letter ended:If he is coming here for a year or less, there are in any case, as you know from this correspondence, arrangements for relieving him from any duty and tax legally due.But Robin fell just outside both these categories, and so I think must the great majority of students arriving here.
1230 I submit to the Minister that it is reasonable that a student coming to this country for an academic year should have some latitude and should not be expected to depart punctually on the day when his year expires. I also submit that it is reasonable, and what a sensible person able to afford a moderate expenditure would do, to buy a new camera before making an eventful trip in one's life to a country such as Britain, where there are so many interesting things to see and record.
Naturally, there is disappointment in Robin's mind that, having arrived here with Granny's new camera which she bought for him last June and which the Customs took away in August, he still has not been able to get it back and it is still held by the Customs. The personal matter is best summed up in the words of his father in a letter to me, in which he wrote:I hate to bother you, but it seems to me that this is a very cavalier way to treat a student from the U.S.A. visiting Britain and hardly the type of thing calculated to help foster better relations between our two countries. Possibly you could bring this matter to the attention of the right authority and I would consider it a personal favor if you would do so.That is what I am doing.
May I now turn briefly to the principles of the matter as I understand them? I think I am right in saying that a resident of this country who has been abroad for a considerable number of years and who returns with his family effects is afforded the courtesy of the port. It would be unreasonable if a person in such a situation had to pay Purchase Tax and Customs Duty on everything that he had acquired abroad during his stay. I have myself received the courtesy of the port, and it would probably have been impossible for me to come home if I had not. I could not have afforded it!
However, we are dealing here with an alien taking up residence here for the first time. I would have thought, as a matter of practical necessity, that an alien taking up residence here ought also to have the courtesy of the port. If he leaves the country again and re-enters, that is another matter; but when he comes here for an extended stay I would have thought that he should be allowed to bring with him duty-free such articles 1231 as are reasonably necessary or desirable for his stay here.
Indeed, I think that is generally the case, for an American in business here tells me that not long ago he came to this country to represent a group of insurance companies for an appointment which he was told was likely to last about fifteen years. When he arrived, he was afforded the courtesy of the port for the belongings which came with him. But this man had got married a week before he left the United States. He had received a lot of wedding presents. They could not be shipped in time to go with him and were shipped after him. When they got here, although they were the essential requisites for setting up his married home, he had to pay Customs Duty and Purchase Tax upon them.
I cannot help thinking that in this whole matter of entry into the United Kingdom for a considerable stay, there is a certain amount of confusion and injustice and that it requires looking at in more detail. In relation particularly to the exchange of students, I am sure that it is reasonable for them to be able to bring in tax-free a camera, even a new camera.
The year 1958 in which we are living is one in which such exchanges are being widely encouraged by all nations and in which Britain is not backward in spending the taxpayer's money to encourage such activities. It is a great pity that when private enterprise ventures of this sort take place they should begin so unhappily because, in my view, the discretion which resides in the Customs has not been imaginatively used.
I have brought to the attention of my hon. and learned Friend another example of a student entering this country who received similar treatment, in this case a student from Australia, who also had camera trouble. The problem is of sufficient proportions to justify this House looking at it and asking the Minister to examine the existing practice to see whether he can bring the exercise of this discretion under a new set of directives which will not bear so hardly upon the student or temporary visitor coming bona fide to this country and which, in particular, will not take away from schoolboys cameras that generous grannies have given them.
§ 10.17 p.m.
§ The Financial Secretary to the Treasury (Mr. J. E. S. Simon)
My hon. Friend the Member for Winchester (Mr. Smithers) has introduced this subject on the Adjournment with his usual felicity, distinction and humour of expression, and I am grateful for the way he has presented it. I entirely agree with him that our Customs administration is important because it makes an immediate impact upon the travellers, and particularly the strangers, who are good enough to come to see this country.
I accept with gratitude what my hon. Friend said about the Customs administration in that the officers do their job with great skill, humanity, humour and wise tolerance towards the travellers. And they are, of course, given considerable discretion; but, as with any public service, this cannot be an unlimited discretion. It must be a discretion which is exercised within the limits of the law and of the regulations which are laid down. My hon. Friend would not dispute that it is necessary to lay down certain guiding principles within which the discretion shall be exercised. Therefore, as he does not dispute that within the rules that were laid down Robin Smith, with whom I have every sympathy in this matter, was correctly treated, perhaps I should deal first with the guiding rules within which the discretion of Customs officers must be exercised.
The discretion turns upon three questions. First, should people who are coming here for more than twelve months have in general to pay the Customs Duty and Purchase Tax legally due on goods newly acquired abroad which they bring with them? Second, should such importers of valuable new goods which are acquired abroad in that way who are coming here for less than twelve months have to give security for the charges legally due if the goods are not re-exported?—and Robin Smith was, of course, given the chance to give security for re-export within twelve months. The third question, at which I should perhaps glance if there is time, is, should a special exception be made in either case for schoolboys?
May I deal, first, with the twelve months' rule? Reasonable provision exists for the importation duty-free and tax-free of any goods which are well 1233 used, however long the importer may be staying. The importer may be coming here for fifteen years, as in the case which my hon. Friend mentioned, but if he brings goods which are well used they are permitted in duty-free and tax-free.
It is only fair, in the first place to the ordinary resident in this country and in the second place to traders who are dealing here in similar goods, that importers who fall into the resident class should be expected to pay any duty and tax legally due on goods newly acquired abroad which they bring here in exactly the same way as they would have to pay them on goods which they buy here after arrival.
The only question is whether the twelve months' period is a reasonable period upon which to base the distinction between the residents and visitors. I submit that the twelve months' period is reasonable and in fact generous. It should be compared with the six months' period which was adopted for the purpose of the United Nations Convention on Customs Facilities for Touring, which was drawn up in New York in 1954. It is double that period and is comparable with the twelve months' limit allowed under the International carnet system for touring motor cars. Any other limit would be more arbitrary and less reasonable.
Moreover, it would be no more likely to be acceptable to the unfortunate people who fell on the wrong side of the line drawn. I know that Robin Smith must feel aggrieved because he stayed just longer than twelve months, but if we drew the line at six months or eighteen months there would still be people who fell just on the wrong side of the line and who would feel a sense of grievance. I submit that when we remember that the period stipulated by the United Nations Convention is only six months, our twelve months' rule is reasonable.
Next, should we ask for security for articles of value in case of re-export within the twelve months period? The Customs do not require security in all cases. They do not normally require it when the importer is staying for less than six months. Although the numbers involved are very much greater, the risk is rather less, and that category is thus ruled out altogether. We are concerned, 1234 therefore, simply with the period between six and twelve months.
The risks of admitting duty-free and with no security articles such as cameras are very great in the case of visitors staying here for six months or more. Cameras command very high prices in this country because they bear a heavy duty, the tax chargeable on them is high and they still have a scarcity value. Many importers, like Robin Smith, are no doubt unlikely in the extreme to take advantage of the chance of obtaining a high price for their cameras here, but I am sure that my hon. Friend agrees that many foreign students, among others, must be so tempted. They are at an age when one is likely to fall into impecuniosity suddenly and alarmingly, and the temptation may arise to sell the camera or any other goods similarly liable to duty to supplement funds.
Where the visitor is going to stay for more than six months but probably less than twelve months, as Robin Smith originally indicated he would, the Customs normally ask for a security—and in fact in the present case they were quite willing to receive one without necessarily any deposit of money, from the English Speaking Union.
§ Mr. Smithers
This young man could not conscientiously say he was going to leave within a year, so he could not ask his friends to give a guarantee that he would export the camera within a year.
§ Mr. Simon
I understand that he originally declared, according to the information I have been given, that he was probably going to stay less than a year. Therefore, an offer was made to accept a purely verbal guarantee, or a written guarantee, without the deposit of any sum of money. This offer was made to the English Speaking Union and then, I think, to Robin Smith's housemaster at Winchester. No doubt, for the reason my hon. Friend gives, it could not be taken up.
One then comes back to the other line of argument with which I dealt first of all, that one has to draw the line somewhere, and that this boy was, in fact, coming in as a resident since he was to stay over twelve months. It is for that reason that the tax was exigible in this case. 1235 Lastly the question arises—perhaps I can deal with this very briefly—whether there should be special facilities for schoolboys. That would really be invidious and quite impossible to defend. Why, for example, should one draw a line between schoolboys on the one hand and university students on the other? We must draw the line after a given period, whether it be twelve months or any other length of time. The twelve months' period is a generous one. Once we have done that there is no reason for excluding any class like schoolboys, Italian mine workers, building trade employees, foreign domestic servants or ministers of religion. We have had pleas in respect of all these classes. They have all got good excuses for asking to be excluded, to say nothing of schoolmasters who also come here on exchange visits.
Really, the only safe rule is to take twelve months, a generous period, and to say "If you stay for less than that period all we demand is security. If you are going to stay for longer you will come in as a resident and you must come in under the same rules that other residents in the community have to obey; in other words, you will have to pay duty on new goods which have been recently acquired abroad."
§ Mr. Smithers
How will this poor young man get back his camera if he 1236 cannot afford to pay the duty or give a guarantee? Will he ever see it again?
§ Mr. Simon
If he does leave within twelve months he will see it again; but if my hon. Friend will take up that point with me separately I will look into it. The point is that at the moment it is in the hands, and rightly in the hands, of the Customs.
My hon. Friend has left me only a moment or two, but I must say that on 19th September the English Speaking Union wrote to offer a guarantee and that it did then say that it would accept a guarantee from the English Speaking Union as the boy was coming here under its auspices, and it has had no reply to that letter. I think that subsequently, the Union passed the matter on to the boy's housemaster. The Customs have heard nothing further. So the ball is really in his hands. The Customs and Excise, as my hon. Friend was good enough to indicate, are reasonable in their treatment of this particular type of case. The rules under which they operate are, I hope I have satisfied the House, entirely reasonable. In those circumstances, I do ask my hon. Friend to admit that this is no special case but that it has been rightly and generously treated under the general rules which operate.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes past Ten o'clock.