HC Deb 11 May 1959 vol 605 cc926-45

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Hector Hughes (Aberdeen, North)

We oppose this Clause for six reasons, which I shall summarise. I am quite sure the Committee will come to the conclusion that they are good reasons, and I hope that the Government will also do so and will withdraw the Clause.

I shall summarise the reasons and then elaborate them briefly. The first one is that there is not the slightest evidence that this change is wanted by the industries involved—either by the herring fisheries, the processing industry or by the consumer, but I will elaborate that point in a moment. Before putting down a Clause of this kind, the Government should certainly have consulted the industries involved.

The second reason is that the Clause is not in accord with the spirit or purpose of the Import Duties Act, 1958, which it seeks to amend. The third reason is that it conflicts with the representations which the Minister who introduced that Bill, as it then was, gave to the House on Second Reading. That Minister was and still is the President of the Board of Trade.

The fourth objection is that it seeks to alter the Third Schedule of that Act by adding goods which are not ejusdem generis with those already specified in it. Although there is in that Clause an omnibus subsection, it is not effective for the purpose and is at odds with the Clause now before the Committee. Fifth, and worst of all, is the objection that this change in the law would be prejudicial to the industries involved. The sixth and last of the cogent objections is, in my submission, that this Clause would be difficult to work in practice without a great deal of trouble and expense, and that it would dislocate the relevant industries.

These are mere heads of our objections, and I shall now elaborate them slightly, but not, I hope, at such length as to weary the Committee. As to the first objection, I am conversant with the relevant industries involved in this Clause—the fishing industry, shipbuilding and shipping, the distributive industry and the consumers, and I have not had a hint that this change in the law is required by the relevant industries. I see some hon. Members here who are concerned with these industries, and I hope they will support me in these objections.

The second objection is that the Clause is out of accord with the Import Duties Act, 1958, which it seeks to amend, and, in particular, Section 5 of that Act. I will not trouble the Committee by quoting the Act. No doubt hon. Members who are good industrious apprentices will have read the Act before they came into the Chamber. It is sufficient to state that that was an Act of a general character designed to enlarge the powers to impose Customs duties granted by earlier statutes. It was not designed as a Finance Act, and now, in this—I was going to say underhand way, but I do not want to use offensive terms—in this rather strange way, it introduces this change in the law which ought not to be made by a Finance Bill.

Section 5, in particular, was designed also in general terms, and it is of a character which is not mandatory, but permissive, enabling the Treasury by order to provide certain reliefs from duties. I am sure that the Committee will want to know why this change in the law is being made by a Finance Bill. It is a most unusual procedure which ought not to be approved. If this change in the law is to be made, in my submission, it should be made by a substantive Bill brought in for that purpose.

7.0 p.m.

Clause 8 does not accord with the general design of the Bill which it seeks to amend, because it singles out a particular industry, namely, the herring industry, and not only the whole herring industry, but part of the industry, namely, the fish meal and oil part. It singles it out for prejudicial treatment. The Clause is therefore inappropriate and out of place here, and it is uneconomic and bad for the industry, as I shall show.

Our third objection is that the Clause conflicts with representations made by the President of the Board of Trade on the Second Reading of the Import Duties Act, 1958. He said, in effect, that that was a kind of consolidating Measure and that it would not alter the existing rates of duty, from which it follows that it would not alter the existing reliefs, as the Clause seeks to do. I will quote a few of his relevant observations. He said: … this Bill … brings our tariff legislation together into one instrument so that the structure of our tariff can be revised in modern form. In other words, he was presenting it to the House as a consolidating Bill and not as a Bill amending the law. He went on: The Bill does not alter the existing rates of duty, nor would the initial Order, bringing in the revised tariff, alter rates except where a very few small changes are unavoidable in order to recast the present unsatisfactory classification of our goods. If Parliament gave us the Bill, the United Kingdom would be neither more protectionist nor more liberal in tariff policy than it has been in the last ten years, but we should have the great advantage of a tariff set out in a form which our own business people and those with whom they trade would understand. Only those who have to thread their way through the jungle of our present legislation know what the difficulties can be that we now propose to remove. Could anything be clearer than those words to show that in presenting that Bill to the House the intention of the President of the Board of Trade was to present it as a consolidation Measure and as nothing else?

He went on to say: Although the Government's tariff policy, that is, whether we put on or take off a duty, is not in any way altered by the Bill, the new structure and the new procedure for changing duties raise questions of principle. I hope that I shall be in order in saying a few words of a general character. He went on with words of a general character to the extent of several columns of HANSARD, and he wound up by saying: A number of principles are laid down to guide the two Departments in deciding whether a duty should be varied. In addition to the need to protect our industries, the Government '…shall have regard to the desirability of maintaining and promoting the external trade of the United Kingdom, to the desirability of maintaining and promoting efficiency of production in the United Kingdom and to the interests of consumers in the United Kingdom.' Those are the principles upon which the Board of Trade has acted since the war and they reflect the altered conditions of today …".—[OFFICIAL REPORT. 2nd December. 1957; Vol. 579, c. 35–41.] They also reflected the intentions of the Bill.

There again, nothing could be clearer for showing that the President of the Board of Trade was presenting that not as a substantive Bill to alter the law but as a consolidating Bill consolidating what he called "the jungle of legislation." Now the Government very improperly seek to treat it as substantive law and to amend it by this side wind in a Finance Bill, instead of bringing in a substantive Bill for the purpose. I hope that the Chancellor of the Exchequer will think again about this and will realise the impropriety of this procedure, that he will withdraw the Clause and bring in, if he desires, a substantive Bill, but to do so only after consulting every aspect of the relevant industries.

It is right to say that this alteration is designed to alter the Third Schedule of the Act. I have said that we object to it on the ground that this alteration is not ejusdem generis with other items set out in that Third Schedule. It is not a very long Schedule, but I do not propose to read it to the Committee beyond indicating what the subjects are, in order to show that I am right when I say that this change, in effect an attack on the herring industry and on the processing industry, is by no means ejusdem generis with other items in the Third Schedule.

There are eight of them. The first is ships; the second, machinery; the third, works of art; the fourth—I hesitate to mention—exposed cinematograph films—I do not know whether that refers to strip tease; the fifth, articles recorded with sound—that, presumably, does not refer to Members of Parliament; the sixth, apples; the seventh, paper. The eighth is what I call the omnibus paragraph, which I think I should read to the Committee.

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

If the hon. and learned Gentleman is in any difficulty about finding it, perhaps I could read it a little later.

Mr. Hughes

The omnibus paragraph of the Third Schedule is as follows: Goods of any description may be relieved from import duties "— The first words in the new paragraph 9 are "herrings may be relieved"; herrings may be relieved by this alteration, but the relevant industries will be far from relieved— if and in so far as the relief appears to the Treasury to be necessary or expedient with a view to conforming with an international agreement relating to matters other than commercial relations. The reason I quote that is that I want to know why the Clause is being introduced without consultation with the relative industries. Is it being introduced for some sinister purpose because of some international agreement? I draw the attention of the Committee to the words: with a view to conforming with an international agreement relating to matters other than commercial relations. Is there some political reason for this? If so, the impropriety of including it in a Finance Bill is more remarkable than ever.

The economic effect of this Clause will be to flood the processing factories in oar ports with imported herrings, relieved herrings which come in free of duty.

Mr. Chapman

Red herrings.

Mr. Hughes

I may have treated this subject lightly in parts, but it is by no means a light subject. It is very important to the industries involved, to shipping, fishing, processing, and consumers. I hope that the Government will think about it again and, for the reasons which I have ventured to adumbrate, will withdraw the Clause.

There is one last reason against it. In my submission, this Clause would be very difficult to work. One has only to read it to see the hypotheses that are involved. There are two "ifs" within two lines, and the paragraph reads: Herrings may be relieved from import duties if they are imported for conversion into fish meal and oil … Who is to know what they are being imported for? That will involve evidence in perhaps a civil suit or a prosecution which will disorganise business to see whether they are imported for conversion into fish meal and oil"; or whether after importation, but before particulars of their value are supplied for the purpose of determining duty payable, they are bought for conversion to fish meal and oil, having previously been bought for another purpose. The herring may be relieved, but the people in the industry will not be relieved by the sea of civil and perhaps criminal litigation which this Clause will give rise to.

For these reasons, I ask the Chancellor to reconsider the Clause and withdraw it. If he is still so much in love with this kind of legislation let him embody it in a substantive Bill which can be fully argued before the House.

Mr. John MacLeod (Ross and Cromarty)

I do not want to oppose the Clause, but I should like to ask what representations have been made to the Government that this relief should be given. The Government should keep their eyes on this relief from import duty on herring imported for conversion into fish meal and oil. I hope it will not encourage the Herring Industry Board to build meal factories where they will not be wanted. In my own constituency, large quantities of herring are imported in the ports of Ullapool and Gairloch and are then transported to the other side of Scotland, to Peterhead, to be processed into oil and meal.

No doubt this relief from import duty has been given because of the shortage of herring in recent years but, as everybody knows, herring are very intractable. Sometimes for no reason at all large quantities suddenly appear. We must look after the interests of the fishermen who depend on selling the fish for human consumption and also on getting rid of their surplus herring for fish meal and oil.

A few years ago when there was a surplus of herring the Herring Industry Board were anxious to extend their factories. Although conditions have now changed, this may not always be the position and I ask the Chancellor to look at the Clause to ensure that in the future our fishermen get a fair price for their labours in bringing herring into our ports.

Mr. E. G. Willis (Edinburgh. East)

I understood from the Financial Secretary when he introduced the Bill on Second Reading that the main purpose of this Clause was to assist employment in Scotland. There is no doubt that it will affect Scotland more than any other part of the country. We ought to have some information about the Clause. I do not know whether the Minister will give us the benefit of his advice. Who was consulted on this question? Who made representations about this? Nobody seems to know. There are a small number of fishermen in my constituency and I have heard nothing about this, nor have I heard any suggestions along these lines.

7.15 p.m.

As I understand it, the fish meal factories have been idle or not used to capacity for a year or two, and the desire is to see them fully employed. We are not opposed to that. Anything that is likely to bring employment to Scotland and keep these fish meal plants working fully is all to the good, but we must ensure that the importation of fish for this purpose does not depress the price for the fishermen. I do not know how the prices will compare, but it seems that at present it results in the production of fish meal which costs more than imported meal used for the same purpose. If we take steps to allow fish to come in cheaper to enable the meal to be produced more cheaply to compete more successfully, !here is a danger that that process might result in the depression of the price our own fishermen receive for fish used for fish meal purposes. Because I think there is some danger of that happening we ought to have some assurance from the Government about how the Clause will operate.

I assume that the provision is entirely optional. This can be done, or it need not be done. If that is so, can we have some guarantee from the Government that if this process results in a depression of the price to the home fishermen the Government will restore this duty? Is the duty to be operated in a manner that is likely to help the fishermen as well as the people employed in the meal factories? It is important to have some guarantee of this before we agree to the Clause. On the general principle, the Clause is a good one if it is likely to produce more employment in these areas.

Mr. Cyril Bence (Dunbartonshire, East)

I support what was said by my hon. Friend the Member for Edinburgh, East (Mr. Willis) about the imposition arid relaxation of this duty. Are we entitled to understand that if in the herring season plenty of fish were being landed from our own boats in Scotland the, duty would be maintained? Would there be a quota system, or would this duty be relieved on all fish coming in irrespective of the catches of our own fishermen, thus loading a lot of fish on the market and creating a situation where the prices would be reversed and our fishermen would be hard hit?

I think this is the worry of the Scottish fishing industry. I agree with anything we can do to make the raw material of our industries as cheap as we can. We want imports to be as cheap as we can get them, but many industries, particularly agriculture and horticulture, are protected by quotas and tariffs against the seasonal influx of commodities that may depress the prices of products of our own work-people. The same consideration should be given to fishermen. I feel sure that every fisherman in Scotland wants to know what his position is when there are plenty of herring available. When he comes into port, will he be faced with heavy importations of fish landed by fishing fleets from Northern Europe? Will he be faced with the possibility of very depressed prices for his catches? From what I have seen of the fishing industry in Scotland it does not take much to knock the bottom out of the fishermen's income. If anybody needs protection it is the fishermen who carry out their difficult and hazardous duties to provide food for us. I hope that this provision will not result in the creation of greater instability for them.

Mr. G. R. Mitchison (Kettering)

What I understand we are discussing in this Clause is not herring meal or herring brought into British ports by foreign boats. What we are discussing, I understand, are imported herring. I have had some difficulty in finding what the present position is. I got hold of the Customs tariff and discovered quite soon that herring meal attracted no duty. I then began to look for herring. That is not so easy as one would think. Herring are not in the list; fish are.

I turned to fish and then discovered that I got into the wrong part. These were fish fit for human consumption, while for fish unfit for human consumption—which I think are the kind of fish we are discussing now—I had to look somewhere else, to a mysterious chapter called: Products of animal origin not elsewhere specified or included. I must say that I was distracted at this point because I read the notes. That is how I find my way about. I found this: Throughout this Schedule elephant, mammoth, mastodon, walrus, narwhal and wild boar tusks, rhinoceros tusks and the teeth of all animals are regarded as ivory. It would be too much to expect the Minister of State, Board of Trade, to give us information about the import of mammoth and mastodon tusks into this country in any given year. However, herring meal was to be found there somewhere and it attracted, so far as I could see, a 10 per cent. duty. That, I believe, is what we are discussing now.

What has happened is that the Herring Board has put up a considerable number of conversion factories on the coast of Scotland and last year there were not nearly enough herring to be converted. The Herring Board has views on this question. There is no doubt something to be said for equalising the tariff between herring on the one hand and herring meal on the other, but the Herring Board would do it the other way round. It would have wished the tariff to be restored—because it used to exist—to herring meal. What it had in mind in this matter is substantially what my hon. Friends who spoke earlier had in mind, that this affects the position of fishermen.

At one time, there was a meal and oil scheme. That worked in the form of allowing fishermen, at any rate in Scotland, an extra price on the meal and oil fish, thereby enabling those: of them who were herring fishermen and in difficulties to get something to go on with. It does mean to get something to go on with, because many of these men find it extraordinarily hard to make both ends meet. Lately, as Scottish hon. Members will know, there has been a shortage of herring and, in one case mentioned in the Report of the Herring Board, there is a curious reluctance for them to be caught "for no known reason." That has made fishing particularly difficult not only for the comparatively large-scale operations of the trawlers and drifters, but for the ring net fishermen, of whom I have some knowledge, on the Clyde coast. They have had a very bad time indeed. They used to rely on this meal and oil arrangement. That was withdrawn and, instead, a buoyage subsidy was introduced. The Herring Board makes a strong case for saying that in addition there ought to be a meal and oil subsidy.

That is the background of this matter. If in fact herring destined for meal and oil are to be cheapened by the removal of this duty, those who have to sell them now without a subsidy, or under any special arrangement, are at risk as to the price they get. Even though it may be kept up for the time being by arrangements for equalised selling and so on, the threat is very definitely there. The reason for it is that the Herring Board put up a pretty substantial allowance of these conversion factories and fishermen, therefore, are concerned in the matter.

Who is to benefit out of this? This has nothing whatever to do with human food. These are inedible herring, or herring which cannot be sold for human food. It is nothing to do with the price of herring fresh, kippered, or eatable in any other form, but purely herring for meal and oil. Therefore, the concession, if it is to help anyone at all, will mainly help agriculturists. This use of herring represents a substantial portion of the annual catch. In the last year for which we have a Report, it was one-fifth and was larger than the amount of eaten herring or the amount of kippered herring. The year before it was a shade larger still, Therefore, it matters seriously to these people.

What I should like to know from the Minister of State is this. I imagine this Clause has been put in at the instance of the Herring Board, or at any rate of someone connected with the conversion factories. If that is not so, perhaps the hon. Gentleman will tell me. It is protection of the conversion factories; it cannot be anything else. It will help the agriculturist no doubt, but what safeguards can we have that this lowering of the price of imported herring for fish meal will not result in a general lowering of price and, therefore, in an added peril to the fishermen?

No one has said anything about the fish, but there is a question about the fish also. As anybody who knows the industry is well aware, and as appears in the Herring Industry Board Report, one of the troubles is that from time to time too many small and immature herring are taken. There are differences of opinion as to what is a small and immature herring and there is no doubt that the practice is supposed to be stopped, but I do not think it is always stopped. Indeed, the Report says that it is not always stopped. It is certainly thought, and seriously thought to be increasing the shortage of herring in some parts of the Scottish waters. Clearly, if imported herring is to be freed, encouragement will be given to one type of person who presents some difficulties. That is the owner of the foreign boat which escapes our regulations by taking its cargo of herring into a foreign port from which place they are then sent to England.

The Committee will not want to go into this matter in detail, but there is evidence in the last Report of the Herring Board—unfortunately nearly a year old now—that foreign boat owners have taken a hand in this. Hitherto, the existence of a tariff on imported herring made it an inducement to them to go into the Scottish ports, where what they were doing could at any rate be checked. The effect of removing it will be that they can turn to Continental ports and send herring from there free of duty.

I do not necessarily say that the Clause is wrong. I do not know enough about the matter. Nevertheless, it raises very serious questions both in relation to the fishermen and in relation to the fish upon which, in the long run, the industry and their livelihood will depend. I hope that the Minister of State will believe that I mean it very seriously when I ask him whether he can explain to us why the Clause is thought necessary and, if it is solely for the protection of the conversion factories, whether other possibilities, including the type of risk which I have indicated, have been considered.

7.30 p.m.

Mr. Malcolm MacMillan (Western Isles)

There is very little which I need add to what has been said by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) in his plea for the herring fishermen of my country, but I should be failing in my duty if I did not add a word on their behalf in respect of what has been said both by my hon. and learned Friend and by the hon. Member for Ross and Cromarty (Mr. John MacLeod).

This industry has been having a rough time for a number of years and I am sure that those in it will regard this Clause as a further attack upon their standards of living and their prospects if it is passed in this form. In pre-war years we had no Herring Industry Board to speak of and hardly any outlet for oil and meal. My last recollection, just before the war, in 1938, of the fishermen's fight for a living and for a price for their catch landed at the port of Stornoway, was their rescue by Adolf Hitler who, through the German Government buying agency at that time, offered 5s. a cran, which means four standard baskets.

For the rest of the season they had been going out with their catches and dumping them back in the Atlantic. The only person who was prepared to offer them anything at all was Adolf Hitler. It is rather ironic when we look back to 1938. when there was no Herring Industry Board as we know it today providing an outlet for the fishermen's catch on their own doorstep, as it were.

Today, the Herring Industry Board provides at least one outlet for oil and meal—an outlet for herring which would not generally be saleable for other purposes. Fishermen have come to regard the Board, at times with certain reservations, as a useful market for their catch and as a very great friend in need. I tremble to think what would have happened to the industry without the Herring Industry Board, especially in the North-West of Scotland. We have the longest fishing season in the British Isles in the North Minch and along the Western Isles, from Ullapool, Stornoway and Mallaig. The Minister will, therefore. understand how much we depend on the herring industry for employment and how much the market depends upon the work of the men in the North-West herring industry.

I do not think that we can dismiss too lightly the appeal which has been made without doing a great deal of damage. I understand that behind all this there is the demand of the agriculturists. They want to be assured of an ample flow of supplies of oil and meal for their purposes, and that is understandable, but they have had a lot of consideration from the House—much more than the fishermen and particularly the men in the herring industry. While we have given certain attention and a great deal of help to the syndicates who own the large fleets of trawlers. we have given nothing like as much consideration to the small men who fish out of the small ports in the distant areas and who in every way have had difficulties created for them by, for instance, the high freight charges and the long distances over which they have to haul their catches.

If we are suddenly to throw open this market for local catches to the kind of competition which is likely to occur, the local men will feel very sore about it, with good reason. These men have been regarded, at least on this side of the Committee, as being worth our help. The industry in the Western Isles and Shetland, where fishing is traditional, has been regarded as the nursery of seamen and as worth preserving, even if purely from the strategic point of view.

We think that we are worth preserving even in peace-time, in all modesty, and we claim that in peace-time we deserve the same consideration and attention as is only too readily available in less happy times when men are called up in war for the minesweepers and other small ships. These men in the herring industry in the Western Isles alone recruited for the Royal Naval Reserve in 1938–39 no less than 25 per cent. of the total United Kingdom complement. That is a very large number of men from such a small area. I think that in peace-time they have a call for more consideration from the House.

They will feel very sore about this provision. With due respect to them, the agriculturists and the farmers have had a fairly good show in the House. They would be the first people to create a row in the House—and they are well organised to do so—if we threw the market for their products open to the mercy of competition from all over the world. They are the most vocal, organised and influential people in the Conservative Party. They are very highly organised in British politics. These small herring fishermen in the Shetlands and the Hebrides are not organised and do not have the support of those who are interested, financially and otherwise, in a big way in the industry.

Before we put the herring fishermen at the mercy of an open market in this way, and before we have dumping of immature fish by foreign vessels, about which my hon. and learned Friend was anxious, cannot we do a little more to make sure that agriculture in this country has a steady, ample flow of oil and meal from our own herring industry by developing more processing plants around our own coasts? That is quite possible. One of the finest herring grounds in the world is the South Minch and around the island of Barra, but it has been abandoned.

I have made plea after plea in the House to a succession of Secretaries of State for Scotland through the years to revive the herring industry in that area by setting up processing plants and producing the whole of the meal there and at South Uist, where no development seems to take place except of rocket ranges. Why cannot we set up processing plant there? Why cannot we have even part-processing, with a partial reduction to oil and meal before vessels take it away to such processing centres as Oban?

The answer has always been, "No". Here we have met the results of that policy of the refusal to develop these processing plants in our own country. We have to ask foreign fleets to land herring from around our own fishing grounds in this country or to bring in the processed, finished product. It seems to me a little unfair and also a little unwise from our own national point of view to neglect our own people and the possibilities of expanding the industry here while opening the market to foreign fishermen.

I understand that at Lerwick at the moment there are fleets of Polish herring vessels landing herrings in the ports of the Shetlands. Of course, we claim the same right to land fish in other countries, and I have no objection to the policy, nor do I believe that the Lerwick people would have a fundamental objection if we were developing our own fisheries as the continental people are doing—and as we are not doing.

Mr. Ellis Smith

Why are we not?

Mr. MacMillan

I have asked that question and still do not know the answer.

The result is to produce this kind of Clause inviting foreign vessels to supply the needs of our agriculture and other markets because we have not built up our own industry. These fishermen have suffered after each of the last two great world wars, after having served in numbers out of all proportion by comparison with any community in the British Empire. After each war they have suffered and have left the industry, and the difficulty is to get them back again. At this moment, the Government should be concerned to rebuild this industry and make every possible use of herring, not only for eating as fresh fish, but as quick frozen or deep frozen fish. They should be planning to make the best use of what are the world's best fish. I speak from experience, not from watching advertisements.

I should have thought that in every way the Government would be developing this industry again and trying to revive it. The Government should be trying to help to revive the fishing industry and at the same time build up once again a larger population of trained seamen fishermen.

The Merchant Navy is clamouring for fishermen to go back into the Merchant Navy as seamen. I had representatives of the Shipping Federation in my constituency this week trying to recruit men from the fishing villages. They will get them simply because the men are not employed any longer in the herring fishing industry, because they are in a neglected industry. We can neglect it only at our peril.

While the Poles are fishing up at Lerwick and landing fish there, I have unemployed fishermen in the Western Isles. I checked the figure with the Minister of Labour only the other day. The figure is running now at 31.3 per cent. That is a disgrace for any Government. It is a disgrace all these years after the war, when we have been talking about full employment and all the rest of it, still to have a figure of 31 per cent. unemployed, which represents even in that small population about 2,000 people unemployed in the Outer Hebrides. They are nearly all ablebodied men. This is in addition to crofters and all the rest who are excluded from Class I insurance and therefore do not appear on the register.

Just short of 2,000 men are unemployed in the Western Isles. Many of these men could be employed in the fishing industry. They could be employed in processing herring, reducing them and processing them to oil and meal. We should not have to be turning to foreign nations to supply our need.

With vigorous action and an infusion of capital into an area where there has been no possibility of building up capital for this purpose during the last few decades, we could be building up a catching power and processing plants and we could be supplying the needs for which we are at present quite shamelessly turning to foreign nations to supply. There is no need to go to foreign countries. We could be developing our own industry.

Mr. Vaughan-Morgan

Having waited here for rather more than four hours expecting Clause 8 to be called at any moment, I am rather pleased that there has been so much interest taken in it. 1 should like to say at once that I have learned a great deal from the speeches I have heard.

I enjoyed the speech of the hon. and learned Member for Kettering (Mr. Mitchison). He has found the same joy as I have in browsing through the Tariff. It needs the hon. and learned Gentleman and Paul Jennings of the Observer to do justice to that miracle publication, which is almost my favourite bedside reading. I was not sure that I had pursued my researches into herring as far as the hon. and learned Gentleman. I am grateful to him for having added to my knowledge.

I listened with great sympathy to all that was said on both sides of the Committee. I was not sure that I was quite so sympathetic to the utterances of the hon. and learned Member for Aberdeen. North (Mr. Hector Hughes), because I thought that he gave six reasons which boiled down to two—first, that he did not like the duty, and, secondly, that h,; did not like the way it was being proposed. I thought that he was particularly wrong about the latter.

The story of this is quite simple. In November of last year, the United Kingdom producers of herring meal and oil applied for the removal of the 10 per cent. import duty. I think that we all know that. That application was advertised in the ordinary way, in accordance with the accepted procedure for a reduction of duty.

After what we have heard today, I rather hesitate to say that only one objection was received. That came from a firm of fish meal manufacturers, although the Association of Fish Meal Manufacturers as a whole supported the application. No other objection was received. The objection of the single objector was that this would tend to lower the price of white fish meal, which I think is not quite the kind of approach to which other hon. Members who have spoken would be very sympathetic.

7.45 p.m.

There is no reason why the production of herring meal should be, as it were. impeded in order to keep white fish meal going. Therefore, on balance and after very full examination the Government decided that the case for the removal of this duty had been made out.

Mr. Willis

When the Parliamentary Secretary talks about the meal and oil producers, does he include the Herring Industry Board?

Mr. Vaughan-Morgan

I could not say whether the Herring Industry Board was amongst those who applied. It certainly did not object. There was only the one objector to whom I have referred. That was a single firm.

I turn to the question of procedure. The hon. and learned Member for Aberdeen, North made great fun following his way through this very simple Act. I think that he omitted to carry his researches as far as the last page, where he would have seen that when the Act was passed no less than sixteen Statutes were referred to, most of which were superseded, where changes had been made in tariffs by means of the Finance Act, which is a very usual procedure. Some of those took place under a Labour Government. Some were for additional duty. Some were for making the kind of exemption which we are making today.

I can explain the procedure in this way. Normally, the right way of removing a protective import duty on specified goods is by making an order under Section 1. This case is different. There is no question of removing the duty on all herring. It is only on herring for a particular purpose. Where there is a case such as this, it is covered by Section 5, as was pointed out, which provides the power to make an order relieving from import duty the goods specified in the Third Schedule.

All that we are doing today is to add to the goods mentioned in the Third Schedule. There is nothing very unusual about it. The effect of the Clause now under consideration is, therefore, to add herring imported only for the purpose of conversion into meal and oil to the Schedule so that an order may then be made granting relief from the duty and making the necessary provision for its administration.

This relief will extend both to herring bought abroad and imported expressly for conversion and to herring purchased for conversion from catches landed by foreign owners for sale on the open market. In the case of the latter, that is to say, herring bought for conversion after importation—I think that this should go on record—the purchase must take place before—I was going to say while the herring are still in the hands of the Customs—but the purchase must be before the herring have left Customs control if they are to qualify for relief from the duty. It would not be practicable to provide for repayment of duty where herring were subsequently sold for conversion purposes.

The hon. and learned Member for Aberdeen, North made great fun about the appalling legal complications that might ensue, but I can assure him that no one else shares his misgivings, if misgivings they were, that this will prove profitable for the lawyers.

The reason for this application is that hitherto the reduction factories in this country, which are mostly in Scotland—I think that some of them are in the hon. and learned Gentleman's constituency—have had to rely on home caught herring. The only foreign caught herring which have been used has been the residue of catches which have been tendered at British ports for other purposes, but have failed to find a market. As a result of the decline in home catches, the supplies to the factories have been getting progressively smaller and the factories are substantially under-employed. The result of that under-employment is that their production costs have risen and they have been unable to compete with imported fish meal. This is obviously anomalous.

It would have been possible, if they so desired, for the factories to obtain additional supplies for reduction from foreign sources, but the very fact of the 10 per cent. duty would have made that an uneconomic proposition for them. Now, the removal of the duty will make it possible for them to supplement what are, alas, the dwindling home supplies and make fuller use of their capacity.

Mr. Malcolm MacMillan

Will the Minister explain why, in that case, the Herring Industry Board is quite considerably extending its plant at Stornoway? It must be known to the Government. It obviously requires more storage and greater plant capacity for the amounts which can be landed at the port, and they do not normally include landings from foreign vessels.

Mr. Vaughan-Morgan

I must plead ignorance, because I am not, I am afraid, in the confidence of the Herring Board in its plans for Stornoway. I do not think there is any question of importing herring for conversion at the expense of the United Kingdom fishermen. After all, the reduction factories take all the catch which is available, and that is not enough to keep them operating fully. If more home supplies became available, there would be no need to turn to foreign imports. While the factories are underemployed, of course, their costs are higher, and if the falling trend of supplies is not checked, they might have to reduce the prices paid for the herring obtained from home fishermen. Nevertheless, I am fully seized of all that has been said by hon. Members.

After hearing that explanation which, I am almost tempted to say, has taken me into waters as deep as those some of the fish live in, I hope that the Committee will be satisfied and will accept the Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.