Clause 1.—(RULES FOR DETERMINING ORIGIN AND PLACE OF CONSIGNMENT OF GOODS.) (Hansard, 22 February 1960)

§ Mr. G. R. Mitchison (Kettering)
I beg to move, in page 1, line 8, to leave out from "origin" to "and" in line 10.
These are the words in the Clause which provide that the Board of Trade may make regulations as to the time by reference to which, in determining eligibility"— that is, eligibility for the lower Convention rates of duty— … the question whether goods are to be so treated is to be decided. … During the course of the Second Reading debate, the Government spokesmen were asked what was the object of these words and the Economic Secretary to the Treasury said: The reason is that the words will allow for the origin rules to apply to goods which are made earlier than the date of the regulations. That, of course, is retrospective legislation as far as it goes. The hon. Gentleman continued: This was felt necessary in order to deal with cases in which the goods are manufactured before the regulations come into force.—[OFFICIAL REPORT, 15th February, 1960; Vol.617, c. 1022.] If the object is to deal with all goods of the required type, whenever manufactured, nothing would have been simpler than to say so in the text of the Bill. 102 The object, however, in giving the Board of Trade powers to decide the time must, I apprehend, be a little more detailed and different than that and I should like the Minister of State, Board of Trade, or the Economic Secretary, whoever replies, to say exactly the purpose of this piece of apparently retrospective legislation. I quite understand that there may be a case for it, but it was not very clearly stated, naturally enough, perhaps, in the Second Reading debate.

§ The Minister of State, Board of Trade (Mr. F. J. Erroll)
I would like to offer a word of additional explanation to that given by my hon. Friend the Economic Secretary on Second Reading. As the hon. and learned Member for Kettering (Mr. Mitchison) has rightly pointed out, one could not exactly give detailed explanations at the end of a Second Reading debate. What my hon. Friend said was correct, but the real purpose of the phrase which the hon. and learned Member seeks to delete is to deal with any changes in the Convention area after it has come into operation.
We have to envisage the possibility, for example, of a country leaving the Convention area. Goods may be in transit from that country to ourselves at the time and it may be necessary to determine whether they should be eligible for Free Trade Association treatment. The Clause also enables us to deal similarly with any territorial additions to the E.F.T.A. It makes it possible for us to determine whether goods already manufactured shall be eligible.
I am as sensitive as the hon. and learned Gentleman to any question of retrospective legislation, but I hardly think that one need apply the full implications of such an important phrase to this quite small matter. It is merely a question of ensuring that where there might appear to be rough edges we are able to keep matters straight and agreed.

§ Mr. Mitchison
The hon. Gentleman will be well aware that retrospective legislation is a topical phrase about the time of a Budget and we are approaching the Budget now. My comment on his explanation is, first, to thank him for it, and, secondly, to say that it is quite inconsistent with what his hon. Friend the Economic Secretary said on Second Reading, as I understand it. However, there it is.
103 If I am wrong in understanding that it is intended to be used only in respect of changes in the Convention area, I am sure that the hon. Gentleman will correct me. If, on the other hand, I am right, I beg to ask leave to withdraw the Amendment.

§ Mr. Mitchison
I beg to move, in page 2, line 1, to leave out subsection (4).
I suggest that we might take at the same time, Sir Gordon, the following Amendment, in line 6, leave out "to (4)"and insert "and (3)", which raises the same point.

§ The Chairman
indicated assent.

§ Mr. Mitchison
The question is about subsection (4) of Section 12 of the Import Duties Act. Section 12 of that Act contains provisions for determining the country of origin of imported goods and by subsection (5) of Clause 1 of the Bill, nothing in subsections (2) to (4) of Section 12 of the 1958 Act is to apply for the purposes of the Bill.
Subsection (4) of Section 12 deals with fish, whales or other natural produce of the sea or goods produced or manufactured therefrom at sea. The effect is that those things are to be treated as produced or manufactured in the flag country of the ship from which they are caught or in which they are produced or manufactured. Similarly, there are provisions that they should not be deemed to be imported or consigned to the United Kingdom when they are brought there direct from that ship. I hope that I have stated the subsection rightly. If I am wrong, no doubt the Minister of State will correct me.
I do not understand why it is proposed to omit that provision. I cannot see that it has much connection with the preceding sub-paragraph, unless, of course, the Board of Trade proposes to make regulations for determining these matters, which will be quite different from the subsection in the 1958 Act. If that is what the Board of Trade proposes to do, we ought to know what the regulations are.
This is not, I take it, simply a reference to the frozen fillets of which we have heard a good deal at one time 104 or another, because it includes whales, among other things, and filleted whale or frozen fillets of whale hardly come into the picture. It is much wider than that. Perhaps the hon. Gentleman will be good enough to explain why the Government have thought it necessary to depart from the 1958 standard, which seems a reasonable one, and to give power to make regulations in quite unqualified terms on much the same matter.
I make the comment that the regulation-making powers in the Bill are extremely wide. It is right and proper that the Government should be asked to explain their purpose and how they are intended to be used.

§ Mr. Erroll
I agree with what the hon. and learned Member has said about the regulation-making power being very wide. We would not have sought the power here unless we had felt it to be absolutely necessary, and I will try to explain why. The hon. and learned Member, in referring to Section 12 (4) of the 1958 Act, said that it was much the same as what is in the subsection which he proposes by his Amendment to delete.

§ Mr. Mitchison
I did not mean to say that. The subsection which it is proposed to delete gives a regulation-making power in almost unqualified terms, no doubt for the same subject matter, but there is a standard laid down in the 1958 Act and we want to know why and in what respect it is proposed to depart from that standard.

§ Mr. Erroll
The standard laid down in the 1958 Act does not go quite wide enough for our purpose, for reasons which I will try to explain. First, we had to give the force of law to the Convention rules for determining the origin of all produce including produce from the sea. The rules for produce of the sea, contained in Rule I of Annex B of the Convention uses different terminology from that used in Section 12 (4) of the 1958 Act, and they are subject to revision from time to time.
It is, therefore, essential for us at the Board of Trade to have the regulation-making power so that we can deal with the origin rules for produce of the sea as for other produce. This would enable us to make amendments from time to 105 time without difficulty, instead of being bound by Section 12 (4) of the 1958 Act.
There is another point in that it is necessary to provide that Section 12 (4) of the 1958 Act, which applies to any other enactments relating to duties or customs, shall not apply for E.F.T.A. purposes. Subsection (5) of the Clause as drafted does this and, therefore, it is important that we should retain in the present Bill subsection (4) and not rely on Section 12 (4) of the 1958 Act. I hope that that brief explanation will be of help to the hon. and learned Member.

§ Mr. Mitchison
I must say that I cannot regard it as quite satisfactory, because when I look, not for the first time, at Rule 2, in Annex B, it does not seem wider than subsection (4). It seems so similar in effect that I cannot see the difference. Moreover, I cannot quite understand how change in a matter of this kind is at all likely. I should have thought that it might raise rather serious questions, but this is a very technical point and the right hon. Gentleman has said, for reasons no doubt connected with the negotiations, that the Board of Trade may wish to make changes from time to time. Accordingly, I beg to ask leave to withdraw the Amendment.