HC Deb 03 July 1961 vol 643 cc1039-50

(1) If, on an application made for the purposes of this section by a horticultural producer in such manner as the Commissioners of Customs and Excise may direct, it is shown to the satisfaction of the Commissioners that within the period for which the application is made any quantity of heavy oils has been used by the applicant as mentioned in the following subsection, then subject to the provisions of this Act the applicant shall be entitled to obtain from the Commissioners repayment of the amount of any duty which has been paid in respect of the quantity so used (including any sum paid under subsection (2) of section two of this Act), unless that amount is less than fifty shillings.

(2) A horticultural producer shall be entitled to repayment under the foregoing subsection in respect of oil used by him—

  1. (a) in the heating, for the growth of horticultural produce primarily with a view to the production of horticultural produce for sale, of any building or structure, or of the earth or other growing medium in it; or
  2. (b) in the sterilisation of the earth or other growing medium to be used for the growth of horticultural produce as aforesaid in any building or structure.

(3) Where any quantity of oil is used partly for any such purpose as aforesaid and partly for another purpose, such part of that quantity shall be treated as used for each purpose as may be determined by the Commissioners.

(4) An application under this section shall be made for a period of six months ending with June or December and within the three months following that period, unless the Commissioners otherwise allow:

Provided that for the year nineteen hundred and sixty-one applications may be made for the period beginning with the seventeenth day of April and ending with December.

(5) The Commissioners may require an applicant for a repayment under this section to state such facts concerning the hydrocarbon owls delivered to or used by him or concerning the production of horticultural produce by him as they may think necessary to deal with the application, and to furnish them in such form as they may require with proof of any statements so made, and may require him to permit an officer to inspect any premises or plant used by him for the production of horticultural produce or in or for which any such oil was used; and if such proof is not furnished to their satisfaction, or if the required facts are not stated, or if he fails to permit any such inspection, the facts shall be deemed for the purposes of this section to be such as the Commissioners may determine.

(6) In this section— horticultural produce" has the meaning assigned to that expression by subsection (1) of section eight of the Horticulture Act, 1960; and horticultural producer" means a person growing horticultural produce primarily for sale.—[Mr. Selwyn Lloyd.]

Brought up, and read the First time.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd)

I beg to move, That the Clause be read a Second time.

The purpose of this new Clause is to provide for repayments of duty on heavy hydrocarbon oils used by horticultural producers for specified purposes connected with the growth of horticultural produce. As the House will remember, during the Committee stage of the Bill, my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) moved an Amendment to relieve from the heavy oil duty oils used for heating glasshouses growing horticultural produce in commercial quantities. I conceded on that occasion that there were special arguments which seemed to me to apply to horticulture alone.

In the first place, the yield of the duty on horticulture would have been comparatively small. The estimates vary, but about £250,000 has been mentioned by my advisers. Perhaps the more substantial reason is that horticulture and agriculture as well have been treated by successive Governments as being in a special position in our economy, and horticulture does not enjoy the protection which agriculture enjoys under the Annual Price Review. In these circumstances, I thought it right to consider what could be done to meet the representations of hon. Members from both sides of the Committee.

The scheme proposed in the Clause provides for horticultural producers to continue buying duty-paid oil, but to make periodic claims for repayment. Similar schemes are already in operation for oils used in fishing boats under Section 205 of the Customs and Excise Act, 1952, and for oils used in coastal ships under Section 204 of the same Act. In the latter case, the shipowners also have an alternative of duty-free delivery direct from the bonded warehouses or refineries.

Unfortunately, it is not practicable to allow horticultural producers to receive heavy oils without paying duty in the first instance. To do that would involve either physically distinguishing the oil by a marking system, which I am advised would be uneconomic for the small quantities involved, or placing the oil and the horticultural producers' premises under bonded customs control, which would also be uneconomic and expensive in terms of Customs staff.

There is no parallel between the delivery of oil direct from a bonded vehicle into the storage tank of a horticulture producer who may be using oil both for domestic central heating and for the growth of produce. I am sure that the House will agree that control is a great deal more difficult in the latter case. Therefore, I have adopted the system which is suggested in this new Clause.

The Clause defines horticultural producers as persons growing horticultural produce primarily for sale, that is, those carrying on a business. It allows repayment claims in respect of heavy oils used in heating glasshouse premises, frames, and so on, for the growth of horticultural produce and also heavy oils used for sterilizing soil for that purpose. Its scope is wider than that put down in the Amendment by my right hon. and learned Friend, which was confined to heavy oils used for heating glasshouses.

I found it necessary to widen the Clause to avoid anomalies, but this widening does not go beyond the spirit of the case that I was asked to meet. Oils used for drying or processing horticultural produce after its growth is completed are excluded from the Clause. I had to restrict the concession to growth in order to confine it to the horticultural industry proper. If I had not done so, the concession would spread to the field of distribution.

I have tried to meet the case urged on me by both sides of the Committee, I hope that this new Clause meets the legitimate anxieties that the horicultural industry had as a result of the Bill originally presented to the House and that the House will give it a sympathetic Second Reading.

Sir Derek Walker-Smith (Hertfordshire, East)

I do not want to detain the House for more than a few moments, but I think that I should be lacking in courtesy if I did not express appreciation of my right hon. and learned Friend the Chancellor of the Exchequer for implementing the undertaking that he was good enough to give in Committee in respect of the duty on heavy oils for horticultural installations.

I think that the right hon. Member for Huyton (Mr. H. Wilson) observed in the course of our proceedings that this was the only material concession which the Chancellor had found himself able to make in the course of our protracted deliberations oh the Bill. While that in itself may be a matter for regret, I naturally take the view that, if my right hon. and learned Friend felt that he was limited to one concession, it is both gratifying and appropriate that his choice should have alighted on this particular one, which was moved by myself, and which, I think, is in a very good cause.

I am sure that this concession will be very warmly welcomed by horticulturists in all parts of the country and that it will be a material help to them in grappling with the very difficult problems which notoriously affect their important industry.

Sir Harry Legge-Bourke (Isle of Ely)

In welcoming this new Clause, I wish to ask my right hon. and learned Friend three short questions about it. First, in defining horticultural produce, I should like to know whether that includes the growing of plants for sale as well as the actual fruit or vegetables which may be sold for consumption. A very important section of the horticultural industry grows young plants in conditions very similar to those which it is obviously intended should be covered by the Clause. I hope that we can have an assurance from my right hon. and learned Friend on that point.

My second question is whether mushroom growers are also covered by the Clause. It is rather a fine distinction, but the question of heating soil is certainly very relevant to mushroom growers, because they suffer as much from the import problems as the growers of any other horticultural commodity.

Thirdly, I notice that in the proviso to subsection (4) of the new Clause there is a date from which the Clause becomes operative. May I take it from that proviso that those who had considerable oil stocks in hand when the Chancellor made his Budget statement will not now have to pay duty on that oil?

Finally, one further observation. Of course, I welcome the new Clause very much indeed, but I hope that my right hon. and learned Friend will appreciate that what has made it necessary for the horticultural industry to put the pressure upon us that it has is not cured by the new Clause, and I hope that the Government will bear in mind that they can expect no relief from the pressure exercised by the industry to have the import policy looked at.

Mr. Douglas Marshall (Bodmin)

I do not propose to detain the House very long in welcoming the new Clause and in thanking my right hon. and learned Friend for introducing it. I share with my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) the hope that my right hon. and learned Friend will make it clear that the growing of young plants is covered by the Clause. I am glad he pointed out that he recognised the difficulty of the horticultural industry in not being covered by the Annual Price Review. That, of course, in itself shows the strength of the Review.

Mr. Nabarro

Worcestershire is a major horticultural producing county and it would be churlish of me not to add my thanks to those of my right hon. and hon. Friends for this minor though very important concession, which has much pleased the horticultural growers in my constituency and in the adjoining constituency.

Mr. William Ross (Kilmarnock)

We in Scotland are not entirely dissatisfied with this new Clause. The point so very well made by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) is one to which I should like to address myself. We are concerned whether that part of the horticultural industry dealing with plants and the growing of plants is covered by the Clause. I hope that we shall get a satisfactory answer from the Chancellor on that point.

I should like to have an explanation of the last part of subsection (5) of the Clause. It states that the grower has to make application for the concession, and it is laid down, more or less, the form which that application has to take. There have to be facts and reasonable proof of the facts. They have to be provided in a particular way and form and there has to be scope for an inspection in order to justify the facts.

What concerns me is that the last part of the subsection reads: If such proof is not furnished … if the required facts are not stated, or if he fails to permit any such inspection"— and then we get— the facts shall be deemed for the purpose of this section to be as the Commissioners may determine". I should have thought that if a person did not comply with these requirements he would be entirely disqualified from receiving the concession. Therefore, I want to know why this form of words was used and, indeed, what it means.

5.15 p.m.

Mr. E. C. Redhead (Walthamstow, West)

It would be wrong, in so far as this concession was urged upon the Chancellor in Committee by both sides in support of the very powerful case made by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) if we were not to welcome the new Clause. A very strong case has been made out for the concession and we are very grateful to the right hon. and learned Gentleman for meeting it. May I say, in passing, that we regret that he has not been so forthcoming in meeting other claims for concessions, but that does not minimise the welcome which we extend to this concession.

I, too, wish to raise the point referred to by my hon. Friend the Member for Kilmarnock (Mr. Ross) as to the exact meaning and effect of subsection (5). It would appear to suggest that though the Commissioner may require an applicant to furnish information and proof in respect of his claim and to allow an inspection of his premises, nevertheless, if he fails to provide the information or proof or to permit inspection, he may still secure some degree of repayment on the basis of some facts determined by the Commissioners.

I should have thought that it would be appropriate in such circumstances, as, indeed I think, is covered in other cases of repayment of duty of a similar character, to disallow the claim. I cannot understand why words to that effect were not incorporated in the Clause. The Chancellor referred to similar concessions made in the principal Act of 1952, under Sections 204 and 205, in respect of vessels in home waters and fishing vessels. I have studied those Sections without finding any comparability in the provisions therein with this subsection in respect of this concession. On the contrary, there are provisions against the abuse of those other concessions, penalties for abuse and for contravention of the regulation. I can find no suggestion whatsoever in this Clause of any penalties that may arise as a result of a false claim.

It seems a little incongruous that a claimant may still hope to get something out of his claim even if he does not satisfy the Commissioners of Customs and Excise as to the facts and even though he may make a false claim. Apparently, he suffers no penalty by so doing. I hope that the Chancellor will clarify the matter, although I readily appreciate that the administrative machinery which he proposes in order to give this relief by way of repayment is, in the circumstances, the best system to adopt.

Sir Douglas Glover (Ormskirk)

May I thank my right hon. and learned Friend for introducing this new Clause and also my hon. Friends who were present when this matter was debated earlier in Committee? I should like to have been present during the debate but, unfortunately, I was prevented from being here. I was on a delegation abroad.

I am sure that the horticultural industry welcomed this concession. I agree with my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) that the horticultural industry is going through a very bad time as a result of the present import policy. Indeed, it is going through as bad a time as any industry in the country. Many of those in the industry are very small people and they need the help of this House to fight their battles for them.

I must warn my right hon. and learned Friend that, although this is a very valuable concession, the whole import policy for horticultural produce is one which is causing a great deal of disturbance in those parts of the country where horticulture is of such great importance.

I hope that my right hon. and learned Friend will resist the objections of hon. Members apposite to subsection (5). It is drawn deliberately widely because many growers are in a small way of business. It means, I understand, that even if they do not correctly complete their forms and the like, the Commissioners of Customs and Excise will decide what they consider to be a reasonable amount for them. Perhaps, however, it would be a good thing if my right hon. and learned Friend would clarify subsection (5) before we part with the Clause.

Mr. Selwyn Lloyd

In reply to my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), plants are covered. The mushroom growers, also, are covered. With regard to oil in stock at the time that this provision comes into effect, if the amount held in stock is under 200,000 gallons, it is not affected. If it is over 200,000 gallons—I rather doubt that anyone concerned with horticulture would have such a quantity—it will be covered by an Amendment to be moved later to another Clause.

In response to the undertaking which I gave to my hon. Friend the Member for Preston, South (Mr. Green) to deal with the retrospective element, an Amendment has been put down to cover that. In either case, therefore, the horticulturists will not be caught by this provision. Penalties are covered by the main Customs and Excise Act. Therefore, it is not necessary to include them in the Clause.

In reply to the point raised by the hon. Member for Kilmarnock (Mr. Ross), my hon. Friend the Member for Ormskirk (Sir D. Glover) was quite right. The reason for framing the subsection in this way was to help, not to hinder. There are cases in which the proper records may not be kept. In that event, if the Commissioners of Customs and Excise were to act on evidence submitted to them, they would be bound to say that the case had not been made; they would not be able to guess at an equitable amount that the grower should receive. The subsection is drawn so that if somebody produces inadequate evidence but the Commissioners are certain that he has ground for some sort of claim, they should be able to pass part of the claim. Without this kind of drafting, the Commissioners would be in difficulty.

Mr. Ross

The subsection goes much wider than that. It uses, for example, the words fails to permit any such inspection". The question of inspection is surely within anyone's competence, no matter how inadequate the books may be.

Mr. Lloyd

I am not certain whether the hon. Gentleman is suggesting that I should stiffen the provisions of the subsection or relax them.

Mr. G. R. Mitchison (Kettering)

We can only take the subsection for what it says. It is a clear and remarkable provision. It is supposed to help the applicant who cannot fill in his form fully. Perhaps he does not have the information, or perhaps he is not very good at it. We all understand that and sympathise with it, within reason. Subsection (5) states, however: if such proof is not furnished to their satisfaction, or if the required facts are not stated, or if he fails to permit any such inspection". That is to say, the poor, innocent man, who is bad at filling up forms, has refused to allow anybody to go and see for himself that which a complete and correct filling up of the form would reveal.

The conclusion is that if any of those things happen, the facts shall be deemed for the purposes of this section to be such as the Commissioners may determine. Suppose that the Commissioners have good ground for believing that it is not begonias or strawberries which are being grown, but something else. How are the Commissioners to decide which of the numerous varieties of horticultural products are to be deemed for the purposes of the Clause to be grown by the small man who finds difficulty in filling in a form?

It is a small matter, we all know, but this is an outrageous way of doing it. If the Chancellor cannot think of any better way of dealing with a man who finds difficulty in filling up a form, or who fills it incompletely, he ought to think again. Nobody supposes the Commissioners to be tyrannical, idiotic, or anything of that sort. Surely, the simplest and the right plan would be to say, "If you make your case, you can have the relief. If you do not make your case, you do not get the relief", and to give the Commissioners, as one does in cases of this kind, a certain amount of discretion about what "making a case" means.

It is an absurd way of doing a simple thing to go on from that to say, "If you deliberately do not allow any Customs representative to come and see the facts for himself, you not having stated them correctly or sufficiently on your form, the Commissioners still have complete discretion to invent, if they so choose, an entirely imaginary set of facts which may or may not entitle you to get relief under the Clause." The Commissioners should be given discretion, but if the grower does not make his case, why should he get the relief?

There are many other people besides horticultural producers who are concerned with making small claims. We have all had to sign lots of them on behalf of people like old-age pensioners. They are treated reasonably and fairly. Those who administer these things know how to give way and how to give a little ground in this kind of case. There is no need to put in such absurd and fantastic provisions as the Chancellor has chosen for this purpose.

Mr. Selwyn Lloyd

I am still not certain whether I am being bullied on the ground that I have given away too much, or reproved because I have not given away enough, From the speech of the hon. and learned Member for Kettering (Mr. Mitchison), I gather that I am being reproved for giving away too much. This concession is not an easy one to administer. We have had to give a great deal of thought to whether it was practicable for the sums involved to be repaid. It will put a heavy burden upon the Commissioners of Customs and Excise to do it.

It may be said that that is no excuse for a form of words which do not make much sense. But the subsection cuts both ways. The proposed arrangement is reasonably fair to both sides. The Commissioners must be able to come to a determination. It may be said, "If the grower fails to permit any such inspection, why should the Commissioners come to a determination in his favour?" I have no doubt that if the grower refuses inspection for reasons which give ground for suspicion, the Commissioners will decide against him. They will assume from the facts that the man is not entitled to anything. I ask the House to accept the new Clause. We have done our best to meet the case which was put forward in Committee.

Mr. H. Hynd (Accrington)

When the Clause was drawn up, I wonder whether the Chancellor had in mind the point raised by one of his hon. Friends about mushroom growers.

Mr. Nabarro

It is important.

Mr. Hynd

I agree. I am only pointing out that mushrooms can be grown in a cellar. Suppose that somebody says, "I have a cellar in which I grow mushrooms." The Commissioners may say that they would like to look at the cellar. The grower might reply, "Oh, no, you will not. You are not coming on to my premises." Are we, in those circumstances, to say that the grower, having refused to allow the Commissioners to see whether he has mushrooms in his cellar, will still get any relief that the Commissioners may determine? Was that sort of possibility in the Chancellor's mind when drawing up the Clause?

Mr. Selwyn Lloyd

That would be a case in which the Clause would operate to protect the Commissioners, because in that case, without doubt, they would say that there was no claim. The man cannot come afterwards to try to reopen the matter and say, "I had a claim after all, but you would not accept it." There must be a means of finality about it. I am grateful to the hon. Member for giving me the chance to reply to such an example.

Question put and agreed to.

Clause read a Second time and added to the Bill.