HC Deb 11 June 1964 vol 696 cc773-5

Motion made, and Question proposed, That the Import Duties (General) (No. 4) Order 1964 (S.I., 1964, No. 633), dated 27th April, 1964, a copy of which was laid before this House on 1st May, be approved.—[Mr. du Cann.]

Mr. Douglas Jay (Battersea, North)

Perhaps the Minister of State will explain these two Orders and say why he wishes them to be approved.

10.12 pm.

The Minister of State, Board of Trade (Mr. Edward du Cann)

I shall be very happy to do that, if it meets the convenience of the House.

Perhaps it would be better to take these Orders seriatim as they deal with different subjects.

The first Order varies the rates of import duty payable on articles of natural cork which enter this country under tariff heading 45.03. Its effect is to increase the full rate of duty on cork stoppers with plastic tops from nil to 10 per cent. ad valorem, and the E.F.T.A. rate from nil to 4 per cent.

In order to show why this Order is necessary, as invited to do by the right hon. Member for Battersea, North (Mr. Jay)—I must ask the House to bear with me for a moment while I go over the history of the matter and explain how the present duty position arose. Until November, 1961, all cork stoppers except those containing metal rubber or wood were dutiable at 10 per cent. ad valorem At that date, this duty was removed, following an application by the Cork Trade Association—what one might call a routine matter of application, justified and accepted. It seems, however, that the Association had not realised that if the duty payable under the tariff head covering cork discs and cork stoppers other than those containing metal, rubber or wood were removed, as it requested, plastic-topped cork stoppers, which come under the same head, would also be freed of duty. As soon as it realised that these stoppers had become duty free, it at once asked for the duty on them to be restored.

The present Order, therefore, does not impose a new duty, but restores one which was removed not by intention but by inadvertence on the part of the applicants.

However we did not feel that it would be right to re-impose an import duty, once it had been removed—I hope that the right hon. Gentleman and the House will agree with this—simply on such grounds which, after all, were rather remarkable and unusual unless there were also some evidence that actual harm was being caused which had not been intended. A full investigation therefore was made to find out whether lack of protection was doing any harm to domestic manufacturers of plastic-topped cork stoppers. We found that it was, and clearly was.

This is a type of stopper which, as hon. Members will no doubt have noticed if they have much contact with bottles—I am obliged for support from whatever quarter it is derived—is coming increasingly into use. They were not so widely used until about 5 years ago because the technical problems of joining the plastic stopper to the cork had not been satisfactorily solved. The right adhesive has now been discovered and manufacturers have found that more and more of their customers are going over to the plastic-topped stopper. In other words there has been some change in the situation.

They are, of course, ready to supply these, but find that they lose many orders because of competition from imported plastic-topped stoppers, mainly coming from the Netherlands and Western Germany, at prices which are often lower than they themselves can afford to quote. This is partly because the plastic raw material used, polystyrene, is cheaper on the Continent than it is in Britain, and partly because Continental competitors, whose home markets are protected by import duties of over 12 per cent are in a better position to install the most modern and efficient machinery. It has been said that restoration of the import duty will enable our industry also to install such machinery and make itself more competitive.

We have, therefore, satisfied ourselves that this small but worthwhile United Kingdom industry stands in need of the protection which it enjoyed until it was inadvertently removed in November, 1961, and that restoration of the duty is, in accordance with Section 1(2) of the Import Duties Act, desirable in the interests of maintaining and promoting the efficiency of its production.

I am glad to have been able to give the House this short explanation as requested by the right hon. Gentleman.

I hope that in the fight of all these considerations, the House will give its approval to the Order.

Question put and agreed to.