HC Deb 04 May 1965 vol 711 cc1081-5
2. Sir Knox Cunningham

asked the Chancellor of the Exchequer if the economic situation now allows him to help the man-made fibre industry and in particular those firms manufacturing in Ulster by removing the 10 per cent. impost from acrylonitrile (Chapter 29), niax polyol (within 39.19) and polyadipate esters (within 39.01), being material of the description specified in Schedule 2 to the Import Duties (Temporary Exemptions) (No. 2) Order, 1965.

3. Mr. Chichester-Clark

asked the Chancellor of the Exchequer if the economic situation now allows him to help the man-made fibre industry and in particular those firms manufacturing in Ulster, by removing the 10 per cent. impost from 1:6 hexolactam (within 29.35) and nylon 6 polymer (within 39.01), being material of the description specified in Schedule 2 to the Imports Duties (Temporary Exemptions) (No. 2) Order, 1965.

Mr. MacDermot

The charge on these materials was reduced from 15 per cent. to 10 per cent. as recently as 27th April. Further reductions will depend on the progress of our economy.

Sir Knox Cunningham

When a further reduction is being considered, will the Financial Secretary ask his right hon. Friend to remove it completely from these materials as the man-made fibre industry is severely hit by so much of its raw material being caught by this tax?

Mr. MacDermot

We shall bear the hon. and learned Gentleman's suggestion in mind, but he will remember from our debates on the Finance Bill the difficulties we found in making exceptions for particular materials. It was for these reasons that we thought it better to make a general across-the-board reduction.

Mr. Heath

Will the hon. and learned Gentleman also remember that in those debates many undertakings were given by Ministers that special consideration would be given to these items and to one or two others which were mentioned, and the impression was given that it would not be just a question of a general reduction but they might be the subject of particular reductions? Will he, therefore, look at these items again?

Mr. MacDermot

Certainly. As the right hon. Gentleman said, we did say in respect of certain items that we would give particular attention to the possibility of reductions on them as separate items. We did not find that possible last time. I cannot anticipate what would be the way in which we might make any further reductions.

4. Mr. Channon

asked the Chancellor of the Exchequer when he proposes to make the next reduction of the import surcharge.

The Chancellor of the Exchequer (Mr. James Callaghan)

I have nothing to add to my Budget statement.

Mr. Channon

Will the Chancellor ensure that, when such an announcement is made in the future, it is done in a less inept way so as to avoid the build-up of imports that occurred as a result of giving long advance notice on the past occasion, and will he also remember what damage this is causing to our European allies and try to remove the surcharge as soon as possible?

Mr. Callaghan

I think that the hon. Gentleman is inaccurate in the first part of what he said. He is certainly inaccurate in the second.

Mr. William Clark

Does the right hon. Gentleman recall that, as reported in HANSARD of 11th November, at c. 1028, he estimated that £300 million would be saved by the imposition of the surcharge? If that was a realistic estimate, will he now admit that the import surcharge is not having the desired effect as, for the first five months of its imposition, there should have been a reduction of £125 million but, in fact, imports in those five months went up by over £40 million?

Mr. Callaghan

No, Sir; one cannot produce a straightforward arithmetical equation based on the first few months out of the 12. It is bound to build up over a period, and it is doing so.

Sir C. Osborne

The Chancellor has just heard his hon. and learned Friend say that a further reduction will depend upon the state of our economy. Will he tell the House exactly what he expects to see in the economy before a further reduction takes place?

Mr. Callaghan

I expect to see us well on the way towards balancing our payments in 1965 and completing the process in 1966.

7. Mr. John Hall

asked the Chancellor of the Exchequer what further representations have been made to him about the effect of the surcharge on the cost of life-saving drugs not manufactured in this country; and what replies he has sent.

31. Mr. Jackson

asked the Chancellor of the Exchequer what representations he has received concerning the effect of the surcharge on the cost of life-saving drugs not manufactured in this country; and what replies he has sent.

Mr. MacDermot

No such representations have been made since my hon. Friend the Chief Secretary answered similar Questions on 2nd March.

Mr. Hall

Will not the hon. and learned Gentleman agree that a surcharge imposed to discourage imports should not be imposed on the importation of life-saving drugs? In view of the anxiety expressed by the Government about the effects of smoking on health, is it not rather illogical to impose a surcharge on drugs and yet exempt imported cigarettes from such a surcharge?

Mr. MacDermot

As I explained on the Second Reading of the Finance Bill, if we had been able to make an exception confined to these drugs we should have been very glad to do so. Unfortunately, we could not do so without exempting a great many other imported chemicals many of which are used extensively in other industries. This, again, is a case on which, for the time being at least, all that we have felt able to do is to enable these items to benefit from the general reduction of 5 per cent.

Mr. Jackson

Does my hon. and learned Friend agree that, if the drug manufacturers in this country made smaller profits and spent less money on advertising, they might be able to have the money for research and make the drugs here?

Mr. MacDermot

That is a separate question.

Mr. Hall

Will the Financial Secretary at least give this matter further attention? I am sure that he is sympathetic. Is he prepared to say that, when the Government next reduce the surcharge, this will be the first class of goods to have their attention?

Mr. MacDermot

I assure the hon. Gentleman that I gave specific attention to this matter before the recent reductions were made. I shall do so again whenever the possibility of further reductions comes up.

9. Mr. Dell

asked the Chancellor of the Exchequer whether he will now remit the import surcharge on goods manufactured in developing countries.

Mr. Callaghan

No, Sir.

Mr. Dell

Is my right hon. Friend aware that it would be entirely within the spirit of the new Part IV of the G.A.T.T. and certainly of the U.N.C.T.A.D. to differentiate in favour of developing countries, especially as so much of these goods are in any case subject to quota arrangements? Cannot he reconsider it?

Mr. Callaghan

I am aware of the point about Part IV and I think that there is a compelling argument here; but, on the whole, it is far better for us to work to get rid of the import surcharge altogether rather than make particular discriminations of this sort.

Mr. William Clark

Does not the Chancellor agree that the best way to help developing countries would be to alleviate the penal effects of Corporation Tax and the abolition of O.T.C.s?

Mr. Callaghan

I assume that that is a matter which we shall be debating in the course of the Finance Bill.