IMPORT DUTIES (Hansard, 5 May 1965)

§ The Minister of State, Board of Trade (Mr. Edward Redhead)
I beg to move, That the Import Duties (General) (No. 2) Order 1965 (S.I., 1965, No. 700), dated 29th March, 1965, a copy of which was laid before this House on 2nd April, be approved. This Order, which embraces only minor technical changes, clarifies the legal duty position on certain organic chemicals in Chapter 29 of the Customs Tariff and on lacquers in Heading 32.09. It also restores the rates of duty which applied until the end of 1963 to certain brush handles of wood.
The Order removes certain obscurities which have only recently been appreciated and which flow from the changes inadvertently brought about by the adoption of the Brussels nomenclature form of tariff in 1959. It is somewhat complicated at first blush, and, without ready reference to the Orders concerned, it is perhaps a little difficult to follow. I will seek to explain rather the purposes and effect of the Order.
To take, first, the chemicals, the Order amends the Notes and Rules to the tariff to make clear that derivatives of certain compounds of organic chemicals in Chapter 29 are classified in the appropriate residual tariff subheadings, generally at a full rate of duty of 33⅓ per cent. In practice, nearly all imports have been classified in this way, but before the clarification effected by the Order this classification could be challenged because Note No. 5 to the Chapter could have been interpreted to mean that the derivatives were classified with their parent compounds at lower rates of duty.
In the second case, that in respect of lacquers, the Order makes clear that lacquers covered by Heading 32.09 fall under Subheading (D)(1) at full rates of duty of 12½ cent. or 7½ per cent. Before the Order came into force Subheading (D)(3), which carries full rates of duty at 10 per cent. and 5 per cent., could have been interpreted as covering certain lacquers. The ambiguity in the legal duty position is removed by specifically excluding lacquers from Subheading (D)(3).

§ Mr. George Y. Mackie (Caithness and Sutherland)
Hear, hear.

§ Mr. Redhead
I am glad to have the hon. Member's approval. I hope that he follows this with the clarity that his comment would suggest.
In the last case dealt with by the Order, certain wooden brush handles fell by a strict legal interpretation of the tariff in the residual subhead G of Heading 44.25, at a full rate of duty of 20 per cent. Wooden tool handles named in a separate subheading attracted a lower rate of duty—10 per cent. or 12 per cent. according to type. For many years the Customs had accepted as tool handles certain types of handles which could be used for brushes. At the end of 1963 it reviewed its classification practice. It decided that it did not conform with the strict legal position and must be amended to do so—and importers with an established trade objected to the resultant increase in duty. The Order has restored the lower rates of duty on wooden brush handles of the types in question.
The practical effect of the Order in all three cases is to bring the legal position unambiguously into line with the intended duty position and to provide for imports to be charged at the rates of duty which, in fact, have generally been applied. In that respect it is purely technical. It is, in fact, regularising a position which in the main has been applied in practice in respect of chemicals and lacquers, and in the case of brush handles it restores these to an appropriate position as was originally intended.

§ Mr. John Hall (Wycombe)
The Minister has explained this rather complicated Order with a clarity which we have been accustomed to from him, and, apparently, he has introduced a note of humour which was at least appreciated by the Liberal Party, if by no one else.
I have one or two questions to ask merely to clarify my mind. Can the hon. Gentleman say what quantity, if any, of the compound of organic chemicals referred to in the Order as entered at the lower tariff—if any entered at all—or is this just to provide for the possibility in future? Much the same question applies to lacquers. Has any come in under the Subhead D(3) which would qualify for the lower tariff, or, again, is this merely to anticipate the possibility that that might occur?
1509 The Order will mean a reduction in tariffs on brush and broom handles, which we welcome, as I remember having heard some reference to brush and broom handles and similar wooden articles when we were debating the surcharge.

§ Mr. Redhead
The answer to the hon. Gentleman's question in respect of the organic chemicals is there has been only one instance where a particular trade have contested the legal position and the lower rate of duties did apply. Elsewhere, in practice, the higher rate of duty, as intended, notwithstanding the obscurity of the legal position, has applied throughout. In the case of lacquers there has been no exception. As he rightly says in regard to brush handles. this is a reduction of the duty.

§ Mr. Forbes Hendry (Aberdeenshire, West)
My hon. Friends on the Front Bench seem to have found the Minister's statement about this very much clearer than I have, because I am afraid that I am just as wise now as I was when this debate started.
I would like the Minister to give us some further clarification about this extremely important Order. It is very obvious that priorities of the Government always seem to be the least important things and that the really important things never seem to come up. I was hoping, when I saw this Order, that we were to have a complete abolition of the 10 per cent. surcharge, but it seems that that is not the case.

Mr. Speaker
It would have been out of order. This debate is in a rather narrow confine relating to broom handles and the other matters referred to.

§ Mr. Hendry
Thank you for keeping me within the rules of order, Sir.
It does seem to me that the effect of this Order is to put a very serious additional impost upon certain chemicals being imported into this country. As I understand it, certain organic chemicals are to bear a duty of 33⅓ per cent. I should like to know what these chemicals are and why they must bear this import charge, which they have not done in the past. Perhaps the Minister would 1510 care to explain what effect this is going to have on the home manufacturer of these chemicals. Is there to be some sort of protective duty in respect of the home chemical industry, or is this for the purpose of raising the price of the chemicals? Who is to pay the additional charge, on the National Health Service for instance, in this country?
We are told about certain derivatives of chemical compounds, but we have had no explanation whatever of what these chemicals are. What are they and what are they used for? What are they made of and who is to pay for them? Is it the taxpayers, the ratepayers, or the private individuals? I hope that the Minister will give us an answer to these questions in the greatest possible detail.
We find that part of the Schedule deals with lacquers. Certain lacquers are to bear the additional impost of 12½ per cent. and 7½ per cent. We have had no explanation about which lacquers are to bear these duties. There has been no explanation as to what a lacquer is. I would like to know what the difference is between a lacquer and a varnish. I hope that the Minister will give us some information on this vital subject and the amount of money involved. We have not had a word of explanation about what these lacquers are used for.

Mr. Speaker
What the hon. Gentleman says is in order except for the reference to varnish, because the Order does not change the position with regard to varnishes.

§ Mr. Hendry
I apologise for that, Mr. Speaker. My reading of this Order had not made this perfectly clear. I am very sorry to say that the Minister did not explain. I hope that the Minister will give us detailed information about the lacquers which are to be used and that he will say whether they are to be used in connection with house decoration or the jewellery trade and so on and how this duty will affect the citizens of this country.
There is to be a serious imposte of no less than 10 or 12 per cent., dependent on the type of wood, on brush handles. This will obviously increase the cost of living, for housewives obviously have to buy brush handles. I should like the Minister to explain the actual increase in the cost of a brush handle. 1511 Why is a 10 per cent. impost to be imposed on ash brush handles and 12 per cent. on others, when ash is a very suitable type of wood and yet other and inferior types of wood are to bear a higher duty?
What will be the effect on the timber industry? Is this proposed to be a protective duty? The production of wooden brush handles is a very important industry in my constituency. There is a man who runs a sawmill and a turning mill and who makes brush handles and I would like to know what the effect of this duty on him will be and whether the Government have taken that into account.
We then come to the very interesting proposition of the duty to be paid on a lacquered brush handle. If a duty of 7½ per cent. is to be put on lacquers and a 10 to 12 per cent. duty on brush handles, this is an important matter which requires a complete explanation.
I should also like an explanation of what the position will be if a brush handle is used not as a brush handle, but as a rake or hoe handle. Is that specific article to bear the duty? If not, how is the Customs officer at the port to differentiate between a rake handle, a hoe handle and a brush handle? We are entitled to some explanation and I hope that the Minister will not only tell us why he is introducing these duties to increase the cost of living, but will give us the other details to which we are entitled and will tell us how the wretched Customs officers at the ports will differentiate.

§ Mr. George Y. Mackie (Caithness and Sutherland)
I agree with the hon. Member for Aberdeenshire, West (Mr. Hendry) on at least one of his statements, when he said he was no wiser at the end of the Minister's statement than at the beginning. I have long thought this to be true.
I should like one piece of information from the Minister. In view of events coming on tomorrow, it is extremely important that the country should know what degree of deviation in the straightness of pole handles of timber 54 inches in length will be allowed. If the Minister could explain whether any deviation in the straightness of brush handles is to 1512 be allowed, that would be extremely important.

§ Sir Douglas Glover (Ormskirk)
This Order is a typical example of the Government's attitude in trying to get important legislation through the House when everybody thinks that the important business is over. [Laughter.] I do not know why the Liberal Party should think that this is amusing, because it is important. As a Member of Parliament, I have a right to ask, on behalf of my constituents, the Minister to explain any Order which comes before the House. Will the Minister tell us what esters means, because I do not know? Will he tell us what halides means, which is mentioned in Note 5, because I do not know?
The Schedule says: Special note applying to subheadings only where any esters, salts or halides mentioned in Note 5 above fall within a heading of this Chapter divided into subheadings, they shall be classified in the final subheading unless mentioned in any other subheading. I do not know whether anybody in the House knows exactly what that means. It certainly has not been clarified by the Minister's explanation in introducing the Order. I hope that before we depart tonight, the hon. Gentleman will make it clear what all these things mean.
One could say that these are only expressions and that they are not important, but the whole rôle of democratic government is that the representatives of the people should find out why they do not know what these things mean. I want an explanation from the Minister of what these expressions mean. I am sure that I carry all my hon. Friends on this side with me, as well as hon. Members opposite, in saying that there is no hon. Member here who knows what these expressions mean.
We then come to paragraph 3 of the Schedule: 3. In heading 44.25, the following shall be substituted for subheading (B):— '(B) Tool, broom and brush handles:

(1) Fork, shovel and spade handles of the box or "D" type, whether riveted or not.'" — — —

After that, all that I can see on the Order is three dashes. Will the Minister explain? Does this mean that although these things have been included in the 1513 Order, there is no change in these categories? If there is no change, why have they been included in the Order?
Next, '(2) Straight pole handles of 20% — 6% softwood not exceeding 54 inches in length or 1¼ inches in diameter.' If the length is 55 in., do they then incur a totally different percentage? If they are 1½ in. in diameter and not 1¼ in., do they come into a totally different category? I notice that the Minister is now reading the Order for the first time. Perhaps he will do the House the courtesy of giving us a reply to the problems with which we are confronted.
Again, (3) Other: (a) Of ash … … 10% — 3%'. There is no explanation of what "10% — 3%" means. ' (b) Of other wood 12% — 4½%'. Does this mean that if it is made of oak instead of ash, instead of paying 10 per cent. originally it pays 12 per cent. and that this figure is now reduced to 4½ per cent.?
When Ministers bring these Orders before the House, they are in duty bound— I see the hon. Member for Islington, North (Mr. Reynolds) smiling. But he is now Under-Secretary of State for Defence for the Army, so it is no wonder that he smiles. He is a Minister and he is getting experience in this kind of thing. He must be becoming very accustomed to these things under the present Government. They are bringing in these things with no explanation, expecting the House of Commons to act as voting fodder. [HON. MEMBERS: "Hear, hear."] I am glad to hear the Liberal Party applauding that. I thought that in recent days the Liberal Party had given up its support for free enterprise and had become totalitarian in outlook.

Mr. Speaker
Order. The hon. Member should get back to the dashes.

§ Sir D. Glover
Thank you, Mr. Speaker, for bringing me back to order. The Liberal Party is an attractive dash, if that is the right word. I will not pursue that, however, because if I were to do so, you would rule me out of order.
1514 According to the Explanatory Note, This Order provides for amendments to the Customs Tariff in respect of— (1) derivatives of certain compounds of organic chemicals. I have read the Order, but for the life of me I cannot see where this is relevant to the Order. I hope that the Minister will make it clear. We are not all senior wranglers. We are the average representatives of the electorate. I am speaking on behalf of the Liberal Party, also.
Next, (2) certain lacquers, and". My hon. Friend the Member for Wycombe (Mr. John Hall) also spoke on this matter. In paragraph 2 of the Schedule, we read: In subheading 32.09(D)(3), in column 1, after 'varnishes' there shall be inserted 'and lacquers'. All the Explanatory Note says is (2) certain lacquers, and". Well, I think the Minister ought to explain what "and" means. It then says: (3) brush and broom handles of wood. The effect is to correct errors in the Tariff, which have recently come to light, in order to restore the intended rates of import duty. I listened very carefully to the Minister when he moved the Order, and he did not make any explanation of what had happened in his Department that had uncovered the errors in the tariff. He did not say whether they were serious errors, what was their cost to the Exchequer, how many millions of pounds, or shillings, or pence, the nation had lost as a result of the inaccuracies in the arrangements before this Order, and that the purpose of this Order was to restore the intended rates of import duty.
Returning to paragraph 3 of the Schedule, as I understand "20% — 6% "and" 10% — 3% "and" 12% — 4½%" indicate that most of the percentages are being reduced and not increased. So how does this Order restore the intended rates of import duty? Does it reduce the rates of import duty? Does it increase the rates of import duty? Does it strengthen the Exchequer?
Is this a process of buttressing the exchanges, removing the great deficit which the Government said they took over when they took power? Is this part of the process of strengthening our position in the international exchanges? 1515 Is it to bring justice into our import duties? Are these duties being increased or are they being reduced? Looking at the Order I find it very difficult to find out whether they were being increased or reduced.
I should be grateful—having had a little bit of fun, I should, seriously, be grateful—to the Minister if he would make it quite clear to me whether they are being increased or reduced, because, with the greatest respect to the Minister, his opening remarks on this Order were so clear it was like being in a Scottish mist—and that is why the Liberal Party is taking so much interest in it.

§ Mr. Jeremy Thorpe (Devon, North)
I should like briefly to ask about the past, the present and the future of this Statutory Instrument. First of all, could the Minister tell us when these errors were discovered and how they were discovered, and how much money has been either lost to the Treasury or overpaid by the importers? If the latter, what provision is there for drawback so that they may be repaid the money which they have been overcharged? I am sure the Minister would agree that justice must be done in this matter and must manifestly be seen to be done, and I am sure, too, that the House, before voting for this Order, would wish to be assured on this point.
I find that the Explanatory Note is very misleading. It tells us that This Order provides for amendments to the Customs Tariff in respect of "— one, two and (3) brush and broom handles of wood. One would, therefore, think, if the Explanatory Note were adequately setting out what is done, or what is purported to be done, in the Order, that one would find out that the brush and broom handles referred to must be made exclusively of wood. No such definition appears in the Order at all. In the first place, it refers to "Tool, broom and brush handles" not referred to in the Explanatory Note for some unknown reason, although I would have thought them at any rate an equally important category, and that, therefore, there was no reason for excluding them while the 1516 others are included. After all, the purpose of the exercise of an Explanatory Note is, I suppose, to explain.
All it says is that tool, broom and brush handles shall have certain tariff rates exacted on them, and then various different categories are mentioned. From (2) and (3) we know that these tool, broom and brush handles are, as lawyers might say, in pari materia with the matters previously referred to, but they are referred to as having to be fabricated in wood. It is not suggested that any other substance is expressly excluded, but, as the right hon. Gentleman knows, it is an old construction of interpretation that expressio unius est exclusio alterius. For that reason the mere mention of wood would clearly hypothecate that nothing else was intended.
When we refer to Fork, shovel and spade handles of the box or 'D' type, whether riveted or not", The Minister should tell us—I know that he wants to be fair about this—whether they are in riveted or non-riveted conditions, whether they are of the box type, or whether they are of the "D" type.
I do not suppose that the Minister can help us by saying whether the word "box" is meant to indicate a particular type of wood—boxwood. I would assume that it refers to a particular type, formation, or shape. That being so, there is no reference to the need that these tool, broom or brush handles expressed in (3)(b) should be fabricated of wood and wood alone.
That being so, it may well be that we shall find plastic and other materials in which these tool, broom and brush handles are fabricated attracting a rate of duty. There may be a conflict, and they may come under some other Statutory Instrument. I hope that the Minister will say something about that.

§ Sir D. Glover
With modern technology, they may be made of ash and wood and hardboard.

§ Mr. Thorpe
I am grateful to the hon. Gentleman. I am coming to that.
If the Minister has found that there has been an error in the exaction of this tariff in the past, I should have thought that he would have been deeply anxious to see that it did not occur in the future. 1517 Who will decide of what particular wood a tool, broom or imported brush handle is made? What will be the position? Will it depend on the decisions of Customs officers? Will they have to examine them? I do not suggest that they should examine each tool, broom and brush handle that is imported, but supposing they have to make spot checks? Will they be trained to make this differentiation in timber? If a person disagrees with the decision of a Customs officer, will there be a right of appeal, or will the officer's decision be final?
With regard to the future, who will decide what should be the length of straight pole hundles? Who suddenly dreamt up this 54 ins. in length or 1¼ ins. in diameter? What is the significance of these figures? Who thought them up? What representations were made by the trade? What discussions took place before this was introduced? Was this suddenly produced? Does it represent some usage in the trade? Has it any significance?
What is to be done with a tool handle which exceeds 54 ins. in length or 1¼ ins. in diameter? If it is not the fault of the unfortunate importer, will he be able to reduce the length of these handles while they are in the Customs' shed? Will they have to be impounded, or will they have to be re-exported? What will be the position?
Last, but not least, there are these strange figures to which reference has been made. There are three columns against (B) (I), in each of which there is a dash. Against (2) and (3) however, two of the columns contain figures, and one column has only a dash. Perhaps we can have an explanation what these subheadings are meant to represent.
I warn the Minister that in this Chamber we have at the moment a body of very interested hon. Members, who are considering the matter very carefully, and unless the Minister can satisfy us on these points we shall find it very difficult to support the Statutory Instrument.

Mr. Speaker
The Minister requires leave to speak again.

§ Mr. Redhead
With your permission, Mr. Speaker, and that of the House, I should like to deal with the points which have been raised. Hon. Members have certainly had their little bit of fun at this late hour concerning what I acknowledged at the beginning to be a very complicated matter. Had they taken note of what I said—

§ Sir D. Glover
Did the hon. Gentleman explain it?

§ Mr. Redhead
I said that it was impossible clearly to understand this without reference to the original Order, which this Order amends. Had they listened to what I then said they might have avoided the necessity of asking some of the multitude of questions which they have flung at my head in the course of this short debate.

§ Sir D. Glover
It is not the duty of a back bench Member to delve into the background of the Order. It is the duty of the Government to explain it.

§ Mr. Redhead
I sought to explain it by reference to the Order which is being amended. I sought to assist hon. Members, instead of getting involved in complicated references in detail about the contents of the original Order, by explaining the purposes of this very brief and—I assure hon. Members—quite innocuous amending Order.
For example, two hon. Members have asked, in reference to the latter part of the Order, referring to tool, broom and brush handles, the significance of the second, third and fourth columns as, for example, 20 per cent.—6 per cent. Had they taken the elementary precaution of looking at the original Order—No. 10 of 1964—

§ Sir D. Glover
That is the hon. Gentleman's job.

§ Mr. Redhead
With great respect, no hon. Member can discuss this subject intelligently unless he follows the references and looks up the appropriate Order which is being amended. If the hon. Gentleman had done that he would have discovered that the columns in question which caused dubiety are the three columns which specify the rate of import 1519 duty, if any. The first of those columns is the full rate duty; the second is the Commonwealth Preference rate of duty, and the third is the E.F.T.A. rate of duty, and by bringing this Order into conjunction with the original Order and its full classification that would have been made abundantly clear to any hon. Member who wanted to follow it.
The humour with which this Order was greeted early on was a rather excessive degree of humour, I thought at the time, and I am confirmed in that view, because it precluded some hon. Members from following or hearing what I said. I was asked, for example, what additional impost is to be put upon these chemicals. I made it clear that there would be no additional impost. What was happening was to make it clear that the duties which have in practice been levied are brought strictly within the legal definitions which justify them, and within the original intention of the original Order.

§ Sir D. Glover
Does the Minister mean that, for some time, according to the laws of the country, the duties which have been levied have been wrong?

§ Mr. Redhead
I sought to explain originally that it had emerged in the course of ordinary business that there appeared to be some degree of obscurity, and that it was possible to read as the interpretation of Note 5 that the derivatives which were concerned in respect of chemicals were classified with their parent compounds at lower rates of duty. The definition has been the correct one all the time, but, because it was possible to challenge the practice, we sought to obviate any future challenge by trying to make the intention crystal clear.
I am asked what the various chemical headings—esters and so on—mean. These and many other questions would have been appropriate when the original Order—the terms of which are repeated, so far as that is necessary—was under discussion. Not being a chemist, I do not propose to seek to explain in detail the chemical headings concerned.

§ Mr. George Y. Mackie
Is the Minister telling us that now that these definitions have been challenged by the trade concerned, this Order appertaining to 1520 straight broom handles and other things has been brought forward on an unchallenged issue to clarify some point in his Department?

§ Mr. Redhead
With great respect, this debate might have been shorter and all these questions unnecessary if, instead of treating the matter with such humour at the beginning, hon. Members had listened to what I said. On the question of the handles, I made it clear that the effect of this Order is to reduce the rate of duty in practice. I expressly said that the definition, derived in this case from the terms of the Order of 1964, had resulted in protests from the trade, and that, in response to those protests, this Order states the situation in the light of the intention of the original Order.

§ Sir D. Glover
The Minister has been most helpful in his second speech, but earlier in his second speech he said that there would be no change in the income or receipts from the duties or anything else, yet in his last sentence he said that this Order was to reduce duties. The two things do not tie up. If the intention is to reduce duties, I should have thought that there would be a reduction in the income from duties.

§ Mr. Redhead
With great respect, the hon. Gentleman still does not listen.

§ Sir D. Glover
I do.

§ Mr. Redhead
I differentiated as between the chemicals and lacquers on the one side, in respect of which, with one exception which I acknowledged to the hon. Gentleman, what we are doing is regularising what has been followed in the charge of duty on the chemicals and the lacquers concerned. In regard to the brush handles, I made it clear that the interpretation put in the previous Order by Customs and Excise resulted in the application of a higher rate of duty, and that by this Order we are meeting the protests of the trade and restoring the original duty at the lower rate. I differentiated in these regards. I hope that I have made that point clear.
I was asked almost academic questions about length, recognition and identification of rake and hoe handles, and who is to decide whether a brush handle is made of wood or plastic or some other 1521 material. Hon. Members who raised those questions must appreciate that many questions of this character arise in the course of the performance of a Customs officer's duty. The Customs officers are trained, and they determine the appropriate heading of the tariff under which any goods fall. From time to time there may be points of dubiety or points on which traders challenge the official definition. There is available to the Customs and Excise abundant expert advice to determine any cases of dispute, and that would equally apply in this instance. I do not propose to traverse all the questions which have been put. I can only refer hon. Members, as I did earlier, to the original Order, the terms of which, in so far as they are relevant, are repeated for clarify in this amending Order. I ask them to be good enough to study that original Order and they will find the answers to many of their questions.
I repeat that the purpose of the Order is nothing sinister. It does not cover up any kind of impost of new duty—nothing of the kind. It is purely a technical provision to adjust certain inadequacies and certain obscurities which have emerged in practice. Such is the complexity of a tariff of these dimensions that such matters arise from time to time under any Government. There has not been a Government in living memory which has not at some time found it necessary to introduce an amending Order of this kind in order to remove minor points of difficulty and obscurity. That is the sole purpose of the Order, and I ask the House to approve it.

§ Sir D. Glover
Before the hon. Gentleman sits down—

Mr. Speaker
There is every sign that he has sat down.