Temporary Import Charge (Hansard, 1 November 1965)

§ 80. Mr. DEREK PAGE
To ask the Chancellor of the Exchequer what proposals he has to simplify the formalities required for the drawback of temporary surcharge on chemicals used in the manufacture of products for export.

§ The Chancellor of the Exchequer (Mr. James Callaghan)
With permission, I will answer Question No. 80.
No further general simplifications are contemplated at present, but the Customs are always willing to consider any special problems. If my hon. Friend will let me have the details of any difficulties that exporters are experiencing, I will see how they can be assisted. I should like to convey to the House my apologies for my absence last Thursday when this Question and Question No. 81 were called.

§ Mr. Page
I am most grateful to my right hon. Friend for that reply. Is he aware that many firms feel that the cost of going through the formalities for the drawback virtually outweighs the value of the drawback? Is he further aware that the demand for these chemicals, which are not made in this country, is singularly inelastic and therefore not amenable to financial control in this way? Would it not, therefore, be better to adopt my original suggestion of treating these chemicals as raw materials and exempting them altogether from the surcharge?

§ Mr. Callaghan
I expected that supplementary question. I would remind my hon. Friend that the surcharge was not designed as a protective duty and, there- 628 fore,it has not been possible to carry out the steps he proposes. There will be an apportunity to debate this matter again, and then, perhaps, I will be able to answer him a little more fully.

§ Mr. Grimond
Is the Chancellor aware that there is fear that what was imposed originally as a temporary expedient will become permanent? May we have an assurance that it is still the intention to remove the surcharge as soon as possible and that it is not intended to become a permanent part of our restrictive machinery?

§ Mr. Callaghan
I am dealing now with Question No. 80.

§ 81. Mr. G. R. HOWARD
To ask the Chancellor of the Exchequer, when the temporary surcharge will be lifted.

§ Mr. Callaghan
With permission, I will answer Question No. 81.
As our progress warrants it, that is to say when we have corrected the imbalance of the economy and in our external payments.

§ Mr. Howard
While thanking the Chancellor for his courteous letter to me about the unfortunate episode last week, may I ask him three questions?

§ Mr. Speaker
Order. This is being treated as an ordinary Question. The hon. Gentleman must put one supplementary question.

§ Mr. Howard
Can the Chancellor tell me the effect that this is having on our exports? Was this discussed during the E.F.T.A. meeting last week? What opinions were expressed about it then? Lastly—

§ Mr. Speaker
Order. The hon. Gentleman has already asked three questions when I asked him not to, and he cannot now ask a fourth.

§ Mr. Callaghan
The answer to the first part of the hon. Gentleman's supplementary question is "None". The answer to the second part is, "Yes". In answer to the third part, I would refer him to the communiqué that was issued.

§ Mr. William Clark
Is the Chancellor not aware that, on 11th December, he 629 said that the surcharge would save £300 million, but that on 29th July the President of the Board of Trade refuted this figure and said that it was never mentioned? Does not this show complete lack of liaison between the Treasury and the Board of Trade? What action is the right hon. Gentleman taking to prevent a recurrence of such a blunder?

§ Mr. Callaghan
I am sorry that the hon. Gentleman missed his chance last Friday when I made my statement and answered a similar question. However, I will repeat the answer. Apparently it has escaped the hon. Gentleman's attention that the surcharge was reduced from 15 per cent. to 10 per cent. early last summer. That, of course, affected the estimates of the effect.