MIXED FRUIT AND PLAITING MATERIALS (DUTIES) (Hansard, 24 October 1966)

§ Mr. Keith Stainton (Sudbury and Woodbridge)
Mr. Speaker, with your leave, perhaps I might put a few questions and comments to the Government in the hope that, in due course, we might have some reply and clarification. I stress the word "clarification" because these Orders tend to become extremely obscure and, unless one is highly conversant with the technicalities of the trade involved, what is headed "Explanatory Note" does not progress the situation at all. It is—[Interruption.]

§ Mr. Speaker
Order. Will hon. Gentlemen who intend to stay for the debate, listen to it?

§ Mr. Stainton
It is our intention to commend the Order from this side of the House, and I hope that the Government's spokesman will relieve us from a lengthy explanation and shoulder this responsibility.
There are a number of queries which I should like to put. The first is the effect of the duty change on the general level of tariffs on this type of tinned fruit coming into the country. It is clear that in some cases it will be reduced and that in other cases it will be increased. It will be increased particularly on fruits coming from Commonwealth sources. I think that the Minister owes it to the House to explain in some detail the kinds of conversations and understandings that have led to this decision.
My second point is that reductions will arise on imports, particularly from the dollar area. On the face of it, this indicates that there will be a liability for this country to expose itself to additional dollar imports which is not entirely 783 straightforward at this phase in the economic state of the country.
My third point in this regard arises out of the possibility of dumping. The reduction of the duty effectively from 15 per cent. to an ad valorem rate of 6s. 5d. per cwt. will, on the face of it, give latitude for those persons who previously imported it into this country and carried the rate of 15 per cent. to cut their prices and possibly to dump on this market. I believe that the Board of Trade has in hand a complaint about dumping with this kind of produce, so I submit that these remarks are extremely apposite.
Finally, I turn to the last part of the Schedule to the Order which seeks to clarify the legal duty position of mats made from sea-grass. I suggest that the Government have to do a little unplaiting for the benefit of the House to make quite clear what the position is.
As I understand it, the situation is that mats made from sea grass are to be reclassified in 46.03 and not 46.02 which was the position effectively under a High Court ruling, but this reclassification does not affect the rate of duty payable. One must, therefore, ask what is the object to be achieved in this case. But the mystery deepens, however, because other goods made from similar materials, such as mats made from plaits of raffia, also became classified under heading 46.02 instead of 46.03 as a result of the High Court decision, but at a lower rate of duty.
There is no known trade in such goods, but since their transfer back to 46.03 make them liable to duty at a higher rate, the Amendment is subject to the affirmative Resolution. There is no trade in these goods, yet we have to come before the House with this procedure tonight, because on the face of it these products will be subject to a higher duty, and in the other classification there is no change whatsoever in the duty position.
To recapitulate, may I simply say that on the question of the tinned fruit imports the queries are in terms of consultation with Commonwealth countries, and possibly Italy and Spain, secondly, the liability to a greater dollar expenditure at this critical time, and, thirdly, the possibility of dumping arising more acutely.

§ The Minister of State, Board of Trade (Mr. Roy Mason)
rose—

§ Mr. Speaker
Mr. Mason.

§ Mr. Mason
I must bow to the knowledge and expertise of the hon. Member for Sudbury and Woodbridge (Mr. Stainton)——

§ Mr. Speaker
Order. I did not notice the hon. Member for Maidstone also seeking to catch my eye. Perhaps it would be convenient if he spoke before the Minister replied.

§ Mr. John Wells
I am grateful, Mr. Speaker.
I wish to raise two points. The first is on the subject of nuts, the first item in this Order where the duty is sharply reduced. We would like some clear explanation of this. My hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) raised the question of Commonwealth produce, but I am sure the Minister is well aware that there are considerable acreages of nuts still growing in this country, and we would like some explanation and assurance that the home producer will not be subjected to any increased competition and any increased difficulties.
Secondly, I stress the point made by my hon. Friend, that if an Explanatory Note is to be attached to Orders like this one, let us have it in some way explanatory. This one is absolute gibberish and incomprehensible. If the printer goes to the expense and bother of printing, let him print something worth reading.

§ The Minister of State, Board of Trade (Mr. Roy Mason)
As I was about to say, I bow to the expertise and knowledge of the hon. Member for Sudbury and Wood-bridge (Mr. Stainton), who, I know, is a professional in this regard, in view of the fact that he is an importer and distributor of many of these goods. I am obliged to him for saying that this a non-controversial subject, although the hon. Member for Maidstone (Mr. John Wells) said that the Explanatory Note appears to be gibberish. When I looked at it for the first time I must admit that, as a layman, it appeared to me to be gibberish.
The Order makes two changes in the tariff, which I believe the House will not find to be controversial. In both 785 cases the amendment proposed reclassifies goods but retains the previous rate of duty on the goods concerned, except in certain marginal cases.
The first change relates to the type of canned mixed fruit which is known in the trade as fruit cocktail. This is a collection of small diced pieces. Formerly, all mixed fruit imported in can entered at rates of duty which varied according to the constituents of the mixture. This was satisfactory in respect of the mixture known as fruit salad, consisting of about ten pieces of mixed fruit in a 4 oz. can, which could easily be packed to specification. The canners were thus able to be sure which rate of duty their cans of fruit salad would attract on importation. The rates of duty on this type of mixture are not altered in the Order.
The position, however, was different in respect of the type of mixed fruit known as fruit cocktail which we have in recent years been importing in increasing quantities. A 4 oz. can of fruit cocktail may contain about 90 small diced pieces of fruit, and for technical reasons it is impossible for the canners to ensure precisely what proportions of the various kinds of fruit are contained in an individual can. Consignments are assessed for duty on the basis of the contents of sample cans and have therefore been liable to vary according to the different proportions of fruit discovered in the samples; so it has been impossible to be certain in advance what rate of duty a consignment would attract. This caused inconvenience to the trade, and also to Customs and Excise, which was involved in a good deal of work in analysing the contents of cans.
The Order puts an end to these difficulties by creating a new tariff heading, applicable to fruit cocktail only, under which a single rate of duty will apply to all imports. This rate is the same as that which formerly applied to the vast bulk of imports, but there will be a few cases in which a higher duty would formerly have been chargeable, and it is for this reason that an affirmative Resolution is sought. There will also be a few cases where the effect of the change is to lower the duty chargeable, but the net 786 effect of these changes on the total duty collected is expected to be minute.
I should add that this amendment to the tariff is acceptable to the importers of fruit cocktail, to the overseas producer interests, to the G.A.T.T., under which the former duties were bound, and to those Commonwealth countries with a trade interest in the various kinds of canned mixed fruit.
The hon. Member for Sudbury and Woodbridge asked about the effect on dollar imports. I am advised that they will be virtually unaffected, and that there will be no dangers of increased dumping under the Order. As for nuts, the tariff rate is unchanged under the Order. The hon. Member also mentioned sugar refining duties and asked whether these had been taken into consideration. It will be noted that the present full rates of duty are higher than the rates bound in the G.A.T.T.
The explanation is that in April, 1962, the tariff duties which were then revenue duties and not protective duties were reduced. Subsequently they were transferred from the revenue to the protective field. Thus the current full rates on canned fruit, which represent a reduction of the total rates of duty charged before April, 1962, are the same as the former sugar duties as reduced, and the protective duties.
The second small amendment clarifies the legal duty position on mats made from sea-grass. The Order makes it clear that mats made from plaits of sea-grass are to be classified in heading 46.03 of the tariff. This accords with a decision of the Customs Co-operation Council. Before the Order was made these goods were classified in heading 46.02. Their transfer to 46.03 does not change the rate of duty payable on them. However, the amendment also has the effect of re-classifying mats and matting woven from other similar material such as plaits of raffia and makes them liable to duty at a higher rate.
There is no known trade in such goods into this country but as their exclusion from 46.02 constitutes a tariff increase, then at least in theory, this amendment also is subject to an affirmative Resolution. If the House can understand the reasoning behind the new Tariff Order, I 787 should be obliged if we could now seek to agree it.