Commons Sitting of 4 December 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ADVOCATES' WIDOWS' AND ORPHANS' FUND ORDER CONFIRMATION BILL
  Read the Third time, and passed.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Domestic Water Rates
    Mr. Buchanan-Smithasked the Secretary of State for Scotland how many local authorities have had to increase their water rate as a result of the contributions levied by the regional water authorities.
    The Minister of State, Scottish Office (Dr. J. Dickson Mahon): Of those whose decisions have so far been reported, 121 rating authorities are levying higher domestic water rates this year than last, and 57 the same or lower rates.
    Mr. Buchanan-Smith: Does the Minister of State realise that, as a result of regionalisation, some local authorities, particularly in my area, had to increase their water rate by as much as 400 per cent.? Is he aware that there is strong feeling among these burghs that some of his assurances during the passage of the Bill about satisfactory transitional arrangements have not been honoured?
    Dr. Mabon: If that is so, it is because the authorities have consented to transitional arrangements, since these agreements were made freely among themselves and confirmed by the Secretary of State. If the hon. Member wants to make a fair comparison once we have all the returns, he should examine the preceding years. Of the 121 authorities
    1498
    which have increased their water rate against last year, 40 deliberately reduced their rate the year before. That is a very significant point.
    Mr. MacArthur: Will the hon. Gentleman not recognise that what has happened in many burghs fully justifies our warnings to the Government during the passage of the Water (Scotland) Bill? Does he not now regret that he did not accept an Amendment of ours which would have introduced reasonable transitional arrangements and saved this trouble?
    Dr. Mahon: On the contrary. The hon. Member must recognise that the so-called reasonable arrangements which he and his hon. Friends proposed would have made the situation worse, not better.
    Mr. Grimond: In view of the injustice which appears to be done to some burghs like Stromness and Orkney, are the Government open to amending the terms of these amalgamations?
    Dr. Mabon: No, Sir, these amalgamations are now in being.

    Agricultural Buildings (Rating)
    Mr. Buchanan-Smithasked the Secretary of State for Scotland when he will complete his review of the rating of agricultural building.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland if he will make a statement on his discussions with the Scottish National Farmers' Union regarding the industrial rating of intensive agricultural units.
    The Under-Secretary of State for Scotland (Mr. Norman Buchan): My right hon. Friend has not yet concluded his consideration of this question.
    Mr. Buchanan-Smith: How much longer will this be allowed to drag on? Does the hon. Gentleman not realise that, as each week passes, more anomalies and nonsenses are shown up? In all seriousness, cannot the Government take a grip on this and try to resolve the problem? There is great concern in the agricultural industry.
    Mr. Buchan: I am aware of the concern, but it is even more important that

    1499
    we get the right answers. Many problems are involved. As the hon. Member should know, we want, when we eventually decide, to get the right solution.
    Mr. Bruce-Gardyne: Would the hon. Member recall that, while he is trying to get the right answers, farmers—who are not receiving S.E.T. premiums, as non-manufacturing, or R.E.P., or industrial investment grants—are still being charged rates as if they occupied industrial premises? Would he realise that this is a grotesque anomaly to continue much longer?
    Mr. Buchan: The hon. Member should know that all the costs to which he refers are taken into adequate consideration at the Annual Price Review. Scottish farmers know under which Government they benefit; it is this one.
    Mr. Stodart: Can the hon. Gentleman tell us anything about the consultations which he is having with the Scottish National Farmers' Union? Is he aware of the statement made yesterday that their representations on British Standard Time were entirely brushed aside? Would he give an undertaking—
    Mr. Speaker: Order. We are discussing that rating of agricultural buildings.
    Mr. Stodart: With respect, Mr. Speaker, I was about to ask whether the hon. Gentleman would assure us that representations on this matter will not be equally brushed aside.
    Mr. Buchan: We have never brushed aside any discussions with, or points made by, the National Farmers' Union. We have considered them on their merits. We have been considering their representations and, if they wish to see me again, I will again listen to them on this question.

    Uncertificated Teachers (Lanarkshire)
    Mr. Brewisasked the Secretary of State for Scotland how many uncertificated teachers are employed in Lanarkshire at the present time; and how many have been passed as suitable for conditional registration by the reference panels.
    The Under-Secretary of State for Scotland (Mr. Bruce Milan): I understand
    1500
    that 355 teachers in the service of the Lanarkshire authority are ineligible for registration. None of the temporary appointments held by these teachers has so far been considered by the reference panel. I should add that the reference panel is not concerned with conditional registration.
    Mr. Brewis: As the enforcement of the registration procedure is likely to cause a considerable crisis in education in Lanarkshire, is the Secretary of State prepared to give any additional help to that county to get suitably qualified teachers?
    Mr. Millan: That is an entirely different question. The hon. Member knows of the special payments of £100 per year which came into operation several months ago and from which Lanarkshire benefits considerably—proportionately more than does any other authority in Scotland.

    Brucellosis
    Mr. Brewisasked the Secretary of State for Scotland how many cases of brucellosis infection in humans have been reported in the last year.
    Mr. Milan: Brucellosis is not a notifiable disease and comprehensive figures of its incidence among humans are not available. What can be said is that 73 persons in whom brucellosis had been diagnosed were discharged from Scottish hospitals during 1967, and that 188 cases giving presumptive evidence of the disease were diagnosed by Scottish laboratories in the last eleven months of that year.
    Mr. Brewis: Why can this miserable disease not be made notifiable so that there is some chance of detecting the source of the infection?
    Mr. Millan: One of the difficulties about notification is the considerable time which elapses between infection and diagnosis. It is therefore doubtful whether compulsory notification would enable us to bring about what both the hon. Member and I would like to bring about, the eradication of the disease.

    Commission on the Constitution
    Mr. Wrightasked the Secretary of State for Scotland whether he will arrange for the forthcoming Commission on the Constitution to consider the constitutional

    1501
    position of Scotland as a matter of urgency and to publish its recommendations dealing with Scotland in advance of those dealing with other nations and regions.
    The Secretary of State for Scotland (Mr. William Ross): It will be primarily for the Commission itself to decide on its method of work, but I have no doubt that it will consider the various questions within it; terms of reference as quickly as possible.
    Mr. Wright: May I point out to the Secretary of State—
    Hon. Members: No.
    Mr. Speaker: Order. The hon. Member must ask a question.
    Mr. Wright: Is the Secretary of State aware that his reply leaves us in darkness as total as that produced by British Standard Time? May I ask him three specific questions? First, when will the Commission begin its deliberation; secondly, when will it be charged to produce a report; and thirdly, how will the subcommission of Scottish experts be chosen?
    Mr. Ross: These are matters which will have to be looked at. If I may reflect on the hon. Gentleman's reference about darkness and British Standard Time, I would point out that a few hours changes the darkness but I doubt whether a week, a month or a year would change the hon. Member's political gloom.
    Mr. Rankin: Will my right hon. Friend draw to the Commission's attention the fact that we have already had a Commission on this topic? Will he ask them to look at the views of that Commission before filing their proceedings?
    Mr. Ross: I do not doubt that the Commission to be set up will look at the findings of the previous Commission, but it would be wrong to suggest that they are covering exactly the same ground because this Commission will be looking at the matter from the point of view of the whole United Kingdom.
    Mrs. Ewing: Does the Secretary of State accept as a good beginning point for this Commission the finishing point of the last Commission—namely, that Scotland is a nation? Is he aware that this House and the United Nations Charter recognise the rights of a nation to
    1502
    self-determination? In the event of the Commission finding against self-government for the next election, will the Secretary of State give an undertaking that he will accept that the verdict of the ballot boxes can overrule that finding?
    Mr. Ross: The hon. Lady has spent a long time proving a point which does not require to be proved—that Scotland is a nation. Scotland as a nation is in a very fruitful partnership, and from my point of view any indication of a change in that will have to be looked at very carefully indeed.

    Scottish Economy (White Paper)
    Mr. Gordon Campbellasked the Secretary of State for Scotland if he will make a statement on the latest position reached in relation to implementation of the White Paper on the Scottish Economy published in January, 1966.
    Mr. MacArthurasked the Secretary of State for Scotland if he will publish a White Paper setting out the progress that has been made towards meeting the employment targets published in The Scottish Economy, Command Paper No. 2864.
    Earl of Dalkeithasked the Secretary of State for Scotland whether he will now make an interim progress report on the implementation of the 1966 White Paper on the Scottish Economy.
    Mr. Ross: I refer hon. Gentlemen to my replies to the hon. Members for Moray and Nairn (Mr. Gordon Campbell) and Perth and East Perthshire (Mr. MacArthur) on 23rd October.—[Vol. 770, c. 1268–9, 1260.]
    Mr. Campbell: Will the Secretary of State now be honest with Scotland and admit, as with the National Plan, that the assumptions have changed, that little growth has taken place and that the results so far, especially with jobs, are very different from the targets?
    Mr. Ross: We hear all that every week. The hon. Member will not look facts in the face. If he would even read this morning's Press he would have seen the report of Sir Robert Maclean, the Chairman of the Scottish Industrial Estates Corporation, in which he points out that he has been letting factories at the rate

    1503
    of one a week over the last year. If he reads that, the hon. Member will appreciate that we have considerably changed the whole pattern and basis of Scottish industry.
    Mr. MacArthur: The right hon. Gentleman will not recognise the fact which is staring him in the face—that employment in Scotland has dropped by about 30,000 people since the publication of the notorious Plan, compared with a forecast of an increase of 60,000 jobs by 1970. In the light of that, will he not leave this mood of total and unacceptable complacency and get on with the job of improving employment prospects in Scotland?
    Mr. Ross: I assure the hon. Member that there is no complacency on this side of the House. The successful efforts which we have been making to get new industry in Scotland are an indication of that.
    Earl of Dalkeith: What steps is the right hon. Gentleman trying to take to bring back to Scotland some of the 168,000 net emigrants who have gone from Scotland during his period of office?
    Mr. Rankin: Do away with landlords.
    Mr. Ross: I assure the hon. Member that if he looks at the most recently published figures for net emigration he will find that they are the best since about 1950. If the hon. Member had shown the same interest in this subject while his party was allowing this emigration to go on without doing anything about it,
    I should feel better satisfied by his questions.
    Mr. Woodburn: Will my right hon. Friend be very careful about the idea of bringing back all the Scottish emigrants, since about 20 million of them are said to be abroad? Is he aware that at this moment it is impossible, and for some time it has been impossible, to get skilled engineers to fill the jobs which are open in Scotland for them as well as for many other workers?
    Mr. Ross: My right hon. Friend puts the situation into proper perspective. I thought for a moment that he was about to tell me that most of the emigrants went from the Buccleuch Estates.

    Building Industry (Metrication)
    Mr. Gordon Campbellasked the Secretary of State for Scotland what consultations he is having with representatives of the construction industry and others concerned on the proposed change to the metric system by the building industry.
    Mr. Ross: Apart from the construction industry, the change involves the associated professions, the British Standards Institution, the National Building Agency, Government Departments and the clients of the industry, both public and private. Between these bodies there have been constant interchanges of view throughout the process, leading to the announcement in February, 1967, of the programme for the change, as well as in the subsequent working out of the programme, and my departments have taken a full part in these.
    Mr. Campbell: Is the right hon. Gentleman satisfied that the approach to this difficult change-over is being carried out in such a way as to minimise dislocation and expense to all concerned?
    Mr. Ross: Yes. The hon. Member will appreciate that the impetus for this action came originally from the Federation of British Industries. We have outlined the programme. As for familarising industry with the change, conferences and discussions have taken place and these are being extended right down the line to ensure that everybody understands what is being done and to minimise the difficulties which, I appreciate, could arise.

    Forth Road Bridge (Tolls)
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a further statement on tolls on the Forth Road Bridge.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland if he will make a statement on the latest position regarding his proposal to increase tolls on the Forth Road Bridge.
    Dr. Dickson Mahon: My right hon. Friend has given the Forth Road Bridge Joint Board notice of his intention to make an Order to increase the tolls and has specified the newspapers in which notice of the change proposed shall be published.
    Mr. Hamilton: Is my right hon. Friend aware that that news will not be greeted with enthusiasm in Fife or anywhere else in Scotland? Despite the Report of the Accounts Committee, and in view of the fact that the Government are proposing to write off £243 million of the capital debts of London Transport in the new Bill, will not my right hon. Friend do the same with the capital debt on the bridge?
    Dr. Mahon: I agree that this statement will be received with disappointment. I am certain that if there are any objectors—and thy, Joint Board themselves may be objectors—and they ask for a local inquiry, then under the Forth Road Bridge Order (Confirmation) Act, 1958, we shall hold an inquiry, and objections can be lodged until 31st January, 1969.
    My hon. Friend raised a wider issue in the second part of his question. I would point out that the Confirmation Act, 1958, lays down the basis of agreement between the parties concerned and the local authorities at that time, and that agreement has to be honoured.
    Mr. Bruce-Gardyne: Will the hon. Member confirm that his answer exposes the nonsense so often talked by his right hon. Friend the Secretary of State on this subject before the last election?
    Dr. Mabon: There is no relevance in that comment. Clearly the hon. Member has not read any of the pronouncements and only assumes the legend.
    Mr. Noble: If an agreement has to be honoured which was agreed beforehand, why was it that his right hon. Friend was proposing to dishonour it?
    Dr. Mabon: There is no question of of that. The difficulty facing my right hon. Friend is that he has to uphold what was done by the right hon. Gentleman's predecessor and by the right hon. Gentleman.
    Mr. Lawson: Will my hon. Friend bear in mind that the Forth Road Bridge was built at the expense of a considerable amount of other road building which would have gone on at that time? If pressure is brought to bear now, will he ensure that there is no easing up at the expense of other road building now due in Scotland?
    Dr. Mabon: I much appreciate that. I only wish that hon. Members opposite would take the same balanced view. In defence of the Conservative Party, it is fair to say that the 1958 agreement did not spring from any compulsion on their part. It came from the accession of the local authorities concerned. One must be fair about this.

    Older Houses (Rehabilitation)
    Mr. William Hamiltonasked the Secretary of State for Scotland what plans he intends to initiate to rehabilitate older houses in both the private and public sectors; and how many houses he estimates will be so rehabilitated in the next 10 years.
    Mr. Ross: My plans were outlined in the White Paper on The Older Houses in Scotland. published in July. The legislation to be introduced this session will aim to stimulate action both by private owners and by local authorities, but I cannot quantify its likely effects over the next 10 years.
    Mr. Hamilton: We shall await with interest the legislation coming forward. Meanwhile, what was done in this matter in 1960–64?
    Mr. Ross: The last Act purporting to deal with the matter, passed before the 1964 election, has proved a dismal failure in respect of its use by the local authorities. But I would not minimise the difficulties of the problem.
    Mr. David Steel: What has the right hon. Gentleman done about the recommendation in the Cullingworth Report that an inquiry should be instituted into the problem of older houses and slum houses in rural areas?
    Mr. Ross: This is one of the aspects in which there was, over a period, more success in relation to the use of existing legislation because of the tied house factor. The legislative change was made in the early 1950s.

    Food Production
    Mr. Stodartasked the Secretary of State for Scotland how much of the net saving in imports of food of £160 million to be achieved by 1972–73 he expects to be made in Scotland.
    Mr. Buchan: It is neither practicable nor useful to make separate estimates for any one part of the United Kingdom. Scotland can, however, make a particularly valuable contribution in respect of beef and other livestock products.
    Mr. Stodart: If the Minister of Agriculture can make these calculations, and since there is a better statistical office in the Department of Agriculture at St. Andrew's House than at the Ministry of Agriculture itself, why cannot the hon. Gentleman give guidance to Scotland? If he cannot, since Scotland produces the best food in the United Kingdom, will he not agree that we should at least contribute one-tenth of the programme?
    Mr. Buchan: I accept the hon. Gentleman's compliment to the efficiency of my Department and of St. Andrew's House, and agree with it. But we believe that it is wrong to break this up area by area and commodity by commodity. We have laid down the broad programme and pace of expansion. No doubt circumstances will alter particular requirements and I think that the hon. Gentleman knows this subject well enough to rest content with that.
    Mr. Maclennan: While welcoming what my hon. Friend has to say about livestock, may I ask whether he has given consideration to the proposals of the N.E.D.C. and whether he challenges its assumptions about sheep farming which are particularly disappointing?
    Mr. Buchan: The N.E.D.C. Report is my nightly reading. I understand my hon. Friend's disappointment with the Report's comments about sheep. Two problems are involved, and both of them give concern. The one involves technical aspects and the other is the effort to increase demand for mutton and lamb in this country.

    Timber (Gale Damage)
    Mr. Stodartasked the Secretary of State for Scotland what date he has set as a target for clearing the timber blown down in the gale last January.
    Dr. Dickson Mahon: The target date set by the Action Group itself is the end of September, 1969.
    Mr. Stodart: Would not the hon. Gentleman agree that the situation in the light of that reply is extremely serious,
    1508
    particularly in the private sector? Is it not the case that, by the end of last September, only 20 per cent. of windblown timber in that sector had been cleared and that, if the target date is to be reached, clearance will have to be stepped up in order to cover 75 per cent.? Since manpower has drifted away from these areas with the approach of winter, will he consider giving an inducement to try to get men back?
    Dr. Mabon: The hon. Gentleman has put his finger on the trouble. The figures he has quoted are more or less accurate. The shortage of skilled labour is the critical matter. We want to review this as we go on and consider whether we can improve on progress but, frankly, I do not know whether we can now manage the target because of manpower shortage. However, we shall do our best.
    Mr. Manuel: Will my hon. Friend note that the number of forestry workers employed by the Forestry Commission is being steeply run down? This will reach a figure of about 2,000 over the whole country but mainly in Scotland. Will he watch this aspect in Scotland?
    Dr. Mabon: We hope that every encouragement will be given by the Forestry Commission—as it has already done—to try to get men displaced to come and help with the wind-blow difficulties.
    Sir J. Gilmour: If the target date cannot be achieved, will it not be necessary to extend transport help beyond that date?
    Dr. Mabon: That is a fair point and we shall consider it as we go along.

    Clyde Estuary Development Study
    Mr. Galbraithasked the Secretary of State for Scotland in view of the size and complexity of various major projects such as that of Murco which are now envisaged in the Clyde area, if he will arrange for a comprehensive public inquiry covering all such projects rather than that each should be considered separately.
    Mr. John Robertsonasked the Secretary of State for Scotland if, before any decisions are taken, he will publish the proposals for the comprehensive

    1509
    development of the Clyde and West of Scotland areas and allow the widest possible pubic discussion of such proposals and submit them to the House.
    Mr. Ross: The Clyde Estuary Development Study was commissioned to focus consideration of such issues. There will be a full opportunity for public discussion before planning decisions are taken on any major new industrial proposals within the ambit of the Study and, so far as possible, related issues will be considered together. I cannot at this stage say whether it will be appropriate to bring any of these proposals before the House.
    Mr. Galbraith: in studying the report will the right hon. Gentleman bear in mind that the development of industry along the Clyde estuary will not only be highly damaging to tourism but will also mean that inland towns will be denuded of industry? Would it not be better to see that industry is brought to the people rather than vice versa?
    Mr. Ross: There is a balance of considerations in all these things, but we must not jeopardise too readily the prosperity or possible increased prosperity of the Clyde..
    Mr. Robertson: Is my right hon. Friend aware that many members of the public are apprehensive about rumours of what is proposed and that some kind of public statement is required fairly soon? Does he also accept that, of all those involved in the discussions, it is only the elected representatives of the people in this House who have not had the opportunity of knowing what is proposed?
    Mr. Ross: I hope that we shall get the report of the Clyde Estuary Study in a few weeks' time. But there is little one can do about rumours except to point out that people should wait until they get firm information about what is really afoot.
    Mr. Noble: In view of the enormous possible importance of this development to the Clyde area and the very large number of interests involved, will the right hon. Gentleman do his best to publish the first report he has available so that the people know what is being planned and need not rely on rumours?
    Mr. Ross: The decision about publication of the report is not for me but I expect the Steering Group of the commissioning authorities to publish a report as soon as possible.

    Crime
    Mr. Galbraithasked the Secretary of State for Scotland, in view of the recently published figures of crime in Scotland, what steps he proposes taking to try to halt the increase which has taken place over recent years.
    Mr. Dempseyasked the Secretary of State for Scotland what action he proposes to take to reverse the increasing crime wave; and if he will make a statement.
    Mr. Buchan: With permission, I shall answer Questions 13 and 71 together.
    Mr. Speaker: Order. The Chair must be told of groupings.
    Mr. Buchan: I would refer the hon. Members to the reply my right hon. Friend gave to the hon. Member for Dumfries (Mr. Monro) on Wednesday, 27th November.—[Vol. 774, c. 121.]
    Mr. Galbraith: Is not this merely tinkering with the problem? How long will it take the hon. Gentleman to face the fact that the first duty of the Government is to provide law and order and that, when murder and crimes of violence have doubled over the last five years, ordinary citizens no longer feel that this is what is being done by the Government?
    Mr. Buchan: The hon. Gentleman should know better than to ask me to face this problem. It would have been more helpful to his own community if statements he has made—some of them outrageous—had slackened rather than increased the tension. Such statements do not help me in trying to get to grips with the problem in a positive way.
    Mr. Dempsey: Does not my hon. Friend agree that, if the courts got rid of inconsistency in sentencing, we might make better progress? For example, we have had an instance of a man being sent to prison for a driving offence while another received probation for murder. Ending that sort of situation would help to curb crime in Scotland.
    Mr. Buchan: If my hon. Friend will write to me about the instances he has in mind, I will look into them but he will not expect me to comment on the courts. They hear the full evidence.

    Western Isles (MacBrayne's Services)
    Mr. Nobleasked the Secretary of State for Scotland what changes have occurred in the estimates of the capital costs of the MacBraynes scheme to serve Islay, Jura, Colonsay and Gigha since July of this year; and what is the present estimate of the capital cost of this scheme and of that proposed by Western Ferries.
    Mr. Ross: Recent indications are that there will be some increase in the capital costs, but I have no reason to think that this increase will be so large as to affect my decision in favour of MacBrayne's services. I have therefore had no reason to ask Western Ferries for revised estimates of capital costs.
    Mr. Noble: Does not the Secretary of State understand that there is no need to ask Western Ferries to revise costs? They have already ordered a boat at a price they said they could afford. When the right hon. Gentleman says that there has been some increase he should be honest with the House and tell us what it is, because my information is that it is very considerable indeed, and that it is a waste of money.
    Mr. Ross: I do not consider it to be a waste of money at all, because I have had to bear in mind in respect of this decision—which was related originally to an overland scheme which was supported by the right hon. Gentleman and which was to cost very much more than the MacBrayne's scheme—the reliability and efficiency of the service, with reasonable passenger comfort. I was satisfied that this would come from MacBrayne's. I am not convinced that the same standard and assurance of service could be provided by the smaller ships and smaller terminals provided by Western Ferries. I had to take into account the possible consequences of a fragmentation of MacBrayne's services.

    Highland Counties (Roads, Bridges and Transport)
    Mr. Nobleasked the Secretary of State for Scotland what expenditure he
    1512
    proposes to make in the roads, bridges and transport fields within the Highland counties above the existing programmes in the next three years.
    Mr. Ross: At this stage, I cannot forecast the level of Government expenditure in the Highlands during the next three years, either on roads and bridges or in that part of the transport field which is my responsibility.
    Mr. Noble: Does the right hon. Gentleman realise that we on this side do not expect him to be able to do anything, but that I have information that makes me believe that he has wantonly wasted £1 million in Islay, Jura and Colonsay and that he might have used the money more satisfactorily elsewhere?
    Mr. Ross: The right hon. Gentleman must appreciate that I resisted his blandishments to spend £1 million more in that respect. I can assure him that if he cares to go round the Highlands, as I have done, he will find that the people think that we are the first Government who have really started to tackle the problem.
    Mrs. Ewing: Is the Secretary of State aware that Scotland is at the bottom of Europe's motorway league—[HON. MEMBERS: "What?"]—and that he has not been able satisfactorily to answer questions about motorway proposals? Is it not clear that expenditure here would compare unfavourably with the expenditure on just one underground extension in London? Is it not time that the Government in Westminster attended to the Highlands, and the attendant problems?
    Mr. Ross: It is time the hon. Lady got her facts right. Her statement about motorways, like most of her other statements, has no relation at all to the truth.
    Mr. Eadie: Would not my right hon. Friend agree that this afternoon we are witnessing a certain amount of hypocrisy? Is he aware that only the other day in the Scottish Grand Committee an hon. Member on the other side called for massive cuts in public expenditure, and was not contradicted by his own Front Bench?
    Mr. Ross: There is no doubt about the difference between what hon. Members say in the House and what they do in the Division Lobbies.

    Housing Developments (Open Spaces and Recreational Facilities)
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what advice he has given to city planning authorities about open spaces and recreational facilities in new housing areas.
    Dr. Dickson Mabon: Advice on the layout of housing developments, including provision for open spaces and recreation, is given in the Scottish Housing Handbook.
    Mr. Clark Hutchison: Has the Minister of State noticed that housing estates in Edinburgh and other cities never seem to be quite completed? Can he do more to see that proper recreational space is provided, and that there is, perhaps, a bit of landscaping? It would make all the difference.
    Dr. Mabon: I accept that fair criticism can be made of local authority estates in Edinburgh and elsewhere in Scotland—as, indeed, is the case in many private developments in Scotland. With this in mind, we are revising the housing handbook jointly with the Ministry of Housing and Local Government. I hope that a new bulletin will be ready by the end of next year. The hon. Gentleman will appreciate that this is an extremely complicated matter, but if we can raise standards all round it is really worth the effort.

    Fife (Communications)
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what study his Department made of improvements in communications in Fife and between Glenfarg and Perth.
    Dr. Dickson Mabon: Communications in these areas are being examined in the Tayside Study and the East Central Scotland Land Use/Transportation Study. North-south communications will be greatly improved by the M90 motorway from Perth to the Forth Road Bridge, of which the Cowdenbeath bypass, now under construction, forms a part.
    Mr. Clark Hutchison: The motorway is moving rather slowly. Has the Minis-
    1514
    ter noticed that this proposed closure of the railway, the direct link between Edinburgh and Perth, would harm communications, particularly to the north? Will he use his good offices to see that the railway is kept open?
    Dr. Mahon: I know that British Rail intends to make formal publication of its proposal to close but the decision whether or not to close the line will be taken by the Minister subsequent to the hearing by the Scottish Transport Users Consultative Committee, and the views of the Tayside Study Group Committee and the Scottish Economic Planning Council will be taken into account.
    Mr. Doig: Is the Minister aware that he has just authorised the expenditure of another large sum of money on the Dundee to Perth road; that the shortest route for all the traffic passing through, with the exception of purely local traffic, is not this road at all, and that he could save money by expenditure on the Fife road, which provides a much shorter route to Glasgow and Edinburgh?
    Dr. Mahon: I am aware of the announcement about the £400,000 to be spent on the A85, since I made it myself on Friday on behalf of my right hon. Friend. I would not agree that development of the A85 should take second place to a Fife regional road. It is the policy of the Government that we shall develop the M90 and the A85. The route of the East Fife road and its potential traffic growth are being studied for possible development some time in the seventies.
    Mr. MacArthur: Will the Minister agree that rapid links with the south are essential to the future economy of Perth? Will he recognise the very wide concern that has been expressed in Perth about the present proposal which would, in effect, put the city half an hour further away than at present? Further, can he say when the motorway is likely to be completed?
    Dr. Mahon: I hope that we would have the motorway, including the southern part of the Perth bypass, completed by the early seventies, but I cannot be precise without due notice. I quite accept that we have to hear the case both for and against British Rail's proposal for closure, but a proposition that has been drawn to our attention, and rehearsed in

    1515
    this question, is that the line of the route might well use some of the railway track if permission for the closure is given, which I admit is an open question.

    Edinburgh-Hawick-Carlisle Railway Line
    Mr. David Steelasked the Secretary of State for Scotland whether, as Chairman of the Scottish Economic Planning Council, he will make public the views of the Council on the proposed closure of the Edinburgh-Hawick-Carlisle railway line.
    Mr. Ross: No, Sir.
    Mr. Steel: Is the Secretary of State aware that the Borders Economic Group has made public its view that this decision is a serious mistake, and that it is public knowledge that the Scottish Planning Council supports that view? Will he take account of the recent representations of the Scottish Council (Development and Industry) and the Church and National Committee of the Church of Scotland, and stand up to his Cabinet colleagues in seeking to have the decision reviewed?
    Mr. Ross: I can assure the hon. Gentleman that exhaustive study was given to this matter. As he knows, this closure was held up for a considerable period in order that we should have this exhaustive study, but there is no doubt at all that the evidence was that the decision would not be an inhibiting factor on economic growth.
    Mr. Monro: Would the Secretary of State accept that the closure of the goods section of a line subsequent to the closure of the passenger section are often equal disasters? Will he confirm or deny that the goods section of the Waverley line will be closed in the spring?
    Mr. Ross: I do not intend to confirm anything at all about that. It is a matter for the Ministry of Transport.

    Skye (Bridge)
    Mr. Russell Johnstonasked the Secretary of State for Scotland whether he will now institute a survey with a view to the construction of a bridge from the mainland to the Island of Skye.
    Dr. Dickson Mabon: No, Sir.
    Mr. Johnston: Is the Minister of State aware that the Scottish Council has agreed to undertake a private survey and is much to be congratulated on taking an initiative about something which is basically a Government responsibility? Can he assure us that he will give it every assistance and consider, for example, the possibility of a special grant to enable it to finish the survey quickly?
    Dr. Mabon: The hon. Gentleman asked me a similar question about the Ballachulish bridge survey, and he knows the pleasant consequence of that, which is that the Government have agreed that we shall do that survey ourselves. The hon. Gentleman knows that we cannot do everything at once. The Highland Transport Board and the Highlands and Islands Development Board have formed the view, which they have passed on to the Secretary of State, that in the context of the transport needs of the Highlands as a whole, a bridge to Skye must be a long-term possibility. I hope that the hon. Gentleman will accept the priorities.
    Sir F. Maclean: Will not the Minister of State soon press on with the existing scheme for a bridge from the mainland to the Isle of Bute?
    Dr. Mabon: That eloquently testifies not only to the dilemma facing the Government, but also to the dilemma facing hon. Gentleman opposite who want to cut Government expenditure.

    Crofters Commission
    Mr. Russell Johnstonasked the Secretary of State for Scotland when he expects to make a statement on the submission made to him by the Crofters Commission on the future of crofting.
    Mr. Ross: I cannot yet add to the answer I gave on 5th November to my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan).—[Vol. 772, c. 72.]
    Mr. Johnston: Can the Secretary of State assure us that we may have a debate on these proposals in the Scottish Grand Committee as soon as possible, and that there will be the widest consultation with the crofting community before any legislation is devised?
    Mr. Ross: A debate is a matter for the Leader of the House, but I am certainly anxious to have views on this subject publicly ventilated and certainly discussed by Members of Parliament, because it is a very complex and far-reaching proposal.

    The Borders
    Mr. David Steelasked the Secretary of State for Scotland when he will make a statement about the Government's acceptance of the proposals contained in the Johnson-Marshall plan for the Borders, in the light of the representations made to him by the hon. Member for Roxburgh, Selkirk and Peebles, the Borders Consultative Group and the local authorities.
    Mr. Ross: The comments received reveal differing points of view which it would be desirable to discuss with the authorities concerned before I make any final policy statement. These discussions will be held as soon as possible.
    Mr. Steel: Is not the Secretary of State concerned about the delay in implementing the White Paper's basic proposals on the Borders? If so, will he recognise that an early statement from him is desirable? Will he pay due regard to the general feeling that the plan should be amended more in favour of the expansion of the existing burghs?
    Mr. Ross: As the hon. Gentleman knows, there is another point of view. I received the comments of Roxburgh County Council only in mid-November and it would be wrong to proceed to a decision without having the necessary discussions with those concerned.

    Midlothian Schools (Swimming Pools)
    Mr. Eadieasked the Secretary of State for Scotland how many training pools or swimming pools there are in post-primary schools in Midlothian; and how many additional ones are planned for the future school building programme.
    Mr. Millan: Five; three more are under construction and one is being planned.
    Mr. Eadie: Is my hon. Friend aware that that information is most impressive? Does he not agree that information now
    1518
    becoming available shows that such projects are preventing loss of life through drowning?
    Mr. Millan: I am very glad to have that tribute. My hon. Friend may be interested to know that since we issued a circular on this matter, in May 1967, about 75 pools have been built or are now in the planning or construction stages. Those are very striking figures.

    Further Education, Midlothian
    Mr. Eadieasked the Secretary of State for Scotland what increase there has been in the number of further education students in the county of Midlothian at present; and if he will give the total numbers for the years 1963 to 1968, respectively, giving figures for male and female students.
    Mr. Millan: Provisional returns for October 1968 show enrolments of 3,123 in vocational further education courses in Midlothian compared with 2,677 in October 1967. In answer to the second part of the Question, I shall, with permission, circulate a table of figures in the OFFICIAL REPORT covering the total number of students enrolled in each session.
    Mr. Eadie: Would not my hon. Friend agree that the post-primary education policy pursued by the Midlothian Education Authority is a contributory factor in these increases in the numbers of students taking further education?
    Mr. Millan: Yes, Sir. The figures also demonstrate the influence which the new Esk Valley College is already having on further education in Midlothian.
    The following are the numbers of students enrolled:

    Session

    Males

    Females

    Total

    1962–63

    …

    1,194

    748

    1,942

    1963–64

    …

    1,410

    915

    2,325

    1964–65

    …

    1,707

    934

    2,641

    1965–66

    …

    1,700

    956

    2,656

    1966–67

    …

    1,705

    1,278

    2,983

    1967–68

    …

    1,721

    1,158

    2,879

    Mental Illness (Young Patients)
    Miss Herbisonasked the Secretary of State for Scotland how many mentally ill adolescents there are in Scotland; how many of these are in units for adolescents only; how many are in hospital wards with adult patients; and what plans

    1519
    he has for the provision of proper treatment facilities for these young people.
    Mr. Ross: At the end of last year there were 204 young people in the age group 15–19 receiving in-patient treatment for mental illness; of these 42 were patients in adolescent units, 14 were in psychiatric units attached to general hospitals and the remainder were in the adult wards of mental hospitals. In the current year two further adolescent units providing 34 beds have been opened giving a total provision of 76 beds. Regional hospital boards have plans for further developments, though none within the immediate future.
    Miss Herbison: Is my right hon. Friend aware that the Mental Welfare Commission is perturbed about the position of these young people? What advice does my right hon. Friend give to regional hospital boards in their discussions of what their priorities will be? Is there anything further he can do to ensure that these young people get the right treatment in suitable places?
    Mr. Ross: I am very grateful to my right hon. Friend for the interest which she has shown in this matter. On looking into the facts, I quickly realised that there was under-provision, particularly in the Western Regional Hospital Board area. Its plans are to expand Woodilee to a unit of 40 boys and 20 girls and there are other plans under consideration in respect of Stobhill, Leverndale and Gartnavel, with a possibility, if required, of further beds at Ailsa; but none of these is immediate, although we are getting on with discussions about them.
    Mr. Monro: Would not the right hon. Gentleman agree that the figures he has given are very sad and represent tragedy for some children and some parents? Will he look again at proposals for the South of Scotland, where parents at present have to travel to see their children at Larbert, which is too far away?
    Mr. Ross: The hon. Gentleman will appreciate that the Government have doubled provision in this respect. The Western Region Hospital Board has indicated that it is prepared to consider provision of a unit at Crichton Royal, provided it can be done by adaptation and without substantial capital expenditure.

    Local Authority Houses (Letting Policies)
    Mr. James Hamiltonasked the Secretary of State for Scotland what response he has had from local authorities to his circular letter recommending them to have some basis for common house-letting policies; and if he will make a statement.
    Dr. Dickson Mabon: The circular asked for a response only from local authorities which considered the policies it described to be unsuitable for their areas. So far two small burghs have indicated that they wish to continue with different arrangements. Many authorities are no doubt still considering the matter.
    Mr. Hamilton: Is my hon. Friend aware that in some parts of Lanark people have to wait for a house for two years, while in other parts they have to wait for seven years? Will he not remind local authorities that, in the interests of the people as a whole, the waiting periods should be level?
    Dr. Mabon: The circular was sent out only about six weeks ago. It is only reasonable to give local authorities time to consider it, because as my hon. Friend will appreciate, in Lanarkshire, for example, it will mean a substantial change of policy.
    Mr. Gordon Campbell: What general indication have the Government received from local authorities, in response to the circular on the recommendations of the Kay Report to the suggestions for improving mobility over the whole country, and in particular for abolishing residential qualifications for housing lists?
    Dr. Mabon: As I have said, it is a little early to be able to make an assessment because it is only six weeks since the circular was sent. Those with local authority experience will know that in local government that is not a long time when there have to be discussions in housing committees and allocation committees and so on before an issue goes to the council. So far, we have had only three letters and the hon. Gentleman would not, I am sure, like a reply based on only three letters.
    Mr. Steele: Will my hon. Friend make it clear that the circular is advisory and not mandatory on local authorities?
    Dr. Mabob: Yes, this is so.

    Unfit Houses
    Mr. James Hamiltonasked the Secretary of State for Scotland if he will now introduce legislation to prevent the reletting of houses deemed to be unfit and not closed when local authorities have rehoused existing tenants prior to demolition and clearance.
    Dr. Dickson Mabon: This is one of the matters under consideration for the Bill my right hon. Friend will be introducing this session.
    Mr. Hamilton: Is my hon. Friend aware that living accommodation is sometimes built over shops and that, under present legislation, the shops, which are sometimes used as dwelling houses, cannot be condemned? Will he ensure that in the new legislation local authorities will be given power to put a closing order on shops when an area is required for redevelopment?
    Dr. Mabon: I should like to think about that a little longer. I should not like at Question Time to give a straight commitment one way or the other. If my hon. Friend will leave it with me, I will discuss it with my right hon. Friend.

    Local Authorities (Contraceptive Advice)
    Mr. Dewarasked the Secretary of State for Scotland when he intends to authorise the supply of contraceptive advice and appliances on social grounds by local authorities under Section 15 of the Health Services and Public Health Act, 1968.
    Earl of Dalkeithasked the Secretary of State for Scotland whether he will now give local authorities the necessary instructions to bring Section 15 of the Health Services and Public Health Act, 1968, into force.
    Mr. Ross: I cannot add to the reply which I gave the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) yesterday.
    Mr. Dewar: Will not the Secretary of State accept that it is a thoroughly unsatisfactory situation in which local authorities cannot give contraceptive advice on social grounds when English authorities can? Will he confirm that this restriction is purely a matter of finance and will he give an estimate of what public expenditure is being saved by this rather petty action?
    Mr. Ross: I entirely agree that we should like to be able to go ahead with this. It is a matter of finance. I cannot give a figure, but I do not suppose that it would be all that much. However, we have not had any representations from any Scottish local authority on this subject. It may be that each authority has its own ideas of priorities.
    Earl of Dalkeith: If it is cost which is holding back the Secretary of State, does he not agree that the cost of producing babies who may arrive by accident must be very much higher than the cost of advice and services rendered. in other words, that prevention of labour would be better than cure?
    Mr. Ross: The hon. Gentleman should bear in mind that we took most of those factors into account.
    Mr. David Steel: In his circular the Secretary of State described the lack of provision of birth control facilities as an economy measure. Is that not the strangest economy measure of all?
    Mr. Ross: The hon. Gentleman will appreciate that this is provision on the ground of social need. The health ground is not affected.

    Secondary Education (Reorganisation)
    Mr. Dewarasked the Secretary of State for Scotland whether he is satisfied with the progress being made by Scottish local authorities with the comprehensive reorganisation of secondary education: and if he will make a statement.
    Mr. Ross: Yes, I am satisfied, but the rate at which reorganisation can be implemented depends to some extent on the size and nature of existing school accommodation and on priorities in the building programme for each area.
    Mr. Dewar: Will my right hon. Friend look most carefully at any attempt to rethink the accepted content of reorganisation schemes as a result of events at municipal elections in May?
    Mr. Ross: Perhaps my hon. Friend has in mind something which might well be mooted in Aberdeen. I assure him that we shall give everything our usual careful consideration before coming to a decision.
    Mr. W. H. K. Baker: Will the right hon. Gentleman assure the House that he will give directions that there should not be any further concentration of secondary education in certain circumstances?
    Mr. Ross: If the hon. Gentleman looks at what has been done over the country, he will see that we have been flexible in our approach, bearing in mind all the local circumstances.

    Salmon and Trout Fishing (Report)
    Mr. Dalyellasked the Secretary of State for Scotland if he will make an interim statement on his policy on the recommendations in the Hunter Report on Salmon and Trout Fishing published in 1965.
    Mr. Buchan: No, Sir. Since the recommendations are closely interlinked, I think it better to wait until my right hon. Friend is able to make a comprehensive statement.
    Mr. Dalyell: After three long years, why no action yet?
    Mr. Buchan: I heard only the first part of my hon. Friend's question, "After three long years … ". As it is 101 years since the previous legislation was passed, perhaps three years is not quite so long.
    Mr. Stodart: Does the hon. Gentleman recall that, three years ago, his right hon. Friend the Member for Edinburgh, East (Mr. Willis) said that this matter was being studied urgently, and that two years ago it was being studied very urgently? Would it not be helpful to the Secretary of State if he called back his right hon. Friend to help him?
    Mr. Buchan: We are now discussing it extremely urgently.

    Scottish Special Housing Association
    Mr. Dalyellasked the Secretary of State for Scotland if he will instruct members of the council of the Scottish Special Housing Association to co-operate with local authorities in non-financial matters of amenity, and in particular to instruct them to enter discussions with those local authorities which, contrary to Scottish Special Housing Association practice, allow tenants to keep caravans in gardens.
    Dr. Dickson Mahon: Questions of this kind are best left to the council of management of the Association, but it is the practice of the council to operate in consultation with the local authorities in whose districts it owns houses.
    Mr. Dalyell: Is it not intolerable that a council of management, elected by nobody, should set itself up as an arbiter of taste superior to the locally elected representatives of the people?
    Dr. Mabon: The council of management is appointed by the Secretary of State and it is responsible for the day-to-day management of the Association's business. As such, it is entitled to take a view on these matters which may in some cases be better than some local authority practice—
    Mr. Dalyell: That is anti-democratic.
    Dr. Mahon: —or, on the other hand, may be not so good as local authority practice.

    The Highlands
    Mr. Alasdair Meckenzieasked the Secretary of State for Scotland, in view of the Government's policy for a shift of the sheep flocks towards the hills and uplands, if he will conduct a survey into the potential for expansion from the hills and uplands of the Highlands.
    Mr. Buchan: No, Sir. The Hill Lands Improvement Scheme and the work of the Hill Farming Advisory Committee, the Hill Farming Research Organisation and the Highlands and Islands Development Board can meet the needs of the situation.
    Mr. Mackenzie: As it appears that the Forestry Commission is re-examining its proposals for planting in the Highlands

    1525
    and going into the economics of afforestation, is not this an appropriate time to carry out a general survey of the potential of agriculture and forestry in the Highlands?
    Mr. Buchan: Where special problems arise, special surveys are carried out. One thinks of the Highlands and Islands Development Board surveys in certain areas. As regards afforestation, there is close liaison on this and the related problems between the two Departments involved and the Highlands and Islands Development Board.
    Mr. Maclennan: As an example of a survey carried out the results of which have not been made public, will my hon. Friend say what has happened to the plan for the Strath of Kildonan? The non-production of this plan is causing great annoyance in my constituency.
    Mr. Buchan: The Board has not yet put its proposals in that connection to my right hon. Friend.

    Farms (Livestock)
    Mr. Alasdair Mackenzieasked the Secretary of State for Scotland, in view of the imbalance in arable farming, due to the high profitability of cereal growing compared with livestock rearing, if he will now take steps to increase the profitability of livestock to redress this imbalance and improve the standard of husbandry.
    Mr. Buchan: The balance between cereal crops and livestock and the level of price guarantees and production grants as they affect different products will be considered, along with other relevant factors, at the forthcoming Annual Review.
    Mr. Mackenzie: Does the hon. Gentleman agree that the present system of cereal growing on farms year after year, without any change in rotation, makes for all sorts of troubles for the grower and lighter yields as time goes on? Would it not help the general standard of husbandry to have a better rotation system?
    Mr. Buchan: As a general statement of framing policy that is correct. I think that the hon. Gentleman has in mind the fattening of sheep in lowland areas. There has been an indication this autumn, since the store period, of a slight return to
    1526
    this form of farming, but it is too early to say.

    Fife Constabulary (Strength)
    Mr. Adam Hunterasked the Secretary of State for Scotland whether he will obtain a report as to the present strength of the Fife Constabulary and by how many that police force is over- or under-strength.
    Mr. Buchan: At 31st October, Fife Constabulary has an actual strength of 585 male and 29 female regular police officers; 17 males and 9 females below its authorised establishment.
    Mr. Hunter: According to Press reports about five weeks ago, the position seems to have worsened. Does not my hon. Friend think that the recent increase in police pay should have improved it?
    Mr. Buchan: There was a net increase in strength in 1967 and a further net increase from the beginning of this year. There are fluctuations from time to time throughout the year. I am sure that my hon. Friend is correct when he suggests that the recent pay award to the police should be a useful incentive to recruitment.

    Sheep
    Mr. Monroasked the Secretary of State for Scotland if the Government propose that the size of the sheep flock should be increased.
    Mr. Buchan: We look for an increase in sheep in the hills and uplands throughout the United Kingdom to compensate an expected further decline in low-ground flocks.
    Mr. Monro: How? Does not the hon. Gentleman realise that there is an increasing sale of hill sheep farms to the Forestry Commission and to private forestry companies? This is an urgent matter. Will he do something to help at once?
    Mr. Buchan: That does not directly arise out of this Question, but I told the House in reply to an earlier Question that we maintain close liaison on the related problems of agriculture and forestry. I have been giving a great deal of thought to the whole question of sheep on the

    1527
    hills and uplands, and I hope that technical assistance plus assistance through the Annual Price Review will be of help in the future.
    Mr. Stodart: The hon. Gentleman has given a disappointing reply to the effect that there was an increase in one sector but there was to be a decrease in another. If he cannot give the assurance for which my hon. Friend the Member for Dumfries (Mr. Monro) asked, does not that make nonsense of his right hon. Friend's expansion programme?
    Mr. Buchan: It does nothing of the kind. It is perfectly in line with my right hon. Friend's announcement. The hon. Gentleman will be aware of the diagnosis by the E.D.C. in this connection. Most farmers—perhaps not hon. Members opposite—accept that as a realistic appraisal. I hope that there will be an over-all increase in the number of sheep in Scotland, but it is too early to say that this will come about because of our policy directed towards the hills and uplands.

    Multi-Storey Flats (Gas Supply Fitments)
    Mr. Rankinasked the Secretary of State for Scotland if he will inquire into the extent to which the rigidity of gas supply fitments affects the safety of tenants in multi-storey flats.
    Dr. Dickson Mabon: My hon. Friend, no doubt has in mind the recommendations concerning the safety of gas installations made by the Tribunal of Inquiry into the collapse of flats at Ronan Point. My right hon. Friend the Minister of Power has these under consideration.
    Mr. Rankin: Do I assume that we shall in due course hear that something is being done and that electricity as a source of heat and power is far safer than gas for tenants in these flats when high winds are blowing? Is an admission to that effect now expected? Will my hon. Friend tell us what he is doing?
    Dr. Mabon: I can only comment that the tribunal reported that no case was made out for the permanent exclusion of gas from high blocks. My right hon. Friend has asked local authorities to cut
    1528
    off the gas in any case where there is the slightest doubt about the freedom of a block from danger of progressive collapse. My hon. Friend will hear more about this from the Minister of Power.
    Mr. Dempsey: How soon shall we hear something? How soon will something be done? We have 192 dwelling houses completed in Coatbridge, but allocations have been withheld because no effective action has yet been taken. Will my hon. Friend speed the matter up?
    Dr. Mabon: I fully appreciate the urgency of the matter. My hon. Friend must be aware of the circular which my right hon. Friend sent out recently giving guidance to Scottish local authorities. If there are specific cases in which we can give direct help, we shall be ready to give it.

    Gypsies
    Miss Herbisonasked the Secretary of State for Scotland what is the extent of the gypsy problem; and what advice he has given to local authorities on the provision of facilities for them.
    Dr. Dickson Mabon: The most recent estimate made puts the number of travelling people in Scotland at around 2,000. My right hon. Friend proposes to arrange for a survey to be made in the early spring of next year which should give a more accurate assessment of the numbers and more clearly identify the problems which the travellers face. In the meantime my right hon. Friend will give local authorities any necessary advice relating to this winter.
    Miss Herbison: Is my hon. Friend aware that there is much distress at present? I know that the Government are doing everything that they possibly can, but I should like to know whether local authorities, for this winter at least, could leave these people alone instead of hounding them from place to place and making their lives a veritable misery.
    Dr. Mabon: I agree with my right hon. Friend that this is a matter of some urgency. My hon. Friend the Under-Secretary of State had two meetings with representatives of the travellers. I answered a Question by my hon. Friend the Member for Coatbridge and Airdrie

    1529
    (Mr. Dempsey) as recently as 29th November saying that we are seeking to alleviate the present difficulties in cooperation with the local authorities concerned. I emphasise that again. We are doing our best.

  OFFICIAL REPORT (ERROR)
  Mr. Braine: On a point of order. May I draw your attention, Mr. Speaker, to the fact that my question on the statement of the Minister of State for Foreign and Commonwealth Affairs yesterday and his reply to it were omitted from the appropriate place in HANSARD and appear somewhere else in a totally different context.
  Since much of what happened subsequently yesterday related to what I said, and may be of some relevance to what may be said in a statement later today, may I respectfully ask you, Mr. Speaker, whether the omitted passages might appear in the OFFICIAL. REPORT of today's proceedings?
  Mr. Speaker: I am grateful to the hon. Gentleman for putting his point of order so pleasantly. If I may make an Obiter dictum, it is that, although we appear to take for granted the splendid work of those who serve us, and never speak of it unless there is an error, the whole House deeply appreciates that work.
  I have had a note from the Editor of the OFFICIAL REPORT on the point which the hon. Gentleman raises. It is clear that the typescript left the House with the pages in the proper order and correctly code lettered and numbered. Apparently, one complete page of typescript got out of sequence at the printers and was printed in the wrong place.
  I express my regret to the hon. Gentleman. At the same time, I pay tribute, not only to HANSARD, but to the printers who work through the night to provide the OFFICIAL REPORT each morning. Errors nay be distressing, but they are remarkably rare. The error in this instance will be corrected in the Bound Volume and, as the hon. Gentleman requests. an erratum will be printed in today's OFFICIAL REPORT.

  QUESTION TO MINISTER
  Mr. Bruce-Gardyne: On a point of order. In view of the widespread and growing anxiety throughout Scotland about the operation of British Standard Time, I wonder whether you, Mr. Speaker, have had any intimation from the Secretary of State for Scotland of an intention to answer now Written Question No. 58?
  Mr. Speaker: If there had been any such intention, the hon. Gentleman would have been aware of it before he put his point of order.

FALKLAND ISLANDS
The Minister of State, Foreign and Commonwealth Office (Mr. Fred Mulley): With your permission, Mr. Speaker, and that of the House, I wish to make a further statement on the Falkland Islands.
In accordance with the undertaking given to the House yesterday, I have now inquired into statements made in the House yesterday about Press reports of remarks attributed to my right hon. and noble Friend when he was in Argentina. I have discussed this fully with my right hon. and noble Friend and I have now received from Her Majesty's Ambassador the relevant Argentine Press reports of the Press conference in question.
The statement to which reference was made yesterday was made in the context of creating a framework in which the obstacles affecting ordinary relationships between islands and mainland will be overcome, particularly with regard to communications and economic and cultural links. In this context—and here I quote the relevant extracts from the two Argentine newspapers Clarin and Nacion:
"Question: Does this mean then that the problem would be to convince the islanders?
Answer: I think it is something which depends not only on Great Britain, but that Argentina also has to solve the problem. Britain's relations with the islands are very good, so it is a question of Argentina promoting good relations between herself and the inhabitants of the islands."
On the issue of sovereignty, again I quote relevant extracts from the Argentine newspapers concerned:
"Question: Has a date been fixed for the change of sovereignty?

1531
Answer: We are not thinking in such terms of a change of sovereignty. This is a question which depends entirely on the wishes of the islanders."
My right hon. and noble Friend confirms the accuracy of these reports.
The hon. Member for Essex, South-East suggested that my right hon. and noble Friend said
"that Britain and Argentina may make a joint effort to convince the islanders that a change of status would be convenient."
My right hon. and noble Friend made no such statement.
On all points in the Falklands and in Argentina, as I repeatedly told the House yesterday, he made it clear
"that there can be no transfer of sovereignty against the wishes of the islanders."
The issue was further raised yesterday of the present state of the discussions with the Argentine Government. Since my right hon. Friend the Foreign and Commonwealth Secretary discussed these problems himself with the Argentine Foreign Minister when he was in New York in October, the House would, I know, wish to have a statement from my right hon. Friend as soon as he returns from India.
I understand there has been discussion about this through the usual channels. My right hon. Friend will be making a statement next week.
Sir Alec Douglas-Home: I have some sympathy with the right hon. Gentleman in trying to explain the various statements made by his right hon. and noble Friend.
Mr. Shinwell: On a point of order. My right hon. Friend has just confounded the allegations made yesterday against my right hon. and noble Friend, Lord Chalfont. In the circumstances, should not we first—[HON. MEMBERS: "What is the point of order?"] I can teach the young fools on the benches opposite how to put a point of order. Go back to school.
Mr. Speaker: Order. Perhaps the right hon. Gentleman will continue with his point of order and not interrupt himself.
Mr. Shinwell: I am sorry, Mr. Speaker. I am easily disturbed.
In view of my right hon. Friend's statement, should not we ask the hon. Member
1532
for Essex, South-East (Mr. Braine) to withdraw the allegation which he made yesterday?
Mr. Speaker: That is a point of argument, not a point of order.
Sir Alec Douglas-Home: If the right hon. Gentleman had not been so impetuous, and had waited for my next sentence, perhaps he would not have had to make that kind of intervention.
We have been trying to extract information. We had to do exactly the same thing over Gibraltar. Trying to get the Minister of State to make a specific statement that sovereignty would not be transferred has been like squeezing water out of a stone.
I have only just seen the statement. However, the right hon. Gentleman says that his right hon. and noble Friend stated:
"We are not thinking in such terms of a change of sovereignty. This is a question which depends entirely on the wishes of the islanders."
The statement continues:
"On all points in the Falklands and in the Argentine, as I repeatedly told the House yesterday, he"—
that is, the right hon. and noble Lord, Lord Chalfont—
"made it clear 'that there can be no transfer of Sovereignty against the wishes of the islanders'".
Why did not the right hon. Gentleman say that before? If only he had done so it would have saved a great deal of trouble.
The right hon. Gentleman said that the Secretary of State will make a statement when he returns from his visit to India. We look forward to that with keen anticipation. If it confirms what the right hon. Gentleman has said, all well and good, but we reserve the right to debate this matter, if we wish to do so, after the right hon. Gentleman has made his statement.
Mr. Mulley: I am obliged to the right hon. Gentleman for his last remarks. I accept that the Opposition have the right on this as on every other question to debate the matter if they so desire. I am grateful to him for accepting my offer to ask my right hon. Friend to make a statement.

1533
I do not make an accusation against the hon. Member for Essex, South-East (Mr. Braine), but I could not find any newspaper quotation which measured up to the words which he used in the House. I am sure that he was quoting from memory. That was why I was not able yesterday to give the House the assurance, which I could otherwise have given, that my tight hon. Friend had not possibly used those words.
Mr. Emrys Hughes: Does the principle laid down by my right hon. Friend that the kind of government they get should always Le determined by the wishes of the islanders apply to islands in other parts of the world?
Mr. Mulley: I am concerned at the moment with the Falkland Islanders and since many newspapers have said that the more often I repeated the pledge, the less the House believed it, I prefer to stand by what I have said.
Mr. Braine Mr. Braine rose—
Hon. Members: Withdraw.
Mr. Braine: There is no question of withdrawing. [HON. MEMBERS: "Oh."]
Are we to take it from what the right hon. Gentleman has said this afternoon that he categorically denies the report—
Hon. Members: Withdraw.
Mr. Speaker: Order. I want to hear the hon. Gentleman.
Mr. Braine: Does the right hon. Gentleman now categorically deny the report in Monday's Daily Telegraph—[HON. MEMBERS: "Oh."]—that Lord Chalfont told a Press conference in Buenos Aires on Sunday that Britain could not work alone in convincing the islanders that a change might be convenient and that it must be a joint effort by Britain and the Argentine?
Does the right hon. Gentleman recall that yesterday he told the House that Lord Chalfont was accompanied by five journalists? If those journalists have been sending back incorrect reports, are not the Government to blame for not making their position crystal clear?
Mr. Mulley: I am sorry that the hon. Member has not been more candid with the House. He has just quoted from Monday's Daily Telegraph. Not only,
1534
when he made his point yesterday, did he not give any reference to a newspaper or any date, but he has now read the correct version. Yesterday—inadvertently I hope—after the word "change" as HANSARD records, he talked about a "change of status", which is a quite different situation from a change of relationships, about which my right hon and noble Friend was talking, as has been confirmed by the Argentine newspapers.
If the House or any hon. Member should be in any doubt about this, I would point out two facts. First, five other British newspaper correspondents were present, several representing newspapers which have been wholly critical of our policy on the Falkland Islands, and not one of them thought fit to report this as a significant statement. If it had been as important as the hon. Member suggests, the Daily Telegraph itself might have put it in a more prominent position in that newspaper.
Mr. Murray: In view of my right hon. Friend's failure to get a withdrawal from the Opposition, does he realise that he would have a great deal of support from this side of the House if he refused to answer any more questions from the Opposition on the Falklands until he has had a withdrawal from the hon. Member for Essex, South-East (Mr. Braine)?
Mr. Mulley: I am grateful for the support of my hon. Friend, and, indeed, of all my right hon. and hon. Friends. I share their disappointment that the hon. Member did not see fit to withdraw.
Sir F. Bennett: Will the Minister clarify two points arising from his statement yesterday? With reference to a referendum on Gibraltar, he said that as it was so well known what the opinion of the Falkland Islanders was at the present time a referendum would be superfluous, but does he recall that in the case of Gibraltar precisely the opposite argument was used and it was said that it was just as well that the world should learn straight away what the people of Gibraltar wanted?
As regards the statement today, does the right hon. Gentleman recall that yesterday he referred, I think, seven times to improved communications? Whatever else Lord Chalfont may or may not have said, he has gone on referring to

1535
strengthening links. What is the explanation for this, or is it a Freudian slip?
Mr. Mulley: I have read carefully the reports in the Press on Monday of Lord Chalfont's Press conference. They all reported that Lord Chalfont had stressed very much the need for improved communication links. I think that anyone with any knowledge of the problems of the Falkland Island realises that the fact that they have no access to the Argentine is a cause of very great difficulty for them.
Mr. Faulds: Will my right hon. Friend accept that most of us on this side are as convinced of the need for white self-determination in the Falklands as we are for black self-determination in Southern Africa? Will he please understand that we mean to maintain our stand in both these cases?
Mr. Mulley: I note the views of my hon. Friend.
Sir R. Cary: Why cannot a full-scale Parliamentary delegation visit the Falkland Islands, as was done by the visit of a Parliamentary delegation years ago to Newfoundland, when the future of that island was at stake?
Mr. Mulley: There has been a Parliamentary delegation recently, as the hon. Member for Louth (Sir C. Osborne) reminded the House yesterday, and I am sure that its reports have been of great value. Until the recent visit of my right hon. and noble Friend, no Minister had previously visited the Falklands in, I think, the 130 or more years of their existence as a dependency. The question of a Parliamentary delegation can be considered, but I would point out the difficulties of getting to and fro, demanding a good deal of time.
Sir Dingle Foot: Will the Government remind the Government of the Argentine, if they have not already done so, that both Britain and Argentina are signatories of the United Nations Charter and that under Article 73 of the Charter we are bound as a matter of duty, from which we cannot escape, to have regard, first and foremost, to the wishes of the inhabitants?
Mr. Mulley: As I explained to the House yesterday, it was because of the United Nations resolution that the discussions with the Argentine were first set on foot. Right from the very beginning in the debate in the United Nations, my right hon. and noble Friend Lord Caradon made it clear that, in our judgment, the interest and wishes of the islanders must be paramount throughout.
Mrs. Knight: May we take it that the Minister will not emulate his right hon. and noble Friend's example yesterday when, having made a statement in another place, he later went on television to admit that he had not given in that statement all the information which he possessed?
Mr. Mulley: I had the pleasure last night of watching the television programme concerned, and that was not the impression which I gained from it. So far, I have no invitation to appear on television tonight and I have no expectation of receiving such an invitation.
Mr. Mendelson: Is it not quite clear, in view of the last allegation, that all that Lord Chalfont said was, as I have heard many Governments saying over the years in similar circumstances, that in the middle of a diplomatic negotiation one cannot publish all the points involved? Is it not time that this personal vendetta against a public servant of Lord Chalfont's integrity and ability should cease once and for all?
Mr. Mulley: I strongly agree with my hon. Friend.
Lord Lambton: Will the Minister say whether he was aware yesterday, when he answered the question of my right hon. Friend the Member for Flint, West (Mr. Birch), that Lord Chalfont had received a letter the day before he went to the Falkland Islands which was relevant to the seaweed project? Did he mention the changed circumstances arising from that letter to the Governor and the Council of the Falkland Islands?
Mr. Mulley: I thought that I dealt with that matter yesterday when, I think, we had not the benefit of the presence of the noble Lord.
Viscount Lambton Viscount Lambton indicated dissent.
Mr. Mulley: I dealt with the matter. Lord Chalfont himself dealt with it in another place yesterday, when he said that the letter was marked "Confidential" and, therefore, sent for his personal information after he had left and it was forwarded to him and reached him just before he went to the Falkland Islands. That letter did not contain anything of the detailed information, or probability of early action, that has been more recently conveyed to the Press by the gentleman in question.
Mr. Shinwell: Is my hon. Friend aware that the hon. Member for Essex, South-East (Mr. Braine) was on television last night and repeated the allegations, as the transcript would show, made yesterday in this House and which are now found to be without foundation? In these circumstances, would my hon. Friend make a statement to the B.B.C. that the hon. Member for Essex, South-East should not receive his usual fee?
Sir Knox Cunningham: Will the Minister of State, on behalf of the Government—[Interruption.]
Mr. Speaker: Order. I want to hear the question.
Sir Knox Cunningham: Will the Minister of State, on behalf of the Government, say that there will be no further discussion of sovereignty with the Argentine, and if he has not that authority will he get it from the Prime Minister, who is sitting beside him?
Mr. Mulley: I went into this question at some length yesterday and I thought that the House had generally welcomed the undertaking I gave today that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will make a further statement next week.
Mr. Hamling: While welcoming warmly the statement made by my right hon. Friend, may I ask whether he would not agree that reliance and insistence upon inaccurate Press reports does a great deal of harm to the confidence of the Falkland Islanders in Her Majesty's Government and that it is the policy of both sides, surely, to reassure the islar ders and not upset them?
Mr. Mulley: I am obliged to my hon. Friend. I think that the difficulty in this
1538
case arose from the hon. Member for Essex, South-East giving to the House yesterday a wrong interpretation of a Press report, and it is for this reason that I regret that he will not withdraw it.
Mr. David Steel: Is the Minister aware that we on this bench have never had, and do not now have, any cause to question the integrity of Lord Chalfont, and that we accept that he did not use the words attributed to him yesterday in this House? But would the right hon. Gentleman accept that the Government could get out of this difficulty if they would stop using so much such words as, "There will be no transfer of sovereignty against the wishes of the islanders" and, instead, say, "The islanders do not wish any transfer of sovereignty. Therefore, there will be no change of sovereignty"?
Mr. Mulley: This is a most helpful suggestion which I will put to my right hon. Friend.
Mr. C. Pannell: Would my hon. Friend try to find out, on behalf of the House, why those Members opposite who want no further palaver with Argentina want to keep on talking ad nauseam with Mr. Smith?
Mr. Sandys: Since it is quite clear that the only thing which Argentina wants from Britain is possession of the Falkland Islands, and since the islanders are determined to remain British, can the Minister at least tell us what the negotiations are about? Will he tell us whether it has been made clear to the Argentine Government that the question of the transfer of sovereignty is not discussable in the negotiations?
Mr. Mulley: The discussions with Argentina arose for two reasons. One, because the two Governments were requested to discuss their dispute by the United Nations General Assembly. As my right hon. Friend the Foreign Secretary said in March, while we may not agree—and we do not agree—with the Argentine Government on this matter, it is difficult, in the light of a United Nations resolution, to refuse to discuss it with them, and since the dispute concerns sovereignty, naturally the question of sovereignty had to be discussed and has been discussed in these talks.
I think that the House will realise that one of the reasons why they have taken

1539
so long and have not come to a conclusion, and, indeed, may well not come to an agreed conclusion, is that we have, as I told the House yesterday, insisted throughout upon the paramount importance of the wishes of the islanders and cannot agree to any transfer of sovereignty against the wishes of the islanders. I thought that I had made that so clear yesterday; so clear, indeed, that I have been taken to task by, I think, almost every newspaper for having repeated it too often.
Mr. Hastings: Has the Minister read a report which appeared on Saturday last in La Prensa which, I understand, is a prominent Argentine newspaper, to the effect that agreement was feasible and that the interests, as opposed to the wishes, of the population would be taken into account, and that sovereignty would be transferred once relations have been improved, and, finally, that a period of from four to 10 years would be set aside for this improvement of good relations, in particular, communications? Is the Minister in a position utterly to repudiate that report?
Mr. Mulley: A question arose about the accuracy of remarks attributed to my right hon. and noble Friend at the Press conference. I am quite certain that no such comment of the kind that the hon. Member has just suggested arose in that conference. While I take no responsibility for what appears in British newspapers, I certainly have no responsibility for what may appear in papers abroad.
Sir C. Osborne Sir C. Osborne May I ask two questions? Why cannot the House be told what Lord Chalfont said to the Executive Council in the Falklands? Secondly, yesterday, if my memory is right, the right hon. Gentleman said that the islanders may change their minds. Will he give an undertaking that no British money will be used to induce them to change their minds?
Mr. Mulley: I am, frankly, astonished by the second question by the hon. Mem-
1540
ber, who has had an opportunity, which I, personally, have not had, of visiting the islands, and that he should suggest that we can make them change their minds by the offer of money. That is certainly not the kind of comment I would have expected from him.
As to the first point—I am sorry, but I am not sure what it was.
Sir C. Osborne: Why cannot the House be told what Lord Chalfont said to the Executive Council?
Mr. Mulley: The reason it was possible to have a more confidential talk with the Executive Council was that the Council is the Government of the Falkland Islands. Members of that body are bound by an oath of secrecy. In the normal course of diplomatic practice it is never possible to divulge details of communications without the consent of the other party. Normally, of course, one reaches the point where there is an agreed statement; or, if one cannot get to that point, a general announcement that the talks have come to an end.
Mr. Kenyon: Is my hon. Friend aware that if hon. Members could spend six months on those islands, the majority of them would change their minds? [Laughter.]
Mr. Speaker: Order. That is the question to end all questions.

BILL PRESENTED
  AGRICULTURAL TRAINING BOARD (ABOLITION)
  Bill to abolish the Agricultural, Horticultural and Forestry Industrial Training Board, presented by Mr. John Farr; supported by Mr. James Scott-Hopkins, Sir Clive Bossom, Mr. John Wells, and Mr. Paul Hawkins; read the First time; to be read a Second time upon Friday, 13th December, and to be printed. [Bill 50.]
ORDERS OF THE DAY

  CUSTOMS (IMPORT DEPOSITS) BILL
  Considered in Committee [Progress, 3rd December, 1968].
  [Mr. HARRY GOURLAY in the Chair]

Schedule 1

  EXEMPTED GOODS
  4.0 p.m.
  Mr. John Pardoe: I beg to move Amendment No. 44, in page 5, line 13, at end insert:

  Chapter 6 (all headings).

  Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage.

  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment we will take also, Amendment No. 45, in page 5, line 13, at end insert:

  06.02(A)

  Buds, eyes and stems for grafting and budding; cuttings and slips; mushroom spawn.

  06.02(B)(1)

  Rose stocks neither budded nor grafted, the following:

  Rosina canina rooted single stems, not less than 4 feet in lengh

  Rosa canina seedlings

  Rosa laxa seedlings

  Rosa rugosa rooted single stems, not less than 4 feet in length.

  06.02(D)(1)

  Azalea indica, not in flower.

  06.02(F)(1)(a)

  Other trees, shrubs and bushes, not in flower.

  Mr. Pardoe: The first question that arises out of Amendment No. 44, which deals with Chapter 6 in the tariff list, is why the chapter was omitted in the first place. Will the Government give their reasons for omitting the chapter from the exemption list? It may be that the products dealt with in Chapter 6 could be categorised as unnecessary imports. We have heard a great deal about unnecessary imports, and I imagine that the reactions to the Amendment of many hon. protectionist Members will be, why should the Government want to flood decent British drawingrooms with nasty foreign cut flowers and foliage? The Amendment is concerned with live trees and other plants; bulbs, roots and the
  1542
  like; cut flowers and ornamental foliage. I have already given to the Committee my definition of unnecessary imports, which does not square with the more protectionist views of some hon. Members. I regard unnecessary imports as imports which no one in this country wants to buy, and since some quantities of these products are at present being imported, I do not accept the argument that they are unnecessary.
  Taking the 1967 figures, the total imports amounted to about £10,845,000 worth of goods, and, since this is a comparatively small product in the import range, would it not be administratively better to exempt it? By exempting the product group the administration of the scheme would be tightened. It is not likely that the Government will have to deal with large quantities at any one time. I suspect that the quantities of this product group coming in at any one time are quite small, and I therefore hope that the Government will consider the matter of administration.
  I turn now to the problem faced by Holland. The great bulk of imports of this product group come from the Netherlands. The total figure for the import of bulbs, tubers, tuberous roots, corms, crowns, rhizomes, dormant, in growth or in flower, is £4,846,000 in 1966, of which £4,344,000 came from the Netherlands.
  To take the 1966 figure for this product group—and I take the 1966 figure because the 1967 figures are not yet broken down, out of a total of £9,693,000 worth of goods—£6,821,000 worth came from the Netherlands. It is, therefore, a vital matter for this one country and, since we have very close and extensive trading relations with the Netherlands, it might well be that the Government should consider their interests in this matter.
  These products are mostly perishable, and I want to raise on this product group the question of what happens with perishable goods. An importer importing a piece of machinery, or something that is likely to be as good in six months time as it is now, who cannot find the deposit, may presumably leave the goods with the Customs and Excise and collect them six months later, or whenever the Government deems. Cut flowers would

  1543
  be of little use six months later, and I therefore wonder what the Government intend to do in the situation which I have envisaged.
  This might well happen in quite a number of cases. Will the Government say what they intend to do with perishable goods if the deposit cannot be found and the goods have to be left with Customs and Excise? I hope that the Financial Secretary has noted the questions I have raised and will give answers to them in the course of the debate.
  Mr. John Wells: Amendment No. 45, in my name, is slightly narrower than Amendment No. 44, which has been moved by the hon. Member for Cornwall, North (Mr. Pardoe). I believe that we should look at these product groups rather more strictly.
  The advantage of taking the smaller range is that the total value is very much less, and these are the vital products for the British nursery industry. The hon. Member for Cornwall, North has just said words to the effect that it is strange for a Liberal to suggest that cut flowers of foreign origins should be put in British drawing rooms. If we were to accept the narrower Amendment we would be dealing only with the raw material of the nursery trade. The Financial Secretary was at pains, when the Ways and Means Resolution was debated, to say that raw materials would be exempt. He was also at pains to remind us that seeds are exempt. The headings set out are basically the raw materials, the equivalent of seeds.
  I would mention heading 06.02(A), buds, eyes and stems for grafting and budding; cuttings and slips; mushroom spawn. All these are the equivalent of seeds although they are not physically such. Heading 06.02(B)(1) refers to rose stocks neither budded nor grafted. These common rose stocks cannot satisfactorily be grown in this country and they are traditionally imported. The entire nursery trade is based on importing them, and this is of great importance. Taking the last five years averaged together the cash value of these products amounts to just over £½ million a year. The quantity in numbers, again taking an average, is over 55 million units a year, that is to say, 55 units of work.
  1544
  With one or two exceptions, the nursery stock trade is based on small, one, two or three man businesses. The present season of the year is the time when they are planting, moving, lifting, transplanting and so on. It is their busy season, but it is also the time of the year when their cash liquidity is at its lowest. They have to buy in their new stocks from abroad, but they are not, generally speaking, paid until the spring. These small firms are at a low ebb financially, and if this extra imposition, which seems most irrational, should fall upon them they will be in a particularly bad way financially.
  This extra impost seems to be most irrational. If it should come upon them, they will be in a bad way financially. I am assured by the Horticultural Trades Association, which speaks for these people, that there will be unemployment and bankruptcy among small firms. We were told by the Financial Secretary that raw materials would be exempt. For that reason, I hope that he will look at these two categories favourably.
  My third category, subheading (D)(1), is azalea indica, not in flower. This could be said to be a luxury product, but, again, the general experience is that azalea indica is not grown afresh here. It is always imported, and there is a comparatively large trade in it. In terms of cash value, the figure is about £⅓ million a year, and that will not break the Treasury, though it might break many small firms.
  My final category is 06.02(F)(1)(a), which takes in other trees, shrubs and bushes, not in flower. This might sound to be a rather exotic import which we could well do without, but, again, this category of shrubs and trees is the raw material. The bulk of importers do not buy them for resale but for lining out in their own nurseries. The approximate ratio is that, in terms of value, about £ 1 in £18 is resold immediately. These are not items for resale and, in the view of the Horticultural Trades Association, they, too, are a raw material.
  I ask the Financial Secretary to look again at these four categories. Acceptance of my Amendment will not cost a lot, and the items involved have the special quality of being the raw material of a small man industry. I hope that he will be sympathetic towards it.
  Mr. Brian Harrison: I want to support Amendment No. 45. My reason for doing so is very logical, and perhaps I should declare my interest in that I am a nurseryman importing root stocks, buds, eye slips and some graft-wood. The reason such items are imported at present is that nurserymen are striving to substitute them for finished products which would have to be imported at a very much higher price. Taking, for example, a given category of roses, there are about 4 million coming in from Holland. One or two nurseries here have now discovered that, by importing raw material from Holland, and paying 3d. or 4d. each, they can substitute them for finished products which would have to be imported at about 1s. 6d. each.
  At this time of the year, root stocks have to be imported because grafting begins on 1st December or 1st January, and then work has to be done for selling at the end of the season, which is further than six months ahead of the present day. We understand that this levy will be taken off in six months' time. Instead of bringing in an object costing about 3d. or 3½d., which then has an amount of work put into it with British labour and is sold at the end of the period for 1s. 6d., nurserymen are to be hindered in bringing in the raw materials, which is what they are.
  In about six or nine months' time, to satisfy the demand of the home market, they will have to be imported at a cost of about 1s. 6d. each. It seems only logical that root stocks should be allowed to be brought in now, so preventing a very much more expensive import in six to nine months' time after this levy has gone.
  Furthermore, rose buds are a convenient and economical way of bringing in new varieties. If such new varieties have to be brought in as finished roses or finished viburnums, they will be about eight or nine times more expensive, and they will have to be paid for in foreign currency. In the following season, too, they will be much more expensive on the market than if the raw material could come in now.
  4.15 p.m.
  It must be emphasised that it is quite impossible to postpone this. It is no
  1546
  more possible than the story of the wartime agricultural executive officer who said that lambing had to be put off for six weeks. It is impossible to put off the grafting or budding of roses.
  Other plants, like azalea indica, come in, not for direct sale and, if they are not in bud now they are normally potted up here and allowed to flower, again with an amount of indigenous labour put in, and they are ready for the market in three or four months. If this is not done, they have to be brought in as finished products at greater expense from Holland, Belgium or France.
  I would draw the Financial Secretary's attention to a Report on Import Substitution in Agriculture, published a few months ago, which draws attention to the fact that we in this country should try to produce a lot of finished products which normally come finished from other countries. A number of nurseries are concentrating on this and trying to bring in raw materials. Later, it is hoped that it will be possible to grow and produce our own stocks, but rose stocks cannot be produced in six months at this time of the year, and there is nothing which can be done to fill in the gap. If this additional burden is placed on those who are trying to follow the recommendations of the Report and substitute finished products for finished imports, it will create tremendous problems for nurserymen.
  I hope that the very limited series of categories set out in Amendment No. 45 will be looked at again. The Treasury should realise that, by rejecting the Amendment, it will cut off its nose to spite its face.
  Mr. John Nott: I have never seen the benches opposite so naked and unashamed as they have been since the beginning of this debate. It is only during the last two or three minutes that a P.P.S. has joined the payroll vote on the Front Bench. Since we are discussing foliage, an appropriate comment might be that not even a fig leaf hides the Government's shame. We are meant to be discussing a key feature of their economic strategy, but not a single hon. Member opposite appears to be sufficiently interested to be present.
  I oppose the Amendment moved by the hon. Member for Cornwall, North (Mr. Pardoe). Not for political reasons, but

  1547
  for other reasons, I find the Amendment of my hon. Friend the Member for Maidstone (Mr. John Wells) more acceptable than that of the hon. Member for Cornwall, North.
  I am against the Bill in toto, because it is administratively inept and will damage this country, particularly our exports. When the Ways and Means Resolution was first proposed I suggested that it would also be subject to a huge amount of special pleading from every kind of interest and from all directions. Indeed, in the debates on the Schedule which follow we merely see the tip of the iceberg, as it were, of the special pleading now going on.
  The reason I do not oppose my hon. Friend's Amendment is that it is reasonable to exclude seeds and the raw materials of the horticultural industry. because these raw materials may not be available here. Although I believe in the maximum liberalisation of trade on industrial products, it is consistent to favour some kind of levy system on imports of agricultural and horticultural products. We have to look at the agricultural and horticultural industries differently from other industries.
  This is certainly accepted throughout the Western world. Being a supporter of a new system of agricultural support, namely, a system of minimum import prices and variable levies on imports, it is reasonable for me to oppose the Amendment moved by the hon. Member for Cornwall, North. I do so without any shame, although I am against the Bill as such. That is because it includes —and this is where it differs from my hon. Friend's Amendment—cut flowers. ornamental foliage and bulbs.
  My constituency has a growing and important part to play in the cut flower and bulb industry. In the same way that we wish to protect agriculture from dumping by overseas countries, so it is reasonable to protect our horticultural industry from dumping.
  I should not like to see Amendment No. 44 go through, because it embodies a move in the direction of a minimum import price protection for the horticultural industry. The bulb industry, which has been growing substantially in
  1548
  this country at the expense of the Dutch bulb industry, should be encouraged more than in the past. Likewise, the cut flower industry, which is vitally important in the Isles of Scilly and West Cornwall, should be encouraged and should receive the same kind of protection that the agricultural industry ought also to receive from minimum import prices and variable levies.
  That is why I oppose Amendment No. 44. But I am happy with Amendment No. 45 which seems to raise an entirely different principle, namely, the importation of the necessary raw materials which cannot sometimes be produced within the United Kingdom.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I am grateful even for the modest kind of support that I am likely to receive from the hon Member for St. Ives (Mr. Nott) in view of his attitude to the Bill generally. I notice that he upholds very firmly the principles of free trade, except in relation to agricultural and horticultural products, for which we know that his constituency is famous. I can only congratulate him on the happy coincidence whereby interest and conviction dovetail so agreeably in a way which all too often many of us do not find possible.
  However, I have noted what the hon. Gentleman said in support. But protectionism is no part of the Bill's intent or thinking, so I cannot even accept this momentarily proffered hand of support from the hon. Member for St. Ives. I emphasise that this is not a protectionist Bill.
  I should again emphasise that our attitude to imports is not hostile as such. We are anxious to be able to afford the maximum amount of imports that the people select by bringing the ratio of those imports in relation to our exports into a satisfactory state at the earliest possible time.
  I am sorry to be tediously repetitive about it, but so many speeches are made in which it is suggested that we have not exempted certain articles because we dislike them. Far from it. I find for a brief and agreeable moment that we are wafted into the air of azalea scent, roses, live trees and ornamental flowers. I fear

  1549
  that we shall be engaged at some length on less agreeable articles as we move through the Schedule.
  Mr. Patrick Jenkin: "An existence à la Watteau", as W. S. Gilbert would have said.
  Mr. Lever: As the hon. Gentleman says, a Watteau-like appearance comes to the Committee for a brief moment.
  If hon. Gentlemen opposite regret the absence of some hon. Members on our side, I take this to be an indication of confidence in my hon. Friend and myself. I am sure that it is not any lack of interest in the many speeches which will be made by hon. Gentlemen opposite for whom, in this sort of situation, they normally provide a silent audience. I hope that hon. Gentlemen opposite will not feel depressed by the lack of numbers on this side at the moment, because it is certain that my hon. Friends will study earnestly what has been said in HANSARD.
  I hope that I have made our position clear. When articles are not on the exempted list it does not imply any kind of hostile disposition towards them. On Amendment No. 45, hon. Gentlemen must not, like the hon. Member for Malden (Mr. Brian Harrison), speak as if, when we do not exempt an article, it means that it is embargoed from entering. How otherwise can the hon. Gentleman speak of the Government biting off their nose to spite their face by refusing to give exemption to certain articles? I hope that the hon. Gentleman will not pessismistically assume that the articles in question will not come in in reasonable quantities. The most we are seeking, concerning those articles, is to make a marginal moderation in the flow or, to the extent that does not occur, some impact on our liquidity situation.
  Mr. Brian Harrison: Can the hon. Gentleman guarantee that nursery-men's bank managers will be prepared and permitted to advance the necessary money to cover the import levy?
  Mr. Lever: I have dealt with this point several times. I hope that the Committee will realise that courtsey to the hon. Gentleman again requires that I should, even to the point of tedium, repeat it.
  1550
  Any nurseryman who requires the import deposit, but has not the cash, will be able to offer any source of finance—an unimpeachable Government security of six months' duration—to secure it. If he has to pay interest, it will be on half the cost of the non-exempted article for six months. I do not want to repeat what I said. I refer the hon. Gentleman to what I said about it yesterday and on other occasions.
  This is an impediment. But I want the lion. Gentleman to know that, far from being resentful or hostile to the import, the Bill is founded on the assumption that most importers will remove most of the impediment to an extent which will not be ruinous to any importer. The hon. Gentleman must realise that this is done with great regret. I am sorry to impose even this impediment, but it is done for the ultimate advantage of all importers, because this is the lightest scheme that we could adopt. It is hard for people like the hon. Gentleman to be inconvenienced like this, and I am sympathetic. However, he might console himself with the thought that timely and moderate action of this kind might be the means of ensuring, for a long time to come, that the country can enjoy the most liberal trading conditions and the least interference with imports.
  In a sense this Measure, because of its moderation and timeliness, and its relation to our general strategy, will be an ultimate benefactor, not a victimiser, of the importer. I cannot resist doing what I did on television, when I quoted the words of Nye Bevan, who said, "When you kick a man in the teeth, even for his own ultimate and enduring benefit, you must not expect him to be immediately grateful". Although this Measure will inure to the ultimate benefit of all the people in this country, including the importers, I do not expect them to be immediately grateful. I appreciate that they have difficulties, and I sympathise with them. We are not hostile to them, but we have to maintain a certain discipline on the import side, in the manner consistent with the purposes of the Bill.
  4.30 p.m.
  Mr. A. P. Costain: Does the Financial Secretary agree that the general principle of the

  1551
  Bill is that raw materials should be exempt? Does not he accept that my hon. Friend has made the case that these are raw materials? Why is he against the importation of raw materials for the horticulture industry?
  Mr. Lever: They are not raw materials in the sense indicated by the Chancellor of the Exchequer, nor are they foodstuffs in the sense indicated by him. These are raw materials which, in most cases, have been the subject of work, and what in industrial areas would be called processing. They do not qualify under the Chancellor's definition.
  I know that only £10 million to £11 million are involved, but that involves an import deposit of about £5 million to £6 million, or 1 per cent. of the entire scheme. We need only 100 minor and attractive Amendments of this kind to make it a work of supererogation to have given the Bill a Second Reading, and to have passed the three Clauses, because we would eliminate the whole purpose of the scheme. We must preserve a sufficiently wide range of non-exempted articles to maintain the immediate impact of the scheme.
  Mr. John Wells: The hon. Gentleman says that the whole sector involves only £10 million to £11 million. Perhaps I might direct his attention to my Amendment—not the Liberal one—and, in particular, to the first part of it. I can only repeat the figures which I gave earlier. The amount involved is under £500,000. Surely, less than £500,000 for the first category, which is undoubtedly a raw material within the Chancellor's meaning, can be accepted? The hon. Gentleman must look again at his right hon. Friend's words.
  Mr. Lever: I heard what my right hon. Friend said, and I came to the conclusion that this was not within those words. Also, it would not be possible to use so selective an attitude at this stage of the scheme.
  I ought to point out, as I shall on other Amendments, at the risk of tedium, that the Government have taken powers to bring the scheme to an end at any time they think right, or to add to the exemptions particular classes in the light of the working of the scheme, or to lower the
  1552
  rate in relation to particular categories of goods. We cannot increase the rate, nor do we want to. We cannot remove an exemption, nor do we want to. But we have taken power to add to the exemptions and reduce the rate as we watch the working of the scheme.
  I know the interests taken by the hon. Member for Maidstone (Mr. John Wells) in all these fruits and horticultural products, and I shall study his arguments again. All these matters will be kept closely under review by the Government after the Bill has continued its operation for some while. At any time that we are able to take action under this power, we shall do so. At this stage, however, I have to urge the Committee to reject the Amendment. It would make an inroad prematurely into the list of goods not exempted and subject to the deposit.
  Mr. Peter Emery: I did not intend to intervene on this Amendment, but that the Financial Secretary's reply raises a matter of principle. It appears that we are likely to hear a similar reply to many of the Amendments. The answer we are to be given is that the Government will look at all the arguments, consider the matters fully, and, if they are suddenly impressed by the position, they can take action.
  Mr. Lever: The hon. Gentleman must realise that that is not what I said. I said that we would keep the arguments in mind, and we would watch the operation of the scheme in respect of particular items. We shall do so bearing in mind the arguments which have been advanced by hon. Gentlemen opposite. It is this watching of the operation of the scheme which is crucial to the operation of the powers which we have taken.
  Mr. Emery: I thank the hon. Gentleman for making absolutely plain what I thought was plain before.
  The hon. Gentleman is trying to suggest that he will watch the scheme, but he can watch it for only one purpose, and that is to make certain that it is operating properly, or in such a manner that he can take action to do what my hon. Friend has suggested, and that is to allow certain produce to be exempted. If that is not the case, the hon. Gentleman's argument is of no avail. In other words, he will be watching the scheme for no

  1553
  purpose, because watching it does not mean that one intends to do something about it. It seems a false argument to be put forward by the Government.
  I am particularly concerned about this, because this is the sort of argument that we had four years ago when we were discussing exemptions from the 15 per cent. surcharge. Over and over again Ministers suggested that they would watch the operation of the scheme, that they would listen to our arguments with great interest, and then, as time went on, if it was thought necessary to take action, they would do so. As I recollect the situation, the Government took no action at all while that surcharge was in operation.
  In other words, despite all the assurances given to us, the number of items excluded from the surcharge after the Bill became law could be counted on one hand. I should not go so far as to say that there were no subsequent exemptions, but there were certainly very few. I hope that the Minister will bear that in mind when he gives us the kind of answer we have just had.
  We do not have to look at the crystal ball. All we have to do is to read the book, and on doing that we find that, despite all the assurances, the Government took no action to increase the number of exemptions. Hon. Members who are trying to get items exempted should realise that the assurances we were given four years ago meant nothing at all. It is extending our credulity a little to think that those arguments can be hashed up again, and I hope that the Government will not repeat their performance of four years ago.
  Mr. Costain: I intervened in the Financial Secretary's speech to inquire whether he would accept these items as raw material. I understand he said that the Chancellor had decided they were not. We now have a farcical situation. Do hon. Members appreciate that a Socialist Government are introducing legislation to allow caviare to come in because it is a foodstuff, but are prohibiting the import of mushroom spawn, because it is not?
  Mr. Lever: The hon. Gentleman must not say that we are not allowing mushroom spawn to be imported. He is
  1554
  entitled to make an interesting debating point—it will not be for the first time—that caviare as a foodstuff is exempt, but he must not talk of any other article which is not exempt as being forbidden. It is not; it is subject to a minor impediment.
  Mr. Costain: I keep off the forbidden fruit. It is admitted that caviare is for a privileged class and mushroom spawn is not. The Financial Secretary said that these imports are not forbidden and all that an importer has to do is to find a finance house to lend him money so that he can lend it to the Government. I have been under the impression that the Government have sent instructions to the banks to put restrictions on lending. Is it suggested that another money lender will come in to lend at lower rates of interest? Mushrooms are a food which is grown in this country and the spawn coming here would help.
  Mr. Peter Blaker: I reinforce the point made by my hon. Friend the Member for Honiton (Mr. Emery). The Committee should look very suspiciously at the plea made by the Financial Secretary that the Government will see how things go, with the implication that they will take action to rectify anything which needs rectification.
  I ask the Committee to imagine what is likely to happen. For the first three months after the Bill has become an Act the Government will say, "We have not enough evidence yet to see whether there is something wrong here. Let us consider a little longer and see what evidence comes in." For the next three months they will say, "We are considering the evidence". At the end of the six months they will say, "This scheme will expire in six months' time, so what is the point of doing anything about it now?" If we are to get the thing right, let us get it right now.
  Amendment negatived.
  Mr. Pardoe: I beg to move Amendment No. 47, in page 5, to leave out line 46 and to insert:

  Chapter 22 (all headings)

  …

  Beverages, spirits and vinegar.

  The Deputy Chairman: With this Amendment we may discuss Amendment

  1555
  No. 48, in page 5, leave out line 49 and insert:

  Chapter 24 (all headings)

  …

  Tobacco.

  Mr. Pardoe: Amendment No. 47 seeks to fill in Chapter 22 by which the Government propose to exempt only two items, vinegar and substitutes for vinegar. I propose to include in the exemption all the items in Chapter 22 beverages, spirits and vinegar. I am not frightfully enamoured of the idea of flooding the country with imports of alcohol and smokes, but, of course, I am in favour of as free a trade as possible. I am extremely concerned about the effect that this Measure might have on the competitive situation, particularly in relation to tobacco.
  For some time some of us have followed events with anxiety. The situation might be slightly better now than it was a year ago largely because of the advent of Americans to this field, but to a large extent there is a monopoly situation. I have always believed that any form of protection in a monopoly situation can only exacerbate that situation. That is why I have tabled Amendment No. 48. It seeks to include all forms of tobacco in the exemption list, not only unmanufactured tobacco.
  I should like to know why vinegar is to be included in the exemption and not any other item in the group. Perhaps the Government are unaware that it is perfectly possible to make a quite tolerable form of vinegar from cider from the West Country. I hoped that I would get the support of apple-eating members of the Conservative Party in this matter. I do not see why it is necessary to exempt this one item while excluding all the others.
  4.45 p.m.
  I turn to a particular problem which I should like the Government to clear up. It is in relation to Guinness brewing in the Republic of Ireland. It was reported in the Sunday Times on 24th November that Guinness was preparing to change its distribution pattern as a result of the Bill. I wonder whether the Government have made investigations into this. It was suggested that the firm would ensure that its export markets were supplied from its Dublin brewery and its home markets exclusively from the Park Royal
  1556
  Brewery, in London. If that is the case the Bill would have an adverse effect on our exports, but increase exports from the Republic of Ireland. I imagine that the Government have had discussions with the Prime Minister and other Ministers of the Irish Government and probably with the Guinness brewing firm. I hope that they will be able to give us a satisfactory answer on this matter.
  Wines and spirits have been subjected to 12 different adverse duty changes since July, 1961. This latest Measure merely adds insult to injury for the industry. In this field probably more than in others many importing merchants are working large turnovers on very small capital. This Measure will make it extremely difficult for them. The scheme is scheduled to last for a year, but people in this trade tend to stock up in August, September and October for the Christmas period. It will be very difficult for them to build up heavy stocks next year at that time and the Christmas trade will be seriously affected as a result.
  The Minister of State, Treasury (Mr. Dick Taverne): In dealing with the various Amendments proposed to this Schedule, the Financial Secretary and I inevitably face a somewhat distasteful task. That is not because we do not believe in the Bill, but for two reasons. In the first place, as an hon. Member said in the last debate, these will be occasions for special pleading, by which I do not mean that the cases are undeserving, but that special cases are put forward which at first sight will appear deserving.
  Secondly, in dealing with the Schedule we have to face the fact that it is quite impossible to make a wholly logical division of what is exempt and what is not or one which altogether avoids anomalies. In formulating the Schedule, we have tried to avoid undue interference with commerce and industry and to secure the maximum coverage so that there will be the maximum effect on the volume of imports and on the credit restriction scheme. Because of that we have exempted food, fuel, unmanufactured raw materials and certain crudely processed materials. There will still be anomalies because of the balance in keeping the cover as wide as possible and yet preserving the categories.
  While one has sympathy with the trades which are affected by these Amendments

  1557
  and the fact that the importers concerned see other importers who do not have to find the deposit, I do not see that any special anomaly arises. The major Amendment deals with beverages and spirits and all the headings under Chapter 22. These are obviously not foodstuffs, although I understand that for some reason which I cannot explain vinegar is and always has been regarded as a foodstuff.
  Obviously, wines, beer and spirits, which are the main categories affected, are not foodstuffs. If they were to be exempted, a very wide category of goods would be exempted. In fact, despite the injuries, to which the hon. Member referred, which are supposed to have been caused to the wine trade since 1961, the fact remains that the consumption of wines has been rising sharply. In 1965, we consumed just under £30 million worth, in 1966, nearly £31 million, and this went up considerably to over £35 million in 1967.
  On the basis of the first nine months of the present year, consumption is nearly one-third up on 1967. So it is not as it the trade has suffered because of these impositions. Considerable totals are involved. During the first nine months of this year alone, over £32 million-worth of wines was imported. For beer, the total is £9 million and for spirits, over £14 million. So this would be a wide category of exemption.
  The hon. Member asked what the effect would he on distribution, for example, of Guinness. I cannot tell him the exact effect in every individual category, but the Financial Secretary and I have explained the likely overall effect of the scheme. But it would be rash to give forecasts about particular quantities for the actual import saving achieved.
  The second Amendment refers to manufactured tobacco. There is comparatively little manufactured tobacco imported. Imports last year were over £86 million-worth of unmanufactured tobacco, while, for manufactured tobacco, the figure was just over £3¼ million. But this is not an anomaly. Manufactured tobacco is clearly outside the basic categories to which the exemptions apply. I can see no particularly good reason for giving a special exemption to manufactured tobacco.
  1558
  As to the monopoly argument, as my hon. Friend said, this is not, in purpose, a protectionist Bill, and the hon. Member, to some extent, answered this himself when he said that there is no longer a monopoly situation in this country.
  Amendment negatived.
  [Mr. JOHN BREWIS in the Chair]
  Mr. Dudley Smith: I beg to move Amendment No. 91, in page 6, line 6, at end insert:

  Chapter 28

  …

  Inorganic chemicals.

  Any item at present exempt from duty under the Import Duties Act 1958.
  The Temporary Chairman (Mr. John Brewis): It would be convenient to discuss, at the same time, Amendments Nos. 49, in page 6, leave out lines 7 to 13 and insert:

  Chapter 28 (all headings)

  Inorganic chemicals; organic and inorganic compounds of precious metals, of rare earth metals, of radioactive elements, of isotopes.

  No. 119, in page 6, line 8, at end insert:

  28.03

  …

  Carbon, including carbon black anthracene black, acetylene black and lampblack

  No. 108, in page 6, line 9, after 'selenium', insert 'helium'.
  No. 50 in page 6, line 9, after 'tellurium', insert 'and phosphorus'.
  No. 51, in page 6, line 13, at end insert:

  Chapter 29

  …

  Organic chemicals.

  No. 52, in page 6, line 13, at end insert:

  Chapter 30

  …

  Pharmaceutical products.

  No. 54, in page 6, line 13, at end insert:

  Benzene, Cumene, Cyclohexane, and mixed Xylenes within 29.01.

  No. 74, in page 6, line 13, at end, insert:

  29.35 Furfuraldehyde

  Heterocyclic compounds; nucleic acids.

  No. 92, in page 6, line 13, at end insert:

  Chapter 29

  …

  Organic chemicals.

  Any item at present exempt from duty under the Import Duties Act 1958.

  Chapter 30

  …

  Pharmaceutical products.

  Any item at present exempt from duty under the Import Duties Act 1958.
  No. 100, in page 6. line 13, at end insert:

  9.201

  …

  …

  Ethyl benzene.

  No. 103, in page 6, line 13, at end insert:

  28.52

  …

  …

  Rare earth chlorides within 28.52.

  No. 105, in page 6, line 13, at end insert:

  28.12

  …

  …

  Boric oxide and boric acid.

  No. 109, in page 6, line 13, at end insert:
  Calcium carbide, within 28.56.
  Dicyandiamide, within 29.27.
  No. 110, in page 6, line 13, at end insert:
  Calcium hydrogen orthophosphate, within 28.40.
  No. 112, in page 6, line 13, at end insert:

  28.27

  …

  …

  Lead oxides; red lead and orange lead.

  No. 117, in page 6, line 13, at end insert:

  Magnesium chloride within chapter 28.30.

  Magnesium sulphate, calcined. anhydrous within chapter 28.38.

  Crude thorium and yttrium salts within chapter 28.52.

  Propylene tetramer within chapter 38.19.

  No. 133, in page 6, line 13, at end insert:

  28.12

  …

  …

  Boric acid.

  28.46

  …

  …

  Sodium borate.

  No. 56, in page 6, leave out lines 14 to 25 and insert:

  Chapter 31

  …

  …

  Fertilisers.

  No. 57, in page 6, leave out lines 26 to 28 and insert:

  Chapter 32 (all headings)

  Tanning and dyeing extracts; tannins and their derivatives: dyes, colours, print, varnishes, putty, silks, stoppings, inks.

  No. 138, in page 6, line 34. at end insert:

  35.05

  …

  …

  Dextrins and dextrin glues; soluble or roasted starches; starch glues.

  No. 120, in page 6, line 46, at end insert:

  38.09

  …

  …

  Wood tar; wood tar oils (other than the composite solvents and thinners falling within heading 38.18) wood cresote; wood naptha; acetone oil.

  No. 122, in page 6, leave out lines 47 and 48 and insert:

  38.19

  …

  …

  Chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products) not elsewhere specified or included; residue products of the chemical or allied industries not elsewhere specified or included.

  and No. 121, in page 6, line 48, at end insert:

  38.15

  …

  …

  Prepared rubber accelerators.

  Mr. Smith: Amendment No. 91 has been tabled by my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) and myself and together with it is Amendment No. 92, dealing with organic chemicals. The idea is that we should seek to get the Government to exempt those items at present exempt from duty under the Import Duties Act, 1958—both inorganic and organic chemicals—which are vital to the British pharmaceutical industry. We wish to call attention to the effect which the Bill will have on the National Health Service.
  I must declare an interest, because I am associated with a British pharmaceutical company, but this is not a case of personal special pleading, because my own company, although it would be affected marginally and irritatingly, will not be so severely penalised as many others. On the other hand, I hope that other aspects of the subject will be dealt with by my hon. Friends.
  Mostly, imported inorganic chemicals are used in proprietary or "over-the-counter" medicines, which are very important for general practice and self-medication, but they are, perhaps, not so important as organic chemicals, which are the raw materials for prescription medicines and are used in life-saving drugs. So far as the purpose of the deposit scheme is to reduce the level of imports, essential medicines should be exempt. I should have thought that lifesaving drugs are in a special category. Food is exempted, so surely these drugs should be.
  It is necessary to establish at the outset that an important category of prescription drugs, of ingredients which are used in those drugs, and of things which are called intermediates, which are raw

  1561
  and semi-processed materials, are not manufactured in this country and cannot be at short notice. Many of these are outlined in Chapter 29 of the 1958 Act. These are not irrelevant drugs. We all know that certain drugs can be used for a number of conditions, but the drugs which we seek to exempt are not those which are used for neurotics or hypochondriacs. They are front-line medicines in the war against disease, fighting pneumonia, bronchitis, heart disease, diabetes, all killers in their own right, which have been overcome by the advances made by medical science over the last decade or so.
  These drugs must be available on prescription. They are needed in hospitals and in any home where illness strikes suddenly. Nothing can be gained by placing obstacles in the way of imported goods and materials needed for the maintenance of public health.
  As to the sheer economics, it could be argued that there will not be severe hardship to the substantial large companies and that they will learn to live with this, but creating difficulties in the confident expectation that they will be surmounted surely makes their task all the harder. In the long term, this can only raise the price of drugs, of which the Government are, allegedly, so conscious. Any move in that direction is to be deprecated, when firms can have no real control over the issue. Vital drugs must be available if they are prescribed and it is dangerous and irresponsible to put obstacles in the way of an essential service like this.
  It has been said many times in these debates that industry will face additional expense, yet other burdens are being imposed by this Government. The pharmaceutical industry is about to learn to live and co-operate with the Medicines Act, a very complex Measure which will require a great deal of time and trouble on their part. The industry has, I think, probably more rules and regulations to cope with than most others, yet it has to combat also this legislation.
  It is not as if the industry does not contribute to our balance of payments position. It is generally admitted that it has an excellent export record. A recent published analysis of British-based companies shows a 97 per cent. rise in their favourable balance of payments. In
  1562
  fact, export values rose from £18 million in 1963 to £35 million five years later. Many of these exports were achieved with material which had to be imported before being re-exported. This is material either not easily available in this country or not available at all.
  An example which comes to mind—and the only example which I shall give from my own company—is that of camphor, which is an essential ingredient of semi-synthetic penicillin and vital to the side-chain effect of semi-synthetic penicillin. This material has to be imported, whether we like it or not. In view of the export performance of the industry, it is entitled to special consideration in determining whether these charges should be imposed.
  5.0 p.m.
  The principle that certain drugs or their ingredients must be imported because they are not manufactured or otherwise available here has been recognised for a long time, for example, by the grant of exemption from duty under the Import Duties Act, 1958. Many items are listed in Chapters 28, 29 and 30 of that Act.
  May I give one example of how two companies in this country will be affected by this new proposal—and I emphasise that I am not connected with either of those companies. These two substantial firms are concerned in imports of raw materials and partly processed substances for use in the manufacture of drugs in excess of £200,000 per annum. These are materials used exclusively in the very latest and most modern drugs to fight tuberculosis. It is essential that these materials be imported.
  The Financial Secretary said last night that one of the principles behind the Bill was to make people think again about importing. If he or I were unfortunate enough to be striken down with tuberculosis, the last thing that we should want would be for the firms concerned to have second thoughts about the importation of these materials.
  Mr. Harold Lever: When I spoke about thinking again, I meant thinking again about the extent of the importation so as to economise as far as possible and keep the imports to a minimum necessary for the reasonable and efficient

  1563
  conduct of the business. I did not say that they should think again whether they should import at all in relation to vital chemicals of this kind.
  Mr. Smith: I assure the hon. Member that both these companies are reasonable and efficient already and do not import more material than they need. But as the demand rises in the fight against illness, surely these imports will rise. But they do not waste these materials on profligate exercises. These materials are essential and are required urgently.
  The cost of drugs is constantly under discussion, although the pharmaceutical industry has proved conclusively that the cost of drugs made under the National Health Service is not unreasonable. Despite the fact that it has a captive customer in the Health Service and that from time to time there is a good deal of political controversy about it, by and large it has learned to live with the Health Service, and we hope that it will continue to do so.
  If the Bill is passed, it will be a deliberate act by the Government to put up the cost of drugs—a subject about which they allege they are concerned. Do the Government want to reduce the imports of the pharmaceutical industry? If so, this is a potential danger to the Health Service and an even greater danger to those who are seriously ill. Surely, in the name of common sense, prescription medicines and the materials associated with them ought to be exempt. I ask the Financial Secretary to give the Amendment serious consideration and to see whether he can accept it.
  Mr. Tim Fortescue: I rise to support my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) and, in particular, his remarks about the effect which these import deposits will have on the cost of drugs.
  It was only the day before yesterday that I pressed the Secretary of State for Social Services, at Question Time, about the basis on which calculations were made for dispensers' reimbursement fees, and he assured me firmly that what had to be taken into account was the cost of the National Health Service as well as the balance-of-payments situation.
  1564
  Under this Bill, this is not being done. My hon. Friend made that point eloquently enough, and I wish, therefore, to examine how the Schedule of exemptions has been compiled and the principles which have been put into practice in compiling it.
  On Second Reading, on 28th November, the Financial Secretary said that the import deposits would be charged on
  "all goods other than basic food, feeding stuffs, fuel and raw materials."—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 749.]
  Basic food and fuel are easy to define, and by and large on these items the Schedule has carried out what the Financial Secretary said, but to try to work out the principle on which the draftsman of the Schedule worked when deciding what is and what is not a raw material is very difficult indeed, until final enlightenment finally comes.
  I should like to ask the Committee to look at the Schedule of exempted goods for a moment, to make the point a little better. Page 5 is more or less in line with what the Financial Secretary said with respect to basic food and fuel. But on page 6 we begin the anomalies. In line 14 we have an exemption for guano. I accept that there was not much difficulty in deciding whether guano was a basic raw material, but it is not exactly what the Financial Secretary gave us to believe on Second Reading would be the kind of material exempted. Lower down the page we have exemptions for
  "casein, caseinates and other casein derivatives".
  Casein is by no means a raw material. It is a derivative of milk. But not only is casein to be exempted; derivatives of casein are to be exempted, too. None of these can be called raw materials in the true sense of the word.
  The next item is
  "Albumins, albuminates and other albumin derivatives".
  Next we have a complete anomaly, "exposed film and plates". Later, we have "natural rubber", which one accepts is a basic raw material, but the next item is "reclaimed rubber", and that moves right away from the principle which the Financial Secretary announced on Second Reading. I will not continue through the Schedule, because I have made the point sufficiently.

  1565
  Where is the demarcation line, to quote a term from another discipline, which the draftsman has used? Clearly, the exemption has not been limited to basic raw materials in the literal sense, such as ores, or materials in the natural state, or unwrought metals. Who has decided, and how has he decided, which other products can be included in the list of exemptions? Who did it and how?
  Suddenly enlightenment comes, because in the Schedule to the Finance Act 1964, which the Government introduced almost immediately they came into power, we find provisions identical with the Schedule to this Bill, being carried in the Bill only by the Amendments made to that Schedule in the debate in December, 1964 and later. All that has happened is that the provisions for import deposits—which, we must remember are not customs duties, as was made clear to us by the right hon. and learned Gentleman the Attorney-General, carry, by a strange coincidence, exactly t le same list of exemptions as the 1964 import surcharge, which was a Customs duty. This is the principle, if it can be called a principle, which the Government have followed.
  To make the point perhaps even more exact, I will refer to Amendment 74, which stands in my name and is being discussed with this group of Amendments. It proposes exemption for a product known as furfuraldehyde under the heading "heterocyclic compounds and nucleic acids". As is well known, furfuraldehyde is a product made from distilling cereal bran or corn cob waste with sulphuric acid. It can be made economically and in quantity only where there are large amounts of these waste materials or cereals fairly near a major seaport, otherwise it would be impossibly expensive. It is not made in this country. Some time ago, it was not even imported, except in a stage of processing known as furfuryl alcohol.
  About six years ago, however, a large firm in this country, with which I am connected—and here I declare an interest—at the expense of about £350,000 built a plant so that this bulky and basic raw material could be imported in the form of furfuraldehyde and furfuryl alcohol manufactured here from it.
  Furfuraldehyde is an essential element in the preparation of castings for the
  1566
  steel and motor industries, among others. Without furfuryl alcohol, from which furin binders are made, these industries could not use their present advanced and highly efficient techniques. It is a basic raw material for them and also as a solvent in oil refining. Indeed, the oil refining industry would soon grind to a halt if it were not available.
  During the Committee stage of the Finance Act, 1964, the then Financial Secretary stated, on 2nd December 1964, that furfuraldehyde is not a basic raw material. He said:
  "Furfural is prepared by distilling cereal bran with sulphuric acid. It is, therefore, itself a processed product and we come up against the difficulty about the heading under which it falls."—[OFFICIAL REPORT, 2nd December 1964, Vol. 703; c. 531.]
  It was said then and is presumably still said, because furfural has not been included on the exemption list, that, because the product has been through one process in its country of origin, because cereal bran has been distilled with sulphuric acid to make furfural for further processing after it gets here—
  Mr. F. A. Burden: On a point of order. While we have become accustomed to the fact that the benches opposite are empty, would it not be a good thing if the Financial Secretary were to recover from his apparent sleep so that he could listen?
  Mr. Lever: Further to that point of order. Is it not quite ridiculous for the hon. Gentleman to make any such allegation that I am not listening intently? I was up until a late hour last night and there is no reason why I should not close my eyelids even at the cost of temporarily depriving myself of the spectacle of hon. Members opposite.
  Mr. Burden: I apologise.
  Mr. Fortescue: I am sorry that my eloquence has made the Financial Secretary sleepy. I accept his explanation fully. I, too, was up until a late hour and feel much as he does.
  As I was saying, furfural is an important raw material for major industries and yet it is not quite a basic raw material under a recent definition, and it is not exempted under the Schedule. But many other derivatives from basic raw materials have specifically been so exempted. I have quoted some of them.

  1567
  The Financial Secretary should look again at this substance, furfuraldehyde. There are hundreds of other cases. This is but one example, of such raw materials which are not made in this country, which cannot be made here and which have temporary exemption under the Customs Tariff, 1959, but which are not specifically exempted in the Schedule. I am sure that he will see that this is an anomaly. He would not wish to have anomalies in the Schedule which would be of direct disadvantage to our export trade.
  5.15 p.m.
  Mr. Burden: I am glad to know that, when the Financial Secretary closes his eyes, it is merely that he is listening with them closed, and is not asleep. We all had a very late night and sympathise with him. But I hope that he will be more forthcoming on this Amendment than the Government have been on others so far. They have not given way on a single Amendment yet. I am not surprised that the benches opposite have been so empty, because there is no great enthusiasm for the Bill among hon. Members opposite.
  In asking for pharmaceutical products to be exempted, it might be pointed out that, inevitably, the import deposit will increase the prices and the difficulties of some smaller firms, although, as has been said, this will not he nearly as much the case in the pharmaceutical industry as in some other cases.
  It seems extraordinary that the Government should wish to increase prices of pharmaceutical products, but they will do so by the Bill. They will increase the prices and mop up liquidity in the industry. The National Health Service is our biggest user of pharmaceutical products and it is extraordinary that the Government should intentionally impose a restriction through import deposits which will make it more difficult to import them.
  In any event, it is unlikely that there would, to any great extent, be importation of these products unless they can be made better abroad and probably more cheaply. Perhaps they have a feature about them that companies in this country cannot produce.
  1568
  If that is the case, perhaps the hon. Gentleman can tell us to what extent imported pharmaceutical products are used in the Health Service. This is a relevant point. If he cannot go all the way and agree that pharmaceutical products should be excluded, perhaps he can at least agree to considering exempting those which are necessary for the Health Service and which are used widely by doctors and hospitals.
  Knowing the hon. Gentleman, I am sure that he will give consideration to this, because he is the last person who would wish to put any premium on human life or well-being. When dealing with pharmaceutical products we are dealing in many instances with products vital to the maintenance of human life and health. I hope that he will look at this from that point of view.
  Mr. Blaker: I wish to mention only one case, which is the subject of Amendment No. 103, which stands in my name. That case illustrates the arbitrary way in which the Schedule as it stands will work. I have a letter from a firm of electro-metallurgists in the constituency of my hon. Friend the Member for Ton-bridge (Mr. Hornby), which, among other things, is a contractor to the Government. It makes cerium mischmetall alloys. It has to import several hundred tons a year of raw material known as rare earth chlorides. I find it difficult to imagine a raw material which is more raw than that. Yet, as the Schedule now stands, the import deposit will be payable on that raw material.
  I therefore hope the Government will look again at this case. The firm believes that the substance is wrongly classified and should be under 25. 32(c)—other mineral substances. Had it been there, it would have been exempt under the Order. It may be possible to reclassify the substance, but assuming that that cannot be done, as I must for the purpose of my argument, I hope that the Government will be able to examine the case.
  Mr. James Scott-Hopkins: My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) put his finger on our difficulty with regard to partly-processed materials which are used by certain industries as raw materials. My Amendment No. 100 refers to ethyl benzene, a partly-processed

  1569
  product which is used as a basic raw material in the manufacture of synthetic rubbers, polystyrenes, and so on. As it is not available in quantity in this country it has to be imported. I understand that a plant will be coming on stream at the end of the coming year but, in the interim, the material has to be imported. It is vital to the synthetic rubber industry, and here I must declare an interest.
  The Financial Secretary said that the problem with this type of raw material was one of stockpiling, and that that was why he did not want to have any wide loopholes in the Schedule, but I urge him to give further consideration to exempting a material used to such a large extent as this is. When the plant now being constructed comes on stream, the industry will not need to import ethyl benzene, and will be able to get it more cheaply than the imported article. I therefore ask the hon. Gentleman to look with sympathy at my Amendment.
  Mr. Emery: Amendments Nos. 119 to 122, in my name and that of my hon. Friend the Member for Harrow, West (Mr. John Page), are concerned with basic raw materials. I ask the Committee to consider for a moment the whole Government concept of exceptions from the list of basic raw materials. During the Second Reading debate on the second Finance Bill of 1964, the Labour Chancellor of the Exchequer said:
  "The phrase 'basic raw materials' has been used in a generally descriptive sense. We have not attempted to apply it with precision because, obviously, there are many opinions about what is a raw material."
  The right hon. Gentleman went on:
  "… we have adopted as a guide the general principle that materials which have undergone only elementary processing should be exempted."—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1096.]
  It was not just one process, but elementary processing. The materials we name are necessary raw materials of production, and this is particularly so with 38.19—chemical products. Here, we are attempting to exempt raw materials which are basic to a hundred and one industries—if I were to give all the relevant examples, the Committee would be sitting all night. The imported chemicals range from synthetic detergents right through to the whole carbon system of chemistry which is an integral part of our chemical
  1570
  industry running into many tens of millions of pounds.
  The import deposit on these chemicals will increase the raw material price by 2½ per cent. I cannot believe that that is what the Government want to do, as it is contrary to the whole policy enunciated by the Financial Secretary's right hon. Friend the "Minister of Production and Efficiency", or whatever it is—the old Ministry of Labour: though there is not so much efficiency.
  We are faced here with the Government purposely changing their mind for no apparent reason other than liquidity. Basing themselves on that argument, the Government have set their minds against allowing the exemption of what to a very large section of British industry must be considered raw materials and which fall within the definition used by the former Socialist Chancellor of the Exchequer in that debate in 1964.
  What concerns me is that in 1964 the late Mr. Edward Redhead, who was then Minister of State, Board of Trade, gave us an assurance when dealing with similar Amendments relating to Chapter 39. He referred to his right hon. Friend the Chancellor of the Exchequer as having said:
  "I shall, of course, always be ready to consider any similar glaring anomalies which hon. Members may alight upon."
  Then he went on:
  "… we will give most earnest consideration to any further representations that are made. We will examine them. I am not to be construed as committing myself on any specific instance, but I want it to be clear that this is not the last word until such time as there will be a general review … ".—[OFFICIAL REPORT, 2nd December, 1964; Vol. 703, c. 553.]
  I do not know what happened about that general review, but it is only too clear that nothing ever came out of it. Amendments we tabled obtained no alleviation at all during two years of the surcharge. The Government must now rectify a position which continues their former errors in connection with such chemical products as carbon, carbon blacks and rubber accelerators—all essential as raw materials in tyre production.
  If the Government do not accept these Amendments, they are not looking either clearly or sensibly at the situation. I

  1571
  do not in any way wish to detract from the most excellent speech of my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith), but his is a natural appeal because it affects health. My Amendments have nothing emotional about them—they only concern ordinary raw materials needed by a section of industry.
  5.30 p.m.
  Mr. Geoffrey Hirst: As one who, like the hon. Gentleman, took a considerable part in those debates, I may say that, not only did nothing come out of that review but, although I made dozens and dozens of representations about chemicals, not one concession was granted afterwards, which is why exactly the same chemicals are now mentioned.
  Mr. Emery: I am delighted to have been reinforced by the hon. Gentleman. I remember his powerful speeches in 1964; in fact, I have just been reading one of them.
  What purpose can the Government have in trying to push up the costs of the raw materials of this section of industry? To do so does not in any way assist to keep down industrial costs. The Government would do well to show that they have had second thoughts and will not continue the anomalies of 1964 into the Bill.
  Mr. Derek Page: In general, I should like to support what has been said by the hon. Member for Honiton (Mr. Emery) about Amendment No. 92. These chemicals are unquestionably raw materials to the industry, particularly those chemicals which are not made in this country and which are, therefore, in general, exempt from duty. They cannot be considered as anything but raw materials. I understand that about £180 million' worth of these duty-exempt chemicals are imported, and we simply cannot do without them. If they are available in this country, they are not available in anything like sufficient quantities.
  A number of examples have been mentioned. I could add to the list ad infinitum—vinyl toluene, which is a tremendously important raw material for the paint industry and without which modern paints cannot be made, ethylene
  1572
  diamine, cyanuric acid, which are duty-exempt and not produced in this country, and many others. During recent months, there have been considerable imports of sulphuric acid and styrene monomer. No one could regard these as consumer goods on which there ought to be a clamping-down. They are raw materials for one of our giant exporting industries to the costs of which, as has been said, about 2½ per cent. will be added by the Bill.
  When a company is placing orders for these imports, it is impossible for it to know what proportion of these chemicals will be used in producing other chemicals for export, but what is certain is that a very high proportion will be used in the production of exports. The production of bulk chemicals is a highly price-sensitive industry. I have one example produced by a company in my own constituency which uses 1·4 tons of imported material to produce every ton of final product. This provision will mean a considerable increase in the cost of the exported product.
  What should be kept out are the imports of products with high profit margins, to which an increase of 2 or 2½ per cent. will not mean anything. Price competition in the sale of bulk chemicals is extremely keen and an increase of 2, 2½ or 3 per cent. in the cost of vital raw materials could lose us tens of millions of pounds of exports. It is a catastrophic mistake not to exempt chemicals which are duty-free, which implies that they are not produced in this country.
  The import surcharge of 1964 has already been mentioned. On that occasion, there was finally a concession which resulted in duty being rebated on that proportion of the imports used to produce chemicals for export. However, that is not sufficient in this case, because the damage will have been done by the extra charges.
  Sir Gerald Nabarro: With the import surcharge between 1964 and 1966 drawback was granted, which means that when an imported material found its way eventually into an export, the amount paid in respect of the import surcharge was refunded to the exporter. But that, I understand, is not possible with all the chemicals which we are now discussing.
  Mr. Page: That is what I was trying to point out. The concession which was made with the import surcharge is simply not possible on this occasion. However, as the concession was made for chemical exports on that occasion, we have every right to expect the Government to make an adequate concession in this case, and the only concession possible is exempting those chemicals now free from import duty.
  A number of chemical companies have already pointed out to me that foreign suppliers in general are offering to extend credit for up to six months, but this, of course, means that they are adding to their cons and, therefore, pushing up their prices a little. The net result will be not to cut down on imports, but to inflate our own costs and that will adversely affect the balance of payments. There is a rock-solid case for exempting these genuine raw materials.
  Mr. Nigel Fisher: I must apologise for coming into the Chamber late. I had not realised that the debate had started and I therefore missed the speech of my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith). I should also declare an interest as a director of a group of pharmaceutical companies. I want briefly to return to the argument which my hon. Friend must have deployed and, I am sure, powerfully deployed.
  I am concerned not so much with the financial as with the medical aspect. Because of the Bill, my own group of companies will have to lock up at least £250,000, and perhaps, more which could otherwise be productively used. I do not claim that we cannot make that money available; of course, we can, although some smaller firms may not be in that position. This may be a serious matter for smaller firms who may not be able to find the cash and, if they cannot bring in their imports, a drug which they are manufacturing may not be made or may not be made in the same quantity. That might mean that patients in need of the drug would suffer in health as a result of the Bill.
  Inevitably, the price of some pharmaceutical products will be increased, which is bad enough. The prices of our exports may well have to go up, which
  1574
  will not help to sell them, and that may have a bad effect on our balance of payments and export position. My own group exports about 62 per cent. of everything we produce and holds the Queen's Award for Industry for so doing. However, it is the medical case which is much more important and more serious than the financial case or the export case or the balance of payments case.
  If they are unobtainable in this country, ingredients for important and essential medicines should be exempt from the Bill. We have all known the Financial Secretary very well for many years as a man of heart and imagination. Whether he was asleep earlier in the debate I neither know nor care, because I have a great respect for him. I make a direct personal appeal to him on medical, not financial, grounds seriously to consider whether he cannot exempt the whole pharmaceutical industry from the Bill; but, if he cannot do that, at least to think seriously about the exemption of important and essential medicines, the inclusion of which may be prejudicial to the health of some patients.
  Sir Arthur Vere Harvey: Perhaps I should say that I am interested in the fine chemicals industry, but I shall speak on this occasion on behalf of two large pharmaceutical companies in Macclesfield, one British-controlled and the other foreign-controlled.
  As my hon. Friend the Member for Surbiton (Mr. Fisher) said, it cannot be the Government's intention to affect the health of people, but there will inevitably be serious consequences for the pharmaceutical industry if the Bill remains unamended. I have never spoken about this industry during the last 12 years, but I must do so now on behalf of my constituents. The industry, which is about 60 per cent. foreign-controlled, exports 56 per cent. of its output. No one wants to impair that performance. It is essential that the industry should maintain its export effort.
  My concern is principally directed to the special ethical drugs which are of such value nowadays. One thinks, for example, of the drugs which relieve high blood pressure, bringing the blood pressure of a man of 60 down to that

  1575
  of a boy of 18 in a matter of days. The medical authorities running our mental hospitals would tell the Financial Secretary that beds are being emptied as a result of the proper use of drugs nowadays. The patients who once suffered for years are now able to do a useful job in the community.
  Many firms, no doubt, will be able to raise the money to cover the 50 per cent. deposit for 180 days. But that is not the point. What matters is that costs will go up for the consumer and for exporters, too. If foodstuffs are to be imported free of the charge, there is a strong case for exempting these special drugs, also. I agree with my hon. Friend when he says that the Financial Secretary is a warm-hearted man. We are sure that he will give these Amendments favourable consideration.
  Mr. John Page: My great anxiety is to improve the credibility of Government policies and to help hon. Members opposite—
  Mr. Patrick Jenkin: I admire my hon. Friend's fortitude in taking on such a Herculean task, especially at a time when the Evening Standard poll shows the Tories leading the Government by 27 per cent.
  Mr. Page: My hon. Friend's intervention reinforces the need for all of us who wish to see co-operation between the Government and industry to do all we can to help them in their public relations.
  Anyone engaged in the rubber industry who was told that carbon black—one of the subjects covered by Amendment No. 119—was not a raw material would need one of the drugs to which my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) referred. Carbon black is an absolutely basic raw material for the main manufacturers of the rubber industry, and to pretend that it is not is absurd.
  The Financial Secretary may tell us that, if a large proportion of goods incorporating raw materials not included in the list are re-exported, drawback will be possible. It will be easy to compute such drawback in rubber tyre manufacture, but what about the rest of the industry, which has an export record of £47 million a year? I am speaking of that section of the industry in which the content of car-
  1576
  bon black in the finished product is comparatively small, the section the products of which are incorporated as components two or three stages away.
  It is impossible for an importer to be able to compute the amount of drawback which he should receive, or the amount of import deposit which he would be allowed to underpay. No manufacturer could give evidence of how much of what he makes will be exported, although it is probable that about half the articles made will be exported. Drawback, therefore, does not have a chance in this context.
  Let the Financial Secretary say in plain terms, "We have made a mistake this time. Obviously, carbon black is a basic raw material, and it shall go on the exemption list".
  5.45 p.m.
  Mr. Pardoe: I have put my name to five of the Amendments which are linked to the main Amendment now being discussed, and those Amendments would affect chemicals, both organic and inorganic, pharmaceutical products, fertilisers, tanning and dyeing. Most of the points have been covered, but one or two still remain to be raised.
  First, fertilisers. Certain groups in the fertiliser chapter are exempted. It all seems very complicated, and I should like the Financial Secretary to tell us, if he can, what is the value of imported fertilisers left out of the exemption list. On the face of it, it appears that virtually all fertilisers have been exempted, and I see no point in making the few distinctions which have been made. What is the value of the distinction?
  Second, phosphorus. I cannot tell whether phosphorus has been exempted or not.
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Pardoe: In that case, I appeal that it should be.
  I hasten to say that I have no financial connection whatever with any company interested in any of the five Amendments to which I have put my name, which makes me almost a pauper in the House, I suppose. But I cannot see how any business can be expected to conduct its long-term investment planning if it is to be subjected to this kind of change.

  1577
  Albright and Wilson, a company in my constituency, finding that production costs of phosphorus were much lower in Newfoundland, primarily because of the sources of cheap power there, invested heavily in phosphorus production in Newfoundland. Now, however, the company will have to find about £1 million in this respect alone. The Government ought to give way on phosphorus. It is a basic raw material, and a large proportion of what we use here has to be imported. It is a special case, and I hope that we shall be told that the Government are prepared to reconsider their decision.
  Sir G. Nabarro: In the case of dutiable imports of partially manufactured chemicals—the point I raised in an intervention during the speech of the hon. Member for King's Lynn (Mr. Derek Page)—will the duty be refundable to the exporter when the goods imported are embodied in the export together with any element of cost arising from the imports deposit scheme, or will the refundable part be only in respect of the import duty and no part of the cost in respect of the import deposit scheme? Will the Financial Secretary answer that question when he replies?
  Mr. G. B. Drayson: The first item covered in Amendment No. 119 is carbon. There could not be a more basic element than carbon. My chemistry is a little rusty now, but I suggest to the Government that, if all elements, as opposed to compounds, were put in the exemption list—including, no doubt, the precious metals—the whole thing would be made much simpler.
  Mr. Patrick Jenkin: It would be right if I were to make a few comments to draw together the threads of the powerful case made by my hon. and right hon. Friends on this first major group of Amendments.
  It is perhaps right to point out—I am not sure whether this has been referred to in the debates—that the Schedule as it stands is identical with the Schedule relating to the temporary surcharge when that surcharge came to an end. A number of additions were made while the temporary surcharge was in force, but what we have in the First Schedule to
  1578
  the Bill is what was left at the end of 1966 when the surcharge ended.
  We are indebted to my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) for the manner in which he opened this debate and for the way in which a number of my hon. Friends have widened its scope and brought out the very critical and difficult problems which this group of Amendments poses in relation to a Bill of this sort. When one comes to chemicals and the various materials related to them, one comes to a sector which, on the basis proposed by the Government, poses problems which are totally insoluble according to any coherent or rational body of principle. The basic feature of the scheme is that raw materials should be exempted, and this sector raises in an acute form the question: what is a raw material?
  The Government's answer as embodied in the Bill is this. They take the whole of Chapter 27 of the tariff classification—mineral oils, fuels, waxes, and so on—a very few elements in Chapter 28, a number of compounds in Chapter 28, a few basic chemicals and mixtures of such chemicals in Chapter 31 and a few isolated materials in Chapters 32 to 38, mostly but by no means all natural pro ducts. In many cases, they have included—and this is the point at which the questions begin to arise—derivatives of these products—solvents, acids, spirits oils and so on.
  Having said that the test was the same as was applicable for the temporary surcharge, I think that it is helpful to look at what was said by the Government spokesman when comparable Amendments were discussed in December. 1964. The right hon. Member for Islington, East (Sir Eric Fletcher), who was then the Minister without Portfolio, said:
  "In so far as some of these chemicals are manufactured chemicals, they are not eligible for exemption. In so far as they are chemicals in their natural state or only slightly processed, they are eligible for exemption."—[OFFICIAL REPORT, 2nd December, 1964; Vol. 703, c. 516.]
  I am bound to add that that gets us absolutely nowhere. It is a totally arbitrary line derived, as we have seen from the list in the Schedule, from a totally arbitrary system of classification, and the results are entirely arbitrary.

  1579
  I should like to illustrate this point with a number of examples which have not been mentioned in the debate. Taking the test mentioned by the right hon. Member for Islington, East, he described the system and said that it included basic materials and some derivatives but that his task was to draw a line. The Bill mentions, for instance, mineral or chemical fertilisers, potassic. We propose by Amendment No. 110 to add dicalcium phosphate to the list of exemptions. Put in its tariff form, it is calcium hydrogen orthophosphate.
  This is an essential raw material used in the production of animal feeding stuffs. As far as can be seen, it is the only such raw material of any significance which has not been exempted. Furthermore, it is impossible to see any use for this material other than in the production of animal feeding stuffs. Why is it right to include in the list mineral or chemical fertilisers, potassic, and exclude dicalcium phosphate?
  The Bill exempts mercury. There is an Amendment to exempt helium. Helium is just as much an element as mercury. It is found in certain mineral formations only in the Western Hemisphere. Every ounce of it has to be imported, and it is an essential import. Helium is an element and so is mercury. Why is helium not to be exempt when mercury is?
  Take silicon, which is a non-metal but is used in the production of metallic alloys. Compare this with one of the products mentioned in Amendment No. 109, calcium carbide. That is a basic raw material for the chemical industry. It is so basic that, although it is a carbon compound, it is listed, not under Chapter 29, which deals with organics, but under Chapter 28, which deals with inorganics. It is produced by a reaction of coke and lime and, to the lay eye, is indistinguishable from coke, which would be exempt under Chapter 27.
  Calcium carbide is permanently free from duty and is imported from Norway and Yugoslavia. Imports are running at about £1¾ million per annum. It is a basic raw material for the whole of the acetylene-based chemicals. Why is that not exempt when silicon is exempt? One could make the same remarks about dicyandiamide, which is used in the manufacture of certain plastics. The
  1580
  Bill excludes bromine and iodine, which are materials produced by a simple processing of naturally occurring materials.
  In Amendment 117 we mention crude thorium and yttrium salts within Chapter 28.52. These are produced by a simple processing of naturally occurring materials. The same can be said for magnesium chloride and magnesium sulphate. I echo the remarks of my hon. Friend the Member for Blackpool, South (Mr. Blaker). How could anything be more of a raw material than those which he mentioned?
  Chapter 28 requires special scrutiny. Unlike all the other chapters, it is cast in a special form in that it includes basic raw materials and a great many often highly complex derivatives of those raw materials. It is not sufficient to regard it as a chapter full of chemicals which are manufactured products. It includes a large number of basic raw materials, all of which should be included in the Schedule to the Bill.
  I turn to Chapter 29 dealing with the organic chemicals. It is a pure accident of classification that certain of the chemicals in that Chapter are to be found there rather than, for instance, in Chapter 27. Many of them are the first derivatives by relatively simple processing of basic materials which are exempt. Amendment 54 deals with four basic chemical raw materials: benzene, cumene, cyclohexane and mixed xylenes. If they are in a crude state they are classified under Chapter 27, the whole of which is exempt from the import deposit. The fact that they are refined results in the accident that they are to be classified under Chapter 29 and, therefore, come within the import deposit charge. They could just as easily come within Chapter 27.
  These are the basic building bricks of the chemical industry and they are used to make such things as nylon, exports of which are running at about £11 million a year, and terylene, with exports running at about £16 million a year. Similar remarks could be made about a number of other chemicals such as propylene tetramer.
  I hope that I have said enough to show that even by the Government's own test by which they wish to exempt raw materials they have drawn the line in the wrong place. Our case, however,

  1581
  goes further than that. The application of this sort of import restriction to the whole field of chemicals demonstrates the folly of trying to run industry in this way.
  6.0 p.m.
  It has been said over and over again during the debate by many hon. Members that in the chemical industry, one man's product is the next man's raw material. It is equally true, as my hon. Friend the Member for Honiton (Mr. Emery) said, that the chemical industry is. perhaps more than any other, an international industry in which many basic chemicals have acquired the characteristics of being commodities which are widely traded in all over the world.
  There are two consequences of this international trade in chemicals. One is what might be described as the tidal flow. At some periods, it will be country A which has the products and is exporting to other countries. A few years later, country B will have put in the next lump of capacity and will then be making the flow go the other way. The flow follows the pattern of investment. For this reason, it is ridiculous to regard a flow of imports into Britain at any particular time as something which it should be sought to restrict by an import deposit of this sort.
  A second characteristic of this international trade is the growing practice of specialisation. As the hon. Member for King's Lynn (Mr. Derek Page) rightly said, it is crazy to believe that this country could make everything. Of course we could not. We import what other countries make more easily and more efficiently than ourselves and we export hundreds of millions of £s of chemical products which we make more efficiently than, or as efficiently as, anyone else. The Kennedy Round has recently given a tremendous fillip to this international trade in chemicals and it is growing rapidly. A Measure such as this, applied with the sort of discrimination which is necessary to make it tolerable, merely cuts it back.
  In a telling speech, the hon. Member for King's Lynn asked the vital question, on which my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) took him up and which, I hope,
  1582
  the Financial Secretary will be able to answer: what about exports? Here is an industry which is essentially producing intermediate raw materials for dozens of other industries, many of which have substantial imports. As the scheme stands, if these goods are transferred from an importer to a manufacturer who then manufactures and exports the finished product, there is no way in which the duty can be remitted. Indeed, the extent to which there can be a drawback is doubtful.
  Therefore, one is bound to conclude that by putting the import deposit on many of the industrial materials listed in Chapters 28 and 29 and subsequently, one is hitting at exports in a way which is manifestly not the Government's intention. Indeed, it can be summed up by saying that the Government have put forward the scheme on the footing that it is tolerable and acceptable only if exports are exempted from it and if raw materials are exempted.
  The debate this afternoon has shown that the Government have succeeded in exempting neither exports nor raw materials. I have no doubt whatever that the Committee will be justified in demanding that there should be the widest revisions and a substantial increase in the scope of the Schedule to take account of the many Amendments which have to be tabled and which have been ably spoken to by hon. Members, on both sides.
  We shall listen with interest to what the Financial Secretary says. I know that he wants to make the scheme as workable as possible and to do as little damage to British industry as possible. I hope that he will recognise the force of the argument advanced from both sides on this matter.
  [Mr. SYDNEY IRVING in the Chair]
  Mr. Harold Lever: I hope that the Committee will permit me to begin my answer to this long and closely argued debate by expanding a little on some general matter before going into some of the details of the argument.
  The first point that we must bear in mind is that it was necessary for the scheme to make a broad division between those raw materials which have undergone only a relative processing and all

  1583
  other materials. This is why it is not simply basic materials or whatever one calls a basic material. For the purpose of our selection, a basic material became, as far as we could make it, those raw materials which have undergone only elementary processing.
  I ought to say at once that it is impossible to draw the line in a way which will not produce an argument of anomaly wherever it is drawn. We know this all too well. Whether it be in relation to Purchase Tax—and the hon. Member for Worcestershire, South (Sir G. Nabarro) made a great reputation simply from examining the anomalies which resulted from the lines that were drawn in the Purchase Tax regulations—
  Sir G. Nabarro: I hope that the hon. Gentleman does not suggest that my reputation rests on Purchase Tax alone.
  Mr. Lever: I would certainly not be guilty of any such rash implication. I thought that the hon. Member was first in the field in exposing anomalies in relation to Purchase Tax which interested and amused the House, because, as it turns out, wherever the line is drawn there will be difficulty in reconciling in strict logic the articles that are excluded from or included in the benefit or disfavour, as the case may be.
  For example, a very good case has been made for helium. Helium is found in natural gas, from which it is separated by liquefaction. If it were to be separated, there are other elements of gases—oxygen, hydrogen, nitrogen, argon, and so on. I shall not turn this into a chemistry lesson, an area in which I have no special competence, but it can be seen easily that if we were to exempt helium, somebody would say how absurd it was to exempt helium and not hydrogen. if I exempted hydrogen, would be referred to the idiocy of failing to exempt oxygen, argon and a number of other gases. [An HON. MEMBER: "Why not?"]
  Hon. Members must remember that the House, in its wisdom, gave a Second Reading to the Bill in the form in which it was made clear that we were looking to an import effect and a liquidity effect by reason of deposits applied to a range of materials to the extent of £3,000 million a year at the commencement.
  Mr. Derek Page: Helium, for instance, simply cannot be produced in this country. The other things like oxygen and hydrogen can.
  Mr. Lever: If my hon. Friend will wait patiently, I will deal with the point, because he is not the first to raise it. I will certainly not fail to deal with it.
  The first point which I wish to get over to the Committee is that I shall not offer an exposition in chemistry, although I warn the Committee that I am very well equipped by my brief so to do, because what I have done in connection with hydrogen, argon, and so on, I am quite prepared to repeat concerning lanthanum, cerium, precordium, europium, terbium and quite a number of Latin-sounding metals, the point being that if I let in one of these ums or iums there are—
  Mr. Blaker Mr. Blaker rose—
  Mr. Lever: I will give way in a moment—a whole series of urns and iums which would have an equal claim.
  I am in the difficulty that I have to preserve a sufficiency of impact in the Bill to make it worthwhile and to produce the effect that my right hon. Friend the Chancellor intended in introducing it. Does the hon. Member wish to intervene?
  Mr. Blaker: The moment for my brilliant intervention has passed.
  Mr. Lever: I beg the hon. Member's pardon. Had I known, I would have stopped even in mid-sentence.
  That is the first point I have to make, and I accept, from the very able argument addressed to the Committee, that we could make cases in particular areas where logic would seem to suggest possible anomalies as between the treatment of one of these chemicals and some other article which is exempt, but I urge upon the Committee that the approach will have to be practical and not theoretical for the reason which I have indicated. that we must preserve the scheme with sufficient impact and then rely on the power we have, in the light of the working of the scheme, to favour, for example—this is not a hint—helium against hydogen or hydrogen against helium, according to the way the scheme is working in practice and where disruption or excessive interference occurs. So I shall urge

  1585
  the practical as against the theoretical drawing of lines, conscious that I shall be open to logical challenge and conscious that there will be possible argument.
  The next point is that it was essential to make it clear that the scheme is not of a protectionist character; that is to say, that the scheme is not designed to protect home producers against their foreign competitors. Non-availability, therefore, cannot of itself guarantee exemption. If it were clear from the scheme that non-availability were to be the test—in other words, if, wherever we have an article which cannot be manufactured in this country, we did not impose the discipline or intent of this deposit, that we freed it from that discipline—it would be quite clear that the scheme would have a protectionist character seeking to favour home manufactures against domestic imports. If we had done that, it would certainly have been against the spirit of E.F.T.A.—and we know the Opposition, at any rate, would have been very passionately against that—it would have been against the spirit of the Anglo-Irish Treaty and against the spirit of G.A.T.T., and it would certainly have been very difficult to operate consistently with our international obligations. So, as far as materials are concerned, non-availability is not an argument.
  I am sorry to have to keep on repeating it, but hon. Members must realise that non-availability would be a devastating argument if we were imposing an embargo of any kind. We are not. It is an impediment which is being placed, but which cannot be based on the criterion of non-availability.
  The Government are aware that, when the scheme is in operation, additions to the exemptions may become necessary in the light of serious difficulty in important areas—I do not want to discount the anxieties which hon. Members have about possible difficulties which may emerge in particular areas—so serious that the Government would feel obliged to erode the range of impact of the scheme. That we have power to do, and that is why the Bill provides that we shall have power to add to the list of exemptions or to reduce the rate, but not to add to the rate of the deposit. We shall watch the impact of the scheme and we shall be giving attention to cases, such as the
  1586
  chemical industry, with a view to operating one or the other of these powers as the situation may require.
  It is too early at this stage to take decisions about all these individual cases merely upon assumptions as to what the effect will be. Although I greatly respect the very rich range of experience which, in this area, we have seen manifested today, I prefer to act on actuality rather than on assumptions at this stage of the scheme.
  Hon. Members have said that they have had disappointing experience in the past in relation to the tariff situation. There are two points I must make. One is that the tariff situation is not on all fours with this situation. The intent of the tariff was to do something rather different from the intent of this scheme. The kind of difficulties which arose in the case of the 15 per cent. or even the 10 per cent. surcharge were quite different in scale from the kind of difficulties which, I frankly admit, could arise in particular areas in relation to the 50 per cent. deposit scheme.
  So I can only say—this assurance is given not in optimism but in good faith—that that power is not likely to erode the impact of this import deposit but, on the other hand, it is standing ready to do so, if the kind of serious difficulties which some hon. Members seem to fear may occur do, in fact, occur. I again repeat we are not dealing with a tariff or an embargo, but with an impediment, not by any means impossible to overcome, on the importation of goods, and this impediment, we hope, will be for as short a period of time as is necessary. I greatly regret—I repeat this on every occasion, so nobody shall mistake my attitude—the inconvenience which this causes to importers, but the sharper and more effective the impact of this scheme is, the sooner we shall be able to reduce the impediment and relieve the inconvenience.
  6.15 p.m.
  Mr. Dudley Smith: Would the hon. Gentleman say, therefore, why there should be an impediment on life-saving medicines?
  Mr. Lever: This brings me to one of the points made very earnestly by many hon. Members. The hon. Member for Surbiton (Mr. Fisher) put it with great

  1587
  force. I was not quite sure—I know it was very kindly meant when he said he did not care whether I was asleep or not; I still retained his regard—whether that was to be taken as implying that, even asleep, I am sufficiently receptive to logic and argument to be useful for the purposes of the debate, but I can assure hon. Members that I have not been asleep throughout any part of the argument, but, as the result of a late night and a subsequent day's work, I have found it convenient to economise muscular effort by lowering my eyes, although I regretted the very obvious deprivation which must inevitably result when I do so, sitting where I do.
  Mr. Blaker: The hon. Gentleman will realise that we on this side do not mind whether or not he keeps his eyes open, but that we want some indication that, at some time, he is going to keep his mind open.
  Mr. Lever: It is not closed.
  Mr. Hirst Mr. Hirst rose—
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Lever: I was giving way to the hon. Member for Shipley (Mr. Hirst), but I will give way to both hon. Gentle-men.
  Sir G. Nabarro: Would the hon. Gentleman, before he concludes, answer the point I put to him with regard to drawback? I am sorry—I thought the hon. Gentleman was finishing his speech.
  Mr. Lever: Both suitors having withdrawn at this point, may I come to one or two of the detailed points I should like to make? It may be convenient if I deal with medicaments.
  I can assure hon. Members that the Government could not possibly allow any shortage of pharmaceutical products to develop in the manner which has been causing so much anxiety. I give the assurance to hon. Members that any danger of any person requiring a health-giving drug and being deprived of it because adequate imports are not coming in to supply the needs of the sick is quite out of the question. We have this power. I do not for a moment believe that it will be widely necessary to use it, and it may not be necessary to use it
  1588
  with pharmaceuticals, but we would not allow to occur a shortage of drugs or a shortage of medicaments for health.
  The whole point of the scheme, however, even with vital and necessary drugs, where we could not conceivably allow a shortage to develop, is that there is marginally an encouragement to ingenious stock management, so as to reduce at this point of time the level of imports in all of the fields which are not exempt. Hon. Members are experienced in this field. I am not going to allow a shortage, the Government will not allow a shortage, to develop at those crucial points such as a sufficiency of medicaments. It is out of the question. This does not mean that we cannot get some marginal economy in the import level of all the items affected, quite apart from the fact that we get this liquidity effect, the details of which I do not want to repeat again.
  The next point which I should cover is—
  Mr. Fisher: I am most anxious to listen to the arguments, but it has become difficult to do so because of the chatter of hon. and right hon. Gentlemen on the Front Bench.
  Mr. Lever: My hon. Friends, when they were engaged in their duties in other parts of the House, were missed by hon. Members opposite. When they are here, the maximum encouragement should be given to them, and I would suppose them to be discussing earnestly the details of the argument.
  I now turn to the problem that exercised many hon. Members and which exercises me, exports, and materials coming in which are components for somebody else's exports. I ask the Committee to notice that we shall later come to a Government Amendment to which I think I shall be speaking, the broad effect of which is to liberalise the possibility of exemption and of repayment in respect of export goods. I hope that the hon. Member for Worcester, South (Sir G. Nabarro), who is a zealous attender on these matters, may be fortunate enough to be present when that later Amendment is discussed. Should there be any imperfection in it in helping this export question I shall be glad to hear arguments. It is drawn in a much more liberal fashion than the original proposal,

  1589
  and I hope that it will be acceptable to the Committee, as making possible the widest avoidance of impediment to export by reason of import deposits.
  Sir G. Nabarro: In anticipating the further Amendment, is the Financial Secretary now giving the Committee an assurance that, so long as an importer demonstrates that the goods he is bringing into the country are for subsequent export from this country, the import deposit will be waived absolutely by Customs and Excise, without demur, without argument, without aggravation and without all the generally cantankerous behaviour for which Customs and Excise are well known.
  Mr. Lever: I am grateful to the hon. Member, but I know that he is a zealous champion of the rules of order and would not wish me to reply broadly to a question which is not the subject of the Amendment which we are discussing.
  Sir G. Nabarro: I am asking only for yes or no.
  Mr. Lever: Even a yes or a no is in order or out of order depending on the question to which it relates. I would not want the hon. Gentleman to have on his conscience that he had led me into a departure from a rule of order, particularly as nothing useful would be gained since we shall be discussing this Amendment, when it will be in order, somewhat later.
  For these reasons I ask the Committee to accept the advice which I shall offer to reject the Amendment and to rely upon Government action, if necessary; and to bear in mind that this does not stand alone as Government action in relation to our export/import ratio. It is to produce an immediate impact to support what we are confident is the fundamentally correct strategy, which is to bring exports and imports into a permanently more satisfactory relation than has been the case.
  Sir G. Nabarro: Mr. Irving, would you not on this occasion exonerate the Financial Secretary from any suspicion that he might be out of order in alluding to a forthcoming Amendment should it be selected, namely Amendment No. 73. It is difficult to know how to vote on the present Amendment, indeed, whether
  1590
  to divide the Committee in support of the Amendment or otherwise, without knowing the Government's attitude and without having this assurance.
  Mr. Lever Mr. Lever rose—
  The Chairman (Mr. Sydney Irving): Order. Both hon. Members have already alluded to the Amendment in question, and I do not think we can go further than that.
  Mr. Lever: I was about to try to assist the hon. Member in determining how he shall vote. In all logic, his complaint must be not on the chemical question but on the inadequate arrangements for export rebate, which we will come to later. I know that the hon. Gentleman is susceptible to logic, and in logic he must vote with the Government, if that is the question. Should there be a Division, he must vote with the Government on chemicals and, if he has a complaint, it is of inadequate arrangements, if they are inadequate arrangements, for export rebate.
  Mr. Hirst: The Committee will probably wish to come to a fairly quick decision, and I shall not detain it for more than a minute or two. I wish to say a word or two on this matter since I have spent 27 years in the chemical industry, although I am not now connected with it and therefore have no interest to declare. This led me to take strenous action in regard to the 1964 surcharge which has been referred to, when I spoke on a large number of Amendments relating to chemicals. I know that the three major associations of the chemical industry were not approached at that time. No reference was made to them on their reaction to the selection of certain items on the list. I am horrified to find that the list today is, in effect, the same list as before. In other words the same wretched fool who stuck a pin in the names in 1964 has stuck in the same pin in the same names this time. No progress has been made, and this is an entirely hit and miss business.
  Reference has been made to-day to carbon items. This is an important basic material for the chemical industry. The chemistry of carbon is an enormous factor, yet carbon is left completely out

  1591
  of the list. It is not good enough for the Financial Secretary to say that the Government are in great economic difficulties, and that he must impose all the impediments that he can in order to get the Government out of their difficulty. The Financial Secretary must approach the matter in a more practical way. He says that non-availability has no meaning in this context, but non-available had a meaning in relation to the surcharge.
  Mr. Lever: Non-availability alone cannot justify exemption.
  Mr. Hirst: Non-availability had the same meaning when we discussed the previous surcharge; there is something in common. The hon. Gentleman has had to draw a distinction between the two, but in both instances the effect is an increase in cost not in the proper direction.
  The situation is different if a material is not basically available. As the hon. Gentleman said, a moment ago, helium is not available. It is possible to get oxygen and nitrogen by fixation, as with ammonia, by getting oxygen out of the atmosphere; it is done every day; but it is not possible to get helium in that way.
  No reference has been made to events which have taken place during the intervening years, and the same list has been produced, the list which has been picked by a well-meaning civil servant without consultation with the industry. That is what I am protesting about. It is not fair to the industry concerned. It is not enough for the Government to try to reduce imports if the result is detrimental to exports. The list should be reviewed. We were promised a review last year, but we have never had it; items were added. Representations were made by the dozen, and I must have sent in 30 or 40 myself. Although they were all based on the experience and the knowledge of the industry concerned they have been ignored. The Government should look at the list in a more scientific and technical way, and it has the means to do so. There is no excuse for the Treasury to cough up this old 1964 list, without consultation, when no consultation took place previously.
  Mr. S. O. Davies: I know your patience is running low, but I
  1592
  must admit that it is an advantage on rare occasions to listen to the speeches made by hon. Gentlemen opposite.
  6.30 p.m.
  We have heard about the absolute necessity to import calcium. Then again. toluene was said to be incapable of manufacture in this country. We have heard references to carbon in speech after speech. The advantage which age has given me is that I have a vivid memory of conditions in the First World War, when we did not manufacture an ounce of calcium and it was all imported from Germany and Canada. However, we proved then that, in an emergency, we can manufacture it here.
  Again and again we have been told, both directly and by implication, that these substances can only apparently be manufactured abroad. That is far from correct and, certainly in the case of calcium, our scientists proved more than 50 years ago that if we are forced to manufacture here we can do it. There was a cry for calcium and for toluene, which was one of the major ingredients in explosives. It was found that the compound trinitrotoluene could easily be split into its elements and toluene would result.
  We have heard a lot about nylon and terylene and, during the First World War years, we saw a revolution in colours. All the conceivable colours were developed in this country from raw materials in those war years. A lot has been said about the defects and the lack of knowledge of our scientists and metallurgists to produce the substances which have been mentioned. As I say, taking calcium as one example, not an ounce was manufactured here before the First World War.
  Again before the First World War, all our anaesthetics came from Germany. When war broke out, in no time at all our scientists were put to work and we were able to manufacture all the anaesthetics needed for the fighting front and for our hospitals at home.
  I hope that the pathetic speeches in a minor key from right hon. and hon. Gentlemen opposite will not be accepted without question by my hon. Friends on the Treasury bench.
  Sir Keith Joseph: We have been fobbed off by the Financial

  1593
  Secretary in his usual charming manner. I hope that my right hon. and hon. Friends will now see fit to divide the Committee in order to register our great disappointment with the Government's rig id attitude.
  In this Bill, we are presented with the same list as the House left when we debated the surcharge nearly four years ago. A number of intermediates used in the pharmaceutical and chemical industries still have not been included, and clearly no systematic principle runs through the preparation of the Schedule.
  We are asked to treat the list as perfectly drawn, and that is highly improbable. My hon. Friend the Member for Shipley (Mr. Hirst) has told us of the lack of contact with the trade associations involved, and the result is that we have
  to rely upon the Government to intervene if the users of pharmaceutical or chemical intermediates suffer damage from this Bill in their trade and service to the public. My hon. Friend the Member for Blackpool, South (Mr. Blaker) demonstrated how hopeless is any dependence on the Government, who probably will plead for the first half of the year that the scheme has not been tried yet and for the later half, that the scheme is drawing to an end.
  I hope that my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) will press his Amendment to a Division.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 164, Noes 233.

  Division No. 22.]

  AYES

  [6.35 p.m.

  Alison, Michael (Barkston Ash)

  Gower, Raymond

  Mawby, Ray

  Allason, James (Hemel Hempstead)

  Grant, Anthony

  Maxwell-Hyslop, R. J.

  Atkins, Humphrey (M't'n & M'd'n)

  Gresham Cooke, R.

  Mills, Peter (Torrington)

  Awdry, Daniel

  Gurden, Harold

  Mills, Stratton (Belfast, N.)

  Baker, W. H. K. (Banff)

  Hall, John (Wycombe)

  Morgan, Geraint (Denbigh)

  Beamish, Col. Sir Tufton

  Hall-Davis, A. G. F.

  Munro-Lucas-Tooth, Sir Hugh

  Bell, Ronald

  Hamilton, Lord (Fermanagh)

  Murton, Oscar

  Bennett, Sir Frederic (Torquay)

  Hamilton, Michael (Salisbury)

  Nabarro, Sir Gerald

  Biffen, John

  Harrison, Brian (Malden)

  Noble, Rt. Hn. Michael

  Biggs-Davison, John

  Harrison, Col. Sir Harwood (Eye)

  Nott, John

  Birch, Rt. Hn. Nigel

  Harvey, Sir Arthur Vere

  Onslow, Cranley

  Blaker, Peter

  Hastings, Stephen

  Orr-Ewing, Sir Ian

  Body, Richard

  Heald, Rt. Hn. Sir Lionel

  Osborn, John (Hallam)

  Boyle, Rt. Hn. Sir Edward

  Heseltine, Michael

  Osborne, Sir Cyril (Louth)

  Braine, Bernard

  Hiley, Joseph

  Page, Graham (Crosby)

  Brinton, Sir Tatton

  Hill, J. E. B.

  Page, John (Harrow, W.)

  Bruce-Gardyne, J.

  Hirst, Geoffrey

  Pardoe, John

  Buchanan-Smith, Alick (Angus, N & M)

  Holland, Philip

  Pearson, Sir Frank (Clitheroe)

  Buck, Antony (Colchester)

  Hordern, Peter

  Peel, John

  Bullus, Sir Eric

  Hunt, John

  Percival, Ian

  Burden, F. A.

  Hutchison, Michael Clark

  Pike, Miss Mervyn

  Campbell, B. (Oldham, W.)

  Iremonger, T. L.

  Pink, R. Bonner

  Carlisle, Mark

  Irvine, Bryant Godman (Rye)

  Powell, Rt. Hn. J. Enoch

  Channon, H. P. G.

  Jenkin, Patrick (Woodford)

  Price, David (Eastleigh)

  Clark, Henry

  Jennings, J. C. (Burton)

  Pym, Francis

  Clegg, Walter

  Johnson Smith G. (E. Grinstead)

  Quennell, Miss J. M.

  Cooke, Robert

  Johnston, Russell (Inverness)

  Rawlinson, Rt. Hn. Sir Peter

  Cooper-Key, Sir Neill

  Jopling, Michael

  Rees-Davies, W. R.

  Costain, A. P.

  Joseph, Rt. Hn. Sir Keith

  Renton, Rt. Hn. Sir David

  Crowder, F. P.

  Kerby, Capt. Henry

  Rhys Williams, Sir Brandon

  Cunningham, Sir Knox

  Kimball, Marcus

  Rodgers, Sir John (Sevenoaks)

  Currie, G. B. H.

  King, Evelyn (Dorset, S.)

  Rossi, Hugh (Hornsey)

  Dalkeith, Earl of

  Kirk, Peter

  Russell, Sir Ronald

  Davidson, James (Aberdeenshire, W.)

  Kitson, Timothy

  Sharples, Richard

  Dean, Paul

  Knight, Mrs. Jill

  Shaw, Michael (Sc'h'gh & Whitby)

  Deedes, Rt. Hn. W. F. (Ashford)

  Lancaster, Col. C. G.

  Silvester, Frederick

  Dodds-Parker, Douglas

  Legge-Bourke, Sir Harry

  Smith, Dudley (W'wick & L'mington)

  Eden, Sir John

  Lloyd, Ian (P'tsm'th, Langstone)

  Speed, Keith

  Elliott, R. W. (N'c'tle-upon-Tyne, N.)

  Loveys, W. H.

  Steel, David (Roxburgh)

  Emery, Peter

  Lubbock, Eric

  Stodart, Anthony

  Errington, Sir Eric

  MacArthur, Ian

  Stoddart-Scott, Col. Sir M.

  Eyre, Reginald

  Mackenzie, Alasdair (Ross & Crom'ty)

  Summers, Sir Spencer

  Farr, John

  Maclean, Sir Fitzroy

  Tapsell, Peter

  Fletcher-Cooke, Charles

  McMaster, Stanley

  Taylor, Sir Charles (Eastbourne)

  Fortescue, Tim

  McNair-Wilson, Patrick

  Taylor, Frank (Moss Side)

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Maginnis, John E.

  Temple, John M.

  Giles, Rear-Adm. Morgan

  Marples, Rt. Hn. Ernest

  Thatcher, Mrs. Margaret

  Gilmour, Ian (Norfolk, C.)

  Marten, Neil

  Tilney, John

  Gilmour, Sir, John (Fife, E.)

  Maude, Angus

  Turton, Rt. Hn. R. H.

  Glover, Sir Douglas

  Maudling, Rt. Hn. Reginald

  Vaughan-Morgan, Rt. Hn. Sir John

  Vickers, Dame Joan

  Whitelaw, Rt. Hn. William

  Worsley, Marcus

  Waddington, David

  Williams, Donald (Dudley)

  Wright, Esmond

  Wall, Patrick

  Wills, Sir Gerald (Bridgwater)

  Ward, Dame Irene

  Winstanley, Dr. M. P.

  TELLERS FOR THE AYES:

  Webster, David

  Wolrige-Gordon, Patrick

  Mr. Jasper More and

  Wells, John (Maidstone)

  Wood, Rt. Hn. Richard

  Mr. Bernard Weatherill.

  NOES

  Abse, Leo

  Finch, Harold

  Mapp, Charles

  Albu, Austen

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Marks, Kenneth

  Allaun, Frank (Salford, E.)

  Fletcher, Ted (Darlington)

  Mason, Rt. Hn. Roy

  Alldritt, Walter

  Foley, Maurice

  Mellish, Rt. Hn. Robert

  Allen, Scholefield

  Ford, Ben

  Mendelson, John

  Anderson, Donald

  Forrester, John

  Millan, Bruce

  Archer, Peter

  Fowler, Gerry

  Milne, Edward (Blyth)

  Armstrong, Ernest

  Freeson, Reginald

  Moonman, Eric

  Ashley, Jack

  Galpern, Sir Myer

  Morgan, Elystan (Cardiganshire)

  Atkins, Ronald (Preston, N.)

  Gardner, Tony

  Morris, Alfred (Wythenshawe)

  Atkinson, Norman (Tottenham)

  Garrett, W. E.

  Morris, Charles R. (Openshaw)

  Ashton, Joe (Bassetlaw)

  Ginsburg, David

  Morris, John (Aberavon)

  Bagier, Gordon A. T.

  Gray, Dr. Hugh (Yarmouth)

  Moyle, Roland

  Barnes, Michael

  Greenwood, Rt. Hn. Anthony

  Mulley, Rt. Hn, Frederick

  Barnett, Joel

  Gregory, Arnold

  Neal, Harold

  Beaney, Alan

  Grey, Charles (Durham)

  Newens, Stan

  Benn, Rt. Hn. Anthony Wedgwood

  Griffiths, David (Rother Valley)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Bennett, James (G'gow, Bridgeton)

  Griffiths, Will (Exchange)

  O'Malley, Brian

  Bidwell, Sydney

  Hamilton, James (Bothwell)

  Orme, Stanley

  Binns, John

  Hamilton, William (Fife, W.)

  Oswald, Thomas

  Bishop, E. S.

  Hamling, William

  Owen, Dr. David (Plymouth, S'tn)

  Blackburn, F.

  Hannan, William

  Padley, Walter

  Blenkinsop, Arthur

  Harper, Joseph

  Paget, R. T.

  Boardman, H. (Leigh)

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Booth, Albert

  Haseldine, Norman

  Pannell, Rt. Hn. Charles

  Braddock, Mrs. E. M.

  Hazell, Bert

  Park, Trevor

  Bray, Dr. Jeremy

  Henig, Stanley

  Parker, John (Dagenham)

  Brooks, Edwin

  Herbison, Rt. Hn. Margaret

  Pavitt, Laurence

  Broughton, Dr. A. D. D.

  Hilton, W. S.

  Pearson, Arthur (Pontypridd)

  Brown, Hugh D. (G'gow, Provan)

  Horner, John

  Peart, Rt. Hn. Fred

  Brown, R. W. (Shoreditch & F'bury)

  Houghton, Rt. Hn. Douglas

  Pentland, Norman

  Buchan, Norman

  Howarth, Robert (Bolton, E.)

  Perry, George H. (Nottingham, S.)

  Buchanan, Richard (G'gow, Sp'burn)

  Howell, Denis (Small Heath)

  Prentice, Rt. Hn. R. E.

  Butler, Herbert (Hackney, C.)

  Huckfield, Leslie

  Price, William (Rugby)

  Butler, Mrs. Joyce (Wood Green)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Randall, Harry

  Callaghan, Rt. Hn. James

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

  Cant, R. B.

  Hughes, Hector (Aberdeen, N.)

  Roberts, Rt. Hn. Goronwy

  Carmichael, Neil

  Hughes, Roy (Newport)

  Robertson, John (Paisley)

  Carter-Jones, Lewis

  Hunter, Adam

  Roebuck, Roy

  Castle, Rt. Hn. Barbara

  Hynd, John

  Rogers, George (Kensington, N.)

  Chapman, Donald

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Coe, Denis

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Coleman, Donald

  Jay, Rt. Hn. Douglas

  Rowlands, E.

  Corbet, Mrs. Freda

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Shaw, Arnold (Ilford, S.)

  Craddock, George (Bradford, S.)

  Jenkins, Hugh (Putney)

  Sheldon, Robert

  Crawshaw, Richard

  Johnson, James (K'ston-on-Hull, W.)

  Shore, Rt. Hn. Peter (Stepney)

  Cullen, Mrs. Alice

  Jones, Dan (Burnley)

  Short, Mrs. Renée (W'hampton, N. E.)

  Dalyell, Tam

  Jones, T. Alec (Rhondda West)

  Silkin, Rt. Hn. John (Deptford)

  Darling, Rt. Hn. George

  Kenyon, Clifford

  Silkin, Hn. S. C. (Dulwich)

  Davies, Ednyfed Hudson (Conway)

  Kerr, Dr. David (W'worth, Central)

  Silverman, Julius

  Davies, G. Elfed (Rhondda, E.)

  Lawson, George

  Skeffington, Arthur

  Davies, Dr. Ernest (Stretford)

  Ledger, Ron

  Slater, Joseph

  Davies, Harold (Leek)

  Lee, Rt. Hn. Frederick (Newton)

  Small, William

  Davies, Ifor (Gower)

  Lee, Rt. Fin. Jennie (Cannock)

  Spriggs, Leslie

  Davies, S. O. (Merthyr)

  Lee, John (Reading)

  Steele, Thomas (Dunbartonshire, W.)

  Delargy, Hugh

  Lever, Harold (Cheetham)

  Strauss, Rt. Hn. G. R.

  Dempsey, James

  Lewis, Arthur (W. Ham, N.)

  Summerskill, Hn, Dr, Shirley

  Dewar, Donald

  Lewis, Ron (Carlisle)

  Swain, Thomas

  Diamond, Rt. Hn. John

  Lomas, Kenneth

  Symonds, J. B.

  Dickens, James

  Loughlin, Charles

  Taverne, Dick

  Dobson, Ray

  Lyon, Alexander W. (York)

  Thornton, Ernest

  Doig, Peter

  Lyons, Edward (Bradford, E.)

  Tinn, James

  Dunnett, Jack

  McBride, Neil

  Tomney, Frank

  Eadie, Alex

  McGuire, Michael

  Tuck, Raphael

  Edelman, Maurice

  McKay, Mrs. Margaret

  Urwin, T. W.

  Edwards, Robert (Bilston)

  Mackie, John

  Varley, Eric G.

  Edwards, William (Merioneth)

  Mackintosh, John P.

  Wainwright, Edwin (Dearne Valley)

  Ellis, John

  Maclennan, Robert

  Walker, Harold (Doncaster)

  English, Michael

  MacMillan, Malcolm (Western Isles)

  Wallace, George

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Watkins, David (Cornett)

  Evans, Gwynfor (C'marthen)

  MacPherson, Malcolm

  Watkins, Tudor (Brecon & Radnor)

  Evans, Ioan L. (Birm'h'm, Yardley)

  Mahon, Peter (Preston, S.)

  Wellbeloved, James

  Ewing, Mrs. Winifred

  Mahon, Simon (Bootle)

  Wells, William (Walsall, N.)

  Fernyhough, E.

  Manuel, Archie

  Whitlock, William

  1596

  1597

  Wilkins, W.

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Willey, Rt. Hn. Frederick

  Williams, W. T. (Warrington)

  Williams, Alan (Swansea, W.)

  Willis, Rt. Hn. George

  TELLERS FOR THE NOES:

  Williams, Alan Lee (Hornchurch)

  Wilson, Rt. Hn. Harold (Huyton)

  Mr. Alan Fitch and

  Williams, Clifford (Abertillery)

  Woodburn, Rt. Hn. A.

  Mr. Ernest G. Perry.

  6.45 p.m.
  Mr. Douglas Houghton: I beg to move Amendment No. 94, in page 6, line 48, at end insert:

  39.02

  …

  …

  High density, high molecular weight polyethylene.

  The Chairman (Mr. Sydney Irving): With this Amendment we can discuss Amendment No. 102, in page 6, line 48, at end insert:

  39.03. F2.

  …

  Seamless tubular artificial sausage casing made from re-generated cellulose.

  Amendment No. 123, in page 6, line 48, at end insert:

  39.02

  …

  …

  Polymerisation and copolymerisation products (for example polyethylene, polytetra-haleothylenes, polyisobutylene polystyrene, poly (vinyl-chloride) and other poly (vinyl derivatives) poly (acrylic derivatives) and poly (methacrylic derivatives) conmarone-indene resins).

  and, for a Division if the Committee so wishes, Amendment No. 58, in page 6, line 49, after '40.01' insert:

  40.02

  …

  …

  Synthetic rubber.

  Mr. Houghton: Amendment No. 94 is one of a group of Amendments to the Schedule which I understand relates to artificial resins and plastic materials and covers as wide a range as synthetic rubber and seamless tubular artificial sausage casing made from regenerated cellulose. I am not aware of ever having had sausages encased in that material, but I have no doubt that it is very important.
  Mr. John Hall: The seamless tubular material to which the right hon. Gentleman refers is used for making skins for skinless sausages.
  Mr. Houghton: It is, so to speak, a non-skin.
  I will confine my remarks to Amendment No. 94. I suppose that this is a smaller moonbeam in the larger illumination of this Schedule. I cannot say that it has any great importance to the industrial activity and exports of this country, but it reveals the kind of anomaly and difficulty which many firms will encounter under the scheme. I make no
  1598
  apology for raising it as a purely constituency matter in which I have no personal interest whatsoever.
  The remarks of the Financial Secretary were extremely discouraging to this Amendment, because he said that it was necessary to draw the line somewhere—we all understand that—and that exemption is given to those raw materials which have gone through only elementary processes. This results in anomalies. For example, the importation of raw timber is exempt, but the importation of a basic material to make substitutes for timber is caught by the Bill. I will refer to that later.
  I should think that after the years that the Government have had since the import surcharge they could have found a more sophisticated Schedule of exemptions—[HON. MEMBERS: "Hear, hear."] I realise that when the Government first introduced the import surcharge they had to use what was readily at hand as the basis of distinction or discrimination between one import and another.
  The Committee will remember that when the Government introduced the Selective Employment Tax they used what was readily available, the Ministry of Labour Schedule, which had been drawn up for different purposes. It was adapted to the introduction of that tax. It is undesirable that taxation and financial measures of this kind should be erected upon a basis intended for entirely different purposes, because if that is done we are bound to get the kind of anomalies and injustices to which hon. Members on both sides of the Committee have referred.
  This material is purchased from Germany, in sheet or rod form, although it is produced originally from powder, and machined into a great variety of shapes and sizes. This is a new branch of the plastics industry, making a number of novel changes in the materials used for manufacture, with a considerable export potential. For example, with this material the firm in my constituency makes what are known as polymatic hammers. They are described as "durable, non-split, soft faced hammers"—just the sort of hammers that we want in the Parliamentary

  1599
  Labour Party. It seems a shame that one should have to pay a 50 per cent. deposit on the importation of raw materials which have such a desirable purpose as that.
  Mr. John Hall: Does the right hon. Gentleman believe that it is necessary to import such hammers? Is not he getting on very well without them?
  Mr. Houghton: We are getting on very well, but any additional equipment which enables us to get on better will be very welcome.
  With this material it is possible to make shuttles for textile manufactures. I am informed that the wood for a wooden shuttle will be imported under the exemptions provided for in the Schedule, but that the raw material to make a plastic shuttle will be caught by the Bill. I am told that a wooden shuttle lasts for one year, while a plastic shuttle will last for ten years. This is another use of a new material which will not only save the import of raw materials, but offer better prospects of export business.
  This firm on whose behalf I admit I am speaking is a small family business. If it were a public company, I should have to declare an interest in it, because I have a modest shareholding in every public company in my constituency. This is a matter of principle, because I think it enables one to see how businesses are doing, and to get a little closer to the industrial activity in one's constituency. I do not want any doctrinaire ideological interventions. That is what I consider to be the right thing to do. This is a private company, and it will have to place a deposit on the importation of all its raw materials. This will be a very severe drain on the firm's resources, and that is why I am making this plea on its behalf.
  I think it is a pity that under the Bill, because of our difficulty of drawing lines more sensibly than is done here, we exempt peanuts, but put the deposit limitation upon materials of the kind I have described. For the life of me I cannot understand why unmanufactured tobacco is exempted under the Bill, considering the content of it, the danger of it, and the dollar source of a great deal deal of it. However, this is all to do with the broad lines which have been drawn in distinguishing between those
  1600
  things which shall be subject to an import deposit, and those which are to be given exemption.
  This is a short case and it is, I am afraid, only an addition to the rather dreary queue of cases put by hon. Members who are seeking some concession from the Government. But, whether the case is hopeless or not, I think it is the duty of us in the House constantly to draw attention to anomalies and injustices of proposed legislation, because it is only by doing that that we can warn the Government that in adopting measures, albeit emergency measures, albeit measures for an overriding economic purpose, they should have regard to their effect on particular interests and spheres of activity, and the hardship and harm which they are doing to many people who are busy working for Britain in the export trade.
  It is sad that we have to accept the overriding objective of the Measure as being desirable in the national interest. We should have pulled out of our troubles by now, by greater efficiency, by greater effort, and by a greater realisation of the perils and problems which confront Britain in the world of today. The Bill really is another warning to the British people that we are not out of the wood. We are still in a highly precarious position in a rapidly changing world, and the Bill is necessary only because of our failure to overcome the difficulties of the last few years.
  Mr. John Hall: The right hon. Member for Sowerby (Mr. Houghton) has my utmost sympathy and complete support. It is not very often that I can say that about speeches made by the right hon. Gentleman.
  I am sure that the right hon. Gentleman will forgive me if I concentrate on my Amendment to which he was kind enough to refer during his speech. It relates to seamless tubular artificial sausage casing made from re-generated cellulose. Perhaps I should explain what that is, because there seems to be some doubt about it. It is tubing which is used for making a wide variety of sausages and processed meats and is an indispensable part of the food industry. When I say that it is used to make skins for skinless sausages, I must tell the Committee that it is used for just that purpose. It is used to form a sausage and

  1601
  the skin is then peeled off, leaving a form of sausage without a skin.
  This item is imported mainly from Canada, from the United States, from France, and from Germany. In passing, perhaps I might point out that under the Bill it will be possible to import sausages and processed meats from those countries with the kind of cellulose casing to which I have referred, and without having to pay any deposit. Presumably this will mean greater encouragement for importers to import sausages and other prepared meats with the skins on, rather than have to pay the augmented price resulting from buying cellulose skins made here, or processed here, with the deposit charge interest added to them.
  The basic tubing is not manufactured here, and there is no possibility that it will be in the near future, largely because of the high cost of putting down the necessary chemical plant, and the large market which is necessary in the country to justify expenditure of that kind. But there is one company—and here I must declare an interest, because it is a company of which I am the chairman—which undertakes part of the manufacturing process. This factory is in a development area and it imports partly from the United States of America, but very largely from France.
  I stress that it imports largely from France because it will not have escaped the notice of the Government that recently the French Government imposed quite severe restrictions. They have restricted the credit which can be given by French exporters to their customers. So it is very difficult indeed to look to the providers of what for us is a basic raw material to help us in the difficulty of finding the necessary deposit for six months.
  7.0 p.m.
  This company will have to find, over the six months' period, £250,000. Like all the firms affected or likely to be affected by this Bill, naturally it has approached its bank to see what is the position about obtaining accommodation. It has been told, in accordance with the directives given by the Chancellor to the Bank of England, that although the bank can help in the first few weeks to overcome immediate problems concerning shipments on the way or at present in the
  1602
  docks, after that some other method of financing will have to be arranged.
  If this company is unable to find a quarter of a million pounds to leave on deposit, and pay the interest on it as an interest-free loan for the Government for that period, at the best it will have seriously to restrict output and at the worst to close down. At the best it will have to reduce its labour force in a development area where every encouragement has been given to manufacturers to take on more labour. At the worst it will have to close the factory.
  It will be unable to supply the food trade with an essential part of that trade's requirements. This will be an encouragement to the food trade to import sausages and prepared meats which are already in artificial casings and do not have to pay the deposit. All this is at a time when the company is developing its market to a point at which there is a strong possibility of it being able in the next few years to set up a manufacturing plant and put down the very large sums necessary to manufacture the complete article in this country. By those means it would save a considerable amount in imports.
  I stress the main points about this Amendment. This semi-manufactured casing is the raw material of this industry. It is not obtainable here. It has already been said by the Financial Secretary that non-availability is not an argument, but surely non-availability must be an argument should an industry not be able to obtain materials or not be able to find the money to pay the deposit and have to close its factory.
  Whatever success the company may or may not have in finding the money to finance these imports, the money for the deposit will have to come out of its expansion programme. Hon. Members on both sides of the Committee are much concerned that a great deal of money has to be put aside for six months after being raised under considerable difficulty and that this will affect capital programmes of firms throughout the country. They will not be able in addition to the deposit money to raise money to finance those programmes, many of which are already planned. To give an example of the company with which I am concerned, we have been planning our expansion programme for the last

  1603
  five to seven years. If we have to find money for deposits that programme will be halted.
  The plans of this company to set up manufacturing plant here, with considerable saving of imports, will be put in jeopardy. When I was last speaking in the Committee between 2 o'clock and 3 o'clock this morning, I pointed out that that was generally regarded as the hour when human vitality is at its lowest. I expressed the hope that the Minister might have had his resistance so lowered that he would accept an Amendment. May I now express the hope that he is even more tired and will not resist but will be prepared to accept this Amendment?
  Mr. John Page: When my hon. Friend the Member for Wycombe, (Mr. John Hall) started talking about skins for skinless sausages I was irresistably reminded of the speech of the Attorney-General yesterday when he said that it was either a duty or a charge or not a duty or not a charge.
  I shall speak briefly in discussing two Amendments in my name and the name of my hon. Friend the Member for Honiton (Mr. Emery) and also the Amendment in my name, No. 58. Amendment No. 121 deals with rubber accelerators. A rubber accelerator is something which speeds up the vulcanising process in the rubber industry.
  The Chairman (Mr. Sydney Irving): Order. I am afraid that the hon. Member has misread the provisional selection list. His Amendment No. 121 was down for discussion with Amendment No. 91. I am afraid that he has lost his opportunity.
  Mr. Page: I think I am right, Mr. Irving, in believing that Amendment No. 123 is being discussed with the Amendment that has been moved. I shall not bore the Committee with a discussion of polytetrahaleothylenes, which I believe are vital, technical and strange to relate a very basic raw material. I shall address my remarks mainly to Amendment No. 58, which deals with the subject of synthetic rubber.
  I declare an interest as I am one of the 150,000 people employed in the
  1604
  rubber industry. About half the rubber used in this country is natural rubber and all that is, of course, imported. About £12 million-worth of synthetic rubber is imported and a little less than that is synthetic rubber in a basic form. It would be quite impossible for any import-saving to be made by increasing the output of British synthetic rubber factories. So it is merely a matter of the potential loss of growing export markets for synthetic rubber if manufacturers in the home factories are confined to the home market.
  The deposit on £12 million-worth of synthetic rubber imports will mean that throughout the year the industry would have a £3 million running deposit on the goods which are imported. That is a considerable sum and it will cause a considerable on-cost for a large number of products made by the rubber industry. There will be an absolutely nil import effect and a virtually nil liquidity effect. Already, with good stock management and foreknowledge of the market demands, there is not over-stocking of imported synthetic rubber. So the Bill will not reduce imports or stocks, and therefore will not reduce the quantities of imported goods. There is the greatest possible reason for exempting imported synthetic rubber.
  Among the chapter headings, 40.01, natural rubber, 40.03, reclaimed rubber, and 40.04, waste rubber, are all exempt, yet 40.02 mysteriously receives no exemption. The first illogicality of this is that it is the only block of four items of which one has been singled out for discriminatory treatment. But the real illogicality is that reclaimed synthetic rubber can be imported without deposit being required. This needs more expensive further processing than the basic manufacture reclaimed rubber as it leaves the factory.
  So the Government say that one raw material of this important industry is being singled out, while its "brother-in-law" can be freely allowed in. This is an extraordinary anomaly. The Government should consider this and show the industry and the country that they can be flexible by accepting the Amendment. I hope that we shall have as good a response as I had yesterday from the Minister of State, but that this time he will stick to his guns and accept the Amendment.
  Mr. Emery: The case made by my hon. Friend the Member for Harrow, West (Mr. John Page) was very telling. I have two more facts concerning the Amendment which relates to synthetic rubber which seem to make an impressive argument irresistible. Consumption of natural rubber during the first six months of this year was 97,900 tons, while that of synthetic rubber was 114,600 tons. In other words, the consumption of synthetic rubber was slightly greater than that of natural rubber. There is no major division between the uses of synthetic and natural rubber with one used in some processes and the other in others. They are usually blended to give a better process, certainly in tyre production. A total of £33 million-worth of loose tyres were exported.
  How do the Government propose that an importer—whether the Dunlop Rubber Company or any other major firm—shall obtain remission of deposit, when he cannot absolutely stipulate how much of this synthetic rubber to be used will be imported and how much will not? This cannot be decided at that one stage, so how is remission to be allowed?
  The second and more powerful question is, how can the Government possibly argue that it is right to exempt ordinary natural rubber but not synthetic? The two are being used as parallel raw materials and for that reason alone—if we accept the Financial Secretary's argument in our last debate—it would be sensible to accept the Amendment.
  I hope that I can reinforce my hon. Friend's argument that it is palpably obvious that this is a golden opportunity for the Government to give way. It is not as if no Amendments had yet been accepted. If the Government had to stick to their guns so as not to have to reprint the Bill before Report, there might be some argument for resisting our suggestions. But since we are to have a Report stage, it would be simple for them to give way on this well-intentioned and admirably argued Amendment, which makes sense for the rubber industry and for the motor industry which is so concerned with many rubber products.
  Sir G. Nabarro: I wish to intervene because an important establishment in my constituency is the Richmond Sausage Company. It is not unusual, of course, to
  1606
  find a sausage and pie manufacturing plant in an important agricultural area, and South Worcestershire produces many pigs. One of the by-products of pig meat is, of course, the filling of a sausage. If the Amendment were carried, regenerated cellulose sausage casings would be exempt from deposit. The sausage is ubiquitous. The value of sausages imported as finished sausages and not as their constituent parts is quite surprising. As my hon. Friend comments, they are fully fashioned.
  I looked up the value, and I was surprised to discover that sausages are separately classified, so important are they, in the Overseas Trade Accounts of the United Kingdom for October, 1968. Hon. Members will find them on page 11, section O, headed "Food and live animals" and under subsection 013.4—
  "sausages not in air-tight containers and sausages in airtight containers."
  That means whether the sausages are tinned or not.
  If they read these statistics, hon. Members will see that, based on the imports of sausages for the first ten months to October, 1968, we are importing foreign sausages at the rate of £2·2 million per annum. The Government's present proposals favour an increase in the import of foreign sausages and a diminution in the production of home-produced sausages in establishments all over the country, including the Richmond Sausage Company in my constituency. The point is that all the sausages being imported at a rate of £2·2 million per annum are ready made, finished sauages, with skins around them, for example as frankfurters, and they escape the import deposit scheme because they are classified as food.
  But if my farmers in South Worcestershire sell their pig carcases to a conversion factory, and from the pig meat is derived the sausage meat, and then that food processing plant has to import the regenerated cellulose sausage casing from abroad, that casing is classified under the import deposit scheme as attracting the proposals for 180 days and 50 per cent. ad valorem deposit. That is a disgraceful state of affairs. It is a deliberate move by the Chancellor to favour the foreign "banger" and to depreciate the value of the British "banger". It demon-states to the Treasury Bench the ridiculous limits to which they have taken us

  1607
  through their discriminatory practices in the Bill.
  The right hon. Member for Sowerby (Mr. Houghton) was exactly correct. These semi-manufactured materials, which are so essential to the export trade of the country and to the production of food in Britain, ought to be totally exempt. The cost to the Government would be negligible and importers would be greatly facilitated in being able to bring into the country materials of this kind without the payment of the import deposit.
  The discussion has been highly technical. My hon. Friend the Member for Wycombe (Mr. John Hall) is expert in these matters as chairman of a company dealing with the manufacture and distribution of these casings. No doubt his company supplies the Richmond Sausage Company.
  Mr. John Hall: Indeed we do.
  Sir G. Nabarro: I am delighted to see that he nods agreement at once. His company supplies the material to the company in my constituency, the Richmond Sausage Company at Evesham, and that immediately adds validity to the case which I am putting forward about these regenerated cellulose sausage casings. I hope that I have impressed the point on the Treasury Bench sufficiently to make them agree to relaxation in respect of this important semi-manufactured commodity.
  Mr. Taverne: It is inevitable in the debate on the Schedule that some of the arguments which have been advanced on these Amendments are not entirely dissimilar from those advanced earlier, and it will be no more surprising that some of the answers will be much the same as those previously advanced. My right lion. Friend the Member for Sowerby (Mr. Houghton) was aware of this, because he had heard a full reply by my hon. Friend the Financial Secretary on an earlier Amendment and he was not particularly hopeful about the fate of his own Amendment. He realised that all that my hon. Friend said in answering the debate on a previous group of Amendments applied with exactly the same force to his Amendment.
  1608
  Amendments 94 and 123 deal with products of the chemical industry and clearly it would be inconsistent for the Government to refuse exemption in relation to the pharmaceutical industry, to helium and other products and substances which we discussed in the previous debates, and then to exempt the group of products covered by these Amendments. Indeed, the Amendment illustrates the trap which the Financial Secretary sought to avoid, because if we make a concession on one point, inevitably more and more anomalies will appear. If we do not consider each case carefully in the terms in which my hon. Friend indicated, we shall build up pressure to widen the scope of exemptions, and by the time we have finished the scope of the entire scheme will have narrowed enormously.
  The hon. Member for Wycombe (Mr. John Hall) was supported volubly by the hon. Member for Worcestershire, South (Sir G. Nabarro).
  Sir G. Nabarro: Eloquently.
  Mr. Taverne: Eloquently and volubly. Both hon. Gentlemen realised that they were talking of a manufactured article. The Amendments refer to manufactured articles. To exempt them would be a breach of the broad category running through the Schedule by which manufactured articles are not exempt.
  Mr. John Hall: I cannot have made myself clear, and no doubt that is my fault. For my company this is a semi-manufactured article which we have to process thereafter.
  Mr. Taverne: It is manufactured, and it falls outside the category of raw materials and the other exempt categories which my hon. Friend outlined. The hon. Member said that in this case it is used as a raw material for the industry. That is precisely the argument with which my hon. Friend dealt in resisting the last batch of Amendments.
  The hon. Member also said that it is not manufactured in this country, but my hon. Friend pointed out that it would be wrong for the Government to base the case for particular exemptions on the ground that the goods were not made in this country, because that would give a protectionist character to the Bill which would be totally opposed to the spirit of the E.F.T.A. Treaty. The fact that it is

  1609
  manufactured in France, the United States or anywhere else cannot determine whether an article comes within the exempt category.
  Mr. John Hall: I do not think that the Minister has understood the problem. Not only is this material not available here but no other competing casing is available here. The concession for which I am asking does not raise the question of protecting a home industry.
  Mr. Taverne: I am afraid that the hon. Member does not follow the argument. He said chat the casing is not available here and that it can be obtained only from abroad, therefore it should be exempt. The implications are that if it were available here and if there were another source from which it could be obtained, then it should not be exempt. The inevitable logic of that argument is that the exemptions should be so directed that goods which are liable to attract the deposit are goods which in some way are competing with those produced in this country.
  7.30 p.m.
  Sir A. V. Harvey: Does not the hon. and learned Gentleman agree that he is giving an advantage to the miserable German frankfurter as against the British sausage?
  Mr. Taverne: I am saying that we cannot base categories of exemptions on the basis of protecting home industries. I am sure that the hon. Gentleman would not wish us to infringe the spirit of the E.F.T.A. Treaty.
  Sir G. Nabarro: I am not sure that the hon. and learned Gentleman has understood the agricultural implications of what I was putting to him. It is a first principle of Government policy to encourage import substitution. I demonstrated from the trade and navigation returns that sausages imported are worth £2·2 million per annum. What we are discussing militates against an increase in output of British sausages and encourages an increase in imports of foreign sausages.
  Mr. Taverne: The hon. Gentleman has cited one case where, to a negligible extent, his case may be supported. But his logic is that we should so arrange the scheme hat home production is protected at the expense of imports, and this
  1610
  is no basis on which particular articles can be exempted.
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Taverne: No.
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Taverne: There must be a limit.
  Sir G. Nabarro: We are in Committee.
  Mr. Taverne: No, I will not give way.
  Sir G. Nabarro: I will make another speech.
  Mr. Taverne: The hon. Gentleman can do so. But he has failed to grasp the fundamental fact that my hon. Friend the Financial Secretary made abundantly clear earlier and which I have repeated.
  Mr. John Hall: I tried to answer the point made previously by the Financial Secretary by saying that, although the argument of non-availability may have some merit in it—I do not say that it has—if it comes to a question of denial of material to an industry, bringing it to a stop, the non-availability argument has no other merit in it.
  Mr. Taverne: The hon. Gentleman is putting forward a different point. He says that the deposit will have such a drastic effect that the whole industry will be ruined. This is familiar ground. There is no reason to suppose that those who are in the sort of position which the company the hon. Gentleman spoke of is in will find it impossible to raise capital. We had the agricultural argument about this. Many hon. Members opposite have said that the scheme will not have the desired effect on the volume of imports because it will be too easy to raise capital. What the hon. Gentleman is concerned with here is a fractional effect of extra costs which this company will have to bear.
  I turn now to the Amendment dealing with synthetic rubber. Rebate on exports would be better considered on a later Government Amendment, which if selected will determine how the rebate will work. Here we are concerned not so much with the rebate but how far one can raise the deposit.
  The hon. Member for Harrow, West (Mr. John Page) pointed out that £12 million worth of synthetic rubber is

  1611
  imported. Immediately, this draws attention to the fact that the Amendment would mean exempting £12 million of imported goods. He said that the scheme means that about £3 million will be on deposit. I strongly contest his argument that, in this situation, the effect on liquidity will not apply. Of course it will apply. A sum of £3 million will be placed on deposit and, to that extent, liquidity of the home market will be reduced, unless there is a loan from a foreign bank which, to that extent, will bring an immediate gain to the reserves.
  Once again we have here a fully manufactured product, made abroad from chemicals which are themselves subject to the deposit. It would be inconsistent with the scheme as a whole if synthetic rubber were exempted. The hon. Gentleman said that reclaimed and waste rubber were themselves exempt but, like rags, these are treated as raw materials. Synthetic rubber is in a different category, obviously, from waste rubber and reclaimed rubber, just as rags are in a different category from other forms of textiles.
  Mr. John Page: I am listening to the hon. and learned Gentleman with care, and I do not think that a comparison of reclaimed rubber with rags stands up. Reclaimed synthetic rubber is a known product of known specification and is quite a thing of itself. It is not like rags, which can be converted and used in a certain way.
  Mr. Taverne: It is more akin to raw materials. Synthetic rubber could not be in the category of waste products which are exempt. The hon. Gentleman says that we cannot save imports here by producing more at home. Once again, the argument which applies in the case of sausage casings and other goods of non-availability at home must apply. In all the cases raised by these Amendments, as in those raised on earlier Amendments, there is the fundamental difficulty that one has to balance broad categories. We have to balance certain anomalies with the need to keep the scheme as broad as possible so that the credit restriction effect will be as wide as possible and, therefore, as advantageous to the economy as possible.
  Sir G. Nabarro: The hon. and learned Gentleman is burying his head in the sand. I shall proceed in words of two syllables so that he cannot possibly fail to understand. There is only one commodity in this group of Amendments that relates to food manufacture—that is, sausage casings. I am not talking about reclaimed rubber or anything but sausage casings. What is the objection to exempting sausage casings and thereby not giving preference to German frankfurters as compared with British pork sausages?
  Sir A. V. Harvey: And beef sausages.
  Sir G. Nabarro: I do not want to talk about beef sausages because they are not of the same quality as pork.
  Sir A. V. Harvey: They use the same casings.
  Sir G. Nabarro: I agree, however, that they use the same casings. The only manufactured commodity in this group which is related to food in any way is the sausage, and as finished sausages come into the country without paying import deposits because they are food, would it not be equitable to allow sausage casings in without import deposits in order that British manufacturers should not be penalised in comparison with their overseas competitors?
  Mr. Taverne: The hon. Gentleman has added nothing to the argument put forward by the hon. Member for Wycombe (Mr. John Hall) and to the point he himself put earlier. The answer is exactly the same as before. If this were the basis on which we were to proceed, then similar exemptions would have to be made in similar circumstances, and we would inevitably be drawn into a selection which would be a selection in order to protect the home market and discourage competition.
  Mr. John Hall: Have we now to wait until a company, mine or that of anyone else, is so affected by these provisions, so affected by the Government's own recently imposed restrictions on the banks, has to reduce output and discharge its employees? Is that what the Government are trying to do? Have we to wait until that happens before the Government adjust the Schedule?
  Mr. Taverne: My right hon. Friend has said that we will look at how the scheme works. There may be cases in which an Order will be made to exempt certain products, but it is totally fallacious to suppose that the effect will be to drive companies out of business. It is totally fallacious to suppose that it will be possible that a company that has to pay the import deposit, and raise capital to do so, will find the interest charged on that capital totally ruinous.
  Mr. Patrick Jenkin: Ever since I arrived in this House over four years ago I seem to have spent an unconscionable amount of time listening to Her Majesty's Ministers attempting to defend indefensible distinctions. We have had from the very beginning a whole series of legislation—with the temporary charge on imports in the first Finance Bill, in the debates on which it was my honour to take part—through investment grants and the Selective Employment Tax, and now with the import deposits. The Government have sought to draw distinctions and to discriminate between things that qualify and things that do not.
  While I have a great deal of sympathy for my right hon. and hon. Friends who have had to debate this present legislation, I have very little for the right hon. Gentleman the Member for Sowerby (Mr. Houghton) because, after all, he has for years supported a Government which believes in purposive intervention in industry, in Government taking discriminatory powers, and he cannot now complain if he finds that when the Government attempt to do this and it hurts some of his constituents—
  Mr. Houghton: I did not come here for the hon. Gentleman's sympathy, but for a concession from my right hon. Friends.
  Mr. Jenkin: If I may say to the right hon. Gentleman with great respect, he will not be disappointed by my lack of sympathy for him.
  The right hon. Gentleman has quite rightly put his finger on one of the three anomalies which this group of Amendments has shown up. He quite correctly said that the Customs Tariff is a document based on the Brussels nomenclature, agreed internationally in 1958, and form-
  1614
  ing part of our own tariffs in 1959, as amended from time to time, drawn up with the purpose of classifying goods in order that import duties and Customs duties could be attached to the goods identified and classified.
  He is perfectly correct, if I may say so with respect, in pointing out that it forms absolutely no basis at all on which to try to distinguish between categories of goods, as the Government are attempting to do in this Bill—between raw materials, food and fuel on the one hand, and manufactured articles on the other. Therefore, the right hon. Gentleman should not be surprised—and I do not think, quite honestly, that he was surprised—when he moved his Amendment to find that having adopted a system of classification exactly as he says—the Standard Industrial Classification was used for the S.E.T.—that all sorts of anomalies and nonsenses have been thrown up.
  This, I point out to him as kindly as I can, is an inevitable concomitant of any policy that seeks to intervene and discriminate. It is not possible to discriminate in the way in which the Government have attempted to do over and over again, and to draw distinctions which will result in rational answers. Inevitably, they are left wallowing in irrationality, and wallowing, if I may respectfully say so, as the Minister of State has done this evening, in attempting to explain the inexplicable and defend the indefensible.
  7.45 p.m.
  Another anomaly was brought out by my hon. Friends the Members for Harrow, West (Mr. John Page) and for Honiton (Mr. Emery) in drawing to the attention of the Committee, which they did with great force, the fact that in relation to synthetic rubber the Government have taken but one subhead out of the whole list of subheads in Section 1 of Chapter 40, where all the other headings are exempt—natural rubber, natural rubber latex, pre-vulcanised natural rubber latex balata, guttar perchar, reclaimed rubber, waste and parings, unhardened rubber, and so on. These are all excluded from the deposit but synthetic rubber latex—40.02—is not.
  The Minister of State tried to defend this on the ground that we were dealing with a manufactured product, and so we

  1615
  are, but this seems to have regard not to the nature of the product—and what we are talking about as raw materials—but to the nature of the process by which the product is arrived at. On the one hand, one has the natural product drawn from tapping rubber trees and, on the other hand, one has a processed product. My hon. Friend the Member for Harrow, West strengthened his case by pointing out that reclaimed rubber, which is exempt from the deposit, may still have undergone more processing than the synthetic rubber. That is what I mean by saying that the Government are driven to defending the indefensible and explaining the inexplicable.
  Again, my hon. Friends the Members for Wycombe (Mr. John Hall) and for Worcestershire, South (Sir G. Nabarro) have put their fingers firmly on a third anomaly, because if one is to draw distinctions between goods which are exempted from paying the deposit and goods which pay the deposit, one will inevitably result in penalising components which are imported for the manufacture of products which, if they themselves were imported, would be free. That is what my hon. Friend the Member for Worcestershire, South tried to point out to the Minister of State over and over again. The case is unanswerable, therefore my hon. Friend got no answer.
  This is a further inevitable anomaly that will result. When one is dealing with manufactured products one can, perhaps, in a chain of products that has been drawn up, make sure that one does not subject to import deposit a product where one has exempted a product further down the manufacturing line, but when one starts exempting a whole range of foodstuffs, including manufactured and processed foodstuffs which themselves require components which may or may not be imported, one is inevitably laying up for oneself a trap and an anomaly. It may be that the question of "bangers" from abroad, of regenerated cellulose sausage skins, is a rather bizarre example, but it clearly illustrates exactly the kind of anomaly that such a scheme as this creates.
  I do not know whether the right hon. Member for Sowerby intends to press his Amendment to a Division. I hope that he will, because he made, if I may say so, a powerful speech. If he does not, I understand, Mr. Irving, that you indicated that you would allow a separate Division on Amendment No. 58. I cannot do otherwise than advise my hon. and right hon. Friends to divide on which-so-ever Amendment is put for a Division.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 138, Noes 210.

  Division No. 23.]

  AYES

  [7.48 p.m.

  Alison, Michael (Barkston Ash)

  Dean, Paul

  Hirst, Geoffrey

  Allason, James (Hemel Hempstead)

  Deedes, Rt. Hn. W. F. (Ashford)

  Holland, Philip

  Awdry, Daniel

  Dodds-Parker, Douglas

  Hordern, Peter

  Baker, W. H. K. (Banff)

  Eden, Sir John

  Hunt, John

  Beamish, Col. Sir Tufton

  Elliott, R. W. (N'c'tle-upon-Tyne, N.)

  Hutchison, Michael Clark

  Bell, Ronald

  Emery, Peter

  Iremonger, T. L.

  Biffen, John

  Errington, Sir Eric

  Irvine, Bryant Godman (Rye)

  Blaker, Peter

  Eyre, Reginald

  Jenkin, Patrick (Woodford)

  Boardman, Tom (Leicester, S.W.)

  Farr, John

  Jennings, J. C. (Burton)

  Body, Richard

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Boyle, Rt. Hn. Sir Edward

  Fortescue, Tim

  Joseph, Rt. Hn. Sir Keith

  Braine, Bernard

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Kaberry, Sir Donald

  Bruce-Gardyne, J.

  Giles, Rear-Adm. Morgan

  Kerby, Capt. Henry

  Buchanan-Smith, Alick (Angus, N & M)

  Gilmour, Ian (Norfolk, C.)

  Kimball, Marcus

  Buck, Antony (Colchester)

  Gilmour, Sir John (Fife, E.)

  King, Evelyn (Dorset, S.)

  Bullus, Sir Eric

  Glover, Sir Douglas

  Kirk, Peter

  Burden, F. A.

  Cower, Raymond

  Knight, Mrs. Jill

  Campbell, B. (Oldham, W.)

  Grant-Ferris, R.

  Lancaster, Col. C. G.

  Carlisle, Mark

  Gresham Cooke, R.

  Legge-Bourke, Sir Harry

  Channon, H. P. G.

  Curden, Harold

  Lloyd, Ian (P'tsm'th, Langstone)

  Clark, Henry

  Hall, John (Wycombe)

  Lubbock, Eric

  Clegg, Walter

  Hall-Davis, A. G. F.

  MacArthur, Ian

  Cooke, Robert

  Hamilton, Michael (Salisbury)

  Maclean, Sir Fitzroy

  Costain, A. P.

  Harrison, Brian (Maldon)

  McNair-Wilson, Patrick

  Crowder, F. P.

  Harrison, Col. Sir Harwood (Eye)

  Maginnis, John E.

  Cunningham, Sir Knox

  Harvey, Sir Arthur Vere

  Marten, Neil

  Currie, G. B. H.

  Hastings, Stephen

  Maude, Angus

  Dalkeith, Earl of

  Heald, Rt. Hn. Sir Lionel

  Maudling, Rt. Hn. Reginald

  Davidson, James (Aberdeenshire, W.)

  Heseltine, Michael

  Mawby, Ray

  d'Avigdor-Goldsmid, Sir Henry

  Hiley, Joseph

  Maxwell-Hyslop, R. J.

  Mills, Peter (Torrington)

  Price, David (Eastleigh)

  Tapsell, Peter

  Mills, Stratton (Belfast, N.)

  Pym, Francis

  Temple, John M.

  More, Jasper

  Quennell, Miss J. M.

  Tilney, John

  Morgan, Geraint (Denbigh)

  Ramsden, Rt. Hn. James

  Turton, Rt. Hn. R. H.

  Munro-Lucas-Tooth, Sir Hugh

  Rees-Davies, W. R.

  Waddington, David

  Murton, Oscar

  Renton, Rt. Hn. Sir David

  Webster, David

  Nabarro, Sir Gerald

  Rodgers, Sir John (Sevenoaks)

  Wells, John (Maidstone)

  Noble, Rt. Hn. Michael

  Rossi, Hugh (Hornsey)

  Whitelaw, Rt. Hn. William

  Onslow, Cranley

  Royle, Anthony

  Williams, Donald (Dudley)

  Osborn, John (Hallam)

  Russell, Sir Ronald

  Wills, Sir Gerald (Bridgwater)

  Osborne, Sir Cyril (Louth)

  Shaw, Michael (Sc'b'gh & Whitby)

  Winstanley, Dr. W.P.

  Page, Graham (Crosby)

  Silvester, Frederick

  Wolrige-Gordon, Patrick

  Page, John (Harrow, W.)

  Smith, Dudley (W'wick & L'mington)

  Worsley, Marcus

  Pardoe, John

  Speed, Keith

  Pearson, Sir Frank (Clitheroe)

  Steel, David (Roxburgh)

  TELLERS FOR THE AYES:

  Peel, John

  Stoddart-Scott, Col. Sir M.

  Mr. Bernard Weatherill and

  Pink, R. Bonner

  Summers, Sir Spencer

  Mr. Humphrey Atkins.

  Powell, Rt. Hn. J. Enoch

  NOES

  Abse, Leo

  Ennals, David

  McBride, Neil

  Albu, Austen

  Evans, Fred (Caerphilly)

  McGuire, Michael

  Allaun, Frank (Salford, E.)

  Evans, Gwynfor (C'marthen)

  McMillan, Tom (Glasgow, C.)

  Alldritt, Walter

  Evans, Ioan L. (Birm'h'm, Yardley)

  MacPherson, Malcolm

  Allen, Scholefield

  Fernyhough, E.

  Mahon, Peter (Preston, S.)

  Anderson, Donald

  Finch, Harold

  Mahon, Simon (Bootle)

  Archer, Peter

  Fitch, Alan (Wigan)

  Manuel, Archie

  Ashley, Jack

  Fletcher, Ted (Darlington)

  Mapp, Charles

  Ashton, Joe (Bassetlaw)

  Foley, Maurice

  Marks, Kenneth

  Atkins, Ronald (Preston, N.)

  Ford, Ben

  Mason, Rt. Hn. Roy

  Atkinson, Norman (Tottenham)

  Forrester, John

  Mellish, Rt. Hn. Robert

  Bagier, Gordon A. T.

  Fowler, Gerry

  Mendelson, John

  Barnett, Joel

  Freeson, Reginald

  Millan, Bruce

  Beaney, Alan

  Galpern, Sir Myer

  Milne, Edward (Blyth)

  Benn, Rt. Hn. Anthony Wedgwood

  Gardner, Tony

  Morgan, Elystan (Cardiganshire)

  Bidwell, Sydney

  Garrett, W. E.

  Morris, Alfred (Wythenshawe)

  Binns, John

  Gordon Walker, Rt. Hn. P. C.

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Gray, Dr. Hugh (Yarmouth)

  Morris, John (Aberavon)

  Blackburn, F.

  Greenwood, Rt. Hn. Anthony

  Moyle, Roland

  Blenkinsop, Arthur

  Gregory, Arnold

  Neal, Harold

  Boardman, H. (Leigh)

  Grey, Charles (Durham)

  Newens, Stan

  Booth, Albert

  Griffiths, David (Bother Valley)

  O'Malley, Brian

  Braddock, Mrs. E. M.

  Griffiths, Will (Exchange)

  Orme, Stanley

  Brooks, Edwin

  Hamilton, James (Bothwell)

  Owen, Dr. David (Plymouth, S'tn)

  Broughton, Dr. A. D. D.

  Hamilton, William (Fife, W.)

  Padley, Walter

  Brown, Hugh D. (G'gow, Provan)

  Hannan, William

  Page, Derek (King's Lynn)

  Brown, R. W. (Shoreditch & F'hury)

  Harper, Joseph

  Paget, R. T.

  Buchan, Norman

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Buchanan, Richard (G'gow, Sp'burn)

  Haseldine, Norman

  Park, Trevor

  Butler, Herbert (Hackney, C.)

  Hazell, Bert

  Parker, John (Dagenham)

  Butler, Mrs. Joyce (Wood Green)

  Henig, Stanley

  Pavitt, Laurence

  Cant, R. B.

  Herbison, Rt. Hn. Margaret

  Pearson, Arthur (Pontypridd)

  Carmichael, Neil

  Hilton, W. S.

  Pearl, Rt. Hn. Fred

  Castle, Rt. Hn. Barbara

  Hobden, Dennis

  Pentland, Norman

  Chapman, Donald

  Howarth, Robert (Bolton, E.)

  Perry, George H. (Nottingham, S.)

  Coe, Denis

  Howell, Denis (Small Heath)

  Prentice, Rt. Hn. R. E.

  Coleman, Donald

  Huckfield, Leslie

  Price, William (Rugby)

  Corbet, Mrs, Freda

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Randall, Harry

  Craddock, George (Bradford, S.)

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

  Crawshaw, Richard

  Hughes, Hector (Aberdeen, N.)

  Roberts, Rt. Hn. Goronwy

  Cullen, Mrs. Alice

  Hughes, Roy (Newport)

  Robertson, John (Paisley)

  Dalyell, Tam

  Hunter, Adam

  Roebuck, Roy

  Darling, Rt. Hn. George

  Hynd, John

  Rogers, George (Kensington, N.)

  Davies, Ednyfed Hudson (Conway)

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Davies, G. Elfed (Rhondda, E.)

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Davies, Dr. Ernest (Stretford)

  Jay, Rt. Hn. Douglas

  Rowlands, E.

  Davies, Harald (Leek)

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Shaw, Arnold (Ilford, S.)

  Davies, Ifor (Gower)

  Jenkins, Hugh (Putney)

  Sheldon, Robert

  Davies, S. O. (Merthyr)

  Johnson, James (K'ston-on-Hull, W.)

  Shore, Rt. Hn. Peter (Stepney)

  Delargy, Hugh

  Jones, Dan (Bumley)

  Short, Mrs. Renée (W'hampton, N.E.)

  Dell, Edmund

  Jones, T. Alec (Rhondda, West)

  Silkin, Rt. Hirt. John (Deptford)

  Dempsey, James

  Kenyon, Clifford

  Silkin, Hn. S. C. (Dulwich)

  Dewar, Donald

  Lawson, George

  Silverman, Julius

  Diamond, Rt. Hn. John

  Ledger, Ron

  Skeffington, Arthur

  Dickens, James

  Lee, Rt. Hn. Frederick (Newton)

  Slater, Joseph

  Dobson, Ray

  Lee, Rt. Hn. Jennie (Cannock)

  Small, William

  Doig, Peter

  Lee, John (Reading)

  Snow, Julian

  Dunnett, Jack

  Lever, Harold (Cheetham)

  Spriggs, Leslie

  Eadie, Alex

  Lewis, Arthur (W. Ham, N.)

  Steele, Thomas (Dunbartonshire, W.)

  Edelman, Maurice

  Lewis, Ron (Carlisle)

  Strauss, Rt. Hn. G. R.

  Edwards, Robert (Bilston)

  Lomas, Kenneth

  Summerskill, Hn. Dr. Shirley

  Edwards, William (Merioneth)

  Loughlin, Charles

  Swain, Thomas

  Ellis, John

  Lyons, Edward (Bradford, E.)

  Symonds, J. B.

  1618

  1619

  Taverne, Dick

  Watkins, Tudor (Brecon & Radnor)

  Williams, Mrs. Shirley (Hitchin)

  Tinn, James

  Wellbeloved, James

  Willis, Rt. Hn. George

  Tomney, Frank

  Wells, William (Walsall, N.)

  Woodburn, Rt. Hn. A.

  Tuck, Raphael

  Whitlock, William

  Woof, Robert

  Urwin, T. W.

  Wilkins, W. A.

  Varley, Eric G.

  Willey, Rt. Hn. Frederick

  TELLERS FOR THE NOES:

  Wainwright, Edwin (Dearne Valley)

  Williams, Alan (Swansea, W.)

  Mr. Ernest Armstrong and

  Wallace, George

  Williams, Clifford (Abertillery)

  Mr. Ernest G. Perry.

  Watkins, David (Consett)

  Sir G. Nabarro: I beg to move Amendment No. 118, in page 7, line 10, at end insert:

  44.15

  …

  …

  Plywood, blockboard, laminboard and battenboard and similar laminated wood products (including veneered panels and sheets); inlaid wood and wood marquetry.

  The Chairman (Mr. Sydney Irving): With this Amendment we are to discuss Amendments Nos. 59, in page 7, line 9, after '44.12' insert 'and 44.15'.
  No. 60, in page 7, line 10, at end insert:

  44.25

  …

  …

  Tool broom and brush handles.

  No. 88, in page 7, line 10, at end insert:

  44.13

  …

  …

  Wood (including blocks, strips and friezes for parquet or wood block flooring not assembled) planed, tongued and grooved, rebated, chamfered, V-jointed, centre V-jointed, beaded, centre beaded or the like, but not further manufactured.

  No. 89, in page 7, line 10, at end insert:

  44.14

  …

  …

  Wood sawn lengthwise, sliced or peeled but not further prepared of a thickness not exceeding 5 mm; veneer sheets and sheets for plywood of a thickness not exceeding 5 mm.

  No. 90, in page 7, line 10, at end insert:

  44.18

  …

  …

  Reconstituted wood, being wood shavings, wood chips, sawdust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances in sheets blocks or the like.

  No. 128, in page 7, line 10, at end insert:
  Boxboards and other wood sawn lengthwise, sliced or peeled, but not further prepared, of a thickness not exceeding five millimetres, and used for box manufacture, within 44.14.
  Imported unassembled softwood boxboards within 44.21.
  No. 129, in page 7, line 10, at end insert:
  Finger jointed sawn timber, within 44.28.
  No. 132, in page 7, line 10, at end insert:

  44.21

  …

  …

  Complete wooden packing cases, boxes, crates, drums and similar packings imported assembled, unassembled or partly assembled—

  (a) imported unassembled, and consisting of softwood boxboards—

  (i) dove-tailed, mortised or tenoned at the ends,

  (ii) other;

  (b) other

  No, 130, in page 7, line 10, at end insert:
  Canadian Lumber Standard timber within 44.13.
  and No. 127, in page 7, line 10, at end insert:

  44.22(C)

  …

  Used barrels of oak whether assembled or not, staves and barrel heads being parts of such barrels.

  Sir G. Nabarro: I propose to address myself, first, to the importance of wood in our national economy, and the figures I shall employ are massive compared with those of earlier Amendments. During 1968, imports of wood and wood products will amount to about £326 million, which is a figure far larger than those associated with any earlier Amendments. That figure includes items which are exempt from import deposits and I delineate those at once as being 44·01 to 44.12, described as wood not planed or further manufactured, and 45.01 and 45.02 natural cork and waste cork. Broadly, those are in Division 24 of Imports in the Overseas Trade Accounts of the United Kingdom.
  The Amendment seeks to add to those items in Division 24 a group of timber products which are only part manufactured in the crudest sense and which are extensively used for essential purposes in the United Kingdom and in connection with our export trade.

  1621
  I expressed these apprehensions when speaking to the ways and Means Resolution on 26th November:
  "The Order means that the Government will take millions of pounds in import deposits from plywood importers in respect of raw materials which are then reconverted and used for packaging essential British exports on an economic basis to go all over the world."—[OFFICIAL REPORT, 26th November, 1968; Vol. 774, c. 261.]
  Earlier, I had referred to the use of plywood for a wide range of building and construction purposes.
  8.0 p.m.
  I wish first, to establish the contradistinction between the exempted and non-exempted items. Broadly, the exempted items are raw lumber. The timber trade may call them short ends, deals, or sleeper blocks, but, in other words they are felled trees, from the Soviet Union, Sweden or Finland, for example, if they are softwoods, and from West Africa, North America and elsewhere if hardwoods. They are trees which have been converted in a primary sense, roughly cut in section to rectangular shape, shipped in that shape, rough sawn, to this country. That timber has been excluded from the import deposit arrangements.
  Broadly, that timber falls within section 2 of Division 24 in the Overseas Trade Accounts of the United Kingdom, and it amounts in value of imports to £230 million sterling in this year, 1968, the figures being based on the first 10 months and grossed up to give the appropriate figure for the full year. Thus, £230 million worth of imports would be outside the import deposit scheme this year.
  There is then another large group, the group to which the Amendment refers, which falls within Division 63 of the Overseas Trade Account of the United Kingdom. I shall quote what is there said, since it relates fairly closely to the Amendment. It comprises
  "Plywood, blockboard, laminboard, batten-board, and similar laminated wood products (including veneered panels and sheets), inlaid wood and wood marketry, cellular wood panels".
  Again grossing up the imports to the full year, basing the figure on the intake during the first 10 months, we have a figure in Division 63 of £96 million. Thus, £230 million-worth of wood and wood products would be exempted from the import deposits arrangement, where-
  1622
  as £96 million-worth would attract the import deposit.
  My claim and that of my right hon. and hon. Friends is that plywood and associated products are truly raw materials. This large volume of plywood brought into the country saves vast quantities of timber. The timber I allude to here is rough sawn timber, principally in the form of softwoods. For example, the tendency during the past 20 years has been for nearly all the packages which carry exports from this country to be switched gradually from softwood to ply. wood packing cases. The reason is that plywood saves a great deal in shipping cube compared with the much bulkier softwood largely used in pre-war days.
  Although both softwood and plywood are imported for this purpose, one must bear in mind that with plywood wastage in the conversion of the trees largely takes place overseas before it is shipped to us, whereas the softwood is largely converted, with consequent wastage, in this country.
  In the context of this large user of both softwood and plywood—but most largely of plywood—it is grossly uneconomic to ask importers of plywood who will convert that material for export packaging to find 50 per cent. of the ad valorem landed cost of the plywood as a deposit for 180 days.
  I should be out of order, as we established during earlier debates, if I strayed to the later Amendment which, in broad terms, would provide that any raw materials brought into this country which are subsequently for export may be relieved of the import deposit. All I do at this stage is make a passing reference to it. If a timber importer brings in 1,000 bales of plywood—we all know what a bale of plywood looks like—he then sells that plywood partly for the manufacture of export packages, partly for purposes in connection with house building and partly for construction, mainly civil engineering construction purposes—for instance, to make contract shuttering for concrete members in civil engineering works, road buildings and the rest.
  It is utterly impossible for that primary timber importer in Manchester, Liverpool or any of the other great timber centres to declare at the moment of

  1623
  import that of, say, £100,000 worth of plywood which he is bringing in from Finland or the Soviet Union, he will undertake that the whole will ultimately be used for export purposes. He cannot do it. A major part of the plywood may be used for construction purposes, another major part may be used for house building and similar work, and a further part may be used ultimately for export purposes.
  Mr. Harold Lever: This is an important point. I want to assist the hon. Gentleman. He is back again—I do not complain—on the point which depends on the value of the Government Amendment dealing with exemption where export or export equivalent is to take place. If he has a dissatisfaction, his dissatisfaction must be with that Amendment. Although he may have a separate complaint regarding plywood in the sense which he is now putting it, he will be much better off, if he wants an answer from me, if he raises it, with his usual acumen, when we come to the Amendment which gives me power to do something for him. I suggest that he will be far happier with his reply if he waits until we are discussing that Amendment.
  Sir G. Nabarro: I am grateful to the hon. Gentleman, but I am in difficulty here because I cannot talk about that Amendment. All I can say is that it does not meet the case which I am now putting.
  Before going further, perhaps I should say that I have no interest to declare in the matter, as I have left the timber trade now, although I spent 20 years in it and know it intimately. The point is that it is impossible for a big importer to say in advance how much of the timber which he is bringing in will ultimately find its way into purposes which can be classified as contributing to the export trade.
  In any event, the inherent inflationary effect of the 50 per cent. deposit for 180 days in putting up the basic price of plywood by 2½ per cent. will result in substantial increases in the cost of these products. In the case of some plywoods, it amounts to an increase in price of as much as 5s. per 100 ft. All that increase must be attributed to essential purposes in this country because
  1624
  plywood, in view of its expensive character, is never used for anything but an absolutely indispensable purpose.
  I quote an example from random. It may be within the knowledge of many hon. Members that the second stage of the High Wycombe by-pass is nearing completion. There is a long viaduct there on the A40 road to Oxford. It is a huge civil engineering works and it comprises very largely reinforced concrete members which were fabricated on the site by pouring concrete into shuttering, the shuttering being the form piece to create the shape of the large structure which is to carry the road. All that shuttering is made in expensive plywood. All of it will rise in price by 2½ to 3 per cent. as a result of this import deposit arrangement. I think that that is incontrovertible.
  The ultimate use of plywood for export packaging is widespread and millions of pounds worth of plywood is used for that purpose every year. It is in connection not only with exports that I plead the case, but the very inflationary effect which the scheme will have on the cost of civil engineering construction and house building, which cannot escape the influence of the price increase as a result of the later Government Amendment.
  I wish to say a few words about the invidious contradistinction between softwood timber and plywood. I suppose that timber technologists have spent the last 30 years encouraging the use of plywood because it is so much more efficient and economic for a wide range of constructional and packaging purposes than softwood or hardwood. The very act of excluding softwoods from and including plywoods in the import deposit scheme discriminates against timber efficiency. We should be doing exactly the opposite.
  If the Financial Secretary claims that plywood is a manufactured commodity because three veneers have been glued together—
  Mr. Harold Lever: Five.
  Sir G. Nabarro: Sometimes five, but most plywood to which we refer is three-ply.
  Plywood can be 3, 4, 5, 6, 8, 9, or 12 millimetre. Its thickness can vary. Generally, the thicker it is the more veneers there are and the more gluing there is.

  1625
  The off-cuts are used to make blockboard, laminboard, and so on. But plywood is hardly a manufactured article, any more than a softwood deal coming into this country is a manufactured article. The tree is chopped down in Russia and is put through a large band mill. The waney edge of the timber is taken off on four sides, thereby making the section of the timber rectangular. It is cut to lengths of 6, 9, or 12 feet.
  All those manufacturing processes are carried out in the Soviet Union, Sweden, Finland, or whatever the timber-producing country may be, before the sawn deals are shipped to this country. Yet we discard all that and say that these deals are not manufactured and exempt them from the import deposit scheme. The same country, Russia, fells the tree, brings to the timber mill, lops to a length of perhaps 18 or 24 ft., puts a spike in each end of the log and rotates the log against a peeling knife so that a veneer of wood flows from the log. That veneer is then dried, steamed and glued to another veneer of wood. It is then trimmed and sent to this country and is called plywood.
  It is argued by the Treasury that the deals or softwood are less fully manufactured than plywood.
  Mr. Harold Lever: It seems so from the hon. Gentleman's description.
  8.15 p.m.
  Sir G. Nabarro: I do not think that it does. The processes are approximately equal. Throughout the scheme there is the invidious distinction made between manufactured timber products and the exempted items of wood products to which I referred at the beginning of my speech.
  I said that wood and wood product imports this year will total £326 million, of which £230 million worth would have been exempted from the import deposit scheme and £96 million worth would be made the subject of import deposits. But, that figure will be diminished if the Government's Amendment is carried exempting from the scheme those items which ultimately find their way into exports. I should have thought that in the interests of the efficiency of British industry, trade and commerce it would be wise to exempt all wood and wood products,
  1626
  except furniture, which does not come into the figures to which I have alluded; it is entirely separate. I should have thought that, in the interests of general efficiency, it would have been wiser to exempt wood and wood products coming into this country which form the largest single commodity with which we deal in our Amendments.
  For these reasons, I hope that Amendment No. 118, at least, will be acceptable to the Treasury.
  Mr. Arnold Gregory: I listened with great interest to the hon. Member for Worcester, South (Sir G. Nabarro). I do not claim to have an expert knowledge of the industry, but I have a deep constituency interest in it. I do not intend to take up the hon. Gentleman's argument. It was essentially a global argument dealing with colossal figures.
  I wish to refer specifically to how the import deposit scheme applies to plywoods, including the range of laminated wood used in the furniture-making industry. Since I shall refer to things like roomliners and unit furniture, it will be appreciated that this is a specialised part of the industry. I emphasise the point made by the hon. Member for Worcestershire, South that there is a strong argument within the industry that this is a raw material. I shall say later why those in the industry stress this point, but first I wish to describe the magnitude of the problem.
  I discussed the problem with people in the furniture-making industry only a few days ago. This specialised part of it is growing. My area is not a development area, but in Stockport and North-East Cheshire generally there has been a lot of diversification and new industries are emerging. There is the obvious feeling that if investment is made in a new industry and machinery is bought and installed the best must be made of it.
  I am referring essentially to small firms.
  Stress has been laid on the fact that the wood products are shaped in a highly competitive market for export purposes. Roomliners made by the firm of Peak Joinery Limited, of Stockport, are being sold in difficult export markets. The firm has to go to the length of filing away in shaping the product for sale in areas like

  1627
  Sweden, West Germany and the United States, the very countries which themselves export the raw material for making it up.
  There is, furthermore, a re-export process. In many cases, if it is desired to sell a highly sophisticated article of this nature for a world market in which there is keen competition, it is re-exported to Italy for relaying for veneer purposes. Polished woods of a particular nature are applied to finish the goods for this special market.
  The firm to which I have referred claims—I think, with justification—that the import deposit system will set it back in three respects. First. it wishes to make a still bigger challenge in the market and has had five years of development to prepare for this. Secondly, the company wants to continue an expansion programme in the industry. Thirdly, an aspect which we do not want to see anywhere, certainly not in my area, is the run down of the growing labour force.
  Plywood is imported from Finland and some has come from the Soviet Union. Dealings in softwood have been extended to as many markets as possible, but the main import is from Sweden. We re-export the finished article, in the form of furniture to that country.
  By virtue of having within the furniture industry a fall-out from the main activity, there is a demand for new types of woodworking machinery to meet the need. The company in question feels that if this were to reach the global terms mentioned by the hon. Member for Worcestershire, South, not only would the field be limited to a relatively small firm in Stockport, but there could be an influence on the much greater engineering industry to meet the demands for this new industry at home.
  In a letter confirming a conversation of mine a few days ago, Peak Joinery states that:
  "Our aim was to be the fulfilment of two separate but interrelated two-year plans. The first was implemented on 1st June, 1967, with the intention of consolidating the home market to a turnover of £750,000 per annum. Subject to the success of stage 1, the second plan is the exploitation of the export potential in Sweden, West Germany and the United States of America".
  That is no mean effort. It is up to the House and the Government to ensure
  1628
  that firms like this shape themselves in future in these terms. In no circumstances should we in any way hinder them.
  "Wih regard to exports"—
  writes the company—
  "our plan was to commence on 1st June, 1969, but due to the success of stage 1, we have already been able to undertake preliminary negotiations for an agency in Sweden and anticipate the contract, worth a minimum of £50,000 per annum, which will be completed in the next three weeks. This contract has taken six months of protracted negotiations and cost approximately £2,000 of our resources."
  The firm points out that it is preparing to sell its product on the basis of an expanding operation to meet the autumn and winter mail order trade in the United States.
  In referring to what is done in West Germany, Peak Joinery states that:
  "Our preliminary market researches show that in two years from June, 1969, we could reasonably expect to build up level to 1 million per annum by opening 10 branches in strategically placed cities."
  I could continue quoting from the letter to show how the exercise of this firm will be hampered by the restrictions to be imposed under the Bill. The company tells me that there will be cancellation of export projects for at least 12 months and a reduction of output for the home market in 1967–68.
  Mr. Harold Lever: I should like to be able to reply to my hon. Friend's satisfaction. Do I understand the letter to mean that those export projects will be frustrated because of the import deposits which the firm will have to pay on the materials to be processed for re-export? If that is the fact, I remind the hon. Member that the Government have put down a later Amendment to deal with precisely this problem. To the extent that my hon. Friend is addressing himself to that matter, perhaps he would like to contribute to the later debate upon it.
  Mr. Gregory: My hon. Friend is very helpful. The company will be pleased to know what he has said and I will not. therefore, develop that part of the argument at too great length.
  On the direct usage side, the company's concern was that in having to pay out so much money, it did not want to make a practice of borrowing from the bank for support in whatever was demanded by the new system of payments. This it has not done so far.

  1629
  The company expects a reduction in its labour force of from 160 to 100 employees, and the cancellation of plant and machinery investment for 1968–69 will represent a loss of engineering investment in terms of 25,000 men. This would be tragic.
  In view of what my hon. Friend the Financial Secretary has said, and in view of the time factor in dealing with so large a group of Amendments, I merely express the hope that the Government will give special consideration to the position as it affects plywoods and laminated woods, bearing in mind the global argument but remembering also that in some areas a new export trade is emerging and is producing a new line of products. The company could certainly he hampered in what it wants to do.
  Mr. James Allason: I wish to support the important case made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro.) and, perhaps, to take it a little further. My four Amendments would extend the area in Chapter 44.15 which my hon. Friend has discussed.
  It must be realised that other timber imports should be considered, and I suggest that they should be considered against the background that certain wood is exempt, as explained by my hon. Friend. I am speaking of wood not planed or further manufactured. We ought to remember the test which the Government apply to this, for these are materials which have gone through some elementary process. It is a very great pity that there is no Minister here at the moment from the Board of Trade, because while I have deep respect for the Financial Secretary to the Treasury, nevertheless, it is in the Board of Trade that they have knowledge of just how much manufacturing does take place in these wood products.
  8.30 p.m.
  I will deal with Amendment No. 60 about tool broom and brush handles. There is in the Board of Trade a sample of a brush handle such as is imported by a firm in my constituency, William Turner and Co., manufacturers of industrial wire brushes. I am very glad to see that a Minister from the Board of Trade has now arrived, just in the nick of time.
  1630
  These brush handles are pieces of wood only very roughly shaped, but are, nevertheless, essential raw materials for the brush industry. They have in the past been manufactured in the United Kingdom, but they are difficult to obtain now. One firm has gone out of production, and the other firm making them is finding such extreme difficulty in producing them that it recently doubled its prices and has had to quote two to three months delivery, which is pretty unsatisfactory for the delivery of raw materials to any industry. Now, that firm has found a source in Denmark, and that source will be supplying at 60 per cent. of the price which would have had to be paid in Britain, but now the firm finds that items which it receives will be subject to the import deposit scheme.
  That firm, as a small firm, will be up against the whole difficulty of finding finance to meet the scheme. I want to deal later with the general point about the implications of the scheme for small businesses, but in general terms I suggest that something which is only very slightly manufactured should be exempt from the scheme.
  I turn to Amendment No. 88 which deals with planed or jointed hardwood or softwood. A great deal of this is under Canadian lumber standards and is timber which is slightly manufactured and is used for industrialised building. At least, that is one of its main uses, but that is not exclusively its use. It is cheaper than sawn timber because it is further shaped than ordinary sawn timber which my hon. Friend was describing, and so has lost a lot of its bulk and therefore is cheaper in freight. The other reason why it is cheaper is that the waste material from it is of value and is used elsewhere. So here we have timber which really ought to be exempt as well.
  There is a new form of timber which is finger jointed goods. This is a method of joining short lengths of timber together in order to make longer lengths. This saves importing long lengths and then chopping them down to the size required and so wasting a considerable amount, and, because of this saving, it is economical, and, therefore, of value to this country. Otherwise, it has no advantage over the comparable solid length. I suggest it ought to be treated in the same way as sawn timber.

  1631
  Amendment No. 89 deals with veneer sheets. My hon. Friend the Member for Maidstone (Mr. John Wells) tells me he wishes to speak on that and therefore I will leave it.
  Mr. John Wells: No. Go on.
  Mr. Allason: The simple case is that veneer, as described by my hon. Friend the Member for Worcestershire, South, is just sliced from the solid sawn timber, but it is still timber and barely manufactured at all, and in those circumstances it would be much more sensible to treat it as sawn timber.
  Amendment No. 90 deals with particle board. Here, there are some very substantial imports. This year 200,000 tons will be coming in to the value of from £9 million to £10 million. This is used for the building and construction industry, for the furniture industry and for the caravan building industry. There is no effective replacement for the furniture industry, and for the other industries the alternative is more expensive or imported substitutes. The home production of roughly 40 per cent. of requirements is fully committed at the moment and for the first part of 1969. It is quite clear that this is a raw material needed by industry, and I hope therefore that that too may be exempt.
  I am still trying to clear my mind as to the main purpose of the scheme. Is it to discourage unnecessary imports? I think this is so. The Financial Secretary spoke as if the mopping up pools of liquidity was the main purpose of the scheme, but this cannot be so. If he wanted to mop up pools of liquidity he could do so by much simpler means than by this elaborate process of involving firms which want to import in the immense intricacies of depositing money and trying to borrow it from somewhere.
  The small businessmen will not be able to get the necessary loans, and I fear that a large number will have to close shop for lack of raw materials. The Government say that they will keep this under review; so that, presumably, when small businesses close and unemployment is created, they will start to do something about it. Surely the time to do something about it is before that happens. I suggest that the view of the Board of Trade that anything handled and pro-
  1632
  cessed, other than where there has been a very elementary process, ceases to be a raw material, is now out-of-date. Raw materials for industry are sometimes quite sophisticated, and the Board of Trade ought to know this. Where a good case is made for exemption, surely it is better to err on the side of generosity and grant the exemption than to go the other way.
  We must remember that when many small businesses have been ruined, the goods which they made in the past will still be in demand, and there will be only one source of supply, from overseas. There will then be a greater demand for imports than if the scheme had never been introduced. Therefore, let us exempt the raw materials of industry rather than run the risk of having to import finished goods. I appeal to the Government to think again.
  Mr. Arthur Blenkinsop: I intervene briefly more for information than for anything else. I have had constituency representations on this matter, many of which have already been met by the Government, but I am still concerned about some elements.
  If the deposit scheme resulted in the greater development of our own plywood-making industry, I would welcome it, but, as I understand it, this represents only a minute proportion of the total user and, certainly for any immediate purposes, this is out of the question. The industry is already more than fully booked for its existing capacity. The main demand in my area is undoubtedly in the shipyards. As I understand it, the point has been met already, but I would be grateful if my hon. Friend could confirm that that is the case. I think it is true that supplies for shipyards will be met by special exemption and that provision is made for exports and re-exports, though whether it will prove adequate no doubt will be argued later.
  There remains the problem of supplies for housing, furniture and all the provisions for housing. Firms who have been in touch with me are concerned that this might lead to considerable shortages of plywood and, as a result, to real difficulties in our housing programme. Naturally, that is a matter which is of considerable concern to me.
  Not only is there the possibility of increased costs but one of shortage of

  1633
  supplies. I would like my hon. Friend to say whether he can assure us, first, about supplies for shipyards and, second, about the fear of a shortage in such an important area of activity as housing.
  Mr. John Wells: I am glad to have the opportunity of following the hon. Member for South Shields (Mr. Blenkinson) in his remarks about shipyards. For a moment, I want to direct attention to Amendment No. 89, because the timber, veneers and plywoods referred to in it are the kind used frequently in smaller boatyards. Will the exemptions outlined in Schedule 2 apply to boatyards as well as to shipyards, and will they enable ship builders to use timber, not as the actual equipment on a vessel, but as part of the equipment for mending and repairing? I raised the specific point with the hon. Gentleman a few days ago when we discussed the Ways and Means Resolution. I would be glad for a clear answer to the point, either now or when we discuss the later Amendments.
  Turning from that point to Amendments Nos. 128 and 132, these are designed to exempt from this impost boxes primarily used by horticulturists and food processors and manufacturers as containers. Kipper curers and many other manufacturers and vendors of foodstuffs pack their products in boxes. Generally speaking, fish boxes have a life several times round, being transported from ports to the fish markets and back again to the ports. However, orchard boxes lie out of doors for longer periods than any other type of food box. Almost inevitably, they have a shorter life and have to be replaced more frequently. I am aware of the trend away from wooden orchard boxes to non-returnable boxes made of cardboard, but the fact remains that wooden boxes are still widely used, not only in apple orchards but in other orchards in the West of England and elsewhere. For that reason, I am glad that the debate on this group of Amendments was initiated by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), because it brings to light what is a genuine nation-wide horticultural problem.
  The Financial Secretary gave some very unsatisfactory answers about the lowly mushroom compared with the arrogant caviar. When we come to the containers for these more humble English
  1634
  foodstuffs, particularly bearing in mind the popularity of English apples in this House, I hope that he will be able to give a satisfactory reply. The Government have given way on absolutely nothing so far. This will cost them very little, but it will do a great deal to improve the position of the British horticulturist. I hope, therefore, that we will at last have some enlightenment.
  8.45 p.m.
  Mr. W. H. K. Baker: I wish to address my remarks to Amendment No. 127, standing in my name. As the Financial Secretary knows, I have written to him on this subject. I therefore await his reply with a great deal of interest, if not a good deal of anxiety, as I will endeavour to show.
  The operative industry which I had in mind in tabling this Amendment was the whisky distilling industry in Scotland which has a tremendous revenue producing potential both in the home market and in exports.
  Sir G. Nabarro: Over £100 million a year.
  Mr. Baker: As my hon. Friend rightly points out, more than £100 million a year.
  Sir G. Nabarro: That is exports.
  Mr. Baker: Exports, yes. The raw material—because I maintain that the commodity I am about to remark upon is a raw material and, therefore, should be exempt under the scheme—comes from the United States. Apparently there is a law in the United States forbidding the use of a whisky cask more than once. I do not pretend to know the reason. The cask is made of very close-grained oak. We cannot grow oak of a sufficient texture for that purpose. When a cask has been used, it must, by United States law, be broken down. It is then packaged up and becomes known as a shook. In barrel form a shook is 40 gallons capacity.
  The coopers in the United Kingdom and notably, but not exclusively, in Scotland, make up these shooks into 50 gallon hogsheads. Experience has taught the distillers that whisky is best matured for varying periods, depending on the distiller, in a 50-gallon cask, because that gives the best surface area per gallon,

  1635
  and by that method we get the famous Scottish whisky.
  Shooks need headings. Under Chapter 44.01 to 44.12, wood, not planed or further manufactured, is exempt from the import deposit. We can have as many headings to complete a cask as we like, but we cannot make a whisky cask exclusively out of headings. Therefore, we have an anomaly. If we want to mature our whisky, we have the headings, the top and the bottom of the barrel, but nothing to go between them under the terms of the Bill.
  Independent coopers, of whom, unfortunately, there are a declining number, are finding that their volume of business from the repairing of casks is declining as fast, if not faster, than their business itself. The reason is that blenders and the large distilling companies are employing their own coopers to do the repair jobs on the casks.
  Last week a cooper in my constituency received the following letter from his importing agent in Glasgow:
  "As you will appreciate this"—
  that is, the import deposit—
  "will result in our having to deposit with the Customs Authorities large sums of money, consequently it will be impossible for us to pay these deposits in advance of receiving your remittance."—
  this is the important point—
  "In the circumstances we suggest that the best system which could be adopted is that we will telephone you immediately the amount of Import Deposit required has been calculated, and that you will, by that day's mail, forward to us a cheque in payment of same."
  That is a tall order for a small firm. The amount of capital tied up in a cooperage is not enormous. There is not very much machinery. The work is done by extremely skilled men, and their cash liquidity, if I may use that expression, though it probably offends some of the financial pundits on this side of the Committee, and no doubt on that side, too, is not great, and they cannot, on the receipt of a telephone call, raise the sums of money which are required for the import deposit. We know the stringency of bank lending, on the instructions of the Government. We know how difficult it is for people to raise money in a hurry. That is the basis of the problem.
  1636
  There are three small cooperages, among many others, which work in my constituency as a consortium. They import more than 100,000 shooks per year. They are worth about £120,000, and thus at one time they will find themselves having to lay out £60,000 over 180 days.
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Baker: The Financial Secretary shakes his head.
  Mr. Lever: Half the amount quoted by the hon. Gentleman. Does he wish me to explain?
  Mr. Baker: I agree it should be half the amount I quoted originally.
  If no home grown timber is available, what are the alternatives? Either the coopers have to go out of business, or we have to get some kind of redress for them, and that is why I hope the Government will accept the Amendment. Surely it is contrary to the Government's intentions and policy to affect the export market in any way? This proposal is bound to affect the export of whisky from Scotland to the rest of the world.
  The three firms which I have mentioned employ between them about 90 men. They are all, or nearly all, skilled coopers. These three small firms reckon that unless we can get an alleviation for them, 60 per cent. or 70 per cent. of their staff will quite shortly become redundant. I admit that those are small figures in terms of cash, and in terms of manpower, when considered in the wider national context, but they are extremely important for a small country area which I have the honour to represent.
  This morning I received a letter from the managing director of one of these small firms. He said:
  "… to offset the disastrous impact of this new charge we will be faced with the necessity of cutting down our labour force by 60 to 70 per cent., thereby making it almost impossible to carry on production at all, and certainly impossible to meet our customers' demands for delivery within a specified time."
  I therefore hope that the Government will see fit to include shooks for exemption under the terms of the Bill.
  Sir Eric Errington: I wish to refer to Amendment No. 113, which deals with things known as ebauchons, pieces of briar root which

  1637
  have been cleaned, boiled, partly dried and sawn into convenient shapes and sizes for transportation. The sole reason for boiling and drying them is to prevent rotting during such transportation. It is my contention that it cannot be maintained that these ebauchons are other than raw materials which have not been manufactured in any way. For this reason they should be excluded from the ambit of the Bill.
  It might have been said that ebauchons could be properly classified under the Customs tariff 1959 heading 44.04, wood that is roughly squared or half squared but not further manufactured. They are in the Customs tariff 98.11B,
  "Briar root blocks, roughly shaped by sawing but not further manufactured."
  The peculiar feature of 98.11 is that it deals mostly with smoking requisites including pipes, pipe bowls, cigar and cigarette holders. It would seem, therefore, that this is not in the right place. One of the peculiar features of this entry in the Customs tariff is that under the heading "rate of duty",
  "briar root blocks, roughly shaped by sawing but not further manufactured"
  —that is, ebauchons—are free so far as full rate of duty, and Commonwealth preference and E.F.T.A., are concerned. All the other things mentioned in the tariff list have a substantial percentage of the full rate of tariff.
  Small firms are concerned in this trade, and one is in my constituency. Proportionately, they have a high rate of exports. I am not founding my justification for this Amendment on the high rate of export, but purely on the fact that this is a non-manufactured article which, in my constituency and other places, is manufactured into briar pipes.
  In view of what the Customs tariff of 1959 says, that it is free in regard to all these matters, it must have been left out in error. There is nothing between 92.12 and Chapter 99, all headings. This seems to be a mistake. Whether it is or not, there is full justification for saying that this is not a manufactured article, but a raw material. This firm, my constituents, for whom I am speaking, feels strongly that it will do them great financial harm if full exemption is not granted. I hope the Minister will say something to ease their minds.
  [Mr. HARRY GOURLAY in the Chair]
  9.0 p.m.
  Mr. Frederick Sylvester: My hon. Friend the Member for Aldershot (Sir E. Errington) has mentioned most of the points which I wish to make about briarwood, but there are some others of importance with regard to Amendment No. 113. Following their own logic, the Government are obliged to accept the Amendment and I am confident that they will do so.
  My hon. Friend described how this material is provided, and there can be no serious doubt that the form in which it reaches this country is not manufactured in any material way. It serves as a raw material. During the war, we tried to make pipes from other materials, but I am sure that the Prime Minister would agree that there are very few things that serve so satisfactorily as briar-wood. Beech was used, with unfortunate results.
  Briarwood is indispensable to the industry. It is available only from Mediterranean areas, so there is no question of trying to promote the development of a British source of supply. In these circumstances, the Government must recognise that it is a raw material. It comes in in the only suitable form and is used solely as a base for manufacture. It is not replaceable from any British source and therefore qualifies, on any ground which they could name, as a raw material. I hope that the Minister, in return for my being so brief, will give an even briefer answer and accept the Amendment.
  Mr. John Biffen: This debate has taken on an exotic flavour, with discussions of shooks and ebauchons. I wish to speak more in support of Amendment No. 118, so forcefully moved by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro).
  In the narrow context of this series of commodities, my hon. Friend highlighted the many disadvantages of the Bill. The first is the immense difficulty, once we have a policy of selectively seeking to identify what we believe to be raw materials or otherwise. The argument that a certain amount of processing of timber is permitted, but that beyond that point it ceases to be raw material and

  1639
  becomes a manufactured product, clearly indicates that the Government recognise that at some point they must make a distinction and that at some point there is a degree of arbitrariness. A very substantial case has been made that the line should be drawn other than where it is now proposed to draw it.
  Although I said that I would not follow the arguments of my hon. Friends the Members for Aldershot (Sir E. Errington) and Walthamstow, West (Mr. Sylvester), I must point out that the case made in respect of Amendment No. 113 seems overwhelmingly powerful. I hope that at least in respect of that Amendment there will be an indication of sympathy and flexibility on the part of the Treasury Bench.
  What worries me is that hon. Members are still discussing this legislation as though it had some capability of import substitution. The hon. Member for South Shields (Mr. Blenkinsop) commented on the difficulty which he foresaw in any import substitution taking place, although he conceded that this could be desirable. It seems to me that it is fallacious to think that there will be any degree of import substitution in a situation in which, on the figures given by my hon. Friend the Member for Worcestershire, South, the cost of the imported product would rise by 2½ per cent. to 3 per cent. and in which, on the Government's professed intention, this is to be a temporary Measure.
  It seems to me that in this situation we are driven to the conclusion—and here I beg to differ slightly from my hon. Friend the Member for Hemel Hempstead (Mr. Allason)—that this is primarily a piece of credit-squeezing legislation which is much more likely to be effective in that context than in any inducement to import substitution.
  Speaking to Amendment No. 118, I am concerned about the effect which the Bill will have on the building and construction industry, because I believe that one of two things will follow: either there will be a diminution in building and constructional activity because of the credit restrictions which will be felt by those intimately concerned with importing those products which are essential to the building and construction industry; or, alter-
  1640
  natively, there will be an increase in building and construction costs. The latter is a prospect which should be particularly daunting within the shadow of the White Paper just issued on local government finance, because any doubt about the very effective squeeze which will be operated in that part of local authority administration concerned with building and construction must have been speedily removed by the publication of that Paper.
  It would be a gesture of some generosity if the Financial Secretary were to accept the Amendment of my hon. Friend the Member for Worcestershire, South and if the Treasury Bench were to show a blinding spasm of good sense and good nature—because I am certain that his own generous and charitable inclinations would lead the Financial Secretary to accept that Amendment and I hope that he will disregard any official advice which he may have had to the contrary.
  Mr. Harold Lever: We have had a wide-ranging and, as I have said previously, closely-argued debate because those who have spoken obviously have close knowledge of their industries. Before dealing with detailed points, perhaps I may be permitted, even at the risk of repetitiveness, to set my remarks in context, because the matter has come up again, although it has been raised before.
  The two purposes in the light of which the Amendments must be seen are, firstly, to bring marginal pressure towards economising on certain imports—and to this end we cover a range of nearly £3,000 million—and, secondly, to bring selective pressure on liquidity by reason of immobilising deposits, month by month, to about £600 million, unless the rate is reduced or further exemptions granted.
  In the light of that—and I do not accept "either/or"—hon. Members opposite seem to be divided into two schools of thought. The first is the school which believes that the mopping-up of liquidity is a characteristic Government chatter, not seriously intended. The second school includes those who believe that it is the heart of the scheme. But both these factors apply—pressure to economise in stock management but not to bar the imports or impose a tariff on them, and the pressure on liquidity which will automatically arise as these deposits mount up. Bearing in mind the second

  1641
  purpose, that of the pressure on liquidity, hon. Members must appreciate that the Government, in taking power to amend the exemption list—to add exemptions or to lower the rate in what is a scheme temporary in intent, in function in relation to the Government's general strategy and in the wording of the legislation—have as their objective to act swiftly and usefully to get the balance of payments more rapidly into surplus.
  In this connection, it becomes important that we do not start the scheme too weakly, because we have no power in the Bill to strengthen it, nor would it be desirable to strengthen it, as we go along. We need to start with a reasonable impact, and we then have power to weaken that impact provided that there is no disruption of a serious kind.
  Hon. Members say that the time to act is before firms are ruined. I agree, and we have power to do so. We shall keep a close and continuous watch in consultation with the Board of Trade and all other interested Departments. We will be in touch and will watch the situation very closely. The powers are not taken for academic reasons or to evade the necessity for adjustment. They are taken for the vital reason that we can make appropriate adjustments, either in volume of the liquidity pressure as a whole by exemption additions or by lowering the rates in some categories and exempting others. That will depend upon the working of the scheme and how the export-import balance moves under its impact, which we believe will be fairly immediate.
  I repeat that I agree that there is no overwhelming logical policy to exempt one article rather than another at particular points. There is a general scheme, which we have outlined more than once, upon which the Government are acting. Conditioning that general scheme is not some absolute theological tying-down to first principles, but an attempt to apply reasonable selectivity in a non-protective way but always bearing in mind that we have to have an aggregate total of nonexempt goods approaching £3,000 million.
  Having conceded that, I still say that there are differences once one has the broad guide of basic materials not subjected to a significant amount of processing and others. I stress the practical
  1642
  consequences to be evaluated as the scheme is in operation rather than the perhaps impossible task at present to prove that one article rather than another should be subjected to the scheme because it has been subjected to more rather than less processing. On the other hand, as a broad guide it is not without its uses.
  9.15 p.m.
  The hon. Member for Worcestershire, South (Sir G. Nabarro) has quoted the very large figures of timber that would be affected. A very serious hole would be driven in the scheme as a whole if we were to exempt plywood and other timbers on the scale suggested in the Amendments. I therefore regret to say that it would need an overwhelming case for me to feel favourably inclined towards accepting the plywood exemption, particularly at this stage, before we have had an opportunity of seeing what the consequences are.
  Let us deal with some of the consequences, about which a very real natural and justifiable anxiety is felt by hon. Members on both sides. The first question is: what about the exports that figured in the arguments advanced by the hon. Member for Worcestershire, South and my hon. Friend the Member for Stockport, North (Mr. Gregory). I hope that, with the leave of the Committee, I can defer argument on this until we come to my Amendment dealing with exports. It is sufficient now for me to say that I believe that that Amendment, when it is proper to consider it, will reveal to the Committee that we have done everything humanly possible to relieve our export trade from the burden of import deposits.
  Sir G. Nabarro: If the importer of the plywood were selling the material wholly and directly to an exporter who was to use it the later Amendment would be satisfactory, but the fact is that millions and millions of pounds worth of this plywood is brought in by timber importers who do not know what the ultimate user and destination of the plywood will be. Probably two-thirds or three-quarters is used in the home market, and therefore would not qualify under the later Amendment, and possibly one-third or one-quarter might find its way into exports at some future indeterminate date. So the

  1643
  whole situation is hypothetical at the moment when the plywood is imported. That is why I say to the Financial Secretary that the later Amendment cannot meet this conundrum.
  Mr. Lever: I do not want to be guilty of dealing with the later Amendment in advance. It has, however, I would respectfully submit, some relevance. I take the hon. Gentleman's point. In deciding whet her or not he presses his Amendment to include plywood the hon. Gentleman might be influenced by the extent of the concession on export goods, and I will try to give him, as far as I properly can, a word or two on the subject.
  When merchants bring in the plywood the rule will still apply if they satisfy the Customs of the percentage of it which is to go to exports. I do not suggest that the Customs will be able to follow every yard of the plywood or ought to try to follow every yard of the plywood. I remember as a lad reading a popular book of that day about the adventures of a 3-guinea watch: we do not want a similar tale of ten square yards of plywood which someone follows to their ultimate and, perhaps, romantic destination in another country. The Customs will deal with the matter with a very broad brush as far as they lawfully can. They are there to help, and with any reasonable evidence as to the ultimate destination coming from the merchant they will be ready to be satisfied and exempt the plywood.
  I do not want to go into more detail, but at least what I have said meets some of the hon. Gentleman's interests and certainly those of my hon. Friend the Member for Stockport, North. It is not beyond the wit of merchants to give evidence of a satisfactory character to the receptive ear of the Customs, who are certainly instructed, and who are certainly anxious, to ensure that as far as they possibly can help they will help to avoid a penny piece of this import deposit falling on exports. I do not say that they should be able to trace every last penny piece, and nor do we want to create waste of time administratively, but there is good sense in the Customs on this matter and a great deal of experience. However, I will enlarge on that more fully when the Amendment itself arises for discussion. I hope that I have satisfied hon. Members
  1644
  that a very liberal Amendment is on its way and, of course, the faster we can get through our work, the sooner we shall come to that enjoyable aspect of the debate when we shall be examining export protection.
  The hon. Member for Hemel Hempstead (Mr. Allason) asked about broom handles. I am afraid that they cannot with any logic be exempt at this stage, although that is not to say that they will not be candidates, like other candidates, for exemption later. He was anxious about mopping up pools of liquidity. I have already dealt with that. It may be a somewhat outlandish and somewhat eccentric and bizarre occupation for the Government to engage in, but I assure him that they are so engaged in it and he may be consoled as to the seriousness of the purpose and possibly the usefulness of the purpose by his hon. Friend the Member for Oswestry (Mr. Biffen), who believes it to be a matter of major importance in the scheme.
  I do not want to go into great detail, but I must say that the case for Amendments Nos. 88 and 89 was one of the strongest which I have heard today. Whereas it would be inconsistent with the principle which I have put before the Committee and which I hope has been sympathetically received, to accept these Amendments until we have had a little more experience of the working of the scheme, I must say—and I do not mind if this is used against me—that there is certainly a case which is worth considering and it will be among those which will get prior examination when we come to operate in the light of practice, if the House sees fit to give the Bill a Third Reading.
  The hon. Member for Aldershot (Sir E. Errington) and the hon. Member for Walthamstow, West (Mr. Silvester) put their case for briar root very forcibly and ably and were it not for the fact that I think that it is a sounder principle not to rely entirely on abstract argument but to have a look a little longer at the operation of the scheme, I would have said that there was a great deal of force in their argument.
  Sir E. Errington: Will the hon. Gentleman deal with what seems to me to be an error? In the Customs tariff for 1959, briar root is free of all rates of duty,

  1645
  and if the Amendment is not accepted the Bill will seem to slap on a duty which was not previously payable.
  Mr. Lever: I am grateful to the hon. Gentleman, because that reinforces our point that this is not a duty in the sense that a tariff is. We would not think of putting a Customs duty on briar root—in fact. we have taken it off—but that does not mean that it should not bear this import deposit which has functions other than that of a duty, which is normally protective in character. It was not a mistake which lead to its being there. I accept that the hon. Gentleman has made a case which will require to be considered at an early date and, while I do not want to raise any false hopes, I can assure him that it will be one of the cases which I shall recommend for consideration with high speed as soon as we get the Third Reading of the Bill.
  Sir K. Joseph: This is such a small commodity with such a minimal impact on the Government's strategy. Will not the hon. Gentleman go so far as to make an exception for this undoubted raw material and let us have one Amendment?
  Mr. Lever: I do not wish to seem obdurate or unfeeling, and I hope that it was clear from my reaction to the hon. Gentleman that my motive was not lack of kindness but a feeling that it would be unwise in the Commitee stage to depart on an individual item. But I promised the hon. Gentleman that his argument had made an impact upon me, and, further, I promised that I shall not be slow to see that it is brought home to the appropriate quarters. That applies also to Amendments Nos. 88 and 89.
  Now, shipyards. Plywood for use in registered shipyards is exempt under Schedule 2, and perhaps we can look at that again. I see that there is a good deal of anxiety on the plywood front, as it were, about how far the scheme will affect the price of building. There will be a small effect on the price of plywood as of other articles affected by import deposits, but plywood is only one item in a building project and it need not necessarily represent more than a fraction of the cost of a building, save in the most unusual circumstances. Therefore, we are dealing here with a tiny fraction of a tiny fraction. One is not justified in being alarmed to an undue extent. I need
  1646
  hardly repeat my regret that this is necessary, but necessary it is in the circumstances of our export-import situation and for a short period of time.
  Now, boatyards. The answer will depend on the boatyard, the size of ship and the like, but small boats are unlikely to qualify under any plywood exemption. Again, the smaller the boat, the less the value of the plywood and the more miniscule the deposit effect on the cost of the boat.
  Certain specific problems have been raised such as that faced by coopers, to whom the hon. Member for Banff (Mr. W. H. K. Baker) referred. I sincerely sympathise particularly with smaller firms of this kind which are not accustomed to making detailed financial manipulations in the course of their business and are not endowed with large sums of liquid capital. I do not give them false reassurance, but I give them this advice. They ought to consult their bank manager. In certain cases he will at the early stages of the scheme be able to help them. In other cases he will be able to advise them where they can get the money. Perhaps I might repeat again what may not be understood by these firms, that they will be in a position to offer whoever lends them the money for the deposit a gilt-edged security of guaranteed six months' date. With a little friendly advice from their bank manager, lawyer, or whoever advises them, they ought to be able to raise the money so far as it is required beyond their liquid funds.
  I accept that this is an inconvenience. I greatly regret it. But the point here—I urge it upon the Committee—is that in imposing this inconvenience upon importers we are imposing the least inconvenience in any scheme intended to affect imports which we could bring in.
  I am willing to suffer all the points about the interesting anomaly as between mushroom spawn and caviare. I was not unimpressed by the case for mushroom spawn. Caviare, unhappily, is another matter. I cannot withdraw caviare from the list, even if I were so minded, as the Ways and Means Resolution has obviously been drawn by a Parliamentary draftsman addicted to it. It is not within the power of the Government now to withdraw caviare from the exemption list.
  9.30 p.m.
  Sir K. Joseph: These Amendments could hardly have demonstrated more clearly the large and small scale effects of the stroke of lightning which the Bill has imposed on all sizes and shapes of British industry.
  First, we have had demonstrated, as my hon. Friend the Member for Oswestry (Mr. Biffen) pointed out, the absurdities into which the Government are being led by trying to decide where a raw material ceases, because of the slightly less or slightly greater processing, to be a raw material. Then, when we have accepted that that absurdity runs through the Bill and the Schedule, we come to the severe impact on small scale industry illustrated by the admirable speeches of my hon. Friends the Members for Maidstone (Mr. John Wells), Aldershot (Sir E. Errington), Walthamstow, West (Mr. Silvester) and Banff (Mr. W. H. K. Baker).
  The speech of my hon. Friend the Member for Banff showed how severe the impact of the Bill can be in a firm devotedly and competently getting on with its business to the benefit of all concerned with it and of the country, suddenly to find the whole environment in which it works altered. I hope that my hon. Friend will advise the firm in his constituency to which he referred to seek financial advice urgently in the light of what the Financial Secretary said.
  I suppose that we have to express modified gratitude to the Financial Secretary for saying that he will look urgently at the formidable case made by my hon. Friends the Members for Maidstone, Aldershot, and Walthamstow, West for what cannot be anything but a raw
  material. I was glad that the hon. Gentleman expressed some sympathy with the case put forward by my hon. Friend the Member for Hemel Hempstead (Mr. Allason).
  At the other end of the scale of size, we come to the timber and plywood Amendment put so forcefully and clearly by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). Whether one considers the credit squeeze results or the import squeeze results of this Bill, one is bound to recognise, and the Government must recognise that the effect of the exclusion of plywood from the list of exemptions can only be to reduce the amount of house building and increase its cost. I should have thought that that was a result which the Government would wish to avoid, even if there were to be some inroads into the range of non-exempted goods.
  It is said that stocks of plywood in this country are low at the moment and that, therefore, unless the building and furniture industries are to suffer severely there will have to be considerable imports, which, if the money can be found for the deposit, are bound to increase the price of goods.
  We have had an excellent debate in which some of the absurdities of the Bill have been shown. I very much hope that, despite the sympathy of the Financial Secretary, my hon. Friends will support the Amendment by calling for a vote.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 144, Noes 213.

  Division No 24.]

  AYES

  [9.24 p.m.

  Alison, Michael (Barkston Ash)

  Burden, F. A.

  Elliott, R. W.(N 't'tle-upon-Tyne, N.)

  Atkins, Humphrey (M't'n & M'd'n)

  Campbell, B. (Oldham, W.)

  Emery, Peter

  Awdry, Daniel

  Campbell, Gordon (Moray & Nairn)

  Errington, Sir Eric

  Baker, W. H. K. (Banff)

  Carlisle, Mark

  Eyre, Reginald

  Beamish, Col. Sir Tufton

  Channon, H. P. G.

  Farr, John

  Bell, Ronald

  Clark, Henry

  Fletcher-Cooke, Charles

  Bennett, Dr. Reginald (Cos. & Fhm)

  Clegg, Walter

  Fortescue, Tim

  Bitten, John

  Cooke, Robert

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Blaker, Peter

  Costain, A. P.

  Giles, Rear-Adm. Morgan

  Boardman, Tom (Leicester, S. W.)

  Crowder, F. P.

  Gilmour, Ian (Norfolk, C.)

  Body, Richard

  Currie, G. B. H.

  Gilmour, Sir John (Fife, E.)

  Boyd-Carpenter, Rt. Hn. John

  Dalkeith, Earl of

  Glover, Sir Douglas

  Boyle, Rt. Hn. Sir Edward

  Davidson, James (Aberdeenshire, W.)

  Goodhart, Philip

  Braine, Bernard

  d'Avigdor-Goldsmid, Sir Henry

  Cower, Raymond

  Bromley-Davenport, Lt.-Col. Sir Walter

  Dean, Paul (Somerset, N.)

  Grant-Ferris, R.

  Bruce-Gardyne, J.

  Deedes, Rt. Hn. W. F. (Ashford)

  Gresham Cooke, R.

  Buchanan-Smith, Alick (Angus, N & M)

  Dodds-Parker, Douglas

  Grimond, Rt. Hn, J.

  Buck, Antony (Colchester)

  Drayson, G. B.

  Gurden, Harold

  Bullus, Sir Eric

  Eden, Sir John

  Hall, John (Wycombe)

  Hall-Davis, A. G. F.

  Maclean, Sir Fitzroy

  Russell, Sir Ronald

  Hamilton, Michael (Salisbury)

  McNair-Wilson, Patrick

  Scott, Nicholas

  Harrison, Brian (Maldon)

  Maginnis, John E.

  Shaw, Michael (Sc'b'gh & Whitby)

  Harrison, Col. Sir Harwood (Eye)

  Maude, Angus

  Silvester, Frederick

  Harvey, Sir Arthur Vere

  Maudling, Rt. Hn. Reginald

  Sinclair, Sir George

  Heseltine, Michael

  Mawby, Ray

  Smith, Dudley (W'wick & L'mington)

  Hiley, Joseph

  Maxwell-Hyslop, R. J.

  Smith, John (London & W'minster)

  Hill, J. E. B.

  Mills, Peter (Torrington)

  Speed, Keith

  Hirst, Geoffrey

  Mills, Stratton (Belfast, N.)

  Steel, David (Roxburgh)

  Holland, Philip

  Morgan, Geraint (Denbigh)

  Stoddart-Scott, Col. Sir M.

  Hordern, Peter

  Munro-Lucas-Tooth, Sir Hugh

  Summers, Sir Spencer

  Hunt, John

  Murton, Oscar

  Taylor, Sir Charles (Eastbourne)

  Hutchison, Michael Clark

  Nabarro, Sir Gerald

  Taylor, Frank, (Moss Side)

  Iremonger, T. L.

  Noble, Rt. Hn. Michael

  Temple, John M.

  Irvine, Bryant Godman (Rye)

  Onslow, Cranley

  Tilney, John

  Jenkin, Patrick (Woodford)

  Osborn, John (Hallam)

  Waddington, David

  Jennings, J. C. (Burton)

  Osborne, Sir Cyril (Louth)

  Wainwright, Richard (Colne Valley)

  Johnson Smith, C. (E. Grinstead)

  Page, Graham (Crosby)

  Weatherill, Bernard

  Jopling, Michael

  Peel, John

  Webster, David

  Joseph, Rt. Hn. Sir Keith

  Pink, R. Bonner

  Wells, John (Maidstone)

  Kaberry, Sir Donald

  Powell, Rt. Hn. J. Enoch

  Whitelaw, Rt. Hn. William

  Kerby, Capt. Henry

  Price, David (Eastleigh)

  Wiliams, Donald (Dudley)

  Kershaw, Anthony

  Pym, Francis

  Wills, Sir Gerald (Bridgwater)

  Kimball, Marcus

  Quennell, Miss J. M.

  Winstanley, Dr. M. P.

  King, Evelyn (Dorset, S.)

  Ramsden, Rt. Hn. James

  Wolrige-Gordon, Patrick

  Kirk, Peter

  Renton, Rt. Hn. Sir David

  Worsley, Marcus

  Knight, Mrs. Jill

  Rhys Williams, Sir Brandon

  Legge-Bourke, Sir Harry

  Rodgers, Sir John (Sevenoaks)

  TELLERS FOR THE AYES:

  Lloyd, Ian (P'tsm'th, Langstone)

  Rossi, Hugh (Hornsey)

  Mr. Jasper More and

  Lubbock, Eric

  Royle, Anthony

  Mr. Hector Monro.

  MacArthur, Ian

  NOES

  Albu, Austen

  Dewar, Donald

  Howarth, Robert (Bolton, E.)

  Allaun, Frank (Salford, E.)

  Diamond, Rt. Hn. John

  Howell, Denis (Small Heath)

  Alldritt, Walter

  Dickens, James

  Huckfield, Leslie

  Allen, Scholefield

  Dobson, Ray

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Anderson, Donald

  Doig, Peter

  Hughes, Hector (Aberdeen, N.)

  Archer, Peter

  Dunn, James A.

  Hughes, Roy (Newport)

  Ashley, Jack

  Eadie, Alex

  Hunter, Adam

  Ashton, Joe (Bassetlaw)

  Edelman, Maurice

  Hynd, John

  Atkins, Ronald (Preston, N.)

  Edwards, Robert (Bilston)

  Jackson, Peter M. (High Peak)

  Atkinson, Norman (Tottenham)

  Edwards, William (Merioneth)

  Janner, Sir Barnett

  Barnett, Joel

  Ellis, John

  Jay, Rt. Hn. Douglas

  Beaney, Alan

  Ennals, David

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Benn, Rt. Hn. Anthony Wedgwood

  Evans, Fred (Caerphilly)

  Jenkins, Hugh (Putney)

  Bidwell, Sydney

  Evans, Gwynfor (C'marthen)

  Johnson, James (K'ston-on-Hull, W.)

  Bishop, E. S.

  Evans, Ioan L. (Binn'h'm, Yardley)

  Jones, Dan (Burnley)

  Blackburn, F.

  Faulds, Andrew

  Jones, T. Alec (Rhondda, West)

  Blenkinsop, Arthur

  Fernyhough, E.

  Kenyon, Clifford

  Boardman, H. (Leigh)

  Finch, Harold

  Lawson, George

  Booth, Albert

  Fitch, Alan (Wigan)

  Leadbitter, Ted

  Braddock, Mrs. E. M.

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Ledger, Ron

  Brooks, Edwin

  Fletcher, Ted (Darlington)

  Lee, Rt. Hn. Jennie (Cannock)

  Broughton, Dr. A. D. D.

  Foley, Maurice

  Lee, John (Reading)

  Brown, Hugh D. (G'gow, Provan)

  Ford, Ben

  Lever, Harold (Cheatham)

  Brown, R. W. (Shoreditch & F'bury)

  Forrester, John

  Lewis, Arthur (W. Ham, N.)

  Buchanan, Richard (G'gow, Sp'burn)

  Fowler, Gerry

  Lewis, Ron (Carlisle)

  Butler, Herbert (Hackney, C.)

  Freeson, Reginald

  Lomas, Kenneth

  Butler, Mrs. Joyce (Wood Green)

  Galpern, Sir Myer

  Loughlin, Charles

  Callaghan, Rt. Hn. James

  Gardner, Tony

  Lyons, Edward (Bradford, E.)

  Cant, R. B.

  Garrett, W. E.

  McBride, Nell

  Carmichael, Neil

  Gordon Walker, Rt. Hn. P. C.

  Macdonald, A. H.

  Castle, Rt. Hn. Barbara

  Cray, Dr. Hugh (Yarmouth)

  McGuire, Michael

  Chapman, Donald

  Greenwood, Rt. Hn. Anthony

  Mackintosh, John P.

  Coe, Denis

  Grey, Charles (Durham)

  McMillan, Tom (Glasgow, C.)

  Coleman, Donald

  Griffiths, David (Rother Valley)

  MacPherson, Malcolm

  Corbet, Mrs. Freda

  Griffiths, Will (Exchange)

  Mahon, Peter (Preston, S.)

  Craddock, George (Bradford, S.)

  Hamilton, James (Bothwell)

  Mahon, Simon (Bootle)

  Cawshaw, Richard

  Hamilton, William (Fife, W.)

  Manuel, Archie

  Grossman, Rt. Hn. Richard

  Hamling, William

  Mapp, Charles

  Cullen, Mrs. Alice

  Hannan, William

  Marks, Kenneth

  Dalyell, Tam

  Harper, Joseph

  Mason, Rt. Hn. Roy

  Darling, Rt. Hn. George

  Harrison, Walter (Wakefield)

  Mendelson, John

  Davies, Ednyfed Hudson (Conway)

  Haseldine, Norman

  Mikardo, Ian

  Davies, G. Elfed (Rhondda, E.)

  Hazell, Bert

  Millan, Bruce

  Davies, Dr. Ernest (Stretford)

  Henig, Stanley

  Milne, Edward (Blyth)

  Davies, Harold (Leek)

  Herbison, Rt. Hn. Margaret

  Morgan, Elystan (Cardiganshire)

  Davies, Ifor (Gower)

  Hilton, W. S.

  Morris, Alfred (Wythenshawe)

  Davies, S. O. (Merthyr)

  Hobden, Dennis

  Morris, Charles R. (Openshaw)

  Delargy, Hugh

  Horner, John

  Morris, John (Aberavon)

  Dell, Edmund

  Houghton, Rt. Hn. Douglas

  Moyle, Roland

  Dempsey, James

  Neal, Harold

  1650

  1651

  Newens, Stan

  Robertson, John (Palsley)

  Tuck, Raphael

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Roebuck, Roy

  Urwin, T. W.

  O'Malley, Brian

  Rogers, George (Kensington, N.)

  Varley, Eric G.

  Orme, Stanley

  Rose, Paul

  Wainwright, Edwin (Dearne Valley)

  Owen, Dr. David (Plymouth, S'tn)

  Ross, Rt. Hn. William

  Wallace, George

  Padley, Walter

  Rowlands, E.

  Watkins, David (Consett)

  Page, Derek (King's Lynn)

  Shaw, Arnold (Ilford, S.)

  Watkins, Tudor (Brecon & Radnor)

  Paget, R. T.

  Sheldon, Robert

  Wellbeloved, James

  Palmer, Arthur

  Shore, Rt. Hn. Peter (Stepney)

  Wells, William (Walsall, N.)

  Park, Trevor

  Short, Mrs. Renée (W'hampten, N. E.)

  Whitlock, William

  Parker, John (Dagenham)

  Silkin, Rt. Hn. John (Deptford)

  Willey, Rt. Hn. Frederick

  Pavitt, Laurence

  Silverman, Julius

  Williams, Alan (Swansea, W.)

  Pearson, Arthur (Pontypridd)

  Slater, Joseph

  Williams, Clifford (Abertillery)

  Peart, Rt. Hn. Fred

  Small, William

  Williams, Mrs. Shirley (Hitchin)

  Pentland, Norman

  Snow, Julian

  Willis, Rt. Hn. George

  Perry, Ernest G. (Battersea, S.)

  Spriggs, Leslie

  Wilson, William (Coventry, S.)

  Perry, George H. (Nottingham, S.)

  Steele, Thomas (Dunbartonshire, W.)

  Woodburn, Rt. Hn. A.

  Prentice, Rt. Hn. R. E.

  Summerskill, Hn. Dr. Shirley

  Woof, Robert

  Price, William (Rugby)

  Swain, Thomas

  Randall, Harry

  Symonds, J. B.

  TELLERS FOR THE NOES:

  Rankin, John

  Taverne, Dick

  Dr. M. S. Miller and

  Roberts, Albert (Normanton)

  Tinn, James

  Mr. Ernest Armstrong.

  Roberts, Rt. Hn. Goronwy

  Tomney, Frank

  Mr. Charles Fletcher-Cooke: I beg to move Amendment No. 95, in page 7, line 13, at end insert:
  Printing paper within Chapter 48.
  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment we can also discuss Amendment No. 131, in page 7, line 13, at end insert:

  48.09

  …

  …

  Building board of wood pulp or of vegetable fibre, whether or not bonded with natural or artificial resins or with similar binders.

  9.45 p.m.
  Mr. Fletcher-Cooke: These two Amendments deal with paper, that is to say, one of the basic vehicles of knowledge, and we propose that printing paper within Chapter 48 should be excluded from the operation of the Bill.
  I would call the attention of the Committee to what is already excluded, which is easily visible on page 7 of the Bill, for the Schedule excludes
  "Paper-making materials (pulp and waste paper)"
  that is to say, the basic raw material of the communication of the written word, and also
  "Books, newspapers, maps, charts, manuscripts, typescripts, stamps, etc."
  which, I suppose, are the end products of the written word.
  Then it goes on, very mysteriously, to exclude a whole variety of types of the printed word, some of which, I should have thought, ought to have been caught. They are:
  "Trade advertising material … being material the primary purpose of which is to stimulate travel outside the United Kingdom.
  1652
  Trade advertising material within 49.11, being publications, illustrated or not, the primary purpose of which is to stimulate study or travel outside the United Kingdom … and less than full-size reproductions thereof … parts of books or booklets in the form of printed pictures or illustrations not bearing a text and less than full-size reproductions thereof … ".
  It is difficult to discover what is behind this. I assume that we have entered into an international undertaking by which we do not impose duty, if that be the word, on trade advertising material being publications whose primary purpose is to stimulate travel outside the United Kingdom. Unless we are obligated so to do, it seems incredible that we should exempt from a Bill designed to protect our balance of payments printed material designed to stimulate travel outside the United Kingdom.
  Will the Minister explain the exact terms of this supposed international obligation by which, in a Schedule more or less exclusively reserved to raw materials, there appears the extraordinary feature that printed booklets and brochures designed to induce our citizens to spend their holidays abroad can be imported without being subject to deposit. The situation is paradoxical. Will the Minister identify those obligations and their terms? Do they say that no duty or import duty or charge should be imposed?
  The use of those words would cast an interesting reflection upon the speech yesterday of the right hon. and learned Attorney-General. If all that those obligations say is that no duty or import duty or charge for Customs may be imposed, the Minister of State is a sufficiently good

  1653
  lawyer to realise that that casts an interesting and, maybe, sinister reflection upon the advice given yesterday to the Committee by the Attorney-General. Otherwise, the presence of this exception is ludicrous, to put it no higher.
  The purpose of Amendment No. 95 is this. If the raw materials of paper making under line 12 on page 7 are excluded, and if the finished product of paper, namely, books, newspapers, maps, charts, manuscripts, typescripts, stamps, etc. are excluded, it is quite inconsistent that the middle range, namely, printing paper, should attract the deposit.
  The former Chancellor of the Exchequer, now the Home Secretary, who conducted the 1964 surcharge Bill through the House of Commons will no doubt find echoes in this argument, since it was deployed by my right hon. Friend the Leader of the Opposition in those distant days in almost exactly the same words, namely, if one is excluding from the operation of the various barriers the raw materials of the printed word, and the printed word, it is absurd to exclude the intermediates, that is to say, printing paper within Chapter 48.
  That, quite briefly and, I hope, fairly cogently, is the case that I wish to advance on Amendment 95. We would like to include newsprint. I am not sure about the complexities of the various categorisations in the Her Majesty's Customs and Excise Tariff and the complications of Chapters 47, 48 and 49. But we have done it, and I am sure that the Minister will not take that point.
  As everyone knows, the newspaper industry is in financial difficulties. Importers of newsprint say that interest at 8 per cent. on the deposit will add 24s. to the price of one ton of newsprint. Added to other rises in costs, it will mean that newspapers will have to put up their prices, and we know that the growth of monopoly and the decrease in the number of newspapers available exercises public concern.
  I hope that the Minister will deal with the effect of the deposit upon newspapers and other media of public information and the dissemination of news. That increase in the price of a ton of newsprint strikes me as serious in the context of the newspaper industry at the present time.
  1654
  I come then to Amendment No. 131, which deals with building board of wood pulp or of vegetable fibre, whether or not bonded with natural or artificial resins or with similar binders. I should have thought that it is a raw material in every sense of the word. Fibre building board is reconstituted wood and is basically a raw material. Hardboard is used extensively by the construction industry for flush doors, kitchen fitments, renovations and maintenance work. The production of fibre building board in the United Kingdom is about 10 per cent. of our consumption and falls far short of requirements. If the Amendment is not accepted, the inevitable effect is that building costs will go up, and one socially undesirable feature at the moment is that building costs should increase.
  There, in a nutshell, is this group of Amendments—[An HON. MEMBER: "A nutshell?"] Yes, a nutshell. I think that I may say to the Home Secretary, who has seen this scenario through several times, that I have been relatively brief in moving these Amendments.
  In the history of this country there have never been taxes on knowledge to the extent that the Government have imposed by putting deposits, surcharges, and so on, on printing paper. This demand for an exception is quite outside the general run of arguments about polymers, billets, or whatever it may be. Material for the dissemination of the printed word should be exempt. The Government have recognised this by exempting end products, like books, newspapers, maps, charts, manuscripts, typescripts, and stamps, including these ridiculous brochures to entice our countrymen to take their holidays abroad. They also exempt paper-making materials, including pulp and waste paper. Yet they claw out the middle range of intermediates, and that takes some explanation from the Minister of State. I hope that he will give it to the Committee.
  Sir Harry Legge-Bourke: In the early hours of this morning I attempted to extract from the Minister of State some comment on the philosophy underlying these exemptions. He chose on that occasion to ignore anything that I said. I hope that tonight he will not do the same thing.
  Before proceeding further with these Amendments, I think that we ought to

  1655
  know what is in the Government's mind about the philosophy on which they are basing these exemptions. The difference between an absolute raw material and a partly finished material which is essential to a completed product, but which, partly completed, is useless for any other purpose, seems to be so fine that we can virtually lump the whole lot together as raw material.
  I do not know what else can be done with printing paper, except eventually to print upon it—[Interruption.] I suppose that a man could paper his house with it if he chose to do so, but I have a feeling that the general atmosphere would become a little monotonous as a result of that exercise.
  By looking at the original exemptions I have been endeavouring to discover the underlying philosophy in the Government's mind in making them. So far as I can see, it is basically, first, foodstuffs; secondly, works of art, such things as pearls and jewellery and matters of that kind; and, thirdly the necessary basic materials from which a manufacturer eventually produces something which can be sold by this country.
  I should think that printing paper naturally fell in the third category. I may conceivably have a remote interest in printing paper in that I am a director of a company which does a lot of offset lithographic printing. However, from this definition I am not sure whether this is so. It is not newsprint as we understand it that I am interested in, but other forms of paper on which printing takes place, so I declare an interest.
  I find it hard to understand why the Government should at one moment say that woven jute or one or two other substances which are already exempted in the Schedule should be exempt if they are not prepared to accept the Amendment.
  What disturbs me most is that information is already coming in on various fronts indicating that companies affected by this new legislation by having to put down deposits are already starting to put up prices to cover interest free loans being extracted from them by the Government for a period of six months. The Government will only have themselves to blame if our balance of payments
  1656
  situation is adversely affected, because they are making it more difficult for exporters to export the products which rely on partly finished materials coming in. If they impose this loan obligation—it is a loan, not a Customs duty; I shall never agree that it is other than a compulsory loan to the Government—they will only have themselves to blame if they further damage the economy of the country.
  Mr. R. T. Paget: I am much more concerned about the exclusions than the inclusions. Surely we have reached the point at which the idea that the Press conveys news is a delusion. People get their news from the B.B.C. and the television. They do not believe a word of the news they read in newspapers, because, quite rightly, they know that it is angled. What the Press conveys to them is sex, crime, scandal and Comment, and I do not see why those should not be taxed.
  10.0 p.m.
  Sir Douglas Glover: The hon. and learned Member for Northampton (Mr. Paget) is far too modest, because very often when I read my papers I note his comments, usually hostile to the Government of the day, and agree with every word he says. The Press has an enormous job to do in reporting comments of the so-called supporters of the Government. It helps the nation to form its conclusion about how the Government are running the country, and it would be deplorable if the hon. and learned Gentleman was not allowed to be so self-destructive to the Government whom he helped to put into office, much to his regret.
  What worries me about the Bill is that a good deal of the opposition has been hamstrung and spoiled by the original Ways and Means Resolution. There are some Members on this side of the Committee who, although they are critical of any interference with international trade, understand that when there is a crazy lunatic driving the car, and it is running downhill headlong into the sea, it is not a bad thing occasionally to put the brakes on.
  Under the Ways and Means Resolution, whereas the Government are bound to resist the Amendment to the hilt because it will reduce the amount of money which

  1657
  they will control as a result of the Bill, we on this side are inhibited from moving an Amendment to take out of the exemption list certain things which, if we are to have a Bill of this sort, are crazy.
  We are inhibiting learning, communication and study by a tax on newsprint and paper, but at the same time we have exempted the importation of caviare, and foie gras from Strasbourg. All the luxury foods are in some strange way now considered by the Labour Party to be the staple diet of the public, and every council house is now using these strange viands as the staple diet and no longer eating scrambled eggs and sauce for breakfast. Instead, there is a diet of caviare and foie gras.
  Mr. Houghton: The hon. Gentleman will realise that peanuts are also exempt.
  Sir D. Glover: The right hon. Gentleman knows that his comments and interjections in the House are always earthshaking, but he was standing on a bed of peanuts when he made his interjection—I am not usually unkind—and he fell flat on his back when he made. Peanuts are exempt, but are they an essential part of the diet of the nation?
  When I first got the Bill and looked through it, I thought that the list of exemptions was the list of the goods in respect o which the Government were going to insist on a deposit, because in the minds of the great mass of the British public half the items in the list are not essential. We are here dealing with an Amendment which seeks to remove an impost on something which it is in the national interest to import without any let or hindrance. Surely no democratic society thinks it is a good thing, despite what the hon. and learned Member for Northampton said about the B.B.C. being the only proper forum, to inhibit in any way the dissemination of news by the Press? I still think that the national local and weekly Press has an enormous rôle to carry out in this country. This Bill will inhibit the dissemination of knowledge, yet the same measure allows exemption; for luxury imports of so-called foods. This is supposed to be a Government which is looking after the interests of the people and not of the interests of those who are better off.
  I am not hostile to the Government trying to do something about our import
  1658
  bill and the situation which largely has been brought about by their mismanagement of the economy, but it has reached a stage at which urgent action is needed. As usual, and this has happened ever since 1964, they are doing it in the wrong way. They are trying to stop the import of vital machinery and putting an impost of 50 per cent. deposit on it while allowing luxury foods to be brought in although that is not what they intended.
  We cannot bring forward reasoned Amendments to provide a better balance because, if we did so, they would be out of order in view of the Ways and Means Resolution. The whole debate has been very frustrating because it is all one-sided. All that we can do is to bring forward Amendments to increase the list of exemptions; we cannot balance that by deleting items from the list. This has made for a sterile debate which is not helpful to the economy nor constructive from the point of view of the Government. The Government are to blame because of the way in which they introduced the Ways and Means Resolution.
  Mr. Taverne: I turn, first, to the point made by the hon. Member for Isle of Ely (Sir H. Legge-Bourke). I apologise for not answering it early this morning, but it related rather more to the Schedule than to the Amendment we were then discussing. It is a point which has been covered in discussion of earlier Amendments to the Schedule. Since I want to deal with it specifically, I will say briefly what the basic theme of the Schedule is.
  The Schedule is an attempt to reconcile two things which to some extent are in conflict. On the one hand, it is designed that this scheme should cause the minimum interference with commerce and industry. For this reason, certain particular categories of food, fuel and unmanufactured raw material have been totally exempted. On the other hand, it is also the desire of the scheme to cover as much of a group of products as possible and to reconcile these two objects, particular categories have been excluded.
  Because there is to some extent conflict and in our debates some hon. Members have successfully made a case for exemption of particular cases, I cannot pretend that there are not anomalies. There are

  1659
  bound to be anomalies just as there are when one draws up a list of Purchase Tax exemptions or a list of differential tariffs. There are anomalies but one has all the time to preserve the basic intention of the scheme and not to narrow the scope because the scheme is a measure of credit control concerning a large number of goods.
  The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) very forcefully exploited one of the obvious anomalies which appears in the scheme. Before dealing with that anomaly which relates to his first Amendment I shall briefly comment on his second Amendment. The same kind of considerations apply to the second as led us to reject other Amendments. Whatever the merits of an Amendment to exempt building board of wood pulp or vegetable fibre, these are processed goods, composed of wood pulp, fibre and other vegetable material reduced to a fibrous state and compressed into sheets. If this category were exempted it would clearly lead to claims for similar treatment of a wide variety of comparable articles of wood and paper which are subject to deposit, and the scope of the scheme would be much narrower.
  But I think that the hon. and learned Member recognised that the stronger case related to the anomaly which he mentioned on the first Amendment. The anomaly does not arise out of the exclusion from the Schedule of printed paper—out of what is not exempted—but, as he stressed, from what is exempted. Printed paper is a fully manufactured product and, if it were exempted, it would create a contrast with other manufactured products. He himself pointed out that books and other forms of printed and publication material are exempted under the Schedule, so the argument to which I must address myself is why books and these other publications are exempt.
  Books have always been treated in a somewhat special fashion. They were specially removed from the scope of Purchase Tax in a celebrated wartime debate. They are also the subject of a special international Convention. The hon. and learned Member asked whether I could refer to any such Convention, and I can. It is the same Convention which deals with the trade advertising material referred to. I cannot find that actual part of the Convention, but the operative part,
  1660
  which he wanted me to quote, is Article 1, which states:
  "The Contracting States undertake not to apply customs duties or other charges on, or in connexion with, the importation of … Books, publications and documents"
  which are listed, it says, in annex A of the Convention.
  So books have always been specially treated for tax purposes. Books are also the subject of an international U.N.E.S.C.O. Convention. We are not compelled by that Convention to exempt books in this scheme, but books were exempted under the surcharge arrangements four years ago, because there was an international obligation to do so. We are not compelled to exempt books, but we did decide, on balance, since they were specially treated in the way of Purchase Tax and were the subject of this Convention, to create what I accept is a totally anomalous position for them within this Schedule as a special exemption. With the same Convention applying to the other kind of material as well, it was decided that books and trade advertising material should be within the exemption.
  On the other question, the effect on newspapers, that is no different from the effect on anything else. The extra cost which will have to be borne will amount to the interest on the deposits which the newspaper companies will have to forgo or the amount which they will have to pay if they borrow the money. This will be about 2 or 2½ per cent. That is why books are within this exemption. However, since it is not open to us to alter the exemptions in the Schedule, and we must have regard to what it is now proposed to exempt, the same arguments advanced in the past apply also to this Amendment.
  10.15 p.m.
  Mr. Fletcher-Cooke: The Minister was obliged to say that he was not compelled to exclude what he has excluded in the Schedule, otherwise he would have cast great doubt on the advice given to the Committee yesterday by the Attorney-General. I understand why he used that form of words. But it is not persuasive to say that the Government would voluntarily have excluded from the import deposit advertising material from abroad
  "the primary purpose of which is to stimulate study or travel outside the United Kingdom".

  1661
  I do not believe that any Government would have excluded such material from this deposit unless they were obliged to do so, otherwise it is totally contrary to the purposes of the Bill. Of course, the Minister is obliged to do so by the international Convention which he cited, which says that Customs duties or other charges on imports are not to be levied on such material—and that completely conflicts with the advice given by the Attorney-General yesterday that the Bill does not impose Customs duties or other charges on imports. This is the litmus paper, acid test of the degree to which that advice is compellable and persuasive.
  We are not, however, dealing with that Amendment at the moment. We are dealing with whether exempting
  "paper-making materials (pulp and waste paper)"
  at the bottom of the scale, and exempting
  "books, newspapers, maps, charts, manuscripts and typescripts"
  not to mention material for
  "publications, illustrated or not, the primary purpose of which is to stimulate travel outside the United Kingdom"
  does not inevitably, in any proper balance of trade, involve the exemption of the intermediate printing paper—and of course it must. There is no logic in it if it does not.
  This is a totally different matter from the other brave attempts to include materials which may not be absolutely and totally raw, but which are, neverthe-
  less, intermediate raw materials. This is a tax on the written word and upon the dissemination of information. This is a tax which will raise the price of newsprint to newspapers by £24 a ton, a figure not denied by the Minister of State. It is, therefore, a tax which in the whole of the tradition of this country, even in wartime, as the Minister of State reminded us, we have rejected, and I do not see why we should now reverse that policy.
  The hon. and learned Member for Northampton (Mr. Paget) said that the Press is ghastly, that no one believes it any longer and that the radio, the spoken or oral word, is much more trustworthy than the printed word. We prefer to allow the Press and the people to judge whether that is right or wrong. But let there be no doubt about it. This is a tax on the Press, a tax on knowledge. The Minister's attempts to defend it were not up to his usual very high level. He has a very difficult brief. He has a compulsion in respect of books, newspapers and brochures inducing our people to travel abroad. At the other end of the scale he has to exempt paper-making material. To try to squeeze out from the middle printing material, printing newspaper and newsprint is more than even he can do. I therefore recommend to my right hon. and hon. Friends that we register our protest in the Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 129, Noes 187.

  Division No. 25.]

  AYES

  [10.20 p m.

  Alison, Michael (Barkston Ash)

  Davidson, James (Aberdeenshire, W.)

  Hill, J. E. B.

  Awdry, Daniel

  d'Avigdor-Goldsmid, Sir Henry

  Hirst, Geoffrey

  Baker, W. H. K. (Banff)

  Dean, Paul

  Holland, Philip

  Bennett, Dr. Reginald (Gos. & Fhm)

  Deedes, Rt. Hn. W. F. (Ashford)

  Hordern, Peter

  Bitten, John

  Drayson, G. B.

  Hunt, John

  Blaker, Peter

  Eden, Sir John

  Hutchison, Michael Clark

  Boardman, Tom (Leicester, S. W.)

  Emery Peter

  Iremonger, T. L.

  Body, Richard

  Errington, Sir Eric

  Irvine, Bryant Godman (Rye)

  Boyd-Carpenter, Rt. Hn. John

  Eyre, Reginald

  Jenkin, Patrick (Woodford)

  Boyle, Rt. Hn. Sir Edward

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Braise, Bernard

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Jopling, Michael

  Bruce-Gardyne, J.

  Giles, Rear-Adm. Morgan

  Joseph, Rt. Hn. Sir Keith

  Buchanan-Smith, Alick (Angus, N & M)

  Gilmour, Ian (Norfolk, C.)

  Kershaw, Anthony

  Buck, Antony (Colchester)

  Gilmour, Sir John (Fife, E.)

  Kimball, Marcus

  Burden, F. A.

  Glover, Sir Douglas

  King, Evelyn (Dorset, S.)

  Campbell, B. (Oldham, W.)

  Goodhart, Philip

  Kirk, Peter

  Carlisle, Mark

  Gower, Raymond

  Kitson, Timothy

  Channon, H. P. G.

  Grant-Ferris, R.

  Knight, Mrs. Jill

  Clark, Henry

  Gresham Cooke, R.

  Legge-Bourke, Sir Harry

  Clegg, Walter

  Gurden, Harold

  Lloyd, Ian (P'tsm'th, Langstone)

  Cooke, Robert

  Hall, John (Wycombe)

  Longden, Gilbert

  Costain, A. P.

  Hall-Davis, A. G. F.

  Lubbock, Eric

  Crowder, F. P.

  Harrison, Col. Sir Harwood (Eye)

  Mackenzie, Alasdair (Ross & Crom'ty)

  Currie, G. B. H.

  Harvey, Sir Arthur Vere

  Maclean, Sir Fitzroy

  Dalkeith, Earl of

  Hiley, Joseph

  McNair-Wilson, Patrick

  Maude, Angus

  Quennell, Miss J. M.

  Temple, John M.

  Maudling, Rt. Hn. Reginald

  Renton, Rt. Hn. Sir David

  Tilney, John

  Mawby, Ray

  Rhys Williams, Sir Brandon

  Turton, Rt. Hn. R. H.

  Maxwell-Hyslop, R. J.

  Rodgers, Sir John (Sevenoaks)

  Vickers, Dame Joan

  Mills, Peter (Torrington)

  Rossi, Hugh

  Waddington, David

  Mills, Stratton (Belfast, N.)

  Royle, Anthony

  Wainwright, Richard (Colne Valley)

  Monro, Hector

  Russell, Sir Ronald

  Weatherill, Bernard

  Morgan, Geraint (Denbigh)

  Scott, Nicholas

  Webster, David

  Munro-Lucas-Tooth, Sir Hugh

  Shaw, Michael (Sc'b'gh & Whitby)

  Wells, John (Maidstone)

  Murton, Oscar

  Silvester, Frederick

  Whitelaw, Rt. Hn. William

  Nabarro, Sir Gerald

  Sinclair, Sir George

  Williams, Donald (Dudley)

  Noble, Rt. Hn. Michael

  Smith, Dudley (W'wick & L'mington)

  Winstanley, Dr. M. P.

  Onslow, Cranley

  Smith, John (London & W'minster)

  Wolrige-Gordon, Patrick

  Osborn, John (Hallam)

  Speed, Keith

  Worsley, Marcus

  Page, Graham (Crosby)

  Steel, David (Roxburgh)

  Wright, Esmond

  Page, John (Harrow, W.)

  Stoddart-Scott, Col. Sir M.

  Pink, R. Bonner

  Summers, Sir Spencer

  TELLERS FOR THE AYES:

  Powell, Rt. Hn. J. Enoch

  Taylor, Sir Charles (Eastbourne)

  Mr. R. W. Elliott and

  Price, David (Eastleigh)

  Taylor, Frank (Moss Side)

  Mr. Jasper More.

  Pym, Francis

  NOES

  Albu, Austen

  Fernyhough, E.

  MacPherson, Malcolm

  Allaun, Frank (Salford, E.)

  Fitch, Alan (Wigan)

  Mahon, Peter (Preston, S.)

  Alldritt, Walter

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Mahon, Simon (Bootle)

  Allen, Scholefield

  Fletcher, Ted (Darlington)

  Manuel, Archie

  Anderson, Donald

  Foley, Maurice

  Mapp, Charles

  Archer, Peter

  Forrester, John

  Marks, Kenneth

  Ashley, Jack

  Fowler, Gerry

  Mason, Rt. Hn. Roy

  Ashton, Joe (Bassetlaw)

  Freeson, Reginald

  Mendelson, John

  Atkins, Ronald (Preston, N.)

  Galpern, Sir Myer

  Mikardo, Ian

  Atkinson, Norman (Tottenham)

  Gardner, Tony

  Millan, Bruce

  Barnett, Joel

  Garrett, W. E.

  Milne, Edward (Blyth)

  Beaney, Alan

  Gordon Walker, Rt. Hn. P. C.

  Morgan, Elystan (Cardiganshire)

  Benn, Rt. Hn. Anthony Wedgwood

  Gray, Dr. Hugh (Yarmouth)

  Morris, Alfred (Wythenshawe)

  Bidwell, Sydney

  Greenwood, Rt. Hn. Anthony

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Gregory, Arnold

  Morris, John (Aberavon)

  Blackburn, F.

  Grey, Charles (Durham)

  Moyle, Roland

  Blenkinsop, Arthur

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Booth, Albert

  Griffiths, Will (Exchange)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Boston, Terence

  Hamilton, James (Bothwell)

  O'Malley, Brian

  Braddock, Mrs. E. M.

  Hamilton, William (Fife, W.)

  Orme, Stanley

  Brooks, Edwin

  Hamling, William

  Owen, Dr. David (Plymouth, S'tn)

  Broughton, Dr. A. D. D.

  Hannan, William

  Page, Derek (King's Lynn)

  Brown, Hugh D. (G'gow, Provan)

  Harper, Joseph

  Paget, R. T.

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Brown, R. W. (Shoreditch & F'bury)

  Hart, Rt. Hn. Judith

  Park, Trevor

  Buchanan, Richard (G'gow, Sp'burn)

  Haseldine, Norman

  Parker, John (Dagenham)

  Butler, Herbert (Hackney, C.)

  Hazell, Bert

  Pearson, Arthur (Pontypridd)

  Butler, Mrs. Joyce (Wood Green)

  Herbison, Rt. Hn. Margaret

  Pearl, Rt. Hn. Fred

  Callaghan, Rt. Hn. James

  Hobden, Dennis

  Perry, Ernest G. (Battersea, S.)

  Cant, R. B.

  Horner, John

  Perry, George H. (Nottingham, S.)

  Carmichael, Neil

  Houghton, Rt. Hn. Douglas

  Prentice, Rt. Hn. R. E.

  Castle, Rt. Hn. Barbara

  Howarth, Robert (Bolton, E.)

  Price, William (Rugby)

  Chapman, Donald

  Howell, Denis (Small Heath)

  Roberts, Albert (Norrnanton)

  Coe, Denis

  Huckfield, Leslie

  Roberts, Rt. Hn. Goronwy

  Corbet, Mrs. Freda

  Hughes, Emrys (Ayrshire, S.)

  Roebuck, Roy

  Crawshaw, Richard

  Hughes, Roy (Newport)

  Rogers, George (Kensington, N.)

  Cullen, Mrs. Alice

  Hunter, Adam

  Rose, Paul

  Dalyell, Tam

  Jackson, Peter M. (High Peak)

  Ross, Rt. Hn. William

  Davies, Ednyfed Hudson (Conway)

  Janner, Sir Garnett

  Rowlands, E.

  Davies, G. Elfed (Rhondda, E.)

  Jay, Rt. Hn. Douglas

  Shaw, Arnold (Ilford, S.)

  Davies, Dr. Ernest (Stretford)

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Sheldon, Robert

  Davies, Ifor (Gower)

  Johnson, James (K'ston-on-Hull, W.)

  Shore, Rt. Hn. Peter (Stepney)

  Davies, S. O. (Merthyr)

  Jones, Dan (Burnley)

  Short, Mrs. Rende (W'hampton, N. E.)

  Delargy, Hugh

  Jones, T. Alec (Rhondda, West)

  Silkin, Rt. Hn. John (Deptford)

  Dell, Edmund

  Kenyon, Clifford

  Silverman, Julius

  Dempsey, James

  Lawson, George

  Slater, Joseph

  Dewar, Donald

  Leadbitter, Ted

  Small, William

  Diamond, Rt. Hn. John

  Ledger, Ron

  Snow, Julian

  Dickens, James

  Lever, Harold (Cheetham)

  Steele, Thomas (Dunbartonshire, W.)

  Dobson, Ray

  Lewis, Arthur (W. Ham, N.)

  Strauss, Rt. Hn. G. R.

  Doig, Peter

  Lewis, Ron (Carlisle)

  Summerskill, Hn. Dr. Shirley

  Dunn, James A.

  Lomas, Kenneth

  Swain, Thomas

  Eadie, Alex

  Lyons, Edward (Bradford, E.)

  Taverne, Dick

  Edelman, Maurice

  McBride, Neil

  Tinn, James

  Ellis, John

  Macdonald, A. H.

  Urwin, T. W.

  Ennals, David

  McGuire, Michael

  Varley, Eric G.

  Evans, Fred (Caerphilly)

  Mackintosh, John P.

  Wainwright, Edwin (Deame Valley)

  Evans, Gwynfor (C'marthen)

  Maclennan, Robert

  Wallace, George

  Evans, Ioan L. (Birm'h'm, Yardley)

  MacMillan, Malcolm (Western Isles)

  Watkins, David (Consett)

  Faulds, Andrew

  McMillan, Tom (Glasgow, C.)

  Wellbeloved, James

  1664

  1665

  Wells, William (Walsall, N.)

  Willis, Rt. Hn. George

  Willey, Rt. Hn. Frederick

  Wilson, William (Coventry, S.)

  TELLERS FOR THE NOES:

  Williams, Alan (Swansea, W.)

  Woodburn, Rt. Hn. A.

  Dr. M. S. Miller and

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Mr. Ernest Armstrong.

  10.30 p.m.
  Mr. Blaker: I beg to move Amendment No. 62, in page 8, leave out lines 22 and 23 and insert:

  Chapter 50 (all headings).

  Silk and waste silk.

  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment, we will take the Amendments, Nos. No. 76, in page 7, line 11, at end insert:

  46.01 to 46.03

  Plait, braid and straw hoods and braids and hoods made of man-made fibre.

  No. 63, in page 8, line 23, at end insert:

  Chapter 51 (all headings).

  Man-made fibres, continuous.

  No. 124, in line 23, at end insert:

  51.01

  Yarn of man-made fibres (continuous) not put up for retail sale.

  No. 64, in line 33, leave out 'and 55.04' and insert '55.04 and 55.05'.
  No. 65, in line 34, after 'combed' insert:
  'and cotton yarn, not put up for retail sale'.
  No. 87, in line 47, after 'bags', insert 'and cotton mesh bags'.
  Mr. Blaker: Amendments Nos. 62 and 63 raise the question of what is a raw material, and the items covered by both are the raw materials for some industries, even if many of them are not raw materials in the sense of having had no process applied to them. As an example, I will mention the manufacture of ties. Many hon. Members will have seen a letter from the Tie Manufacturers' Association setting out the problem. The manufacturers say that this is a highly specialised product and that the material cannot be replaced by British manufacturers whose capacity is fully utilised, and they therefore buy abroad because they have to do so.
  They say, further, that the fabric represents 50 or 60 per cent. of the total cost of ties and they add that the industry consists of small manufacturers who, therefore, will suffer as much as anybody if not more than anybody from problems of liquidity.
  Amendment No. 87, which stands in the name of my hon. Friend the Member for Maidstone (Mr. John Wells),
  1668
  relates to cotton mesh bags or nets. These are a finished product, but the fact that they are not exempted by the Schedule illustrates a further anomaly, because, if they are not exempted, there will be an effect on the price of food, because these nets or bags are used, I am told, only to wrap food for sale to the public, for instance, to wrap parsnips, carrots and so on, but not, so far as I am aware, cabbage.
  I am also told that there is no substitute which is as good for this purpose and that jute bags, for example, which are exempted by the Schedule, are not so satisfactory, at least for this purpose. If we are not to include these cotton mesh bags in the exemptions, there will be an effect on the price of food to the public.
  Mr. Drayson: This morning I raised the question of the problem faced by two firms in my constituency, a problem covered by Amendment No. 62 and others. The matter with which we are concerned is the extent to which yarn used in a manufacturing process can be regarded as a basic raw material.
  The yarn with which one of the firms in my constituency is concerned is imported from Austria, but the firm tells me categorically that it would have no wish particularly to buy from Austria if it could get its requirements in the United Kingdom. It points out that this yarn is part Terylene, which has previously been exported from the United Kingdom, while the rest is Australian wool. The two are brought together in Austria and spun into yarn, which is then imported by my constituents, who tell me that they have firm contracts at fixed prices going right to the end of 1969 with delivery in November and December of that year.
  The final product manufactured in my constituency from that yarn is light-weight tropical suitings for export. The company's export performance is 98 per cent. of total production. Now, it faces the problem of having to pay the import deposit on the yarn, the basic raw material which comes in from the Continent. Even if the goods which the company manufacturers are exported within less than the three months for which the deposit is paid, it sees little prospect of obtaining draw-back on that money.
  I am encouraged by Government Amendment No. 73, and I hope to be told

  1669
  that this sort of case will be covered by it. This is a typical example of a material being imported with a view to re-export. The part of that Amendment which encourages me to think that it is covered is paragraph (1)(a):
  "The Commissioners may remit import deposit payable in respect of any goods if satisfied—.
  (a) that it is intended to re-export the imported goods, or goods incorporating the imported goods, or goods manufactured or produced from the imported goods."
  That is precisely this case. Although the Terylene and wool have gone through certain spinning processes, the yarn is imported for the express purpose of re-export. As I have said, the company's export record is excellent.
  The problem is accentuated because the company is working three shifts a day, something which successive Governments have urged the textile industry to do. It uses the yarn at a great rate, so that the import deposit will have a heavy impact, and it is anxious to hear at the earliest possible moment that the new charge will not, under the Government Amendment, actually fall upon it.
  A further major problem confronting this company is that it is now embarking on a programme of re-equipment, and it cannot both carry through that programme and pay the import deposit. Which do the Government prefer? Do they want companies to modernise and re-equip, or do they want them to use their resources to pay the import deposit? In its letter to me, the company says:
  "If we have to pay the deposit, we shall have to abandon the modernisation and re-equipment scheme".
  It goes on to say that its main competitors are in Germany, Japan and the United States, and it is having a hard struggle to keep ahead, though the present position is satisfactory. But it sees the import deposit scheme as a further handicap.
  This is another example of the way in which the policies pursued by the Government act as a brake on progress and hamper our export programme. The firm is quite a small one, employing 100 people, but the cloth it manufactures is exported to the value of £1 million. In its letter to me the firm says:
  "We think that we are making a useful contribution to the balance of payments."
  1670
  I should say that with 98 per cent. exports that firm is making an understatement, and that it is making an outstanding contribution to exports, and that the Board of Trade might consider the firm for the Queen's Award to Industry. If the Minister would like further details of this company's achievements, I shall be only too pleased to send them to him.
  In its letter the firm goes on to say that its order books extends well into 1969, and the firm is prepared to give an undertaking to Customs and Excise that it will accept orders only for export, provided, of course, that it can get an assurance that it will not have to pay this import deposit. I cannot see how this firm, which has an outstanding export record, can assist the Government or the country any more than it is doing at present.
  I hope, therefore, that the Government will find it possible to relieve this kind of yarn from the levy or, if that is not possible, to include firms with such export records as this firm has in the provisions of the Amendment to be moved by the Government later. When this import levy was imposed the firm asked me, "Do the Government really want us to export?" I am sure that we can assure the firm that the Government do want it to, but the Government are not giving very much encouragement to firms trying so hard to export.
  I have another example of a firm—I am sure there must a vast number of similar examples in Yorkshire and Lancashire—which, because it cannot get a supply of yarn from the United Kingdom, has to go overseas for it. It tells me it despatched some samples of cloth to Denmark on 20th November in a 25s. postal packet and up to 29th November it had not be received.
  I know that that does not really come within the scope of the Amendment, but it is an example of the difficulties which are being placed in the way of exporters, and they are entitled to ask the Government whether they will support them in this important work which they are doing.
  Sir A. V. Harvey: I want to say a few words about the tie industry, because it plays an important rôle in my constituency. Macclesfield ties are known all over the world for their quality, and are making a very real contribution to our exports, particularly the high-quality ties. silk ties and others.

  1671
  During the postwar Parliament, under the Attlee Government, ties got a poor deal from that Government, who, at one time, classified them as haberdashery so that they carried 100 per cent. Purchase Tax. I remember having a debate with the then Chancellor, Mr. Dalton, in the early hours of a morning, and eventually getting the tax reduced.
  Raw silk and silk waste is a raw material and is not affected, but spun silk is, and 50 per cent. of it, I understand, comes from E.F.T.A. countries, mainly Switzerland. That material goes into ties made in this country.
  I asked the hon. Member for Harrow, East (Mr. Roebuck) what tie he was wearing; he looked at the back and said, "Swiss". I think that hon. Members should wear British ties, good Macclesfield ties. The quality of the ties, and the materials, have changed considerably. Many ties are now made of synthetic materials. I do not know whether the Home Secretary wants to intervene. Perhaps he will tell us what tie he is wearing; it is probably a black one, in mourning for the Government. For over 50 years tie fabrics have been imported—
  The Secretary of State for the Home Department (Mr. James Callaghan): My tie is made of silk, in England.
  10.45 p.m.
  Sir A. V. Harvey: I am relieved to hear that.
  Approximately 78 per cent. of tie fabrics are imported. In Macclesfield, some ties are made in larger factories, but many are made up in the homes of individuals, as they have been for a hundred years; firms put out the work to be done in homes, and great skill is shown in the making up of ties. These firms are in no financial position to put down the 50 per cent. import deposit required under the scheme; they cannot raise the money from banks as large companies can. They are faced with intense competition from France, Italy and other European countries; and exporting to North America is a tough business. I hope that the Government will give sympathetic consideration to this matter.
  It seems to me that Ministers made up their minds 48 hours ago not to give way on anything. Is this a democracy, or not?
  Mr. Hirst Mr. Hirst: Not!
  Sir A. V. Harvey: What is the point of spending 48 hours in the House of Commons debating this when Ministers have decided beforehand to give away absolutely nothing? This is not the way to encourage industry. At the end of the day the Government rely on free enterprise to bring home the goods. Only by selling overseas at competitive prices goods which have been made here will the country solve its problems. These measures will put up the price of goods, certainly in the tie industry. I hope that the Chief Secretary will give this matter his favourable consideration, not for large firms, who are probably able to finance themselves, but for small firms who need help.
  Mr. Emery: Amendment No. 124, in my name, goes further than the silk and tie industry; it is concerned with manmade fibres.
  I have looked at my tie to see whether it bore the label "B.N.S."—British Nylon Spinners—and I am delighted to be able to assure my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) that it bears the label "Made in Macclesfield", which, perhaps, will help his constituency.
  I am delighted to see the Home Secretary on the Front Bench. He will remember that on 2nd December, 1964 he was sitting in the same position and dealing with Amendments to the Finance Bill under the same tariff headings. In column 553 of HANSARD of that date he is quoted as saying that he would look at concessions and consider whether they were justified. We were hopeful that concessions would be made, but I can assure my hon. Friend the Member for Macclesfield that, as he might expect, nothing came of it.
  These are of special concern to many aspects of industry. When the debate was taking place in 1964, home production was able nearly to meet the total consumption of man-made fibres in industry. We produced about 98 per cent. of our requirements. As the Chief Secretary will know, that is not the position today. The amount available for the home market is such that 20 per cent. of industry's requirements has to be imported. I am surprised that my hon. Friend the

  1673
  Member for Worcester, South (Sir G. Nabarro) is not here, because carpets take about 80 per cent. The rubber industry is another that is affected, and, of course, so is the clothing industry.
  We know that the First Schedule to the Bill is that which applied at the end of the import surcharge in 1966. The Government's arguments in 1964 might have been relevant then, but the situation has altered considerably, and man-made fibre yarn is in much greater demand as a raw material in industry than it was in 1964. On that basis alone, it would seem that there is a strong argument for making a concession to man-made fibre yarn.
  It is suggested that if such a concession is made purely for man-made fibres, it would not necessarily cover those which are essentially for industry. I take that point. But if the Government were disposed to do it, I am sure that they could devise a sub-heading to ensure that it applied only to man-made fibre for industrial consumption.
  There is a strong argument which I hope that the Chief Secretary will consider. If he cannot give me a direct answer, we will be more than pleased to have an assurance that he will consider it before the Report stage.
  Mr. Charles Mapp: I have been most interested in the argument about ties and man-made fibres. However, the special pleas that have come from the benches opposite are not sustained by the state of the market as a whole. A good deal of it is controlled by monopolies, and other areas are subject to well-understood arrangements about production both here and in Europe. In the main, the only effective, reasonably free and unregulated competition comes from the Far East, and perhaps some attention to the state of the industry at home is just as desirable as the claims of other countries.
  I am very familiar with the man-made fibre side of the industry, which is of crucial importance. Its use is now overtaking that of natural cotton stock, and I would be hesitant to resist a small element of discouragement to imports of it.
  Mr. Emery: Following the hon. Gentleman's argument to its logical conclusion, if he is arguing against a monopoly or oligopoly position, the last thing that
  1674
  he would want to see is more "featherbedding" of home producers by limiting competition and giving them the safeguard of making importers pay the duty before they can put competitive goods on the market. I think that he should be on our side, rather than arguing as he is.
  Mr. Mapp: The hon. Member has failed to notice that I said the trade was largely monopolistic in this country and that I added that it was somewhat well-regulated on the Continent of Europe. The alleged open competition which he argued is present in this trade does not exist, apart from heavy rivals in the Far East with a low-paid labour basis. Because I am a member of this House and not a House in the Far East, I am anxious that an industry which has had a fair share of injury, inflicted by this and other Governments in the last decade or two, should have whatever small privilege as is conferred.
  There is some merit in the point made by the hon. Member for Macclesfield (Sir A. V. Harvey), but it is not so substantial as he suggested. I am not unfamiliar with his constituency, which is not far from where I live Equally, I am not unfamiliar with the claims of the silk industry, but I do not think it is so spread in individual homes as the hon. Gentleman suggested. Generally, this is a consumer element which most of us can afford whatever infinitesimal addition to the price is involved. For these reasons I hope that the Minister will resist the pressures put on him.
  Half an hour ago I listened to discussion about another industry in which an hon. Member said prices had already gone up. I wondered how a private firm, in a matter of two or three days, with all the problems arising from this Measure, could decide to increase its prices. That is an arbitrary decision. We are moving into an era in which price increases must be justified and be seen to be justified. This applies to salaries and incomes and must also apply to prices. If they can be justified, I would be the first to agree.
  Sir A. V. Harvey: It is all very well for the hon. Member to suggest that he does not mind paying more for ties—I am glad that he can afford to do so—but these firms have had two doses of

  1675
  Selective Employment Tax and they face increased costs. The hon. Member is completely out of touch with reality.
  Mr. John Wells: I am grateful to my hon. Friend the Member for Blackpool, South (Mr. Blaker) for drawing attention to Amendment No. 87, which is in my name. That Amendment seeks to exempt cotton bags in which nearly all field vegetables are now packed.
  The aim of the Ministry of Agriculture, Fisheries and Food is to get more heavy vegetables grown in this country. The Ministry and its supporters are anxious to increase the acreage of home-grown onions, brussels sprouts and other foodstuffs which go to market in cotton bags. My hon. Friend said that he did not think that cabbages go to market in cotton bags, but they do. I must declare an interest as one who uses them to send cabbages to market.
  11.0 p.m.
  Mr. Blaker: Is my hon. Friend suggesting that it was I who said that cabbages do not go to market in these bags? I am well informed on what cabbages go to market in.
  Mr. Wells: I apologise to my hon. Friend. I must have misheard him.
  These bags are used exclusively for the wrapping of foodstuffs. The quantity imported is between 25 million and 30 million a year, mainly from Hong Kong. The total duty under this new impost will be about £125,000 a year and this will be a direct charge on the horticultural industry. Although the hon. Member for Oldham, East (Mr. Mapp) may be able to afford a few more shillings for a silk neck-tie, the housewife in the supermarket will not pay more for her vegetables and the horticulturist is in the middle of this unfortunate position.
  The housewife is unable to pay more, the Government are forcing the grower to pay more for string bags, and all the costs of production are going up. The Government have just hit the horticulturist with increased oil fuel duties and the costs of marketing have gone up. It is invariably the grower who suffers. We have had a disturbing evening, with the Government giving way on nothing. Here is a golden opportunity. These units are used only for foodstuffs.
  1676
  The Government pay lip service to getting foodstuffs to the shops and to the housewife in a clean and wholesome condition, efficiently, and as quickly and cheaply as possible. Let us have some practical help by putting this one small item in the Schedule.
  [Mr. SYDNEY IRVING in the Chair]
  The Chief Secretary to the Treasury (Mr. John Diamond): I count myself privileged to have listened to a debate in which a number of hon. Members spoke robustly, demonstrating their knowledge of the materials with which they are concerned, and of their constituency interests, as hon. Members should. I have been interested to hear the great variety of articles which hon. Members would seek to exclude from the scheme.
  The debate has made it clear that if any one of these items were excluded on the grounds put forward, other than the export ground, the number of items entitled to exemption would be such that the coverage of the scheme would be sharply diminished. The principle of the scheme is that it is intended to have a sharp impact, and if hon. Members have regard to this, they will realise that to exclude such a wide and substantial range of goods would—I will not go so far as to say destroy—but would reduce the effectiveness of the scheme in a way we could not possibly accept.
  We have to have regard to the coverage of the scheme and, within that, to see which items could be excluded. With the exception of the export argument, these Amendments have sought to exclude materials which are in no sense raw materials. They are materials which many manufacturers use, and I see the starting point in terms of materials, but that is a common experience and has nothing to do with having raw materials or materials which would be excluded on the basis that they have reached only a simple processing stage.
  All these materials go much further than that. Indeed, many hon. Gentlemen have been pressing me about manmade fibres, many of which are made from complex chemicals not excluded from the scheme because of their complexity and the distance which they are removed from raw materials. Therefore, it would be wholly illogical to include

  1677
  the chemicals and to exclude the manmade fibre which is a further stage in the manufacturing process.
  I am bound to invite the Committee to say that these proposals in these various Amendments, if all similar proposals which could justifiably be attached to them were accepted, would really damage the scheme in such a way that it would be pointless to go on with it. The hon. Member for Macclesfield (Sir A. V. Harvey) and others who have spoken in similar strain are wrong when they say that we come here with a closed mind. It is also wrong to say that we do not wish to meet the reasonable desires of the Committee, at the same time retaining the main shape of the scheme.
  The major argument addressed to me by the hon. Member for Macclesfield, the hon. Member for Shipley (Mr. Hirst) and one other hon. Member was on exports. I am in difficulty here, because there is an Amendment down on this subject. I think that the Committee will not be unhappy to discuss the Amendment and to hear the Government's views about it, but we cannot discuss it now and it does not help to try to anticipate it. However, I believe that we are meeting the real needs of the situation on exports, but not arising out of these Amendments.
  Mr. Robert Cooke: Will the Chief Secretary give the Committee a clearly defined definition of a raw material? It would be helpful if he could.
  Mr. Diamond: That has been gone into before. None of these Amendments deal with raw materials or materials in the first stage of processing. They are all quite complex materials. The grounds on which they ought to receive special consideration are not those set out in these Amendments or in this Schedule. but in a separate Amendment which I should like to come to as soon as I reasonably can.
  Having said those encouraging words about exports, for the reasons I have given these Amendments must fall as all similar Amendments have fallen.
  Mr. A. G. F. Hall-Davis: It will not be any surprise to the Committee that the Chief Secretary has looked on these Amend-
  1678
  ments with just as little sympathy and receptiveness—certainly receptiveness—as he and his colleagues have looked on earlier Amendments.
  It is important that those who will be affected by the rejection of these Amendments should understand that one of the fundamental reasons for the Government's closed mind is that it has become increasingly clear that we have been considering not one scheme, but two schemes: a scheme of import deposits to exercise a moderating effect on imports coupled with a credit restriction scheme.
  During the discussion, perhaps more emphasis has been laid on the credit restriction aspect than on diminishing the flow of imports. It is as important, in the eyes of the Chancellor of the Exchequer, to use this scheme as a means of restricting credit as it is of restricting imports. Indeed, the Minister of State, on the last Amendment, said that the scheme, as a method of credit control, depends on it covering a large number of goods.
  It is one thing to talk about a large number of goods being affected by this scheme. I do not think that it is sufficiently appreciated that the number of firms affected by it is very much more concentrated, and that the impact on them will, therefore, be very much more concentrated, too.
  It is entirely understandable that those users of imported materials—and we have been talking about some of them on these Amendments—who have no possibility of turning to a home-produced material should feel aggrieved at finding such a savage financial burden imposed on them as unwilling tools of the Chancellor's credit policy, because that is what is happening. If, as is the case in these Amendments, one uses a highly discriminatory policy, applied fiercely, on a narrow sector to produce a general effect of credit restriction dispersed over a wide field, one must be prepared for some unforeseen consequence on those who are the unwilling dissipators of freeze throughout the economy. We know about heat conducting materials. Under this Government, one becomes a freeze conducting vehicle.
  These unfortunate importers, who have no alternative home source of supply for

  1679
  their basic materials of produce, are the unwilling dissipators of freeze throughout the economy. Import restriction does not enter into this at all. It just happens to be a convenient vehicle for putting a turn on the screw of the economy, using them as an instrument.
  I propose to say a few words about the effect on the textile industry of rejecting the Amendments. The hon. Member for Oldham, East (Mr. Mapp) made one of the rare contributions to the debate from the back benches opposite. I know the hon. Gentleman's great sympathy for the textile industry, and his understanding of it, but I thought that on this occasion he was wide of the mark. The hon. Gentleman said that he was not opposed to introducing a small area of privilege for an industry which, in the past, had suffered at the hands of the Government. In this case, the small area of privilege is going to those who do not need it, at the expense of those who do, because the effect of this impost will fall on those small units in the industry which have been going out of business in vast numbers.
  It will not affect the monopolists about whom the hon. Gentleman was talking.
  It will not affect the large producers. They will benefit. It is the small manufacturer, who has found it very difficult to get the quality and variety of yarn that he needs, and who is dependent upon imported materials to enable him to follow specialised production, and to continue in the fashion trade and specialised lines, who will be faced with this additional impost.
  During the last two or three years we have seen hundreds of small textile firms going out of business. The rejection of the Amendments will have, as one consequence, an acceleration in the reduction of variety of production in the textile industry, a further reduction in the number of small specialising units in the industry, and as a result, in a comparatively short time, a propensity to increase our imports, which is the exact opposite of what the Government wish to bring about.
  For those reasons I must ask my hon. Friends to reinforce the strength of their arguments by registering their votes in the Division Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 119, Noes 176.

  Division No. 26]

  AYES

  [11.15 p.m.

  Alison, Michael (Barkston Ash)

  Gower, Raymond

  Mawby, Ray

  Awdry, Daniel

  Grant-Ferris, R.

  Maxwell-Hyslop, R. J.

  Baker, W. H. K. (Banff)

  Gresham Cooke, R.

  Mills, Peter (Torrington)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Gurden, Harold

  Monro, Hector

  Biffen, John

  Hall-Davis, A. G. F.

  More, Jasper

  Blaker, Peter

  Harrison, Col. Sir Harwood (Eye)

  Morgan, Geraint (Denbigh)

  Boardman, Tom (Leicester, S.W.)

  Harvey, Sir Arthur Vere

  Morrison, Charles (Devizes)

  Body, Richard

  Hiley, Joseph

  Munro-Lucas-Tooth, Sir Hugh

  Boyd-Carpenter, Rt. Hn. John

  Hill, J. E. B.

  Murton, Oscar

  Bromley-Davenport, Lt.-Col. Sir Walter

  Hirst, Geoffrey

  Nabarro, Sir Gerald

  Bruce-Gardyne, J.

  Holland, Philip

  Noble, Rt. Hn. Michael

  Buchanan-Smith, Alick (Angus, N & M)

  Hordern, Peter

  Osborn, John (Hallam)

  Buck, Antony (Colchester)

  Hunt, John

  Page, Graham (Crosby)

  Burden, F. A.

  Hutchison, Michael Clark

  Page, John (Harrow, W.)

  Campbell, B. (Oldham, W.)

  Iremonger, T. L.

  Pink, R. Bonner

  Carlisle, Mark

  Irvine, Bryant Godman (Rye)

  Powell, Rt. Hn. J. Enoch

  Channon, H. P. G.

  Jenkin, Patrick (Woodford)

  Price, David (Eastleigh)

  Clark, Henry

  Johnson Smith, G. (E. Grinstead)

  Pym, Francis

  Cooke, Robert

  Jopling, Michael

  Renton, Rt. Hn. Sir David

  Costain, A. P.

  Joseph, Rt. Hn. Sir Keith

  Rhys Williams, Sir Brandon

  Crowder, F. P.

  Kershaw, Anthony

  Rossi, Hugh (Hornsey)

  Davidson, James (Aberdeenshire, W.)

  Kimball, Marcus

  Russell, Sir Ronald

  Dean, Paul

  King, Evelyn (Dorset, S.)

  Scott, Nicholas

  Deedes, Rt. Hn. W. F. (Ashford)

  Kirk, Peter

  Shaw, Michael (Sc'b'gh & Whitby)

  Drayson, G. B.

  Kitson, Timothy

  Silvester, Frederick

  Eden, Sir John

  Knight, Mrs. Jill

  Emery, Peter

  Legge-Bourke, Sir Harry

  Sinclair, Sir George

  Errington, Sir Eric

  Lewis, Kenneth (Rutland)

  Smith, Dudley (W'wick & L'mington)

  Eyre, Reginald

  Lloyd, Ian (P'tsm'th, Langstone)

  Smith, John (London & W'minster)

  Fletcher-Cooke, Charles

  Longden, Gilbert

  Speed, Keith

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Lubbock, Eric

  Steel, David (Roxburgh)

  Giles, Rear-Adm. Morgan

  Mackenzie, Alasdair (Ross & Crom'ty)

  Stoddart-Scott, Col. Sir M. (Ripon)

  Gilmour, Ian (Norfolk, C.)

  Maclean, Sir Fitzroy

  Summers, Sir Spencer

  Gilmour, Sir John (Fife, E.)

  McNair-Wilson, Patrick

  Taylor, Sir Charles (Eastbourne)

  Glover, Sir Douglas

  Marples, Rt. Hn. Ernest

  Taylor, Frank (Moss Side)

  Goodhart, Philip

  Maude, Angus

  Tilney, John

  Turton, Rt. Hn. R. H.

  Wells, John (Maidstone)

  Worsley, Marcus

  Waddington, David

  Whitelaw, Rt. Hn. William

  Wright, Esmond

  Ward, Dame Irene

  Williams, Donald (Dudley)

  TELLERS FOR THE AYES:

  Weatherill, Bernard

  Winstanley, Dr. M. P.

  Mr. Anthony Royle and

  Webster, David

  Wolrige-Gordon, Patrick

  Mr. R. W. Elliott.

  NOES

  Albu, Austen

  Garrett, W. E.

  Morgan, Elystan (Cardiganshire)

  Allaun, Frank (Salford, E.)

  Gordon Walker, Rt. Hn. P. C.

  Morris, Alfred (Wythenshawe)

  Alldritt, Walter

  Gray, Dr. Hugh (Yarmouth)

  Morris, Charles R. (Openshaw)

  Allen, Scholefield

  Greenwood, Rt. Hn. Anthony

  Morris, John (Aberavon)

  Anderson, Donald

  Gregory, Arnold

  Moyle, Roland

  Archer, Peter

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Armstrong, Ernest

  Griffiths, Will (Exchange)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Ashton, Joe (Bassetlaw)

  Hamilton, James (Bothwell)

  Ogden, Eric

  Atkins, Ronald (Preston, N.)

  Hamling, William

  O'Malley, Brian

  Atkinson, Norman (Tottenham)

  Hannan, William

  Orme, Stanley

  Barnett, Joel

  Harper, Joseph

  Oswald, Thomas

  Beaney, Alan

  Harrison, Walter (Wakefield)

  Owen, Dr. David (Plymouth, S'tn)

  Benn, Rt. Hn. Anthony Wedgwood

  Hart, Rt. Hn. Judith

  Paget, R. T.

  Bidwell, Sydney

  Haseldine, Norman

  Palmer, Arthur

  Bishop, E. S.

  Hazell, Bert

  Park, Trevor

  Blenkinsop, Arthur

  Herbison, Rt. Hn. Margaret

  Parker, John (Dagenham)

  Booth, Albert

  Horner, John

  Pavitt, Laurence

  Boston, Terence

  Houghton, Rt. Hn. Douglas

  Pearl, Rt. Hn. Fred

  Brooks, Edwin

  Howarth, Robert (Bolton, E.)

  Perry, Ernest C. (Battersea, S.)

  Broughton, Dr. A. D. D.

  Howell, Denis (Small Heath)

  Perry, George H. (Nottingham, S.)

  Brown, Hugh D. (G'gow, Provan)

  Huckfield, Leslie

  Price, William (Rugby)

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

  Brown, R. W. (Shoreditch & F'bury)

  Hughes, Roy (Newport)

  Roberts, Rt. Hn. Goronwy

  Buchanan, Richard (G'gow, Sp'burn)

  Hunter, Adam

  Roebuck, Roy

  Butler, Mrs. Joyce (Wood Green)

  Hynd, John

  Rogers, George (Kensington, N.)

  Callaghan, Ft. Hn. James

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Cant, R. B.

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Carmichael, Neil

  Jay, Rt. Hn. Douglas

  Rowlands, E. (Cardiff, N.)

  Castle, Rt. Hn. Barbara

  Johnson, James (K'ston-on-Hull, W.)

  Shaw, Arnold (Ilford, S.)

  Coe, Denis

  Jones, Dan (Burnley)

  Sheldon, Robert

  Dalyell, Tam

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Shore, Rt. Hn. Peter (Stepney)

  Davies, Ednyfed Hudson (Conway)

  Jones, T. Alec (Rhondda, West)

  Short, Mrs. Renée (W'hampton, N.E.)

  Davies, G. Elfed (Rhondda, E.)

  Kenyon, Clifford

  Silkin, Rt. Hn. John (Deptford)

  Davies, Dr. Ernest (Stretford)

  Lawson, George

  Silverman, Julius

  Davies, Ifor (Gower)

  Leadbitter, Ted

  Slater, Joseph

  Dempsey, James

  Ledger, Ron

  Small, William

  Dewar, Donald

  Lee, Rt. Hn. Jennie (Cannock)

  Snow, Julian

  Diamond, Rt. Hn. John

  Lever, Harold (Cheetham)

  Steele, Thomas (Dunbartonshire, W.)

  Dickens, James

  Lewis, Arthur (W. Ham, N.)

  Strauss, Rt. Hn. G. R.

  Dobson, Ray

  Lewis, Ron (Carlisle)

  Summerskill, Hn. Dr. Shirley

  Doig, Peter

  Lomas, Kenneth

  Swain, Thomas

  Dunn, James A.

  Macdonald, A. H.

  Taverne, Dick

  Eadie, Alex

  McGuire, Michael

  Tinn, James

  Edelman, Maurice

  Mackie, John

  Urwin, T. W.

  Ellis, John

  Mackintosh, John P.

  Varley, Eric G.

  Ennals, David

  Maclennan, Robert

  Wainwright, Edwin (Dearne Valley)

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Wallace, George

  Evans, Ioan L. (Birm'h'm, Yardley)

  McNamara, J. Kevin

  Watkins, David (Consett)

  Fernyhough, E.

  MacPherson, Malcolm

  Wellbeloved, James

  Fitch, Alan (Wigan)

  Mahon, Peter (Preston, S.)

  Wells, William (Walsall, N.)

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Mahon, Simon (Bootle)

  Whitlock, William

  Fletcher, Ted (Darlington)

  Mallalieu, J. P. W. (Huddersfield, E.)

  Willey, Rt. Hn. Frederick

  Foley, Maurice

  Manuel, Archie

  Williams, Alan (Swansea, W.)

  Ford, Ben

  Mapp, Charles

  Willis, Rt. Hn. George

  Forrester, John

  Marks, Kenneth

  Wilson, William (Coventry, S.)

  Fowler, Gerry

  Mason, Rt. Hn. Roy

  Woodburn, Rt. Hn. A.

  Freeson, Reginald

  Mikardo, Ian

  Woof, Robert

  Galpern, Sir Myer

  Millan, Bruce

  TELLERS FOR THE NOES:

  Gardner, Tony

  Miller, Dr. M. S.

  Mr. Neil McBride and

  Milne, Edward (Blyth)

  Mr. Charles Grey.

  Mr. Michael Shaw: I beg to move Amendment No. 106, in page 8, line 50, at end insert:

  70.03

  …

  …

  Glass in balls, rods and tubes, unworked (not being optical glass).

  The Chairman (Mr. Sydney Irving): I think that it would be convenient to discuss al the same time, Amendments No. 107, in page 8, line 50, at end insert:
  1682

  69.02

  …

  …

  Refractory bricks, blocks, tiles and similar refractory constructional goods.

  and No. 146, in page 8, line 50, at end insert:
  Graphite pipes within 69.03(B).
  Mr. Shaw: This Amendment has arrived on the Notice Paper in a typical manner, disclosing the difficulties under which both industry and the Opposition

  1683
  have to work in dealing with a Bill like this. The formation and development of the glass industry is in the middle of a most dramatic change. Very much depends on a high state of activity and on very large sums being spent on capital development. The industry is fiercely competitive and there is a wide variety in the state of prosperity among the various firms. Such an industry therefore has a great interest in the Bill and, properly, it has taken a hurried look at the way in which it will be affected.
  It has written seeking exemption in respect of at least two matters. Amendment No. 106 deals with the type of glass used for tubing, ampoules and the manufacture of clinical thermometers—glass vital for an important sector of the industry—and Amendment 107 seeks exemption in respect of refractory bricks which not only play an important and expensive part in the development of new factories but which also have to be replaced frequently. The industry states:
  "If these items are not exempted, the extra cost involved in making the deposits may be reflected in increased prices which might well be damaging to the export of lead crystal and scientific glassware".
  It is worth remembering that in 1967 the industry exported nearly £29 million of glass and glass products against imports of nearly £18 million.
  The industry is not certain how great the effect of the scheme will be. It comments:
  "Owing to the speed at which legislation is being introduced to cover the import deposit scheme, we have not been able to carry out a very thorough investigation of all the implications arising from it. However, we are immediately concerned with some items"
  —and I have mentioned them as the subject of the Amendments. That is typical of the handicap under which industry has been placed by the speed at which the legislation has been presented to the House. Even more, because this information has reached us at the last minute. it indicates the handicap under which hon. Members suffer.
  In view of the Ways and Means Resolution, we have not received sufficient information why there has been this great haste in pushing through the Bill so that we had no chance of consultations with industry before we discussed the Amendments. The manufacturers do not know the full impact of the Bill on their affairs
  1684
  and these items, but they are sure that it will have an effect which will be ill for their trade.
  Mr. Taverne: It will in no sense be out of disrespect to the hon. Member for Scarborough and Whitby (Mr. Shaw) or the glass industry if I deal with the Amendment briefly, but the issues involved are those which we have been debating for a long time. I was asked why we are in such a hurry with the Bill. With this kind of Measure, speed is of the essence. The Resolution must be introduced quickly and the Bill must follow the Resolution as soon as possible. We will, of course, in all these matters raised by hon. Members opposite look at the position very carefully, as my hon. Friend the Financial Secretary has said, with an eye on the powers in the Bill. But, when it comes to the subjects of these Amendments, the same principles apply which have so far forced us to turn down so many other requests.
  These products are manufactured from basic materials by more or less elaborate processes and they have gone beyond the stage of raw materials which would qualify them for one of the basic categories for which exemption is being provided. They therefore come within the categories which will be subject to the deposit scheme.
  I am sure that the Committee will understand that, however reluctant we may be in each case to turn down an Amendment, to let this one out would mean letting out many others and thus destroy the whole purpose of the scheme.
  Amendment negatived.
  11.30 p.m.
  Sir G. Nabarro: I beg to move Amendment No. 66, in page 9, line 10, at the end insert:

  73.06

  …

  …

  Puddled bars and pilings, ingots, blocks, lumps and similar forms, of iron or steel.

  73.07

  …

  …

  Blooms, billets, slabs and sheet bars (including tinplate bars), of iron or steel; pieces roughly shaped by forging, of iron or steel.

  73.08

  …

  …

  Iron or steel coils for rerolling.

  73.09

  …

  …

  Universal plates of iron or steel.

  73.10

  …

  …

  Bars and rods (including wire rod), of iron or steel, hot-rolled forged, extruded, cold-formed or cold-finished (including precision made); hollow mining drill steel.

  The Chairman (Mr. Sydney Irving): With this Amendment we shall discuss Amendment No. 67, standing in the name of the right hon. Member for Leeds, North-East (Sir K. Joseph), in page 9, line 20, at end insert:

  76.02

  …

  …

  Wrought bars, rods, angles, shapes and sections, of aluminium; aluminium wire.

  76.03

  …

  …

  Wrought plates, sheets and strip (including discs and circles), of aluminium.

  76.04

  …

  …

  Aluminium foil.

  76.05

  …

  …

  Aluminium powders and flakes

  76.06

  …

  …

  Tubes and pipes and blanks therefor, of aluminium; hollow bars of aluminium.

  76.07

  …

  …

  Tube and pipe fittings (for example, joints, elbows, sockets and flanges), of aluminium.

  Sir G. Nabarro: The large number of words on the Notice Paper cover, broadly ferrous metals imported into this country almost entirely for the engineering industry. Amendment No. 67 is the same in principle as Amendment No. 66, but covers non-ferrous metals and, therefore, we have exact complements in the metallurgical sense.
  The imports of iron and steel into Britain have been very large during 1968—no one will deny that—and there has been a sharp increase compared with 1967, due, no doubt, to devaluation. These are the kind of figures which have demonstrated to many in the business world that devaluation is not working. In 1968, based on the first 10 months of the year and again, as in the case of timber, grossed up to represent the full year at the same rate or volume of incoming iron and steel products, the figure will now be £158 million. In 1967, the figure was £116 million. So, in the case
  1686
  of iron and steel products, there has been an increase in imports of no less than £42 million.
  Of course, people import rolled and re-rolled steel products broadly to the specifications delineated in Amendment 66 for two reasons: first, because they cannot obtain prompt specifications in the required period of time for their engineering production processes in the United Kingdom or, secondly, because the prices offered by British steel manufacturers are not competitive with continental and other competitive suppliers.
  In any event, the shutting out of continental and other classes of foreign rolled and re-rolled steel products is likely to cause substantial dislocation in the engineering industry, particularly in workshops which have become attuned over a long period to the use of specialist steel from overseas sources. Restricting or coercing buyers in the engineering industry to buy only British steel in future is not only likely to cause dislocation, but also to put up their costs of production and their prices, quite apart from the difficulty of financing the import deposits scheme.
  Many of these specifications are not obtainable from British sources. Birmingham, the Black Country and Wolverhampton will suffer particularly on that score if there is a rupture of supply of iron and steel products from Continental sources, or a cesser of that supply.
  I hope, therefore, that the Treasury Ministers will think again about placing impediments on our free import of certain specifications of iron and steel rolled and re-rolled products which I claim are indispensable to the British industry in all its diverse form in all parts of the United Kingdom.
  Mr. John Page: I want to reinforce the case so cogently made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and to speak particularly of the experience of one of our largest motor manufacturers, which has asked me to raise the subject.
  The British Steel Corporation agree that it has been proved that certain types of steel cannot be bought in this country, and that even if they could be bought it is important that overseas sources should be kept available to our manufacturers.

  1687
  The firm writes:
  "We have imported a minor amount of sheet and coil for many years and the reasons for this are understood and accepted by the British Steel Corporation. The need is so clear that the Corporation have given us their written approval to continue these imports and without loss of their loyalty rebate."
  The Corporation gives the fullest discount on what it supplies to certain customers on condition that those customers give it the whole of their business. The Corporation would not give that discount in this case if there were not very good reasons for certain steel products to be purchased abroad.
  I put it to the Minister that flexibility must be left so that the import deposit need not be paid in cases where it is overwhelmingly proved to the Board of Trade that suitable types of steel are not available in this country or should for strategic reasons be purchased abroad.
  Mr. Diamond: The hon. Gentleman the Member for Worcestershire, South (Sir G. Nabarro) told us a number of interesting things out of his deep knowledge of these matters. He told me—and I do not know that this is an immediate reply to him—something interesting about the non-supply of steel articles, and I propose to follow up what he had to say in order to find out why it is that these articles and this production are not available in this country. It seemed to me that this was a challenge to the steel industry that needed to be inquired into and followed up.
  The hon. Gentleman made two very important statements. He said that the amount of imports was great and that the increase in the amount imported in recent years—indeed, during the past year, I gathered—was very considerable. This is what the scheme is about. It is not to put up a barrier, as he suggested. It is not to exclude completely, as he suggested, steel and steel manufactured items from abroad. It is to take note of the vastly increased import in recent times of goods, most of which, if not all of which, we can make in this country. It is to discourage importers or, at all events, to make them think twice, in the interests of all manufacturers here and, if I may say so, in the interests of those who are not yet fully employed in the steel industry—
  Mr. Callaghan: Hear, hear.
  Mr. Diamond: —and we should encourage them all. Therefore, on the hon. Gentleman's general remarks and very cogent arguments, it is obviously right that the Government should have taken the steps they have taken.
  On the limited ground of an exception, what the form of the Amendment seeks is to remove the only tenable distinction, which is that between the wrought and the unwrought metal. Unwrought metal is excluded; the hon. Gentleman and his hon. Friends propose also to exclude wrought metal, either ferrous or nonferrous. That is a division which we could not accept.
  The hon. Gentleman has made it clear that the amount involved would be very considerable, and the only way in which to be consistent with what we are doing with raw materials and materials which have been processed in a very preliminary way requires us to stick to that division. The coverage of the scheme would be considerably eroded by the Amendment, and in those circumstances I hope that hon. Members will not press the Amendment.
  Mr. Patrick Jenkin: I hope that my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) will feel it right to ask the Committee to divide on the Amendment. There is a most remarkable contrast between the attitude brought to the Dispatch Box by the Chief Secretary and that which we have had through most of these debates on Amendments to the Schedule from the Financial Secretary. I am sure that the right hon. Gentleman will not misunderstand me if I say that I considered his reply protective. He was clearly seeing the import deposit not substantially as a means of impinging on credit, but as a method of trying to reduce the imports of products in order—and here he was cheered by the Home Secretary—to increase the employment of people in the steel industry in this country.
  This is exactly what we have been told throughout these proceedings is not the Government's intention. We have been told all along that it may have some impact on imports, a marginal effect upon imports, but that its chief intention is to impact on credit. The Chief Secretary's reply gave a very different interpretation and I cannot help warning him that it will make the task of the President of the

  1689
  Board of Trade, when he confronts his colleagues in the E.F.T.A. Council, just that much more difficult. I hope that my hon. Friend will think it right to press the Amendment to a Division.
  Sir G. Nabarro: I was inordinately brief in moving this important Amendment covering, as it does, about £158 million worth of imports during this year of the ferrous metal products alluded to in Amendment No. 66. I was brief because in the debate on the Ways and Means Resolution on 26th November—columns 258 to 261 of the OFFICIAL REPORT—I related this case in much greater detail. The Chief Secretary's reply this evening was not an effective answer to the case which I then related in
  depth and in detail. I endorse my hon. Friend's view and hope that my right hon. and hon. Friends will press this important matter to a Division.
  Mr. Peter Kirk: Surely the most significant part of the Chief Secretary's answer was his admission that he did not know why these products could not be manufactured in this country. Surely we should not part with the Amendment until he does know.
  Sir G. Nabarro: I entirely agree with my hon. Friend.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 106, Noes 165.

  Division No. 27.]

  AYES

  [11.44 p.m.

  Alison, Michael (Barkston Ash)

  Gurden, Harold

  Page, John (Harrow, W.)

  Awdry, Daniel

  Hall-Davis, A. G. F.

  Pink, R. Bonner

  Baker, W. H. K. (Banff)

  Harrison, Col. Sir Harwood (Eye)

  Powell, Rt. Hn. J. Enoch

  Bennett, Dr. Reginald (Gos. & Fhm)

  Hiley, Joseph

  Price, David (Eastleigh)

  Biffen, John

  Hill, J. E. B.

  Pym, Francis

  Blaker, Peter

  Holland, Philip

  Renton, Rt. Hn. Sir David

  Boardman, Tom (Leicester, S. W.)

  Hordern, Peter

  Rhys Williams, Sir Brandon

  Body, Richard

  Hunt, John

  Rossi, Hugh (Hornsey)

  Boyd-Carpenter, Rt. Hn. John

  Iremonger, T. L

  Royle, Anthony

  Boyle, Rt. Hn. Sir Edward

  Irvine, Bryant Godman (Rye)

  Russell, Sir Ronald

  Braine, Bernard

  Jenkin, Patrick (Woodford)

  Scott, Nicholas

  Buchanan-Smith, Alick (Angus, N & M)

  Johnson Smith, G. (E. Grinstead)

  Shaw, Michael (Sc'b'gh & Whitby)

  Buck, Antony (Colchester)

  Jopling, Michael

  Silvester, Frederick

  Burden, F. A.

  Joseph, Rt. Hn. Sir Keith

  Sinclair, Sir George

  Campbell, B. (Oldham, W.)

  Kershaw, Anthony

  Smith, Dudley (W'wick & L'mington)

  Carlisle, Mark

  Kimball, Marcus

  Steel, David (Roxburgh)

  Channon, H. P. G.

  King, Evelyn (Dorset, S.)

  Summers, Sir Spencer

  Clark, Henry

  Kirk, Peter

  Taylor, Sir Charles (Eastbourne)

  Cooke, Robert

  Knight, Mrs. Jill

  Taylor, Frank (Moss Side)

  Costain, A. P.

  Legge-Bourke, Sir Harry

  Tilney, John

  Crowder, F. P.

  Lloyd, Ian (P'tsm'th, Langstone)

  Turton, Rt. Hn. R. H.

  Dance, James

  Longden, Gilbert

  Waddington, David

  Dean, Paul (Somerset, N.)

  Lubbock, Eric

  Ward, Dame Irene

  Drayson, G. B.

  McNair-Wilson, Patrick

  Weatherill, Bernard

  Eden, Sir John

  Mackenzie, Alasdair (Ross & Crom'ty)

  Webster, David

  Elliott, R. W. (N'c'tle-upon-Tyne, N.)

  Marples, Rt. Hn. Ernest

  Wells, John (Maidstone)

  Emery, Peter

  Mawby, Ray

  Whitelaw, Rt. Hn. William

  Eyre, Reginald

  Maxwell-Hyslop, R. J.

  Williams, Donald (Dudley)

  Fletcher-Cooke, Charles

  Mills, Peter (Torrington)

  Winstanley, Dr. M. P.

  Fraser, Rt. Hn. Hugh (St'ftord & Stone)

  More, Jasper

  Wolrige-Gordon, Patrick

  Giles, Rear-Adm. Morgan

  Morrison, Charles (Devizes)

  Worstey, Marcus

  Gilmour, Sir John (Fife, E.)

  Munro-Lucas-Tooth, Sir Hugh

  Wright, Esmond

  Glover, Sir Douglas

  Murton, Oscar

  Goodhart, Philip

  Nabarro, Sir Gerald

  TELLERS FOR THE AYES:

  Gower, Raymond

  Noble, Rt. Hn. Michael

  Mr. Timothy Kitson and

  Grant-Ferris, R.

  Osborn, John (Hallam)

  Mr. Hector Moore.

  Gresham Cooke, R.

  Page, Graham (Crosby)

  NOES

  Abse, Leo

  Bennett, James (G'gow, Bridgeton)

  Castle, Rt. Hn. Barbara

  Albu, Austen

  Bidwell, Sydney

  Coe, Denis

  Allaun, Frank (Salford, E.)

  Bishop, E. S.

  Dalyell, Tam

  Alldritt, Walter

  Blenkinsop, Arthur

  Davies, Ednyfed Hudson (Conway)

  Allen, Scholefield

  Booth, Albert

  Davies, Dr, Ernest (Stretford)

  Anderson, Donald

  Boston, Terence

  Davies, Ifor (Gower)

  Archer, Peter

  Brown, Hugh D. (C'gow, Provan)

  Dewar, Donald

  Armstrong, Ernest

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Diamond, Rt. Hn. John

  Dickens, James

  Ashton, Joe (Bassetlaw)

  Brown, R. W. (Shoreditch & F'bury)

  Dobson, Ray

  Atkins, Ronald (Preston, N.)

  Buchanan, Richard (G'gow, Sp'burn)

  Doig, Peter

  Atkinson, Nonnan (Tottenham)

  Butler, Mrs. Joyce (Wood Green)

  Dunn, James A.

  Barnett, Joel

  Callaghan, Rt. Hn. James

  Eadie, Alex

  Beaney, Alan

  Cant, R. B.

  Edelman, Maurice

  Benn, Rt. Hn. Anthony Wedgwood

  Carmichael, Neil

  Ellis, John

  Ennals, David

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Palmer, Arthur

  Evans, Fred (Caerphilly)

  Jones, T. Alec (Rhondda, West)

  Park, Trevor

  Evans, Ioan L. (Birm'h'm, Yardley)

  Kenyon, Clifford

  Parker, John (Dagenham)

  Faulds, Andrew

  Lawson, George

  Pavitt, Laurence

  Fernyhough, E.

  Leadbitter, Ted

  Pearl, Rt. Hn. Fred

  Fletcher, Ted (Darlington)

  Ledger, Ron

  Perry, Ernest G. (Battersea, S.)

  Foley, Maurice

  Lee, Rt. Hon. Jennie (Cannock)

  Perry, George H. (Nottingham, S.)

  Ford, Ben

  Lewis, Ron (Carlisle)

  Roberts, Albert (Normanton)

  Forrester, John

  Lomas, Kenneth

  Roberts, Rt. Hn. Goronwy

  Fowler, Gerry

  Macdonald, A. H.

  Roebuck, Roy

  Freeson, Reginald

  McGuire, Michael

  Rose, Paul

  Galpern, Sir Myer

  Mackie, John

  Ross, Rt. Hn. William

  Gardner, Tony

  Mackintosh, John P.

  Rowlands, E.

  Gordon Walker, Rt. Hn. P. C.

  Maclennan, Robert

  Shaw, Arnold (Ilford, S.)

  Gray, Dr. Hugh (Yarmouth)

  McMillan, Tom (Glasgow, C.)

  Short, Mrs. Renée, (W'hampton, N.E.)

  Greenwood, Rt. Hn. Anthony

  McNamara, J. Kevin

  Silkin, Rt. Hn. John (Deptford)

  Gregory, Arnold

  MacPherson, Malcolm

  Silverman, Julius

  Grey, Charles (Durham)

  Mahon, Peter (Preston, S.)

  Slater, Joseph

  Griffiths, David (Rother Valley)

  Mahon, Simon (Bootle)

  Small, William

  Griffiths, Will (Exchange)

  Mallalieu, J.P.W. (Huddersfield, E.)

  Snow, Julian

  Hamilton, James (Bothwell)

  Manuel, Archie

  Steele, Thomas (Dunbartonshire, W.)

  Hamling, William

  Mapp, Charles

  Strauss, Rt. Hn. G. R.

  Hannan, William

  Marks, Kenneth

  Summerskill, Hn. Dr. Shirley

  Harper, Joseph

  Mason, Rt. Hn. Roy

  Swain, Thomas

  Harrison, Walter (Wakefield)

  Mikardo, Ian

  Taverne, Dick

  Hart, Rt. Hn. Judith

  Millan, Bruce

  Tinn, James

  Haseldine, Norman

  Miller, Dr. M. S.

  Urwin, T. W.

  Hazell, Bert

  Milne, Edward (Blyth)

  Varley, Eric G.

  Herbison, Rt. Hn. Margaret

  Morgan, Elystan (Cardiganshire)

  Wainwright, Edwin (Dearne Valley)

  Horner, John

  Morris, Alfred (Wythenshawe)

  Wallace, George

  Houghton, Rt. Hn. Douglas

  Morris, Charles R. (Openshaw)

  Watkins, David (Consett)

  Howarth, Robert (Bolton, E.)

  Morris, John (Aberavon)

  Wellbeloved, James

  Howell, Denis (Small Heath)

  Moyle, Roland

  Wells, William (Walsall, N.)

  Huckfield, Leslie

  Mulley, Rt. Hn. Frederick

  Whitlock, William

  Hughes, Emrys (Ayrshire, S.)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Williams, Alan (Swansea, W.)

  Hughes, Roy (Newport)

  Ogden, Eric

  Williams, Mrs. Shirley (Hitchin)

  Hynd, John

  O'Malley, Brian

  Wilson, William (Coventry, S.)

  Jackson, Peter M. (High Peak)

  Orme, Stanley

  Woof, Robert

  Janner, Sir Barnett

  Oswald, Thomas

  Jay, Rt. Hn. Douglas

  Owen, Dr. David (Plymouth, S'tn)

  TELLERS FOR THE NOES:

  Johnson, James (K'ston-on-Hull, W.)

  Page, Derek (King's Lynn)

  Mr. Alan Fitch and

  Jones, Dan (Burnley)

  Paget, R. T.

  Mr. Neil McBride.

  Sir K. Joseph: I beg to move Amendment No. 68, in page 9, line 31, at end add:

  84.45

  …

  …

  Machine tools for working metal or metallic carbides, not being machines falling within heading No. 84.49 or 84.50.

  84.46

  …

  …

  Machine tools for working stone, ceramics, concrete, asbestos-cement, and like mineral materials or for working glass in the cold other than machines falling within heading No. 84.49.

  84.47

  …

  …

  Machine tools for working wood, cork, bone ebonite (vulcanite), hard artificial plastic materials or other hard carving materials other than machines falling within heading No. 84.49.

  84.48

  …

  …

  Accessories and parts suitable for use solely or principally with the machines falling within headings Nos. 84.45 to 84.47 including work and tool holders, self-opening die-heads, dividing heads and other appliances for machine tools; tool holders for any type of tool or machine tool for working in the hand.

  The Chairman (Mr. Sydney Irving): With this Amendment we can take, also, Amendment No. 86, in page 9, line 31, at end insert:

  84.25

  …

  …

  Harvesting and threshing machinery; straw and fodder presses; hay or grass mowers; winnowing and similar cleaning machines for seed, grain or leguminous vegetables and egg-grading and other grading machines for agricultural produce (other than those of a kind used in the bread grain milling industry falling within heading No. 84.29):

  (a) root topping machines, root lifters and root harvesters;

  (b) parts of the machines of sub-heading (a) above

  (c) hay or grass mowers;

  (i) rotary blade type;

  (ii) other;

  (d) other:

  (i) agricultural and commercial horticultural machines;

  (ii) other.

  84.26

  …

  …

  Dairy machinery (including milking machines):

  1693

  (a) cheese presses;

  (b) milking machines;

  (c) parts of milking machines;

  (d) churns for butter making and combined churns and butter workers;

  (e) other.

  No. 147, in page 9, line 31, at end

  86.08

  …

  …

  Road-rail and similar containers specially designed and equipped to be equally suitable for transport by rail, road and ship.

  No. 125, in Schedule 2, page 10, line 36, leave out from "yard" to "and" in line 39 and insert:
  "for the purpose of being used for the building, repairing or refitting of ships in the yard".
  No. 148, in Schedule 2, page 11, line 18, at end insert:
  Spare parts for industrial and farming machinery and plant
  2. The Commissioners may remit the import deposit payable in respect of any goods if satisfied that—

  (a) it is intended to use them as spare parts or replacements for machinery or plant in use in manufacturing or processing industry or agriculture, and

  (b) such spares or parts are for machines or plant of foreign origin, and

  (c) such spares or parts are not manufactured in the United Kingdom.

  Sir K. Joseph: This is a group of most important Amendments. I shall take them quickly, because their virtues are self-evident. The first, No. 68, deals with a number of machine tools. The Government really have landed themselves in a problem here, because though they have recognised the importance of exempting imports which are to be turned into exports—and we note with pleasure that we shall be coming shortly to the Chancellor's Amendment for this purpose—they have not so far recognised that many of the exports for which firms have firm contracts depend upon machine tools which need to be imported because they are not available in this country.
  I have a selection of letters here from different firms, mostly small, with firm export orders which are entirely dependant for their implementation on the arrival of machine tools from abroad. The firms concerned face the need, under the Bill, to find deposits of large sums, in one case, £90,000. That firm says that it is quite impossible for it to find this
  1694
  sum or borrow it, yet, if it does not find it, it will have to break contracts, in one case involving a firm order worth £1 million of foreign exchange.
  I could give detailed examples, but I hope that the Government will take the point, which is amply illustrated in the letters I have received from hon. Members and directly, and which can be only a small sample of a wide-ranging problem. I hope that the Government will recognise the problem and will undertake to accept the Amendment, or to meet the point on Report or, if that is too hurried, to consider the point carefully and deal with it by discretion or by an Amendment.
  Amendment No. 86 deals with the need to import agricultural machinery. If such agricultural machinery is subject to deposit on arrival, obviously there will be an implication for farm costs.
  Amendment No. 147 is most important. The Government have recognised the importance of the shipping and shipbuilding industry by putting ships above a certain size in the Schedule of exemptions. I understand from the Chamber of Shipping that it has been accepted that containers should be treated in the same way as ships where the containers are, as it were, a part of a ship. The ships on which the containers go are exempt, but the containers which would go on them are not exempt. One shipbuilder has ordered abroad several thousand containers, and he is now faced with a totally unpredictable extra cost which may seriously affect the economics of his operation.
  No single Amendment which has been dealt with has such force as the case for exempting containers, and I hope, again, that the Minister will either accept Amendment No. 147, or that he will, on Report, by discretion, or by a later piece of legislation, treat containers in the same way as ships with which they go.
  Mr. Emery: I will attempt to be as brief as my right hon. Friend. Amendment No. 148 has equal strength with any other Amendment to this Clause. It is concerned specifically with spare parts for industrial machinery and plant already in this country and which, to enable industry to continue, must be properly maintained. It is concerned, also, with spare parts for agricultural machinery which is essential to enable

  1695
  the farmer to continue in operation. The Government surely cannot consider that it is right to limit imports of spare parts of machinery in such a way as to prevent the proper maintenance of machinery so that it stands idle.
  Almost by definition it is impossible for the proper spare parts for foreign industrial and agricultural machinery to be obtained in this country. To safeguard the Government's position, subparagraph (c) states that these spare parts should be exempted only if they are not manufactured in the United Kingdom. If they are manufactured in the United Kingdom, my argument falls to the ground, even if they are not genuine spare parts but merely replacement parts. I am willing to bend over backwards to persuade the Government to accept my argument. By definition, the Government cannot demand import deposits for spare parts for machinery which without those spare parts would stand idle.
  I cannot believe that that is the view of the Government. Therefore, I must ask them, if they will not accept the exact words of my Amendment, at least to accept the principle behind it and act upon it before we come to Report.
  [Mr. JOHN BREWIS in the Chair]
  12 p.m.
  Mr. Kirk: My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) has made a strong case generally, but I want to refer specifically to Amendment No. 86, which deals with agricultural machinery.
  At a time when the Minister of Agriculture is calling for a vast increase in agricultural production, it is lunatic to limit the possibilities of doing it. We are told that British agriculture has to produce import savings of about £150 million in the period beginning 1970, but how is it to be done if our farmers cannot get the machinery with which to do it and, as my hon. Friend the Member for Honiton (Mr. Emery) said, even if they get the machinery, they cannot get the spare parts to keep it going.
  The Amendment covers virtually all the necessary machinery—[Interruption.] I did not catch what the Home Secretary said. Perhaps he would care to repeat it.
  Mr. Callaghan: I was thinking what a thin case right hon. and hon. Gentlemen
  1696
  opposite were making. and wondering when one of them would suggest that our farmers might buy British now and again. There is plenty of farm machinery which is manufactured in this country and which is of good quality, available at good prices and with early deliveries. They could buy that, instead of foreign-produced machinery.
  Mr. Kirk: If the right hon. Gentleman knew anything about agriculture, which, clearly, he does not, he would know that a very large part of the machinery used on our farms is provided from home sources. But if he wishes to restrict British farmers solely to supplies coming from home sources, a lot of which come from my constituency, he will not achieve the increase in agricultural production which his Government are so anxious to see, together with the import savings which will come from it—[Interruption.] If the right hon. Gentleman can produce figures, perhaps he will produce them now, instead of sitting there muttering.
  Mr. Callaghan: One of the features of the case put forward by right hon. and hon. Gentlemen opposite which have impressed me is that they have produced no figures in support of their claim.
  Sir K. Joseph: I hope that the right hon. Gentleman will recognise that, with rushed panic legislation, our case cannot be as well presented as it would be given proper time.
  Mr. Callaghan Mr. Callaghan rose—
  The Temporary Chairman (Mr. John Brewis): Order. We cannot have intervention after intervention.
  Mr. Kirk: Mr. Brewis, I am always prepared to give way to a right hon. or hon. Gentleman on the Front Bench opposite.
  Mr. Callaghan: All that the hon. Gentleman needs is to go to the Library, where he will find all the statistics about imported machinery that he wants. The fact that right hon. and hon. Gentlemen opposite produce no figures shows how thin is their case.
  Mr. Michael Alison: Did the right hon. Gentleman notice that, when Mr. Catherwood spoke about exports the other day, he pointed out that

  1697
  we have a favourable balance of trade on machinery? His argument that we import more machinery than we export is fallacious.
  Mr. Kirk: I am beginning to wonder whether the Home Secretary is now in charge of the Bill. I understood that he ceased to be Chancellor of the Exchequer a year ago. Perhaps he has resumed office and we have not heard about it.
  Mr. Callaghan: That is rather discourteous, even for the hon. Gentleman, when I rose in reply to his invitation.
  Mr. Kirk: I did so because I could not hear what he was muttering from a sitting position. I hope that he will not accuse me of being discourteous to him.
  Before this storm of interruptions fell about my ears, I was trying to say that, if the Amendment is not made, the Government will not be able to get the import savings which I understand that they are anxious to maintain. Therefore, it is important—
  Mr. Callaghan: Buy British.
  Mr. Kirk: It is no use the right hon. Gentleman's muttering "Buy British". He is not the hon. Member for Buckingham (Mr. Maxwell). He is Home Secretary. He knows the facts of life. I have no doubt that he wishes that he were the hon. Member for Buckingham. He is displaying symptoms of paranoia, and appears to be unable to make up his mind whether he is Home Secretary, Chancellor of the Exchequer or Minister of Agriculture. He must choose who he is. I have said once or twice, but the right hon. Gentleman did not appear to be listening, that if he is serious about having an increase in agricultural production, he should allow this Amendment to pass, as he appears to be in charge of proceedings at the moment and he is a senior Minister.
  Mr. Alison: I can hear the Home Secretary's comments almost as clearly as my hon. Friend's speech. If he believes that "Buy British" should be translated overseas and that the Germans should say, "Buy German", the Japanese should say, "Buy Japanese" and the French should say, "Buy French", would it not be a happier and more rational world?
  Mr. Kirk: I think that the Home Secretary would say that is about what he wants. Despite the somewhat disruptive nature of what I have been trying to say, I hope that it has been understood and that the Committee will accept these Amendments.
  Captain Walter Elliot: Amendment No. 125, in my name, deals with the shipping industry. Its purpose is to widen the powers of the Commissioners to remit import deposits so as to cover also importations of productive plant and equipment for use in a registered shipbuilding yard for building, repairing and refitting ships.
  Mr. Harold Lever: On a point of order. Is Amendment No. 125 being taken with this group?
  The Temporary Chairman (Mr. John Brewis): Yes.
  Captain Elliot: That was an unnecessary intervention.
  As at present drafted, the paragraph authorises remission only in relation to components, parts, preservatives or finishes of any ship being built, repaired or refitted in a yard or the equipment or machinery of the ship. The shipbuilding industry trades in an unprotected and international competitive market and it has long been recognised that it should be free to purchase not only materials and components, but also plant unhampered by import duties. This freedom dates back to the Import Duties Act, 1932, re-enacted and continued by Section 5(2) of the Import Duties Act, 1958.
  The Amendment would substitute in the Bill the wording in the existing regulations. It covers productive plant as well as materials and components. The Amendment is particularly important because many shipbuilding undertakings are carrying out major schemes of reorganisation following the Report of the Geddes Committee. Whenever possible new plant is obtained from home sources, but some has to come from abroad because of the nature of the plant or because of the cost. Today, most major reorganisation schemes are financed by borrowed money. Even if the 50 per cent. deposit can be found, it will add materially to the cost of the reorganisation schemes. This will be to the detriment of the industry's competitive position in world markets.
  Mr. Peter Mills: I wish to speak about Amendment No. 86. There is a very good case for using more British agricultural machinery. I fully accept that and I have said so on many occasions. Sometimes we are far too eager to use machinery coming from abroad when there is adequate and perfectly good British machinery, but we have the very serious problem of spares.
  In agriculture today we have many types of foreign machines. Some are very sophisticated, particularly mowers and combine harvesters and milking machines. It is ridiculous to think, when we consider the part which agriculture should be playing in the economy, that there should be hindrance in obtaining spares. To have spares at hand and to be able to get them to farms quickly is vital and this is, therefore, a suitable Amendment. All agricultural spares should be exempt.
  Another important point has not been mentioned: that certain types of machines being used on our farms are sophisticated and complicated types which we do not produce in this country. It is necessary for British agriculture to buy them. They include heavy crawlers and Dutch drainage equipment. If we want to get our farms in full working order, and capacity, it is necessary to use some of these heavy machines and tackle, particularly heavy drainage machinery and equipment from Holland and other countries. I could give other examples of heavy equipment to which the exemption should apply.
  Agriculture is playing a vital part now and will be even more important in future. It is stupid for the Government to hinder spares coming here with the specialised equipment which British agriculture needs. I hope that we shall have a satisfactory answer from the Minister. He should give a promise to farmers that there will be no delay. What is the use of having combines and other gear and no spares? I hope that the Minister will set my mind, and the minds of other farmers, at rest.
  Mr. Patrick McNair-Wilson: I support my hon. Friends the Members for Torrington (Mr. Peter Mills) and Honiton (Mr. Emery), and I am grateful to my hon. Friend the Member for Honiton for drawing attention to Amendment No. 148, which is in my name as well.
  1700
  The spares question is important. It is ridiculous if machinery, albeit foreign, which upsets the Home Secretary so much, cannot be used to the full. This Amendment is a modest attempt to ensure that spares can come in so that machinery can play a full part in getting the cut in our imports which we are striving for and to enable British agriculture to expand.
  One point which has emerged throughout the debate is the Government's refusal to give an inch on any item in the Bill. We are asking here for something so modest that at this late hour, at the end of the day, if the Minister could at least make this concession he would set at rest the minds of many people.
  If there is one criticism, it is of the bad public relations which the Government have used in connection with the Bill. I took a party of school children from my constituency round this building this morning. We came to the postcard stand and it was selling postcards produced in Spain. That is an example. I urge the Minister to give us a satisfactory answer. Postcards from Spain, children from an agricultural constituency, look bad when we are debating import control.
  12.15 a.m.
  Mr. Dudley Smith: I should like to reinforce the plea made on behalf of the machine tool industry The Government's action has come as a tremendous shock to the machine tool industry. As my hon. Friend said, the Government have got their public relations badly wrong.
  There are a number of machine tool firms in my constituency. One, which can by no means be described as large, has had to put down over £200,000 in deposits for machinery which cannot be obtained in this country. The industry has been doing a tremendous amount to try to get the country moving again and this scheme has come as a decided slap in the face. The Government, on this occasion, ought to give way, as my hon. Friend the Member for New Forest (Mr. McNair-Wilson) said, both on agricultural machinery and on general machine tools.
  Mr. Taverne: One common feature of all the speeches made so far has been their brevity—a sterling quality at this

  1701
  time of night. The reason my reply to these many Amendments, covering a very wide area, can also be brief is because they are all concerned with one common feature—manufactures.
  The Amendments cover a huge area. The first Amendment, for example, would exempt most machine tools from the deposit scheme. The second Amendment would exempt a huge quantity of agricultural machinery. The consequence of accepting the Amendments would be to blow a huge hole in the scheme. It would make nonsense of the scheme as a whole if this vast area of machine tools and agricultural machinery was to be made exempt.
  Mr. Peter Mills: Does the hon. Gentleman realise that although it may have serious consequences for the Bill, in agriculture it will have particularly serious consequences?
  Mr. Emery: And for the nation.
  Mr. Taverne: The argument here would apply to a great many other manufactures. The whole credit control aspect of the scheme, which is one of the two main purposes, would be not nullified, but enormously shrunk, if these Amendments were accepted.
  Various arguments were advanced in favour of making exemptions, but they were no different from those advanced in favour of other Amendments. In some cases it was suggested that there were people who needed machine tools which could only be obtained from abroad. Concerning machine tools, it is impossible to define any workable distinction between those that can only be obtained from abroad and those that cannot. It has never been the Government's intention, as my hon. Friend has explained time and again, to produce something which would be a purely protective Measure. Even if we could discriminate in favour of desirable imports, this would run counter to the spirit of the E.F.T.A. agreement.
  The short answer to the major Amendments for machine tools—and we could not specially exempt machine tools in shipbuilding from this category—and for agricultural machines is that this would destroy the major effect which the deposit scheme is designed to achieve.
  1702
  Two special pleas were made. One was for spare parts and the other was for containers. I do not fully understand the Amendment about spare parts, but that is a comparatively minor point. I am not clear whether it is meant to relate only to spares or, at certain stages, to whole machines.
  Mr. Emery: Perhaps I might help the hon. Gentleman. There is a misprint. If he looks at the line, "parts" should be two further on. So it is always spares and not machines.
  Mr. Taverne: I thought that that was probably the intention of the Amendment. But there are two diffculties about it. The first is the same fundamental point that arose on the other Amendments. This would mean that manufacturers were being exempted when the purpose of the scheme is to keep manufacturers out of the Schedule.
  The second point is that the administration of this kind of provision to decide the various points brought forward would be extremely difficult. It would place a huge volume of work on the Customs. We would have the difficulty of imports being held up at the docks and confusion being created there while inquiries were made whether the conditions of this exemption applied. The moment that this kind of situation arises, other importers are affected. We must have clear criteria to try to avoid the difficulties to which these Amendments would give rise.
  The most meritorious of the cases which were made was that relating to containers. The Amendment as it stands goes rather further than the representations which the Chamber of Shipping has been making, because it would apply also to containers which could be used wholly for United Kingdom domestic traffic. But this is a minor point. The difficulty here is, again, that one has manufactures, but I should like to look carefully at the position which arises, since there is obviously force in the point made by the right hon. Gentleman. A deputation from the Chamber of Shipping is discussing the matter with the Customs today. This is one of the items which will be considered carefully, with a view to the powers which the Government have in reserve being applied if a strong case arises.

  1703
  We must see how this works out. We shall listen carefully to the detailed representations which the Chamber of Shipping makes, but the bulk of the Amendments go fundamentally counter to the whole scheme and for that reason I cannot recommend the Committee to accept them.
  Sir K. Joseph: I thank the Minister of State at least for his attitude to containers, but my hon. Friends and I are very disappointed with the rest of his speech. Nevertheless, I ask my hon. Friends to consider that it might be better not to press the matter to a Division, to give us more time for the important group of Amendments relating to surgical instruments, and also to enable us to get, before too long, to the vital export Amendment which the Government have tabled.
  So that we can discuss these matters which are so important for industry, I ask my hon. Friends to consider not pressing the Amendment to a Division.
  Amendment negatived.
  Mr. Patrick Jenkin: I beg to move Amendment No. 69, in page 9, line 45, leave out from beginning to end of line 15 on page 10 and insert:

  Chapter 89

  …

  Ships, boats and floating structures.

  The only point on the Amendment—and I put it pursuant to representations made by a business man in my constituency to my hon. Friend the Member for Chigwell (Mr. Biggs-Davison), whose constituent he is—arises in relation to the International Boat Show. There, mostly British boats are on display. As with an increasing number of these shows, it is international, and firms there bring foreign made boats here, just as British-made boats go to foreign boat shows.
  The boats which will be displayed in the new year have been ordered, and in some cases are on the high seas. I imagine that a relatively small amount will as it were be taken out of the scheme if the whole of Chapter 89 were included in Schedule 1, and not merely boats of more than 80 tons and fishing boats and other classes of vessel mentioned in the First Schedule.
  This is a small Amendment which will contribute to international trade, and I hope that the Financial Secretary will
  1704
  feel able to make a sympathetic reply, possibly with a view to looking at this after the Bill has become law and making the necessary addition to the Schedule.
  Mr. Harold Lever: The present exemption covers the largest sea-going vessels which could be mainly engaged in commerce, and light vessels, dredgers. floating cranes and floating docks used in maintaining ships or navigation. It does not exempt pleasure yachts or similar vessels of fewer than 80 tons, and that is not an unreasonable split. The hon. Gentleman moderately pressed his case for yachts at exhibitions. I can set his mind at rest. Yachts which come purely for exhibition purposes are not chargeable to the deposit.
  I would only say, further, that, on this Amendment, we are on course. I say, "Steady as we go".
  Sir K. Joseph: I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Burden: I beg to move Amendment No. 93, in page 10, line 16, at end insert—
  Medical and surgical instruments and apparatus within 90.17.
  I must say straight away that I am filled with quite a lot of hope. It seems that the Government's attitude is changing. I accept, of course, that these are manufactured goods. They are most clearly defined, and they appeal to a very restricted and professional market. They are for the supply of equipment to skilled professional men and women engaged in the treatment of human and animal suffering, illness and disease.
  I would point out that the Customs tables very clearly define what items come within this sphere. The cost of imports of medical, dental, surgical, and veterinary instruments in 1966 amounted to a total of £4,282,144, and some of these items are at present free. Among the free articles are aorted heart valves and Mitchell heart valves, and it would surely seem only logical that these should still be free.
  The range of duties on medical appliances and equipment go from 12½ per cent. in the lowest scale to 32 per cent. and those from E.F.T.A. and Commonwealth countries are all free of duty. I

  1705
  would remind the Government that if there is to be a continuation of imports on the same scale as in 1966, then a deposit of about £2 million will be required; and yet all these items for which we are asking exemption are needed solely for the treatment of injury and suffering and disease in human beings and in animals. They are used almost entirely by hospitals and the hospital services and, therefore, a great amount of the money which is expended on them comes from the National Health Service. They are used in clinics, both private and those established in the Service, and by doctors for the treatment of human suffering and injury.
  I ask the First Secretary and his right hon. Friends to consider very carefully whether these life-saving items could not be exempted from the charge.
  12.30 a.m.
  Mr. Taverne: The hon. Member for Gillingham (Mr. Burden) has made out a case which is deserving of careful consideration. We have not generally, under the Bill, been able to exempt imports because they were for a worthwhile purpose. The Financial Secretary had a long discussion with hon. Members earlier about chemicals, pharmaceuticals and medicaments, when much the same principles had to apply as applied to other products. Much as we would like to free an importer from the burden of the deposit if the import was for a particularly humane purpose, we cannot proceed in that way.
  If there is any shortage of these instruments because importers are unable to obtain the money for the deposits—which seems inconceivable—action could and would be taken. As the hon. Member fairly realised, these are manufactures, and not an insignificant quantity—£4 million worth, for which deposits amounting to £1 million, and not £2 million, would have to be found. I do not see that there will be any difficulty in raising the deposits.
  If we exempted goods for this purpose, we would then open a wide door to pressure for other worthwhile exemptions. In the circumstances, although the position will be kept under review, I would not advise the Committee to accept the Amendment.
  Mr. Patrick Jenkin: I cannot believe that the Minister of State was happy at having to deliver that reply. It was a typical example of what is wrong with a scheme like this. For a Minister to refuse a request as reasonable and modest as this—and one which was reasonably put by my hon. Friend the Member for Gillingham (Mr. Burden)—is a condemnation of the whole of this scheme. It is entirely appropriate that my right hon. and hon. Friends should support my hon. Friend should he be disposed to press his Amendment to a Division.
  Mr. Burden: We are extremely disappointed at the Minister's reply. Even at this last stage, I would ask the hon. and learned Gentleman to reconsider the matter—
  Mr. Taverne Mr. Taverne indicated dissent.
  Mr. Burden: He shakes his head. I think that the Government have gone as low as they possibly can on this, one of the last Amendments to be considered during Committee stage. They are saying that, before any exemptions for medical appliances and instruments necessary for the relief of human suffering can be made, it must be shown that there is a shortage, which means that the suffering must take place before they will—
  Mr. Taverne Mr. Taverne indicated dissent.
  Mr. Burden: Yes, that is what the hon. and learned Gentleman said—
  Mr. TaverneNo, there is no likelihood of any kind that those who will be needing these instruments will be unable to raise the deposits to import them.
  Mr. Burden: That is pure supposition. It may be pure supposition on my part to say that there will be suffering, but in circumstances like this it is better to avoid any possibility of suffering being caused, and remove this imposition. I must ask my right hon. and hon. Friends to join me in expressing our disgust in the Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 101, Noes 159.

  Division No 28.]

  AYES

  [12.25 a.m.

  Alison, Michael (Barkston Ash)

  Hall-Davis A. G. F.

  Page, Graham (Crosby)

  Awdry, Daniel

  Harrison, Col. Sir Harwood (Eye)

  Page, John (Harrow, W.)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Hiley, Joseph

  Pink, R. Bonner

  Biffen, John

  Hill, J. E. B.

  Powell, Rt. Hn. J. Enoch

  Blaker, Peter

  Holland, Philip

  Price, David (Eastleigh)

  Boardman, Tom (Leicester, S.W.)

  Hordern, Peter

  Pym, Francis

  Body, Richard

  Hunt, John

  Renton, Rt. Hn. Sir David

  Boyle, Rt. Hn. Sir Edward

  Iremonger, T. L.

  Rhys Williams, Sir Brandon

  Braine, Bernard

  Irvine, Bryant Godman (Rye)

  Rossi, Hugh (Hornsey)

  Buchanan-Smith, Alick (Angus, N & M)

  Jenkin, Patrick (Woodford)

  Royle, Anthony

  Buck, Antony (Colchester)

  Johnson Smith, G. (E. Grinstead)

  Russell, Sir Ronald

  Burden, F. A.

  Jopling, Michael

  Scott, Nicholas

  Campbell, B. (Oldham, W.)

  Joseph, Rt. Hn. Sir Keith

  Shaw, Michael (Sc'b'gh & Whitby)

  Carlisle, Mark

  Kershaw, Anthony

  Silvester, Frederick

  Channon, H. P. G.

  Kimball, Marcus

  Sinclair, Sir George

  Clark, Henry

  Kirk, Peter

  Smith, Dudley (W'wick & L'mington)

  Cooke, Robert

  Kitson, Timothy

  Steel, David (Roxburgh)

  Costain, A. P.

  Knight, Mrs Jill

  Taylor, Sir Charles (Eastbourne)

  Crowder, F. P.

  Legge-Bourke, Sir Harry

  Taylor, Frank (Moss Side)

  Davidson, James (Aberdeenshire, W.)

  Lloyd, Ian (P'tsm'th, Langstone)

  Tilney, John

  Dean, Paul.

  Longden, Gilbert

  Turton, Rt. Hn. R. H.

  Drayson, G. B.

  Lubbock, Eric

  Waddington, David

  Eden, Sir John

  McNair-Wilson, Patrick

  Webster, David

  Elliott, R. W. (N'c'tle-upon-Tyne, N.)

  Mackenzie, Alasdair (Ross & Crom'ty)

  Wells, John (Maidstone)

  Emery, Peter

  Marples, Rt. Hn. Ernest

  Whitelaw, Rt. Hn. William

  Eyre, Reginald

  Mawby, Ray

  Williams, Donald (Dudley)

  Fletcher-Cooke, Charles

  Maxwell-Hyslop, R. J.

  Winstanley, Dr. M. P.

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Mills, Peter (Torrington)

  Wolrige-Cordon, Patrick

  Giles, Rear-Adm. Morgan

  More, Jasper

  Worsley, Marcus

  Gilmour, Sir John (Fife, E.)

  Morrison, Charles (Devizes)

  Wright, Esmond

  Glover, Sir Douglas

  Munro-Lucas-Tooth, Sir Hugh

  Goodhart, Philip

  Murton, Oscar

  TELLERS FOR THE AYES:

  Gower, Raymond

  Nabarro, Sir Gerald

  Mr Hector Moore and

  Gresham Cooke, R.

  Noble, Rt. Hn. Michael

  Mr. Bernard Weatherill

  Gurden, Harold

  Osborn, John (Hallam)

  NOES

  Abse, Leo

  Faulds, Andrew

  Lestor, Miss Joan

  Allaun, Frank (Salford, E.)

  Fennyhough, E.

  Lever, Harold (Cheetham)

  Alldritt, Walter

  Fitch, Alan (Wigan)

  Lewis, Ron (Carlisle)

  Allen, Scholefield

  Fletcher, Ted (Darlington)

  Lomas, Kenneth

  Anderson, Donald

  Foley, Maurice

  Macdonald, A. H.

  Archer, Peter

  Ford, Ben

  McGuire, Michael

  Armstrong, Ernest

  Forrester, John

  Mackie, John

  Ashton, Joe (Bassetlaw)

  Fowler, Gerry

  Mackintosh, John P.

  Atkins, Ronald (Preston, N.)

  Freeson, Reginald

  Maclennan, Robert

  Atkinson, Norman (Tottenham)

  Gardner, Tony

  McMillan, Tom (Glasgow, C.)

  Barnett, Joel

  Gordon Walker, Rt. Hn. P. C.

  McNamara, J. Kevin

  Beaney, Alan

  Gray Dr. Hugh (Yarmouth)

  Mahon, Peter (Preston, S.)

  Benn, Rt. Hn. Anthony Wedgwood

  Greenwood, Rt. Hn. Anthony

  Mahon, Simon (Bootle)

  Bennett, James (G'gow, Bridgeton)

  Gregory, Arnold

  Mallalieu, J. P. W. (Huddersfield, E.)

  Bidwell, Sydney

  Grey, Charles (Durham)

  Manuel, Archie

  Bishop, E. S.

  Griffiths, David (Rother Valley)

  Mapp, Charles

  Blenkinsop, Arthur

  Griffiths, Will (Exchange)

  Marks, Kenneth

  Booth, Albert

  Hamilton, James (Bothwell)

  Mason, Rt. Hn. Roy

  Boston, Terence

  Hamling, William

  Mikardo, Ian

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Hannan, William

  Millan, Bruce

  Brown, R. W. (Shoreditch & F'bury)

  Harper, Joseph

  Miller, Dr. M. S.

  Buchanan, Richard (G'gow, Sp'burn)

  Harrison, Walter (Wakefield)

  Milne, Edward (Blyth)

  Butler, Mrs. Joyce (Wood Green)

  Hart, Rt. Hn. Judith

  Morgan, Elystan (Cardiganshire)

  Callaghan, Rt. Hn. James

  Haseldine, Norman

  Morris, Alfred (Wythenshawe)

  Cant, R. B.

  Hazell, Bert

  Morris, Charles R. (Openshaw)

  Carmichael, Neil

  Herbison, Rt. Hn. Margaret

  Morris, John (Aberavon)

  Castle, Rt. Hn. Barbara

  Horner, John

  Moyle, Roland

  Coe, Denis

  Houghton, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Dalyell, Tam

  Howarth, Robert (Bolton, E.)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Davies, Ednyfed Hudson (Conway)

  Howell, Denis (Small Heath)

  Ogden, Eric

  Davies, Dr. Ernest (Stretford)

  Huckfield, Leslie

  O'Malley, Brian

  Davies, Ifor (Gower)

  Hughes, Emrys (Ayrshire, S.)

  Orme, Stanley

  Dewar, Donald

  Hughes, Roy (Newport)

  Oswald, Thomas

  Diamond, Rt. Hn. John

  Jackson, Peter M. (High Peak)

  Owen, Dr David (Plymouth, S'tn)

  Dickens, James

  Janner, Sir Barnett

  Page, Derek (King's Lynn)

  Dobson, Ray

  Jay, Rt. Hn. Douglas

  Paget, R. T.

  Doig, Peter

  Johnson, James (K'ston-on-Hull, W.)

  Palmer, Arthur

  Dunn, James A.

  Jones, Dan (Bunley)

  Pavitt, Laurence

  Eadie, Alex

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Peart, Rt. Hn. Fred

  Edelman, Maurice

  Jones, T. Alec (Rhondda, West)

  Perry, George H. (Nottingham, S.)

  Ellis, John

  Kenyon, Clifford

  Roberts, Albert (Normanton)

  Ennals, David

  Lawson, George

  Roberts, Rt. Hn. Coronwy

  Evans, Fred (Caerphilly)

  Leadbitter, Ted

  Roebuck, Roy

  Evans, Ioan L. (Birm'h'm, Yardley)

  Lee, Rt. Hn. Jennie (Cannock)

  Rose, Paul

  1708

  1709

  Ross, Rt. Hn. William

  Summerskill, Hn. Dr. Shirley

  Whitlock, William

  Rowlands, E. (Cardiff, N.)

  Swain, Thomas

  Williams, Alan (Swansea, W.)

  Shaw, Arnold (Ilford, S.)

  Taverne, Dick

  Williams, Mrs. Shirley (Hitchin)

  Short, Mrs. Renée (W'hampton, N.E.)

  Tinn, James

  Wilson, William (Coventry, S.)

  Silkin, Rt. Hn. John (Deptford)

  Urwin, T. W.

  Woof, Robert

  Silverman, Julius

  Varley, Eric G.

  Slater, Joseph

  Wainwright, Edwin (Dearne Valley)

  TELLERS FOR THE NOES:

  Small, William

  Wallace, George

  Mr. Ernest G. Perry and

  Snow, Julian

  Watkins, David (Consett)

  Mr. Neil McBride

  Steele, Thomas (Dunbartonshire, W.)

  Wellbeloved, James

  Strauss, Rt. Hn. G. R.

  Wells, William (Walsall, N.)

  Mr. Emery: On a point of order, Mr. Brewis. May I refer you to Standing Order No. 48, which makes it clear that, in Committee or at any other stage, the procedure is such that no new Clause may be considered without notice? If that is so, what is the minimum notice that may be given so that a new Clause can be considered on Report if we proceed to that stage immediately after the Committee stage?
  12.45 a.m.
  The Temporary Chairman (Mr. John Brew is): That is not a matter for me. The hon. Gentleman will have to make his point of order to Mr. Speaker.
  Sir D. Glover: Further to that point of order. My hon. Friend the Member for Honiton (Mr. Emery) has raised a matter of very great importance to the Committee, and I am sure that he would like the advice of the Chair. How can he make that submission to Mr. Speaker when we are in Committee? If, by the time we cease to be in Committee and are back in the House, it is too late for him to make that submission, as is only too likely by the Ruling of the Chair, what protection is there for the rights of back benchers? We are here in very great danger of the rights of back benchers being overridden by the Ruling of the Chair.
  The Temporary Chairman: I regret to say that the time has passed in which new

  Goods for export

  5

  3.—(1) The Commissioners may remit import deposit payable in respect of any goods if satisfied—

  (a) that it is intended to re-export the imported goods, or goods incorporating the imported goods, or goods manufactured or produced from the imported goods; or

  (b) that the remission of import deposit would conduce to the exportation of other goods, being goods constituting or incorporating, or manufactured or produced from, equivalent articles.

  10

  (2) The Commissioners may repay import deposit paid in respect of any goods if satisfied that those goods, or goods incorporating the imported goods, or manufactured or produced from the imported goods, have been exported.

  15

  (3) Any remission or repayment of import deposit under this paragraph shall be subject to such conditions and restrictions, if any, as the Commissioners may think fit to impose for the protection of the Revenue; and if any condition or restriction so imposed is not complied with, or if, where import deposit has been remitted under paragraph

  Clauses can be taken in Committee. That is as far as I can go, because I am occupying the Chair. I cannot give any ruling on behalf of Mr. Speaker.
  Mr. Michael Jopling Mr. Michael Jopling (Westmorland) rose—
  The CHAIRMAN, being of the opinion that the principle of the Schedule and any matters arising thereon had been adequately discussed in the course of debate on the Amendments proposed thereto, forthwith put the Question, pursuant to Standing Order No. 47 (Debate on Clause or Schedule standing part), That this Schedule be the First Schedule to the Bill.
  Schedule agreed to.
  Mr. Jopling: On a point of order, Mr. Brewis. Is it not possible for us to discuss Schedule 1? I rose when you started to put the Question.
  The Temporary Chairman: Order. I regret to say that it is not debateable. It is the Chairman's discretion. I have put the Question. We must move on to Amendment No. 73.

Schedule 2

  RELIEFS
  Mr. Harold Lever: I beg to move Amendment No. 73, in page 11, line 42, leave out paragraph 3 and insert:—

  (i)(a) above, the goods are disposed of or used in a way inconsistent with the intention to re-export, the import deposit remitted or repaid shall become payable, or repayable, to the Commissioners.

  20

  (4) In this paragraph 'equivalent articles' means goods of any description which, in the opinion of the Commissioners (having regard to such matters, and in particular to such of the following matters, namely, the description, quantity, quality, value and function of those goods and the imported articles respectively, as appear to the Commissioners to be relevant in the particular circumstances) are sufficiently similar to the imported
  articles or to goods which could be manufactured or produced from the imported articles, to be reasonably regarded for the purposes of relief under this paragraph as interchangeable with those articles or, as the case may be, with goods manufactured or produced from them.

  25

  30

  (5) To facilitate applications for relief under this paragraph, the Commissioners may extend the said definition of 'equivalent articles' so as to include all or any categories of articles which are classified in the Customs Tariff 1959 (as applied by orders under the Import Duties Act 1958), in the same heading, sub-heading or sub-division of a subheading as the imported goods; and, where the relevant heading is sub-divided, it shall be for the Commissioners to determine, as between the heading, and the relevant

  35

  sub-heading or further sub-division, which is the appropriate classification to select.

  40

  (6) For the purposes of this paragraph—

  (a) any reference to goods produced or manufactured from any imported goods shall be construed as including cases where the goods are produced or manufactured partly from the imported goods, or wholly or partly from other goods produced or manufactured from the imported goods;

  (b) any container in which goods are exported, being a container—

  (i) which is provided by the supplier of the exported goods and is not required to be returned to him, and

  45

  (ii) for which, if it were returned to him, that supplier would give no credit and would discharge no contingent liability,

  shall be treated as forming part of the exported goods.

  The Temporary Chairman (Mr. John Brewis): With this Amendment we will take the Amendment to the proposed Amendment standing in the name of the hon. Member for Pudsey (Mr. Hiley), in line 19, at end insert:—
  Provided that the Commissioners shall repay the deposit repayable under this paragraph immediately evidence is available to them that the goods in question have been exported.
  and the following Amendments: No. 84, in page 12, line 6, at end insert:
  (2) The Commissioners may remit the import deposit payable in respect of goods if satisfied that it is intended to use them as a component part of goods intended for export or in the process of producing goods for export.
  and No. 126, in line 38, at end insert:
  Goods imported as a condition of exports
  5. Articles imported in fulfilment of a contract which also provides for the export of British goods of a value greater than the total value of such articles shall qualify for relief from import deposit.
  Mr. Lever: Broadly speaking, the effect of the Amendment is to make it possible for the Customs to relieve from import deposits goods which, when imported, can be shown to be intended for use in the export trade. I hope that hon. Members will notice the broad sweep of those words: the intention that so far as pos-
  1712
  sible all goods intended for use in the export trade will be relieved from any additional burden of the import deposits intended, in fact, to fall on home market goods.
  The effect is thus to generalise exemptions for exports and further liberalise the provisions in that we no longer retain the limitations of the law on protective duties which cover only part of the field. I hope that I will be forgiven, because it is of great importance to all exporters, to have this described somewhat accurately, if I go into some detail, even at this late hour.
  It will, of course, not be easy for the Customs to operate these reliefs, but they are already operating a similar scheme in regard to goods liable to protective duties and they will, as far as possible, combine the two operations. Broadly speaking, the intention is that in so far as importers can, at the time of importation, earmark goods or a proportion of them as intended for use in the export trade, whether as they stand, or after incorporation in other goods, or after being further processed or manufactured, the import deposit will be remitted on these goods or on the appropriate proportion of them.
  Sir K. Joseph: Will the Financial Secretary repeat that last sentence?
  Mr. Lever: If I can recall it.
  It will, of course, not be easy for the Customs to operate these reliefs, but they are already operating a similar scheme in regard to goods liable to protective duties and they will, as far as possible combine the two operations. Broadly speaking, the intention is that in so far as importers can, at the time of importation, earmark goods or a proportion of them as intended for use in the export trade, whether as they stand, or after incorporation in other goods or after being further processed or manufactured, the import deposit will be remitted on these goods or on the appropriate proportion of them.
  I can think of no words broader than that to cover the intention of the Government that the import deposit shall not fall on any goods intended for export in whatever form they ultimately appear at their export destination.
  But we go beyond that. Alternatively, if this cannot be done, that is, if the importer cannot earmark a proportion of the goods, or say that part of them is likely to be exported in this way, but can show that there is every expectation that a certain percentage of his goods in this class as a whole will be so used, the import deposit will be remitted on that percentage of his imports.
  Finally, to try to cover every possible case, if the importer cannot do either of those things, but can show that goods on which he has had to pay import deposit because it was not possible to establish the intention to export have actually been used in the export trade and duly exported, the import deposit can be repaid as soon as that is established. If he satisfies either of the two very broad conditions, he never has to pay it; if he cannot do that, he has to pay, but if, subsequently, he can show that a percentage of the whole of the goods has been exported, he will get his money back right away.
  Under some of the protective duty reliefs, the Customs operate subject to the concurrence of the Board of Trade, but this proviso is emitted from this provision. The reason is that cases will have to be settled so quickly that formal statutory consultation would be impracticable, but there will, of course, be sensible interdepartmental co-operation in a more general way.
  Sir D. Glover: The hon. Gentleman always tries to be practical and helpful to the Committee. Some Amendments today have dealt with chemicals, for instance. How far will this apply to them? Will it be once, or twice, or three times removed? For instance, if a firm buys some chemicals which are then used in the manufacture of other chemicals or other substances which are then exported, the total original import having been divided among some 20 firms in minor quantities, will all those firms be entitled to a come back, or will it be only at the point of departure that there will be that right to remission, the others being excluded?
  Mr. Lever: I will repeat one sentence which may give the hon. Gentleman satisfaction. Broadly speaking, the intention is that so far as importers can at the time of importation earmark goods, or a proportion of them, as intended for use in the export trade, whether as they stand or after incorporation in other goods, or after being further processed or manufactured, the import deposit will be remitted.
  It is simply a question of evidence. Of course, nobody will require from importers the sort of evidence which would be necessary, for example, to hang any hon. Member; that standard of proof will not be required. What is wanted is a reasonable, practical standard of proof. If it is forthcoming, the Customs will remit the deposit. This is not an area in which the Customs are inexperienced, because we have an identical problem with protective duties, except that there is not as liberal a coverage for an import duty as there is for the deposit.
  The broadest possible words have been used. To put it in plain non-legal language, there is complete power and discretion on the part of the Customs to protect from the import deposit burden any goods which are intended for export in any form, whether in their original form, or as part of a bundle, or after processing, or after processing by the man importing or somebody else.
  Sir D. Glover: I do not wish to be awkward, but there is here a matter of substance. Let us suppose that an importer genuinely imports a chemical which he then sells on the market. At that point, when he imports the chemical, he cannot say to the Customs that 25

  1715
  or 30 per cent. will be exported in some other form, though it may be two months later, after the chemical has been sold to others and has been processed, and when he may have a certificate from those other people showing that they are, in fact, exporting a certain percentage. I do not see how the Government can control the scheme at the point of first release.
  Mr. Harold Lever: The hon. Gentleman must first be clear that we have established a structure wide enough to deal with this. He then asks how we can, in the practicalities, establish the facts which would bring people within that structure. As I understand him, he is not complaining of the structure, which is as wide as draftsman's ingenuity can provide. The question is one of evidence. As I said, this is an area in which the Customs are exceedingly experienced, exceedingly flexible and exceedingly well able to make reasonable assessments.
  I take the case cited by the hon. Gentleman. One can look at the past experience of the user concerned, supposing him to be a merchant who is importing a particular chemical, sulphuric acid—I am not sure whether sulphuric acid is in the scheme—or whatever it may be. If he can show in a general way from his last year's trading that, say, roughly one-third of his material went into other people's export components, the Customs will look at the evidence of that in a broad, sensible and practical way, just as the hon. Gentleman would, I hope, if he had the task of assessing it for information purposes, and the Customs will remit the import deposit.
  Mr. Hugh Fraser: Let us take the simple example of a colour importer in London who imports cobalt and sells it to a colour-maker in the Potteries. The colour-maker sells the colour to a pottery firm, which then exports a quantity of its pottery on which the cobalt is used in the glaze. Is it intended that the process must be traced right back before the colour-maker can have his rebate? Does he have to have a certificate from Wedgwood to say how much cobalt was exported in the form of pottery?
  Mr. Lever: The right hon. Gentleman is drawing incorrect inferences. First, let me make the rule plain. The words are so wide about "intended for export" that I can assure the Committee that they cover this matter, through however many hands the goods may pass and through whatsoever number of processes they may pass. We are left with the practical question raised by the right hon. Gentleman and his hon. Friend, and this must be settled by practical men in a practical way.
  If it is just not establishable in any sort of reasonable and commonsense way, this is too bad. But most people have a reasonable notion and are reasonably able to show what percentage of the goods they are importing will ultimately find their way into the export trade. I do not want to particularise too much, but I shall use this example. We know that a man imports cobalt, and he deals with it in such a way that it is impossible for him to trace what happens to it ultimately. I should suppose that, if he can show that the normal user, the normal expectation in the nature of the customs he has, is that 50 per cent. will go to home and 50 per cent. will go to export, he will have not repayment of his deposit, but he will have remission of the payment; he will never have to pay it.
  It is important that all exporters and all those importing goods which are to be re-exported by themselves or by anyone else after processing, or after being handled by whomsoever thereafter, should realise that they can readily bring themselves within this exemption from payment of the deposit. I suggest that all people affected by the deposit who believe themselves to be handling goods with an ultimate export destination, after whatsoever complicated routes, should be in touch with the Customs. I imagine that most of them are already. They should be in touch with Customs to learn of the possible ways in which they can establish their right to come within the broad walls of this provision.
  1.0 a.m.
  I want to sum up in a sentence. We have all the power required to relieve exporters directly or indirectly of goods from bearing the import deposit. We have all the power and all the will. It only needs a little commonsense and

  1717
  practical communication with Customs to ensure that effect is given to this provision.
  Several Hon. Members Several Hon. Members rose—
  Mr. Lever: I am giving way in order. strictly from left to right.
  Mr. R. B. Cant: What about those at the rear?
  Mr. Ian Percival: I do not want the hon. Gentleman to think that I am in any way out of sympathy with the object of the Amendment, but he used the phrase, "if the importer establishes his right to so, then the duty will be remitted". That is not what the Amendment establishes, because it says, "The Commissioners may": not "shall". The hon. Gentleman shakes his head. I can quite see the point: he must be fed up with dealing with details. But what I am saying is correct. Under the Amendment the importer may establish on incontrovertible evidence the conditions required for the remission of the duty, but still the Customs have discretion. Why is it that the Government give the Customs discretion, instead of saying, to use the hon. Gentleman's own words, that the importers who establish these conditions shall have the right to have the duty remitted?
  Mr. Lever: The hon. and learned Gentleman obviously belongs to the hypothetical danger school of lawyers. The reason it is made discretionary is entirely for the benefit of the exporter. If we were to say "must" we would then have to set down very strict rules dealing with evidence, leaving nothing to the discretion of the Customs authorities as to the practicality of proving the very important consideration which the hon. Gentleman the Member for Ormskirk (Sir D. Glover) has put forward. So the hon. and learned Gentleman cannot have it both ways. If he wants me to put "must" in the Amendment I then have to put in very strict rules to ensure that that rigid provision is enforced. What I wanted was that the Customs should have discretion. Therefore, I have to have "may".
  I can assure the hon. and learned Gentleman that he is dealing with things which he thinks might happen, but will not. He will not think me rude, because
  1718
  he thinks that I am tired of detail—I am not—when I say that I cannot help feeling that he was being pedantic in that intervention if he thinks the purport is that in a case of incontrovertible evidence for remission the Customs will refuse remission.
  The whole point of this drafting is to ensure that Customs are not to be fettered with the obligation to stick to the strictest possible rules of evidence of the kind I suggested would be required to hang any hon. Member—on either side: I am being impartial—but should instead have more reasonable and practical methods of assessing evidence—the different kind of evidence which would be available.
  Sir D. Glover: Having raised this matter, may I say that, so far as I am concerned, I think that the hon. Member's explanation is absolutely first class? I accept it entirely. He has shown great sense in what he has said. I realise that there are a great many difficulties. I did not ask my question in any hostile manner. I wanted only to get information—
  The Temporary Chairman (Mr. Arthur Probert): Would the hon. Member help me by saying whether he is making a speech or asking a question? I remind him that I have not yet proposed the Question.
  Sir D. Glover: I thought that the hon. Gentleman gave way to me.
  Mr. Lever: I gave way to the hon. Gentleman.
  Sir D. Glover: I am grateful to the hon. Gentleman for saying so. Otherwise, I should be in some difficulty. I am very grateful for what he has said, and I accept it entirely. He has gone about as far as one could expect any Minister to go on this problem.
  There is one worry I still have, though, and that is about multiple transactions. The Minister has said the Bill is to run for only 12 months. Far from being excused their deposits, the people involved in these multiple transactions, will with all the best will in the world, not be able to get through them before the six months will be up. This is what worries me. As my right hon. Friend said about cobalt, by the time it is sorted out the six months will he up.
  The Temporary Chairman: Before the Financial Secretary replies, may I ask hon. Gentlemen to be brief in their interventions at this late hour?
  Mr. Lever: The hon. Gentleman has not, I fear, heard, and it is understandable. To secure remission, which means that the obligation to pay is remitted from the beginning, all the importer has to do is to give the evidence that there is a reasonable expectation that these goods will be exported within the wide phrases which I have already used. Once he does that, he is exempt from paying the deposit. If he can raise the expectation only in respect of a percentage of the goods, then he is from the start exempt from a percentage of the deposit. If for some reason he fails to raise that expectation, and later is able to show that the goods were directly or indirectly exported, he will get his money back right away, but that is the very last resort.
  Mr. Cant: I agree with the hon. Member for Ormskirk (Sir D. Glover) that the Financial Secretary's explanation has been extremely clear, and that it has solved most of my problems concerning the pottery industry. One question remains, although it may have been answered. I understand today from the Board of Trade that the decision whether or not to remit will be made by the local Customs official and that there will be no right of appeal. Will my hon. Friend comment on that?
  Mr. Harold Lever: There is always a right of appeal, in the sense that if a man is dissatisfied I suppose that he can have the matter taken up at the highest level. I assure all hon. Members that we have the widest power in the Clause to relieve exports directly and indirectly, and the will. The power and the will will be used in the most practical manner possible and not, as the hon. and learned Gentleman supposes, to deny unquestioned rights of this kind.
  Moreover, for import duty purposes, we have accepted the qualification contained in Section 1 of the Finance Act, 1966, that export relief does not depend upon the exportation of the actual goods imported, but may extend to goods which are interchangeable with them. We go further and link the relief with the Finance Act, thus ensuring that interchangeability can take place.
  1720
  The importer who imports 100 gallons of sulphuric acid does not have to follow the vats of acid around and show that those very vats were exported. If some vats of sulphuric acid went out, that will suffice for the purpose of getting relief pro tanto.
  Mr. Tom Boardman: The hon. Gentleman has referred to all importers and their rights, but perhaps he will make it clear that an exporter can get remission or repayment only if he is the person who paid the import deposit? Further, is the import deposit repayable on exports to the E.F.T.A. countries, bearing in mind Customs and Excise Notice 4A2, published today?
  Mr. Lever: I have had no notice of the second part of the question, but I will have it looked at urgently.
  In the meantime, I will tentatively give the answer to the first part of the question. It is not surprising that we remit the deposit only to the man who pays it. We cannot be expected to remit to a man who has not paid it. If the deposit is repaid it must surely be to the man who paid it. If it is remitted, it is to stop a man paying it at all. If it is remitted, as opposed to being repaid, there is nothing left to remit any more. We have not had a deposit. How can we remit anything further? As to repayment, we cannot make repayments other than to people who make deposits. I am not at all clear about what is troubling the hon. Gentleman.
  As for E.F.T.A. countries, I can say tentatively, until I have had time to reflect, that these, too, would be completely exempt—
  Mr. Tom Boardman Mr. Tom Boardman rose—
  Mr. Lever: We cannot be certain that traders who claim remission of the import deposit will be given E.F.T.A. tariff treatment by other E.F.T.A. countries. Customs are, therefore, telling traders at the moment that exports to E.F.T.A. countries do not qualify for relief. In our view, since the import deposit is not effectively a duty, remission of the deposit should not disqualify exporters from E.F.T.A. tariff treatment.
  I think that that is the point about which the hon. Gentleman wanted to

  1721
  know. He will get the remission, but apparently he will not be given E.F.T.A. tariff treatment by E.F.T.A. countries if he gets the remission. The treatment that E.F.T.A. countries give our exports is a matter for them, and there is nothing that we can do about it. All that we can do is remit the deposit when goods are being exported to E.F.T.A. We cannot guarantee what will be the reaction of an E F.T.A. country when the goods arrive at one of its ports. That is a matter which we will have to take up with the E.F.T.A. countries.
  Mr. Tom Boardman: I have copied the notice, and it says that it should be noted that exports for which E.F.T.A. tariff treatment will be sought cannot be counted is exports for purposes of relief from export deposit. If that is right, surely it means that an importer has to allocate his imports between those exports going to E.F.T.A. countries and those going to other countries. The situation will be even more complex than we anticipate.
  Mr. Lever: We are taking up the matter. It is not really complicated. The point is that, once we are satisfied that an export to E.F.T.A. on which remission has been granted will receive E.F.T.A. tariff treatment, we will remit We are taking up the matter urgently in Geneva, and we hope to give accurate information on it as soon as possible. It is not the fault of the Government. It is simply the fact, however much right hon. and hon. Gentlemen opposite may dislike it, that E.F.T.A. countries are independent State entities and are entitled to do what they think right.
  Sir D. Glover: We are passing a law without knowing what is happening.
  Mr. Lever: It is not a question of that. The law is quite in order. However, it seems useless to give relief to exports to E.F.T.A. countries if the effect of giving that relief is to disqualify them from E.F.T.A. tariff treatment. We are anxious to give both relief and procure for them E.F.T.A. tariff treatment. Our attitude is not half-hearted. We want them to get remission of the deposit and not to lose their E.F.T.A. tariff benefits by reason of that fact.
  1722
  The only reason this is in question is, I fear, because we cannot legislate for the E.F.T.A. countries, and we have to take up this matter with them—[Interruption.] We do not regard it as a charge—
  Sir K. Joseph: I did not mean to say that it is a charge, but that it could be treated as a charge. I did not mean to prejudice the hon. Gentleman.
  Mr. Lever: That is right, and it is an interesting point. We have had the advantage of the Attorney-General's view. In our whole treatment of it, we have imposed this obligation even where we have specifically exempted articles from Customs duty. It came up in our debates, and it is clear. We do not regard this as a disqualifying charge. I am sure that hon. Members would not want to prejudice the discussion which is being conducted urgently in Geneva. We want to get the best of all possible worlds for our exporters and we shall do our best to produce the best possible result in this respect.
  1.15 a.m.
  Mr. Joseph Hiley: I am in some difficulty over my suggested Amendment to the Amendment. If the Financial Secretary can tell me that in cases where deposits have been made and subsequently it is agreed that they should be refunded they will be refunded immediately, I would be content for that is the purpose of my Amendment. Rather than detaining the Committee, I ask the Financial Secretary if he will accept my Amendment as an addition to line 42. It would be merely dotting the i's and crossing the t's for immediate repayment for those concerned in the export trade.
  Mr. Lever: For the most part, relief will be provided by way of remission at the time of importation, and the need for repayment on proof of actual importation should arise comparatively rarely. It will be necessary in such cases to take the import deposit payment out of the usual automatic repayment machinery for special, separate repayment.
  This is bound to take a certain amount of time and we could not, therefore, undertake to make the repayment immediately the evidence is produced, but since it is our intention to make these special early repayments as soon as

  1723
  practicable after the essential facts have been established, the object of the Amendment can fairly be said to be covered.
  I can give the hon. Member for Pudsey (Mr. Hiley) the absolute assurance that the Customs will be instructed, when this fall-back situation comes, that we want to avoid taking the money and that it should be repaid at the earliest practicable moment when the evidence is produced.
  Mr. Hiley: In view of that assurance, I do not wish to move my Amendment.
  Mr. Blaker: I am sure that my hon. Friends would not wish to see anything which might prejudice the discussion now going on in Geneva on the question of refunds to exporters to E.F.T.A. countries of deposits which they have paid, but I think that the Committee should explore this question a little more because yesterday the Attorney-General made a categorical statement that there is no conflict between these proposals and the E.F.T.A. Convention. He was speaking as legal adviser to the House.
  It should follow without doubt that the deposits should be refunded, but my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) pointed out that Custom and Excise Notice 482, which, I understand, was issued yesterday at the same time as the right hon. and learned Gentleman was addressing the Committee, says categorically that exports for which E.F.T.A. tariff treatment will be sought cannot be counted as exports for the purposes of relief from import deposit.
  It does not say that the question is being explored with E.F.T.A. and that an announcement will be made later. There is not a syllable of qualification in that notice. The average exporter should not be misled in this way. If the situation is unclear, it should be frankly admitted as one of the consequences of the way in which these proposals have been introduced and the speed with which they have been introduced. In the whole of what the Financial Secretary has said the situation has not been made clear. That is a deplorable way of proceeding.
  Mr. Harold Lever: That notice, admittedly, needs some amendment, but this
  1724
  will be attended to as soon as possible, when we have clarified the matter of the treatment to be granted by E.F.T.A. countries.
  Mr. Blaker: I am much obliged to the Financial Secretary for the helpful way he has spoken. If the Government had given this mature consideration, how is it that this notice was issued at the same time yesterday as the Attorney-General was telling the Committee that there was no doubt about the legal situation? If the Government had given this mature consideration, surely the news should have filtered through to Customs and Excise by yesterday. Apparently it did not, unless the explanation is that Customs and Excise are pursuing a separate policy from that of the Government.
  Mr. Emery: Is not the case that when we were discussing this yesterday no mention was made of this when we presumed that the deposit would be returnable on exports to E.F.T.A. If this is not so, it puts in doubt whether the scheme is contrary to the E.F.T.A. Agreement.
  Mr. Lever: Hon. Members have declared that they will not add to the difficulties that arise even though it means sacrificing a further point of chastisement. There are plenty of opportunities for chastisement.
  I wonder whether we could have a self-denying ordinance if I explained this a little more. The difficulty which presented itself to the Customs was that if they told exporters before the matter had been settled that they were going to remit the deposit that might prejudice the tariff treatment they received from E.F.T.A. On balance, the wiser course seemed to be not to remit the deposit until they had cleared up the point with E.F.T.A., because it means that by not remitting the deposit, there is no question but that our exporters are at present getting E.F.T.A. treatment. If we were to jump the gun and give them deposit exemption now before clearing up the matter, we would perhaps prejudice E.F.T.A. treatment of tariffs now. It is free from doubt so long as we do not give remission.
  Mr. Blaker: I have experience of international obligations and I cannot see what prejudice there would be if the Government had said frankly what the situation is.
  Mr. Lever: The hon. Member is not following me. Suppose we had remitted this right away with the query duty or deposit. This would have raised an important question for E.F.T.A. countries, whether they should say that it was not a charge or tariff before we have any discussions. By not remitting this, provisionally, we give ourselves the necessary breathing space of a few days to clear this up with the E.F.T.A. countries. The hon. Member will appreciate that once the duty is charged, or taken up by the E.F.T.A. countries, it is far more difficult to undo. When we take the matter up, is it for us then to release or to repay the deposit paid? It seems to be an entirely sensible rule.
  Mr. Blaker: I take the hon. Member's point. But is he aware of what the Minister of State said to the House on Second Reading, when this point was put to him? He said:
  "… discussions on this kind of problem have already started."—[OFFICIAL REPORT, 28th November. 1968; Vol. 774, c. 866.]
  The E.F.T.A. countries have been seized of the fact. Their embassies are full of skilful people who, no doubt, read the OFFICIAL REPORT every day, especially when it concerns a Second Reading debate on a matter like this. Therefore, they knew what the situation is. What possible prejudice could have arisen to a satisfactory result from the negotiations for which I and my hon. Friends wish, if the notice had, in effect, said what the Minister of State said to the House of Commons last week?
  A week has elapsed since the Minister of State said that discussions were already under way. My experience of international negotiations suggests that if we have a clear and simple case it should be straightforward enough for the Government to establish it. In the circumstances, I am confident that they will have a successful result, but they should have had it by now. I am disappointed that the Financial Secretary is not able to tell us what the result it. However, I am confident that he will be able to do so before long.
  But what will be the position when he gets his satisfactory result? Is he satisfied that his paragraph in Amendment No. 73 is adequate to cover the situation; or, depending on the result of the negotiations, will it need some further amendment?
  Mr. Harold Lever: We hope to satisfy the E.F.T.A. countries that this is not a duty within the meaning of the E.F.T.A. arrangements. The hon. Gentleman has been more fortunate than some of us in his international negotiations if he thinks that, in a few days, we can clear up a matter like this involving, as it does, several countries and aspects that have to be considered. These discussions were already in being when the Minister of State spoke, they are still in being, and we are trying to clear them up.
  I think that the hon. Gentleman has a good point on the wording of the notice. It might have been just as well to have reproduced, in effect, the Minister of State's speech in the notice. But, unhappily, those who drafted the notice either did not hear his speech, or, if they did, acted without sufficient subtlety.
  On the hon. Gentleman's other point, I think that the Committee would be well advised to leave it where it is. We are trying our best to help the exporters. Some people can believe that the Bill is bad. There are even some who could believe that this is a bad Government and others, although I hesitate to think so, who believe that there are bad Treasury Ministers. Whatever they are, they are all struggling, in the given circumstances, to try to assist the exporters to get the best of two worlds, namely, not to be afflicted with the import deposit and to still receive the E.F.T.A. treatment.
  If we attempted to jump the gun and give them remission in advance of the few days, I hope, which will be required to clear the matter up, we would prejudice the whole situation, because we would not be giving the E.F.T.A. countries proper time to reflect. On the whole, as hon. Members find, we always do better if we give people a moment or two to reflect. That is what we are doing by not remitting the credit until we have cleared the matter up.
  Mr. Ian Mikardo: Mr. Probert, you were good enough to indicate a few moments ago that we might discuss Amendment No. 84, standing in the name of the hon. Member for Leicester, South-West (Mr. Tom Boardman) and Amendment No. 126, standing in my name, together with Government Amendment No. 73.
  I hope that I may say, without the least scintilla of disrespect, that the fact that

  1727
  my Amendment has been grouped with the other two shows that even the Chair, with its great knowledge of these matters and its great experience in unravelling the meanings of even the most esoteric Amendment, has, nevertheless, totally misunderstood the point of my Amendment. If it had been understood, it could not conceivably have been grouped with the other two Amendments. It is on a totally different point, and I therefore feel that even at the cost of talking a little time at this late hour I must make the difference absolutely clear.
  1.30 a.m.
  The Government Amendment, and Amendment No. 84, seek to assist those exporters a part of whose exports consists of goods or materials or components which have been imported. My hon. Friend has won the praise of hon. Members on both sides of the Committee for the effort he is making to remove any obstacle which our exporters have in this highly competitive and difficult world in competition with exporters in other countries in selling exports in third markets.
  I am speaking about a different group of exporters, those whose power to compete with foreign competitors is affected by an import factor even though imports do not go into the goods they are exporting, and even though the imports may be of articles totally different from the goods they are exporting.
  I am talking of the growing practice of conditional sales, or conditional counter sales.
  Mr. Patrick Jenkin: Barter.
  Mr. Mikardo: It is not quite that, because that is 100 per cent. cover of one for the other. The practice to which I am referring is a growing one. Some people will find it reprehensible, but it does not matter whether they do or not. It is happening in this competitive world, and we have to keep up with our competitors.
  Under this arrangement a complete plant it may be a steel rolling mill, or a chemical or petro-chemical plant—is sold by a British company in competition with an Italian company and a West German one in a third country—the Communist market, the South American market, the Arab market, India, or wherever it is.
  1728
  The purchase price is satisfied as to, say, four-fifths in cash, or perhaps cash with an element of credit, and one-fifth in goods, which the exporter undertakes to find somebody to market. The plant may be sold for £3 million. Of that, £2½ million will be paid for in cash, and the remaining £500,000 in rice or other things.
  I repeat that this practice is growing very considerably in many markets of the world. Two N.A.T.O. countries do quite a lot of their purchasing from other Western countries along those lines, and in some fields we have been out-distanced by the West Germans and even more by the Italians, because they are more flexible about these countervailing purchase and trading arrangements.
  We shall be out-distanced still more, because this is a very competitive business in which one is dealing in margins sometimes of fractions of 1 per cent. If one has to take 20 per cent. of the purchase price in imports, and one then has to load on to that 6 or 7 per cent. for the cost of financing the deposit for 180 days, one has 1-plus per cent. over the whole thing, and very often that is enough to make the difference between the order coming to this country or going somewhere else.
  This practice is growing, and especially in certain fields where exports from this country are most valuable to our economy. It is growing most of all in the sales of complete plants which contain a substantial part of the payment element as being, not for what we would call the ironmongery, but for know-how, design, and engineering knowledge; and it is something of peculiar advantage to this country.
  So, since my hon. Friend the Financial Secretary said in respect of his own Amendment that he was leaning over backwards to help exporters not to be inhibited by any elements in the Bill in their contact with other exporters, I would say that British salesmen will be completely disadvantaged to the tune of something between 1 and 2 per cent. of price competitiveness by the application of this to the imports which they have to take, or have to get somebody else to take, as a countervailing purchase.
  I am sure that my hon. Friend has had an opportunity to consider this. I do

  1729
  not know the procedures, and I am not sure that he will have time to do something about this during later stages of the Bill, but, if there is time, I urge him seriously to consider this fact.
  We ate dealing with a group of exporters no less great and important than that group which the Chancellor has sought to cover. It would be absolutely wrong if one group of exporters was relieved of the consequences of the operation of the Bill and the other group was not relieved at all. I am quite sure that the Financial Secretary cannot but be seized of the importance of this, and I hope that he will give serious consideration to the possibility of accepting this Amendment, or, if it is not very well drafted, that he will say that he will look at something better drafted—something which I am sure he could get from a better draftsman than myself.
  Mr. Harold Lever: I can tell my hon. Friend, in answer to his query, that I am well seized of his point, but I must tell him that the nature of our proceedings s likely to be such that there will not be facilities later on—
  Mr. Evelyn King: Nonsense.
  Mr. Lever: The hon. Member says "Nonsense", but the fact is that I cannot offer the likelihood of an Amendment, and for this reason. What my hon. Friend has been talking about is not too clearly covered by some of our international obligations. The remission of deposit in these cases might be an infraction of some of our foreign obligations. The exporting of goods similar to those which have been imported is a matter which has already been dealt with by international arrangements, but, so far as I know, there are no such arrangements for what we might call bulk deals. On the contrary. I will look into it very carefully. He has missed one point: that we have the power to exempt by Order after the Bill is passed—
  Mr. Mikardo: But it is power to exempt only certain classifications of goods. That does not cover this point, because goodness knows what sort of goods come in on this basis. There is a very wide range.
  Mr. Lever: We can classify the goods as barter goods within a definition which I would not try to draft on my feet at this moment. I ask my hon. Friend not to press his Amendment. These deals are usually very large, so we can have proper time to examine them and to discuss them with him. If it is possible and lawful for us to assist in this way I should like to consider it favourably, but I cannot go beyond that. There are administrative and international complications which would have to be checked.
  Sir H. Legge-Bourke: I am sorry for the hon. Member for Poplar (Mr. Mikardo), who is seeking to get contracts honoured but is not getting all that he wants from the Financial Secretary.
  My point goes back to the Minister's original remarks. In reply to my hon. and learned Friend the Member for Southport (Mr. Percival), he made a very persuasive argument for saying that this should be a permissive instruction to the Customs rather than a mandatory one, and that if the phrase "the Commissioners shall" were substituted in every instance for the words "the Commissioners may", the whole Clause would have to be much more specific.
  But let us be under no illusion. However persuasive he may have been on this subject, this is delegated legislation writ very large, and in a very pernicious form. Some delegated legislation that we have had to tolerate in the past at least had the safeguard that it was the subject of Statutory Instruments which we could pray against. But this is delegated legislation without even that check. The hon. Member knows that not all Customs and Inland Revenue officers are as amenable as he is, whenever he can be.
  It is only natural that there will be some brushes in the implementation of this. Now and again tempers become frayed because industry is over-burdened with the amount of paper work required by the Government, not least with the Customs because of the delays which they cause in dispatching. Industry has no great love for Customs and Excise. Somewhat reluctantly, they accept the need for them, but we should not suppose that all will be sweet in implementing this.
  It is, therefore, most important that specific instructions should be given not

  1731
  only to the company importing the product but to the companies which are relying upon it to import for them and who themselves will be re-exporting the finished product in which is embodied the semi-finished original product. I foresee many disputes and confusions about whose obligation it was to tell Customs that some of a particular consignment was to be re-exported. It will often be extraordinarily difficult for the company which is merely importing the semi-finished material to be able to give a reliable figure to the Customs of exactly what the split will be in the total consignment between home consumption of the finished product and export. It is important that as soon as possible all the companies likely to be affected are given as full instructions as can be provided about how Customs should be informed of the re-exportable content of each consignment.
  I have a recollection of a former Member, now deceased, telling me that he had talked with a high officer of the Inland Revenue on his retirement and that the officer had boasted that in all the years he had occupied his most senior appointment he could claim with pride that the Inland Revenue had received more from the public than it was entitled to receive, because individuals had not exercised their right to claim. The happy phrase appears in the Amendment:
  "… as the Commissioners may think fit to impose for the protection of the Revenue … "
  I hope that the emphasis will be on the protection of the right of individual importers and exporters who are doing their best to help the country pay its way. Obviously, we want to protect the Revenue from gross abuse, but there are plenty of impositions on industry without the Government adding to them unnecessarily. The Commissioners appear to be completely free to introduce these conditions and restrictions. I hope that the financial Secretary will tell us that their main object will be to facilitate rather than to impede the efforts of industry to help the country pay its way.
  We are giving carte blanche and we shall have no control over the use of these powers. We are putting great faith in the Customs and Excise and I strongly suspect that they feel as the Inland Revenue felt when the Government intro-
  1732
  duced their first Finance Bill. The overloading of the Government machine is appalling, and the overloading of Customs which could result from the Bill could make life extremely difficult for them. The Financial Secretary apparently disagrees, but when one comes into contact with these officers one realises the burden which the Government have placed upon them. All Governments place burdens upon them, but this Government have done it more than most. The fact that this is unrestricted delegated legislation is a good reason why we should not have this beastly Bill at all.
  1.45 a.m.
  Mr. J. E. B. Hill: I intervene only because I have received urgent representations from a firm which recently moved to my constituency—last Friday—the Lotus Car Company, which is well known for its racing achievements and for the touring models which it makes and sells. So important did these representations seem that my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) joined me in putting down the Amendment in our names to the Chancellor's Amendment No. 73 and I thank the Chair for adding it to the selected list today.
  In fact, most of the difficulties raised by my constituents have been answered, but answered at a very late hour and after an enormous amount of wholly unnecessary trouble, expense and anxiety has been incurred on my constituents' part and, I suppose, in the corridors of the Customs and Excise.
  Lotus makes a car called the "Europa". It is not available in this country. It was designed for the Common Market and the whole of the firm's production goes to export. It uses a Renault engine imported direct from France by the company. The company therefore applied for remission of duty and the first point of difficulty it raised was why it was told that it was only eligible for remission on that proportion of its total exports to countries other than E.F.T.A. countries. The Financial Secretary has made that point clear. I take the point and I hope that the company will be reassured. But the second point of difficulty was that it was told on Friday by the Customs and Excise at Norwich that, in any event, it was ineligible for any remission of the import deposits

  1733
  because the same person did not export as imported this French engine.
  The company structure is not uncommon. The group Lotus owns everything, but operates through some wholly-owned subsidiaries. This was made clear when it was made public in September. Lotus Cars Ltd. does the manufacturing and the importing of the engines required, whereas the wholly-owned Lotus Car Sales does sales and exports. But the two firms work together in an open plan office. There is not even a physical partition.
  The company was told on Monday in writing that it was ineligible. Yesterday morning it was telephoned to say that the local officer had received instructions from London changing all the rules. Presumably, he had received this notice. I make no complaint of the Norwich Customs officer. He has acted with great diligence and has been careful to communicate to the company as soon as he could every fresh instruction he has received.
  My complaint and question is: why need there have been this confusion and vacillation? Presumably, the idea of import deposits as a possible fiscal activity has been floating around for some time and, therefore, there might have been some detailed contingency planning. Why was it not until Friday that Amendment No. 173 appeared on the Notice Paper? Why was this provision not incorporated in the Bill originally?
  Secondly, why did we have to wait until yesterday and the publication of Notice No. 482 for the retraction of the untenable decision that the same legal entity must be both importer and exporter to qualify for remission? I ask for the hon. Gentleman's attention to this point, because I wonder whether he realises the astonishing waste of effort and time this apparent failure to do the homework is causing.
  Mr. Harold Lever: I realise that there is an astonishing waste of effort and time, but in a different connection. The hon. Gentleman has said that there was apparently some unawareness of the Amendment being tabled to liberalise the treatment for exporters. He has said that the Amendment is now being enforced by the Customs officers precisely as I assured the Committee that it would
  1734
  be enforced. I am not clear at this stage why he is so anxious. He has got what he wants for his constituents, who are being treated exactly as I said they would be. I explained this matter to the Committee and satisfied it on the point.
  If the hon. Gentleman wants me to go into the details at this hour, and not before the Amendment was tabled and considered by the Committee, as to why the original decision, not as liberal as this, was being enforced tentatively by the Customs, I cannot see what gain it will be to the Committee, because I tell him at once that the original position was not as liberal as the present. We have now liberalised it. Is the hon. Gentleman now telling me that he regrets that we liberalised it, or that we should be deterred from liberalising it because we get complaint of what was done before we liberalised it?
  Mr. Hill: I am simply saying that my constituents, and many other people, must be seriously wondering how it happens that the Government can allow one decision to be promulgated. There is this statement about the wholly-owned subsidiary being quite distinct from the other wholly-owned subsidiary, and that, therefore, there is no remission in law. There is the question of how that decision could ever be promulgated, and why it should be only after pressure and representation that a better ruling should be made. Surely the public are entitled to know—
  Mr. Lever: The hon. Gentleman knows the explanation.
  Mr. Hill: —why the Government seem to produce ill-considered legislation which they themselves have to amend and keep on amending. Surely, to ask for an explanation is not unreasonable.
  Mr. Percival: The Financial Secretary is usually so genial and courteous that I hesitate to join issue with him on a point which he has already told us he thinks is not very important, and on which my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) and my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) seem to have found the hon. Gentleman persuasive. It is the question whether the word should be "may" or "shall". The hon. Gentleman described this as a pedantic point of law. I know of only two kinds of

  1735
  points of law—good ones and bad ones. If my point is a bad one, I apologise to the Committee for taking its time—
  Mr. Harold Lever: May I say to the hon. and learned Gentleman—because I withdraw any suggestion of pedantry—that, on mature reflection, I think that he is, rather unusually, wrong, and that in this context the word "may" means "shall" or "must". That is what I would advise, on the legal advice I myself have received, is the effect. So no effect would result from the hon. and learned Gentleman changing the word from "may" to "shall", because in the terms of this paragraph I am advised very firmly that "may" and "shall" would apply with equal force.
  Mr. Percival: Perhaps the Financial Secretary will acquit me of discourtesy if I say that I find myself unable to agree with him as readily as he would wish—
  Mr. Paget: If the hon. and learned Gentleman wants to be convinced, he had better go to the Library and read Julius v. Bishop of Oxford, which settled that point.
  Mr. Percival: I hear what the hon. and learned Gentleman says, but I must have my say, albeit it will take but a short time.
  If this is a bad point, I apologise to the Committee, but as I said in the early hours of yesterday, I do wish that if we mean something we could say it, and not use another word and say it does not mean that but something else. If we mean something, let us say it. I hope that what I have to say is not a bad point, but a good one.
  The Financial Secretary used certain phrases. I do not know whether they just slipped from his tongue—I do not think so; I think that they reflected his intention. One phrase that I wrote down was, "It is our intention to give a right … ". Another was: "Their right to come and ask for the deposit to be remitted … ". Let there be no doubt about it: if the word there used is "may", the importer has no right. It is no good the Financial Secretary wagging his head—and if the hon. and learned Gentleman the Member for Northampton (Mr. Paget) wants to intervene, I shall gladly give way. "May"
  1736
  is the word used from time immemorial to signify a discretion.
  2.0 a.m.
  Mr. Paget: This is a very well decided point. If the hon. and learned Gentleman cares to look it up, he will find that when a public official is given power by the word "may" for the benefit of an individual, he is bound to exercise it. "May" means "must" in this context. It has been well settled in a number of cases.
  Mr. Percival: I hear what the hon. and learned Gentleman says. I hope that he will have a word with his colleagues in the Board of Trade, because the word used in connection with the investment grant is "may" and the Board of Trade is contending at this moment that that confers a discretion and not a right.
  At all events, what is the point of all this? If "may" means "shall", why not say so? Why put "may" and then leave it to people to persuade the court that in this case it means not "may", but "shall"? It is too silly for words and if the House of Commons wants to bring itself into disrepute, let it go on doing that and let the hon. and learned Member for Northampton make the sort of point he has made. If it has already been decided that "may" in this context means "shall", for goodness sake let us start using "shall".
  The Financial Secretary said that the purpose was to allow the Customs a latitude, but he up-ended his own argument.
  Mr. Harold Lever: When I originally intervened, it was before I had had legal advice, which I took because I suddenly remembered the line of cases to which my hon. and learned Friend the Member for Northampton (Mr. Paget) referred. I was wrong in saying that "may" was to give discretion. The discretion is given in the conditions, "if they are satisfied". The "may", however, means no discretion, I am advised, so that "may" means "shall". I agree with the hon. and learned Gentleman that it would be preferable to stop using "may" when we mean "shall" and when it has the effect of "shall", but I should like to make it clear that I am not now saying that "may" gives discretion. It is the conditions which give discretion, not the word "may".
  Mr. Percival: I am obliged to the hon. Gentleman, because it seems that he and I are now entirely agreed. Perhaps we may therefore forget the intervention of the hon. and learned Member for Northampton, which was irrelevant at the level of agreement which we had reached. If "may" means "shall", let us put in "shall", which makes a much better fit. Furthermore, it does not detract from what the Government want to achieve.
  The hon. Gentleman has already taken my point that the latitude given to the Customs is in the two words, "if satisfied", which enables them to say—the importer does not have to establish a certain level of proof—that they are satisfied on any sort of evidence. The difference between the hon. Gentleman and me is that I think that if the word "shall" were inserted it would establish beyond doubt that if an importer went to the Customs with evidence which was clear beyond doubt, so that there could be no question of the Customs not being satisfied, the word is "shall" and there is no doubt—
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Percival: The hon. Gentleman wags his head, but I hope that he will consider this. He and I are agreed with that when the Government use the word "may", they intend to mean "shall" and are relying on the fact that there are cases which say that "may" sometimes means "shall". Can he not go a little further and say that for once he intends to use the word he means, so that people will not have to say that he meant not "may", but "shall"? That would detract nothing from the purpose of the provision and would enable the House of Commons for once to say, "We said what we meant".
  [Mr. HARRY GOURLAY in the Chair]
  Mr. Tom Boardman: I will not develop the argument of my hon. and learned Friend the Member for Southport (Mr. Percival), except to say that there is a good deal of uncertainty about what is meant by the Bill. The Financial Secretary, who has tried to be most helpful, has found that some of the answers have had to be sought from outside the Treasury Bench. I think that he is far too
  1738
  complacent about the effect of the remission. Of course I welcome any liberalisation scheme of remission to help exports, but the hon. Gentleman has said that it will work in much the same way as draw-back. That is not so.
  The majority of goods which will attract the import deposit will not go direct to manufacturer-exporters; they will go through various hands and processes, and some of them will eventually find their way into the export channel. Only a small minority will go from the importer to an export manufacturer. Thus, the chain will have to trace through. Also there will have to be a division of goods going to E.F.T.A. and those going to other countries. The administrative task will be monstrous.
  An easy way to overcome the difficulty would have been to hand if we had assignability of the import deposit receipts, but that cannot apply now. That is precisely what happens in the case of draw-back of ordinary duty. The importer pays the duty. When the goods are subsequently made up and manufactured, passing through many hands, and re-exported, the exporter gets the draw-back. The same could have happened here.
  The only point of substance which distinguishes my Amendment No. 84 from the Government Amendment is that it refers also to goods intended to be used
  "in the process of producing goods for export".
  This covers plant and equipment used for exporting and would make them equally eligible for remission.
  I have an example here. Plant coming in from Germany to a small company is to cost £80,000, and 85 per cent. of the output of that plant will be exported. That has been the export proportion from similar plant. If I have understood aright, there will be no deposit remission on that.
  Mr. Harold Lever: The short answer is that the hon. Gentleman has not understood aright.
  Mr. Boardman: I am glad to have that assurance.
  Mr. Lever: I am sorry. The hon. Gentleman is referring to plant coming in to produce goods. There is no remission on that plant. Neither duty remission, if it is dutiable, nor deposit

  1739
  remission, and for the same obvious reason. The practice was the same under Conservative Governments in respect of duty, and I did not hear protests from the hon. Gentleman or his hon. Friends then.
  Mr. Boardman: I am talking about plant which is coming in at a cost of £80,000 and on which an import deposit of £40,000 will be payable.
  Mr. Lever: Why is the hon. Gentleman so keen to talk exclusively of the import deposit? Why not talk at the same time and for convenience of any relevant tariff duty which has long been established as payable and which also would not be remitted? Has it anything to do with the fact that this Government have brought in the import deposit and Governments of both complexions have for a long time operated tariffs on precisely the same principle?
  Mr. Boardman: I did not talk about duty, because it would have been strictly out of order. If I were allowed to stray on to that ground, I could give instances of duty remission on plant coming in from overseas having been cut back under the present Government.
  The point I am making on the import deposits is that plant coming in and which will be wholly used for the production of goods for export will still attract the import deposit. In the case I instanced for illustration, the plant cannot be produced here; it will attract a deposit of £40,000; interest will be borne by the manufacturer; and the export price will have to be increased; and there is no remission at all.
  That is the reason for my Amendment, which, I hope, will have support. The distinction between my Amendment and the Government Amendment for liberalisation of remission lies in the vital phrase
  "or in the process of producing goods for export".
  It is quite wrong that the deposit should be imposed in a way which will operate harshly against exporters.
  Mr. Robert Cooke: I do not want, at this late hour, to revive the recrimination we had a little earlier about the difficulties some of us have had with constituency cases involving goods brought
  1740
  in for processing and re-export, though those difficulties have meant anxious days for many people and a great deal of hard work for hon. Members—late into the night on many occasions.
  While one must feel happier at the liberalising Amendment which the Government have moved, I must join with my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) in saying that it all depends on how the Customs behave; and my hon. Friend added that we in this Committee are not able to control them, once we pass a Bill. In spite of what the Minister has said, it will very much depend on how the rules are worked. One can only hope they will be worked in as liberal a way as he has suggested. I hope that, if we have any difficulty, the Government will be active in telling Customs to mend their ways—should there be any difficulty.
  The liberalising Amendment will deal very largely with the difficulties of the substantial importers of wine, of whom I spoke on a previous occasion, who blend and bottle for re-export, largely to dollar countries. There is, however, wine taken out of bond and processed in one way or another by the smaller firms. I gather that there are some processes which are more complicated than those used by the larger firms. They will have to pay the duty and there will be difficulty over the deposit. The Government have had very adequate representations from the big people in this trade. It is the smaller ones of whom I now speak, and I hope that the Government will bear their difficulties in mind.
  The other matter I wanted to raise, and was positively invited by the Financial Secretary to raise on this Amendment, is one of which I spoke very briefly at a late hour last night, and that is the difficulty of my constituent, who is a small close company with very limited capital and limited opportunities of obtaining credit and facilities for finding the extra money needed for deposits under this Bill, but who has obtained the exclusive franchise in the United States, Canada and South Africa for a foreign piece of machinery produced in a land far from the United Kingdom but similarly produced by one of our European rivals.

  1741
  The point my constituent makes is that he will not be able to find out of his resources the import deposit which he will have to pay on that part of his business which relates solely to the United Kingdom. So much of his money will be locked up in financing his home operations that he will not be able to find the money to finance this marvellous export trade. He says in his letter to me that he will have to cancel his plans for the United States, Canada and South Africa because he cannot finance his business in view of the deposit which will he locked up.
  2.15 a.m.
  I can see no way out for him unless the liberalising Amendment can be worked in such a way that the import deposit on the goods imported and sold in the home market can be remitted. Paragraph 3(1, b) states:
  "that the remission of import deposit would conduce to the exportation of other goods …".
  It would be fine if it stopped there, but difficulty is produced by the words and commas which follow, which my legal friends could no doubt explain to me.
  If the re-exports greatly exceed the imports for home consumption is there discretion to remit the deposit on those goods for sale at home? The Financial Secretary does not look helpful, but perhaps he can give me a glimmer of hope. There may be a loophole in the words:
  "… sufficiently similar to the imported articles …"
  contained in paragraph 3(4).
  I am sure that the Financial Secretary will do all he can to help. He has had this case in his office for some days. Despite the rules of order, surely exports are more important than bent rules of order, and I hope the hon. Gentleman will be able to say something helpful.
  Dr. M. P. Winstanley: I have one question which I hope the Financial Secretary will be able to answer, even at this late hour. It is not dissimilar to the point put by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke). I fully appreciate that the intention of the Amendment is to liberalise the situation for exporters, and I welcome this, as will those small but highly specialised and
  1742
  efficient exporters in my constituency who depend upon imports.
  The Financial Secretary has explained that to make the provision flexible it has had to be drafted leaving considerable discretion. He has explained why the word "may" was used, and we now understand that "may" means something entirely different. The importer has been given two bites at the cherry. The deposit will be remitted immediately if he can demonstrate that the goods are to be re-exported in part or in whole, however indirectly. If he cannot satisfy the Commissioners on that point, he pays, and can later apply for repayment. If the importer is to be given two bites of the cherry so must the Commissioners, but they have not.
  Paragraph 3(1) states:
  "… if, where import deposit has been remitted under paragraph (1)(a) above, the goods are disposed of or used in a way inconsistent with the intention to re-export, the import deposit remitted or repaid shall become payable, or repayable, to the Commissioners."
  What kind of procedure has the Financial Secretary in mind? Customs and Excise, who are familiar with enforcement, have been given the job, but here there is a novel situation that an importer will be qualified for remission even if he shows that the goods he has imported are to pass through a number of hands before finally being exported. The disqualifying action, therefore, may be nothing to do with the person to whom the deposit has been remitted. Action may have occurred which has rendered the whole procedure invalid. A middleman, or a party to whom the goods have passed, may have used the goods for a different purpose, and I would like to know what the Financial Secretary has in mind on enforcement procedure. To what extent are the Customs and Excise expected to follow up goods? What kind of inspection will be conducted?
  I understand that the hon. Gentleman has made flexible arrangements, which are very satisfactory, and it is understandable that he has to have some kind of check. But the point concerning the hon. Member for Isle of Ely is how the officials concerned will behave, and that is a matter of some importance. Clearly, the Financial Secretary will have to give some thought to this, and I hope that he will give the Committee the benefit

  1743
  of his opinion on how this arrangement will work.
  Mr. John Page: The Financial Secretary said that one of my hon. Friends was dealing in the science of hypothetical fears. I have been engaged in an industry which has had to cope with import duty drawback for about 20 years. We have been told that the Customs and Excise have a lot of experience on which they can draw. I agree, but the immense new weight of imported goods with which they will have to deal will strain the organisation greatly, although the Financial Secretary remarked that it was only trivial.
  There is a booklet on import duty drawbacks which sets out what a person wishing ultimately to claim for import duty drawback has to do, and the complicated the detailed procedures which must be followed. Though the Government do not intend that these identical procedures shall be followed, it is difficult to see how the Customs and Excise are to safeguard the Inland Revenue unless they try to institute similar ones.
  The procedures are headed:
  "Requirements applying to manufacturers and to exporters and others who stock manufactured goods which include imported materials."
  They have to segregate materials, segregate products, keep special records, transfer the goods to other premises under certain forms, have notification and retention of evidence of payment, and a number of other details.
  I think that we must regard the Financial Secretary's statement as a holding one until the Customs and Excise have settled down to a modus vivendi for dealing with a new situation running at a rate of £750 million a year as from now. He stated that the Customs would allow remission on the basis of reasonable expectation. Would he qualify what he believes that such a basis would comprise? Until instructions are given further to those which he has confirmed tonight, remittance could be given in cases where general percentages of categories of end users can be presented immediately as evidence to the Customs officer at the time the deposit is being paid and claimed to be remitted.
  It is a most serious and difficult matter and, unless we can know exactly what
  1744
  a Customs officer in King's Lynn, Inverness, Glasgow, or Cornwall can consider to be a basis of reasonable expectation, the whole system must break down.
  I ask the Financial Secretary to give an exact and detailed statement of what he considers to be the basis of reasonable expectation which can be used as a definite rule for the time being. I also ask that if he makes that statement tonight, before altering it he will come back to the House and give details of a new statement of what the basis of reasonable expectation is. I assure him that instructions to the Customs and Excise will have to be changed within the next four to six weeks if the system is not to break down and remissions are to be allowed.
  Mr. Evelyn King: It is inevitable in a debate such as this that the subject changes with each speech. I was immensely disappointed with the reply that the Financial Secretary gave to my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) on general grounds and on a particular case.
  In my constituency there is a firm, Weyrad (Electronics) Ltd., which employs 200 people. It manufactures components for navigational and radar goods. The firm sent me a telegram emphasising the strains that this Measure will put on it. It uses automatic machines which cannot easily be made in this country and an order for their importation has already been given for delivery by air. Suddenly, the firm has been told that on these machines there is to be a 50 per cent. deposit on the value of the import. For a firm of this size, and having regard to the value of the machines it seeks to use, this is a considerable impost.
  When we consider that on the amount which, presumably, the firm will have to pay to the Customs authorities it will have to pay 7 or 8 per cent. interest, it is seen that this is a considerable hardship. I should have thought this a direct disincentive to the export trade which should be the desire of everyone to encourage.
  The Deputy Chairman (Mr. Harry Gourlay): Will the hon. Member please relate his remarks to the Amendment before the Committee? He is going rather wide.
  Mr. King: I was surprised that the Financial Secretary said that he would see that so far as possible there would be exemption for goods intended for "use" in the export trade. Those were the words with which he opened his speech and I like those words. They certainly ought to include machinery such as I have described which is vital to the export trade. I cannot see how they can be valid if they do not refer to such machines. Nor do I think there would be practical difficulties in making this concession.
  2.30 a.m.
  Mr. Drayson: Twice in 24 hours I have raised the question of textile manufacturers importing yarn with the object of exporting finished goods. I welcome the additions which the Financial Secretary is proposing to the Second Schedule, but I would like him to take the opportunity to say that the type of case I have put forward, which we know is repeated many times in Yorkshire and Lancashire, will be covered by his proposals, particularly cases where a manufacturer is manufacturing goods, sometimes on commission, and selling them through an export house in Manchester or Bradford, or wherever it may be. I have copies of 12 letters from different export houses all operating for one firm of manufacturers which I have mentioned.
  Sir D. Glover: The Financial Secretary covered most of my doubts about this problem. What has been said by hon. Members on this side, with little support from the other side, which has been distinctly silent, is that once one gets beyond the import of first instance, despite the protestations of the Financial Secretary it is becoming like the pregnant girl in the brothel being asked to state categorically who is the father of her child.
  This is the problem which the Government will be up against with Customs and Excise. Once one gets beyond the point of first instance, and goods and merchandise get into other ownership, whatever the Government's protestations it will be impossible for the Government and for Customs and Excise to keep a complete link for rebate of deposit.
  Despite what the Financial Secretary said—and he is the most sensible member of the Government party—
  Mr. Mikardo: Withdraw.
  Sir D. Glover: I do not withdrawn. I think that he is the most sensible member of the party opposite. I do not withdraw. I have great admiration—
  Mr. Mikardo: I asked the hon. Member to withdraw only because he was being offensive to everybody else on this side.
  Sir D. Glover: I said it with great purpose and malice aforethought. I was being complimentary to the hon. Gentleman and purposely offensive to every other hon. Member on that side.
  The Financial Secretary, who understands commerce and industry, has done his best to reassure hon. Members on this side about the working of this. But once one gets beyond the point of first instance, despite his protestations, there is no way one can overcome our genuine anxieties. This is bound to be rough justice and, in the long run, will be disadvantageous to our export performance and to the country's efficiency.
  I raise this with a definite purpose. I understand that in a few moments we will be on Report, when the Government should be bringing forward amending Clauses to make the Bill much more logical and workable than it will be under the present situation.
  Mr. Patrick Jenkin: This has been one of the most important debates in Committee. I extend a cautious welcome, and it can be no more, to the Amendment to which the Financial Secretary has spoken. I welcome it because of its intention. The Financial Secretary has convinced the Committee that the Government's intention is that the import deposit scheme should in no way act as a fetter or brake on exports. In particular, I welcome his assurance on the point raised in the Amendment put down in the name of my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) and myself, that the original instruction that the importer and the exporter had to be the same company has been withdrawn and that this will be operated with the maximum flexibility.
  I understand and take the point about the doubt on E.F.T.A. treatment. We can only hope that this will be cleared up as rapidly as possible, because it is of

  1747
  major concern to companies doing a substantial amount of business with the E.F.T.A. countries.
  On flexibility of operation, while I recognise the intention, I think that we are bound to have reservations about how it will work in practice. As the Financial Secretary described it to the Committee, it is the Government's intention that this should cover almost very conceivable eventuality. This would seem to be a very far reaching extension of the reliefs from burdens on imports. It does not cover the case made by my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) and my hon. Friend the Member for Dorset, South (Mr. Evelyn King). but it covers pretty well everything else. I accept the Government's bona fide intentions, but I share the fears which have been expressed about the terrifying complexity to which this will give rise.
  I fear that the system, with the best will in the world, will run into grave risk of becoming a bit of a paper chase with a large number of civil servants—much larger than the 250 mentioned on Second Reading as being the likely additional number—struggling to administer the scheme. I do not believe that, even yet, Treasury Ministers have taken on board the fact that this will represent a vast extension of the existing procedures which operate for import duty under Section 7 of the 1958 Act and Section 1 of the 1966 Act.
  A very large proportion of the goods to be incorporated into the extension are at present imported either permanently duty-free or they come in under temporary exemptions. No applications for remission, for draw back or for any of the other things have had to be made. It simply does not touch the problem. The import deposit scheme covers the whole sphere, with the limited exceptions mentioned in Schedule 1 which we have been discussing for most of yesterday and today.
  This will represent an enormous extension of the administration necessary to do it. From my inquiries, I believe that the Board of Trade recognises this. It has had this problem, and it is now seriously concerned with the weight of it. I only hope that, accepting the intentions
  1748
  of the Treasury Ministers that this should be as widely flexible as possible, they will recognise what this will mean in terms of administration both for the firms who will have to operate it and for the Customs and Excise. I anticipate that there will be tens of thousands of applications spreading not just from one company to another, but right down a chain, because of the substantial weight that the import deposit scheme is adding to the burden.
  I do not regard it as impossible that the delays into which this procedure is likely to run importers will induce a good many to recognise that the game is not worth the candle, they will pay the deposit to get hold of the goods and push them through the factories to get their production under way. This would utterly defeat the intention of the well-meaning and possibly valuable Amendment which we are discussing.
  The Financial Secretary has expressed great confidence in the skill, experience, and expertise of the officers of Customs and Excise to work this scheme in the manner that he has described it to the Committee. I sincerely and profoundly hope that the hon. Gentleman is justified, but I confess that I share the apprehensions which have been expressed by some of my hon. Friends, notably by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), that this is going to run into serious administrative difficulties. I draw the conclusion that if legislation of this sort is made tolerable only by the addition of a mass of complicated administrative paper work, involving millions of man hours, it is bad legislation, and ought not to have been brought before the Committee at all.
  Mr. Harold Lever: Legislation of this type is frequently recommended by leading personalities in the Opposition. Hon. Gentlemen opposite can groan. The fact is that it is the truth.
  This sort of scheme necessarily involves some minimal attention to administrative detail. Hon. Gentlemen opposite are singularly ambivalent. On the one hand, they press for innumerable concessions throughout the Committee stage, which, unhappily, I did not feel able to recommend to the Committee, and thereby simplified the administration, without receiving the appreciation one might have

  1749
  thought would be the case having regard to the remarks made when I make a concession and put down an Amendment to the greatest value to our exporters, in all forms.
  I am told that this will involve a paper chase. It becomes complicated only because I have ensured that the drafting of the provision shall be such as not to exclude a single possibility of assisting British exporters. It would have been simple to narrow the remission to cover only firms doing their own exports, but I have widened it to cover exports even if they occur six firms hence. The hon. Gentleman cannot have it both ways. This is the clearest and most liberal scheme possible for relieving exporters of the burden of the import deposit.
  I referred to goods which when imported can be shown to be intended for use in the export trade. That means those goods to be used in the export trade, and not to be used in making goods for the export trade. If anyone finds anything ambiguous about that, I shall clear it up straight away.
  There is not the faintest prospect of giving relief for deposit, or tariff, or any other duty on machines simply because they are being used for the export trade. This would be nonsense, because one does not know what is to happen to a machine, whether it will be used for three months, six months, or for 10 years, in the manufacture of particular articles. Unless it was intended facetiously, I must reject this argument. I take it that it was put forward in all earnestness, but I must reject the suggestion that we should give relief for machines on the ground of what the output was going to be. With goods exported within a measurable time there is some control. If I were to yield to what the hon. Gentleman said we would find that by comparison, the administrative complications of the relief that I am giving is child's play. If the hon. Gentleman's suggestion were accepted, over a long period it would be necessary to police the machines, check on the goods they were making this year and next year, winter and summer—
  Mr. Tom Boardman: It was not a facetious remark. I gave a factual illustration. The hon. Gentleman is talking of winter and summer. I remind him that this is to last for one year. I
  1750
  think that it is far less difficult administratively to police a specific machine of the type I illustrated than to police the mechanics of the remaining goods.
  Mr. Lever: I was being generous in suggesting that the hon. Gentleman's suggestion was intended to be facetious. It seems that the hon. Gentleman was seriously suggesting that we should provide relief for every machine and its production for a year. The hon. Gentleman can take it that we have no intention of making any such remission, nor would it be practicably desirable or within the bounds of reason to do so.
  With regard to the wording, I cannot do more than assure the Committee in open Parliament what our purposes are. I was bound to read it in the clearest terms so that exporters would know what it was intended their rights should be, and that would be a protection for them.
  I wish to say this in the clearest possible terms. I have the utmost confidence in the Customs in the matter of the administration of this provision. I know that they will show a practicality which we shall not be able to question in the use of this provision. I have been advised by the Customs, and not by a remote body, and it is manifestly unjust for hon. Members to make aspersions such as have been made because not a single hon. Member has offered to document facts when implying what has been implied against the Customs.
  2.45 a.m.
  Sir K. Joseph: Nobody has reflected upon the skill or competence of the Customs. What we have consistently criticised from this side of the Committee is the task which is being imposed upon them.
  Mr. Lever: if the right hon. Gentleman reads HANSARD tomorrow he will see that there was some claim that the Customs would operate this part of the Bill in a spirit very different from that which the Government have sought. We were told such things as that the Customs would need to be under constant surveillance, but that is certainly not necessary. The instructions which will be issued will be perfectly clear, and I have the utmost confidence that the Customs will operate them with sincerity and with fairness.

  1751
  I would like to finish with one small point. The hon. and learned Member for Southport (Mr. Percival) said that we should specify "shall" if we mean that and, without prolonging our discussion at this hour of the morning upon the relativity of "shall" and "may", I will tell him that I agree. Alas, however, it is too late for us to be able to give expression to his point on this occasion, but I can tell him that I will consult the Parliamentary draftsmen and, if they give a good reason, I shall see that "shall" is used in future. There is no other way of treating the various combinations of circumstances to fulfil the purpose we have intended here. We have the will, and I ask the Committee now to come to a decision.
  Sir D. Glover: Could we at least have an assurance for my hon. and learned Friend the Member for Southport (Mr. Percival) that, on Report, an Amendment may be moved to achieve precisely what is asked for?
  Mr. Lever: I have already told the Committee that I cannot offer to do that. For one thing, we must consult with those learned in drafting, but, as I have also already said, I cannot undertake to do that in time for this Bill.
  Mr. Robert Cooke: Could the Financial Secretary answer the point which I made, about importers who are very actively engaged in the export trade?
  Mr. Lever: What the hon. Member wanted me to promise was that the Government would relieve importers engaged in the export trade.
  Mr. Cooke: Those who are exporters in a very big sense.
  Mr. Lever: Yes, in a very big sense, but the fact that a firm is actively in the export trade does not, of itself, qualify that firm for relief.
  Amendment agreed to.
  Mr. Blaker: I beg to move, Amendment No. 111, in page 13, line 39, at end insert:
  Goods imported for use in defence systems
  7.—(1) No import deposit shall be payable—

  (a) in respect of goods imported by or on behalf of any Minister of the Crown, for use in, or for the development of, defence systems or for use by the armed forces of the Crown; or

  1752

  (b) in respect of any goods imported by or on behalf of any person engaged. pursuant to a contract with the Crown in that behalf, in the development of. or in the production of goods for, defence systems, for use in such development or production.

  (2) In relation to goods of the description in sub-paragraph (1) above, section 6 of the Import Duties Act 1958 (power to exempt particular importations of certain goods) shall apply as respects the repayment or remission of import deposit as it applies as respects the repayment or remission of import duty, provided that it shall apply as if paragraph (a) of subsection (1) thereof were omitted therefrom.
  This is an Amendment of some substance. Although our Armed Forces are being rapidly reduced in size, they do involve the purchase by the Government of substantial quantities of defence equipment from overseas, often from private sources. The Bill has two purposes—to reduce imports and to exercise a limited pressure on liquidity. Whether or not the deposit is payable cannot affect the quantities bought, including those bought overseas, since the Government will presumably act in accordance with their view of the national needs. Therefore, the adverse pressure on the resources of small firms will be particularly strong.
  If smaller firms cannot raise the deposit, it will mean not that the imports will not come in but that they will come in through another, bigger, firm which can raise the deposit. There will be greater difficulty, in that firms will not be able to raise the deposits from at least one possible source, the ultimate consumer, because that consumer is the Government. This is a reason to relieve importing firms of the burden of the deposit.
  I doubt whether the Amendment would have a substantial effect on the liquidity of the economy, but perhaps the Minister of State can give some figures. Paragraph (2) refers to Section 6 of the Import Duties Act, 1958, and I will be glad to explain that reference if it is not clear to any hon. Member.
  Mr. R. Gresham Cooke: I support my hon. Friend the Member for Blackpool, South (Mr. Blaker). An important principle is involved, because the Government have, in the past, taken power to exempt machinery, and so on, bought for

  1753
  essential Government purposes, and anything used by the Armed Forces should be exempt from these duties.
  I heard last night of a relevant example. I met a friend of mine, an importer of wines and spirits, who has a very large contract for the import of rum for the Navy. He has a shipment of £24,000 worth of rum on the seas at the moment from Trinidad, for which he will now have to find an import duty of no less than £12,000. His is a small firm and he will have difficulty in finding the money, but if and when he does he will no doubt have to raise the price of rum to the Navy. It seems stupid that, when the rum is consumed on board ship, it is free of Excise duty but the importer has to pay the import duty. I am sure that the Navy would be glad if the Government dropped the import duty in cases like this.
  Mr. Taverne: There are three parts to this Amendment. I am not sure that I understand its effect, and I know that I do not understand the third part. Its first aim is to exempt goods imported by the Crown. The Bill does not bind the Crown, so that part is not needed.
  It appears to be the intention of the second part that those who are under some contract with the Crown and import goods which will be used for defence development should be exempt. I do not see how that could possibly cover the importers of rum mentioned by the hon. Member for Twickenham (Mr. Gresham Cooke), because these are not goods for use by the Armed Services of the Crown. They are not being imported by the Crown. Moreover, paragraph 7(1)(b) refers only to goods which are imported for use in defence systems.
  Mr. Gresham Cooke: Paragraph 7(1)(a) refers to any goods
  "imported by or on behalf of any Minister of the Crown … for use by the armed forces of the Crown."
  Mr. Taverne: I am not sure that that case would be covered. It is vague. It is not clear in that case whether the goods were imported on behalf of a Minister of the Crown. If the person were purely an agent, that might be so, but if he were selling to the Crown it is not clear that paragraph 7(1,a) would apply.
  Mr. BlakerMay I give an example of what I conceive would be covered? I have in mind the importation of components for defence equipment, microwave systems and sub-assemblies for military equipment which are imported through importers in the private sector, as many other supplies for the use of the Armed Forces are imported.
  Mr. Taverne: I understand that part, but it would not cover the example given by the hon. Member for Twickenham.
  The second category with which the Amendment deals includes goods for use in defence systems imported by those who are
  "engaged, pursuant to a contract with the Crown in that behalf".
  There are three objections to exempting this category. First, it would be contrary to the Government's general policy; though the Government are not bound, those who are under contract to the Government would not have to pay the deposit. If it were more widely applied it would erode the scheme. More important is the creation of anomalies which would arise between those who were importing these goods under contract to the Crown and those who were not.
  Thirdly, because of a certain element of vagueness and the difficulty of identifying the goods in question at the time they leave the Customs, it would impose a major administrative difficulty of the kind which has been suggested in the debates. It is extremely important that the Customs should know exactly for what the goods were intended at the time they were imported. It would be difficult to identify the goods at the time they left the Customs for the latter to be absolutely clear about the purpose for which they were imported and clear that this sub-paragraph applied.
  I am totally at a loss about subparagraph (2). I do not understand why it is thought to be necessary. Under Section 6 of the Import Duties Act, the Treasury have power to give directions which would exempt from duty in respect of a limited list of goods. It is suggested that this limited list should be extended to apply to goods which are referred to in sub-paragraph (1), but since that subparagraph is in any event intended to exempt those goods from the payment of the deposit I do not see what further

  1755
  effect is achieved by sub-paragraph (2). As I cannot understand the purpose of that sub-paragraph, as the first part, paragraph 7(1,a), is unnecessary, and as paragraph 7(1,b) is undesirable, I invite the Committee not to accept the Amendment.
  3.0 a.m.
  Mr. Blaker: The purpose of subparagraph (2) is to provide machinery to give effect to the purpose of subparagraph (1) by adopting the machinery set out in the Import Duties Act, 1958, to make it available for the goods described. If the hon. and learned Gentleman says that sub-paragraph (2) is unnecessary, then I am satisfied.
  But I am not convinced by what the hon. and learned Gentleman said about acceptance of the intention of the Amendment, disregarding his anxieties about the machinery suggested. He said the exemptions suggested in sub-paragraph (2) would erode the scheme. I cannot see how this could be so in relation to at least the level of imports of defence equipment, because surely the level of these imports is decided by the Government in relation to its conception of national needs. I do not see how the Committee can be persuaded by the right hon. and learned Gentleman's argument, and I regret that he is unable to accept the Amendment.
  Amendment negatived.
  Schedule, as amended, agreed to.
  Motion made, and Question proposed, That the Bill, as amended, be reported to the House.—[Dr. Miller.]
  Hon. Members: Object.
  The Deputy Chairman (Mr. Harry Gourlay): The Question is not debatable.
  Mr. Emery: On a point of order. I want to make clear a position I raised with the Chair earlier, concerning Amendments on Report.
  The Deputy Chairman: The hon. Gentleman's point of order should be raised in the House and not in Committee.
  Question put and agreed to.
  Bill reported with 5 Amendments.
  Motion made, and Question proposed, That the Bill, as amended, be now considered.—[Dr. Miller.]
  Mr. Emery: On a point of order, Mr. Speaker. I refer you to Standing Order No. 48, where it is stated that
  "On a clause being offered in a committee on a bill, or on consideration of the report of a bill, the chairman or Mr. Speaker shall desire the Member offering the same to bring it up, whereupon it shall be read a first time without any question being put, but no clause"—
  and this is the point I am raising—.
  "shall be offered on consideration of report without notice."
  May I ask how we could have had notice of any new Clause for consideration on Report? Is it not the case that the Government have forced us into a position where it is impossible for a new Clause to be in order now? By this procedure, have not the Government denied the right of back benchers to amend the Bill on Report through the normal practice of introducing new Clauses?
  Sir D. Glover: On a point of order—
  Mr. Speaker: Order. I will deal next with the hon. Gentleman's point of order when he raises it. We are now discussing whether the Bill, as amended, be now considered. What the hon. Gentleman the Member for Honiton (Mr. Emery) has argued just now is, in my opinion, quite a reasonable argument against the Question before the House, which is, That the Bill, as amended, be now considered. If we move from the Committee stage to the Report stage as swiftly as we have moved now it handicaps hon. Members in the way he has described. This is an argument against considering the Bill now.
  Sir D. Glover: I support my hon. Friend the Member for Honiton (Mr. Emery). I want to make it quite clear that anything I may say is not in the slightest degree a reflection on the Chair or on the procedure of the House. We all know that we are governed very much by our Standing Orders and procedure and that, in theory, the Government are quite in order in moving to the Report stage immediately after the Committee stage. But I should like to protest at the present Government's proposals that tonight, immediately after the Committee stage, we should take the Report stage.
  Mr. Speaker, you can run a democracy on theoretical lines without the spirit of that democracy working at all.

  1757
  and in my submission to you the Government of the day should not, as they are doing tonight, seek to take the Report stage of a very controversial Bill immediately after the Committee stage—and a Committee stage in which many points have been argued virulently and cogently.
  If I may say so, Mr. Speaker, although you were not here, of course, it was a Committee stage during which many of the Government replies indicated a great deal of sympathy for the points of view we put forward. But they have had no opportunity at all of mature consideration of the arguments advanced in Committee. I am sure that every unbiased hon. Member would say that the hon. and learned Gentleman the Minister of State was not in any way convinced of the argument he put forward on the last Amendment we dealt with—No. 111—and that, if given the opportunity to consult his advisers and maturely consider the matter, he would be only too prepared on Report to go perhaps not all the way, but halfway, to the Opposition point of view and the development of the Bill.
  I want to make this submission, not only to you, Mr. Speaker, but to Parliament in general—
  Mr. Speaker: Order. What is happening now is perfectly in order, but the hon. Gentleman must not make his submission to Mr. Speaker. He must make his submission to the opposite benches.
  Sir D. Glover: I apologise, Mr. Speaker. I was, in fact, trying to be kind. I withdraw what I said, because I realise that I must direct my remarks to the Government.
  The Government are working what I would call the machinery of democracy, but they are not really working democracy at all. If hon. Gentlemen opposite want to ride roughshod because of their majority, they can do so, but if they do they are weakening the whole fabric of Parliament—[HON. MEMBERS: "Oh.") It is no use hon. Members groaning. I only wish that a great many of the people who sent them here could hear these groans.
  The whole basis of Parliament is debate. The whole basis of that debate is that when we have a Second Reading we accept the general principle of the
  1758
  Bill. Then we have the Committee stage, and the whole basis of that stage is that we argue the details of the Bill. It is understood that in our procedure the Bill is then taken away so that mature consideration can be given to the arguments advanced in Committee. If they see fit, the Government, on the Bill's return to the House on Report, may accept some submissions of the Opposition and sometimes some of those of their own supporters. This is done not just like that, but after mature consideration and after taking advice from officials in the Departments concerned. On Report, we work in a narrow compass, dealing with the faults of the Bill, trying to produce not a Bill which is contrary to the designs of that introduced on Second Reading, but more efficient, a Bill which will work better in the interests of the people as a whole.
  I am sorry to see that the Home Secretary, who has sat through many hours of debate, has suddenly left now that we have reached the crunch of the evening. I should have liked to tell him something about this. I am not very hostile to the Bill. I made a speech in July and another in the debate last week on the Ways and Means Resolution which showed that I was not all that hostile to the Bill.
  However, it is generally accepted that the Bill was produced in a rush, that it is full of anomalies and that it will give rise to many problems. We have now spent two days debating it in Committee and during those debates, during which hon. Members have shown much forbearance and not a great deal of hostility, Ministers have said time after time that they appreciate the point of an argument, or that they see the difficulty, but that at that stage they could not accept the Amendment. The Financial Secretary has been the soul of conciliation and so on.
  But the point is that Ministers have said that immediately after an argument has been adduced and before they have had time for mature consideration and discussion with their advisers. It is often after studying the collective argument that Ministers will bring forward Amendments on Report to meet the anxieties of the Opposition or at least partially to do so. This is how a Bill

  1759
  goes through its stages. Hon. Members have a duty—
  Mr. Roy Roebuck: Hear, hear.
  Sir D. Glover: It is all very well for the hon. Member to say "Hear, hear", but it is the duty of hon. Members to ensure that when a Bill becomes law, it is the best which can be produced, and that is our duty whether we are hostile to the Bill or in favour of it. In common sense, that cannot be done unless arguments in support of proposed alterations are properly considered. Ministers and their advisers must have the opportunity to study what has been said and to decide whether there is more in an argument for an Amendment than appeared to be the case at first sight.
  That cannot happen when the Government, by using their majority, ride roughshod over the will of Parliament and, by the drop of a guillotine, proceed immediately from the Committee stage to the Report stage. It is not even certain that this controversial Bill, which will create a lot of upset in the commercial activities of the nation, will achieve the object which the Government have in mind. I am not hostile to that object, but the Government have a great task in convincing the House that what they are doing is right. It is a Measure which breaks new ground and initiates new processes. It is almost inconceivable that the Government have got it 100 per cent. right the first time.
  Hon. Members opposite who have not spoken in our debates on the Bill have just as much responsibility for the working of the Parliamentary machine and for seeing that legislation is well drafted so that it will not bring injustice to a firm or group of employees in their constituencies. This is an entirely new system of deposits for the purpose of controlling imports. In our two days of debate, there has been no difficulty in producing arguments against a great many of the Bill's provisions. There has been no accusation of filibustering. Every point raised was argued cogently.
  Mr. Speaker: The hon. Gentleman is going a shade wide of the Motion. We are discussing whether the Bill, as amended, should be now considered.
  Sir D. Glover: I appreciate that, Mr. Speaker, but it is a little difficult for me to show why the Bill should not now be taken on Report unless I give you some of the background. You, Sir, of all Members now sitting in the Chamber, are the one who was not able to listen to our previous debates. I was trying to inform you of what went on.
  Mr. Speaker: I am always grateful for education, but we must keep to the Motion.
  Sir D. Glover: I understand how you appreciate the way in which I was trying to help, Sir, and I appreciate the kindly way in which you have accepted my instruction in this difficult matter.
  If we proceed to Report, any hon. Member who wishes to propose an Amendment will have to do it by manuscript Amendment. I must not say what your ruling would be—I am treading on even more tender ground now, Mr. Speaker—but the probability is that the Chair would refuse such manuscript Amendments. Therefore, it will be a mockery of a Report stage. The whole basis of Report is mature consideration of what went on in Committee. It is our duty to proceed in that way, with the object of improving the legislation which the House passes. I regret that a good many of us are lax in that duty, but that is what we should do.
  The Motion would make a mockery of the work of Parliament because no hon. Member has had opportunity to read all the debate in Committee, let alone give it mature consideration. The Government now are just using their majority to steamroller legislation through the House. I cannot carry this argument any further—[HON. MEMBERS: "Hear, hear."]—unless I am encouraged by the party opposite, and if it encourages me I am prepared to develop further arguments. What I say is that the procedure the Government are adopting is the negation of the whole basis of the way Parliamentary democracy ought to be worked.
  The Government can tonight get Report of the Bill because of their majority, but in the long run they will lose yet more prestige both in the country and among their own back benchers, because

  1761
  they are no longer working the Parliamentary machine as it was designed by our forefathers to work in the interests of the people.
  Sir H. Legge-Bourke: In rising to support what my hon. Friend the Member for Ormskirk (Sir D. Glover) has just said I should like to raise two other matters which he did not touch upon. It is worth recalling the fact that the Bill is incapable of amendment in another place. It starts by saying
  "We … the Commons of the United Kingdom in Parliament assembled … "
  because we are raising necessary supply, or allegedly necessary supply: therefore, the Bill cannot be amended in another place.
  I have on several occasions during the last two days heard the Financial Secretary say of a matter being discussed that he will look at it again. Just before the conclusion of the Committee stage we had a statement from the Financial Secretary—I hope he is listening—in reply to my hon. and learned Friend the Member for Southport (Mr. Percival) that he felt the word "shall" should be in the Government's Amendment.
  Mr. Harold Lever: Will the hon. Gentleman give way?
  Sir H. Legge-Bourke: May I finish?
  Mr. Lever: Surely.
  Sir H. Legge-Bourke: The hon. Gentleman said he would have to take the advice of the Parliamentary draftsmen before committing himself. I do not know whether he noticed, but one of them looked as though he was watching a fast rally at Wimbledon; he was shaking his head—
  Mr. Speaker: The hon. Member is one of my Chairmen and he knows what it is to keep in order. He must keep to the Motion.
  Sir H. Legge-Bourke: The point I am making is that the Financial Secretary gave an undertaking to look at certain things again. We—
  Mr. Lever Mr. Lever rose—
  Sir H. Legge-Bourke: I will give way in a minute.
  1762
  In Committee, hon. Members were entitled to think that there might be opportunity before the Bill finally came back to the House for something to be done.
  Mr. Lever Mr. Lever rose—
  Sir H. Legge-Bourke: I am not accusing the Financial Secretary—
  Mr. Lever: The hon. Member is most reluctant to give way, though he mentions my name and said that I gave undertakings in Committee to consider things, undertakings which would have lead him to believe that he would have opportunity on Report to hear further from me, or that there might be opportunities open to him. This is absolutely untrue.
  Sir H. Legge-Bourke: This is not what I have said or have accused the hon. Gentleman of. He is getting a little Jackin-the-Boxey.
  Mr. Lever: The hon. Gentleman must not make those accusations.
  Sir H. Legge-Bourke: The hon. Gentleman was very courteous during Committee. I hope that he will continue to be so. I only say that people who listened to things he said on certain of these matters were entitled to assume that, not necessarily on Report, but at some stage before we finally parted with the Bill, before Royal Assent, something might be changed.
  I am not saying at what stage, but we must not overlook the fact that the Bill cannot be amended in another place, so it is all the more reprehensible that we should be asked to take Report in the early morning immediately after the conclusion of Committee.
  The Financial Secretary, in replying to my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman), said that negotiations with E.F.T.A. were still being conducted. What is the hurry to get the Bill through quickly when a Ways and Means Resolution has been passed which will last for 25 days? In anticipation of the Bill receiving the Royal Assent the Government have power to authorise the Customs to collect the money. Every minute that passes strengthens the case for first completing the E.F.T.A. negotiations.

  1763
  The Parliamentary draftsmen should have an opportunity to consider the matters raised in Committee before Report. It is an outrage that we should be taking Report at 3.30 a.m., having completed the Committee stage at 3 o'clock. It is fortunate for the Financial Secretary that the hon. Member for Tynemouth (Dame Irene Ward) is not here.
  Mr. Jopling: I understand that we are debating whether or not the House should move to consider the Report stage of the Bill. The arguments already put to the House by my hon. Friends the Members for Honiton (Mr. Emery) and Ormskirk (Sir D. Glover) were compelling, and I am surprised that the Leader of the House has not seen fit to be present. This is a matter for the Leader of the House, and I suggest to the Government Whips that one of them should go and fetch him, so that he can hear the feeling of the House on the proposal by the Government to move at this hour the Report stage of the Bill.
  I do not want to use arguments about the hour of the night, and whether or not we are at our best. I want to use an argument which has affected me seriously during the last two or three hours, and which makes the manoeuvre of going straight to Report stage one of extreme difficulty for me. In Committee, I was waiting for the Motion, on Schedule 1, That this Schedule be the First Schedule to the Bill, as there were matters which I was anxious to raise at that stage. I wanted to ask why it was that certain items were not included in Schedule 1.
  Mr. Speaker: I am following the hon. Gentleman with great attention. If he wanted to raise a matter on the Question, That this Schedule be the First Schedule to the Bill, he should have done it in Committee. He could not do it on Report.
  Mr. Jopling: I am sorry, Mr. Speaker. I shall explain why it was impossible, and why at that stage I tried to do what you have suggested. This is the crux of my argument, if you, Mr. Speaker, would allow me to come to it.
  I wanted to ask the Government why certain items were included in Schedule 1. I do not want to press this too much,
  1764
  but I particularly wanted to ask why the Government had included dairy produce in the Schedule. At the moment, the whole of the agricultural industry is in the greatest difficulty—
  Mr. Speaker: Order. With respect, I hope that I am a most sympathetic Speaker, but the hon. Gentleman should have argued that in Committee when we were discussing the Question, That this Schedule be the First Schedule to the Bill. He could never discuss it on Report.
  3.30 a.m.
  Mr. Jopling: Mr. Speaker, I will come immediately to why that was not possible.
  When the moment came for the Question, That this Schedule be the First Schedule to the Bill, to be considered, the Chairman took it formally. I rose and, on a point of order, asked him why it was that I had not been called. This has put me in serious difficulty, because the Ruling of the Chairman was that this matter could not be raised, when I had been present throughout the Committee stage, intending to raise it.
  Mr. Speaker: Order. If it could not be raised then, certainly it cannot be raised on Report.
  Mr. Jopling: I am coming to my difficulty. As I was not able to raise it at that stage, and as my intention was to ask the Government why items were included, so that I could consider tabling Amendments for consideration on Report, my whole strategy of trying to alter the Bill was completely scuppered.
  In view of the Government's manoeuvre of moving straight on to Report at this hour, without giving us a reasonable break in which to consider what has happened and what was the Chairman's Ruling at that point in the Committee. I have had to change my plans in trying to get the Bill altered. I think that mine is a reasonable complaint. I hope, Mr. Speaker, that you understand my difficulty.
  It is for that reason that I object strongly to the Government's manoeuvre. Their motives are most dubious. I shall not have had proper time to consider my position. I do not know how I could have foreseen it. No one could have said that the Question, That this

  1765
  Schedule be the First Schedule to the Bill, would be decided formally. No one could have told me that I should not have an opportunity to ask why certain items had been included in the Schedule.
  In view of that, it is only reasonable to ask the Government for a little time to consider the situation and prepare Amendments that I feel I must table for discussion on Report. This is a most unparliamentary practice. I listened with interest to what my hon. Friend the Member for Ormskirk (Sir D. Glover) said. He pointed out that the Government are behaving in a way which runs completely counter to the spirit of free speech and the tradition of hon. Members examining Bills properly. It seems to be a growing practice of this Government.
  Mr. Speaker, I object strongly to the Government not giving us an opportunity to consider what has happened in Committee before moving on to Report. I can do no more than record my objection.
  Mr. T. L. Iremonger: I have listened very carefully for the last three or four hours to the debate in Committee and eagerly anticipated the Report stage. It seems inconceivable that this should be taken right away. I understand the virtue of the Standing Order to which my hon. Friend the Member for Honiton (Mr. Emery) drew attention. I should have thought that the whole House would be aware that it is convenient, in certain circumstances, to be able to move quickly from Committee to Report, but the object of that is the convenience of the House. If ever there were a classic example of a Bill to which it was essential that time should be given for consideration, this is that Bill.
  As my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) said, it is not so important that the Bill should be got through before dawn today. It is important that when it is got through we should get it roughly right. The Bill breaks new ground administratively. It is a Bill in which the principle is fairly simple, but the detail is all. The detail has been carefully considered by both sides of tae Committee. Listening to the debate, I must say in fairness to the Minister of State and the Financial Secretary that I have never before known the Government Front Bench to be so receptive, open-minded, constructive and
  1766
  frankly open to persuasion that they might have second thoughts.
  Was this all a charade, a totally insincere and cynical exercise of leading hon. Members up the garden path and letting the children play with the toys of democracy and then saying, we shall wash it all out and go to bed? The Committee was trying to get the details right. This is the only opportunity the House will have to settle details about which our constituents will come on us hard. A great deal of money is at stake. Many individual enterprises and forms will be broken if it turns out that the law is such that their legitimate grievances cannot be met.
  I should not have thought it the object of the Government to achieve a bad Act of Parliament. Whatever their object may be, it seems extremely sinister that increasingly over the years of this Parliament the Government have been obsessed with the idea under the leadership of the former Leader of the House—
  Mr. Speaker: Order. We are discussing whether we shall consider the Bill now.
  Mr. Iremonger: I was saying that the suggestion that we should not consider the Bill would be sinister enough in any circumstances, but in the circumstances of the tendency in this Parliament it seems more sinister than ever because more and more this House has been required to accede to the convenience of the Government as an instrument of the Executive rather than as a proper deliberative Chamber in which the people should be able to put their objections through the voices of their representatives.
  I am aghast to see no serious attention given to these arguments by hon. Members opposite. The figure of the Patronage Secretary is lurking in the background. He is apparently wondering whether to come in and wash out consideration of the Bill without paying any attention to the serious second thoughts which the occupants of the Government Front Bench have indicated. Therefore the Bill is to come before the House in an unalterable form with no opportunity of changing it.
  Mr. Taverne: The hon. Member has been extremely fair in the way in which he has made his point, but the Financial

  1767
  Secretary and I gave no undertaking to consider these matters on Report. We listened to a number of very telling points and said that we would consider them in the light of the power to add to the list of exemptions. There is power in the Bill to add to the exemptions by Order.
  Mr. Iremonger: The hon. and learned Gentleman, although most assiduous and courteous throughout, was not on the Front Bench during our debates on all the Amendments. That may well have been what he was indicating, but his hon. Friends were considering matters far wider than that. The House cannot be satisfied that this was an entirely sincere exercise in procedure. I hope that the House will not accept this rapid move into making final provision on matters which we are entitled to have properly considered and brought before the House in a way which allows Amendments to be tabled.
  Sir K. Joseph: I rise, knowing that my hon. Friends have strong views, to ask your guidance, Mr. Speaker. One of the principal factors we shall have in our minds when considering whether to go on to Report is the question of Amendments. No hon. Member knows which Amendments will be selected. We cannot tell, because of the collapsing together of the normal stages of business, what Amendments have been put down and nor have we your guidance on which Amendments have been selected.
  This is exacerbated when it comes to new Clauses, because Standing Order No. 48 precludes consideration of new Clauses on Report without the giving of notice. We ask you what is meant by notice of a new Clause? Is the notice given by the handing in by one of my hon. Friends of a manuscript new Clause? Is that notice given by the handing in by one of my hon. Friends of a manuscript new Clause, or more than one, a sufficient notice for the purposes of Standing Order No. 48, permitting you to call it if Report follows Committee without interval? Is it possible for you to give guidance on that?
  Mr. Speaker: I thought I had already made that clear. The hon. Gentleman the Member for Honiton (Mr. Emery) was perfectly right earlier. Notice means formal notice. The new Clause must
  1768
  appear on the Notice Paper. This is one of the casualties of the procedure we are now discussing.
  Mr. Emery Mr. Emery rose—
  Mr. Speaker: The hon. Member for Honiton has exhausted his right to speak. He raised a matter as a point of order, but it was a point of debate. But I will be generous.
  3.45 a.m.
  Mr. Emery: I was trying to elicit a point from you, Mr. Speaker, and from your reply I wish to deal with why we should not proceed now to further consideration of the Bill.
  It seems to me one of the normal procedures of the House of Commons that on a Bill which affects a vast number of people, industries and those who work in them, there is normally a desire for the Government to try to ensure that these people who are affected are allowed time so that they, as well as hon. Members of Parliament, can consider what further action should be taken after Committee stage has been completed on the Floor of the House. If the Government fail here, industry has had no chance, and nor has anyone else. to consider the Bill, as reported from Committee to the House. What has happened from a little after 3 a.m. to 3.45 a.m., or when we get off this Motion, is stretching imagination well past breaking point.
  My major objection to the proceedings is that people outside the House have had no opportunity to consider many of the statements made by Government spokesmen in answer to the debate. We reflect the views that are expressed to us. This is a normal procedure. But the Opposition, by the approach of the Government, are being denied that right. We are being denied the opportunity of any consultation between the Committee and Report stages by the way that the Government are proceeding with this legislation.
  I say to the Chief Secretary, who is the senior Minister on the Government Front Bench at the moment, that this is not only a matter for the Government but for the House of Commons. I think that the Leader of the House should be in his place, because this is a matter for the House of Commons, not just for the Government. The rights of the Opposition should be defended by the Leader

  1769
  of the House. We cannot expect the Government to defend them. The Leader of the House should be here to listen to our objections to proceeding to Report Stage.
  I would appeal to the Leader of the House to use his influence to stop the Government overriding the rights of the Opposition, because that is what is happening. Indeed, if certain members of the Government, whom I remember so well in the period 1959 to 1964, were sitting on these benches now we would have had a near revolution. There would have been absolute uproar. We would not have this mild and fairly reasonable objection. We would have had the right hon. Member for Belper (Mr. George Brown), and heaven knows where we would have been.
  I turn now to my second reason for objecting to proceeding to the Report stage. This refers to the point of order that I tried to raise with you, Mr. Speaker, and on which you were so helpful. We are in the position of having to proceed to a most serious aspect, namely, seeking to amend a money Bill by manuscript Amendments. Even in a small Committee upstairs, where things can be dealt with easily, most chairmen object strongly to proceeding on manuscript Amendments. But the only way that any Amendment, if it is in order, can be taken on Report, if we get to it, is on a manuscript basis. No hon. Member on either side will have in his hand the Amendment being considered by the House. How we will proceed, unless the mover reads it out, I do not know. That would he an unworkman and unbusiness like way of proceeding.
  But, in addition, it appears that any new Clause, which is a normal method of amending on Report, probably could not be called. I have prepared a new Clause to try to meet some of the objections raised by the Government to certain Amendments considered in Committee. However, because of Standing Orders, I now find that Mr. Speaker can do nothing to ensure that that new Clause is called. We are completely hamstrung. It is impossible for us to proceed in that way and the Government realise this. If the party opposite was in opposition we should probably hear much stronger objection; than we are making.
  1770
  As a matter of reasonable House of Commons procedure, the Government have power, under the Ways and Means Resolution, to do whatever they want to do for another 10 days. I appeal to the Government to defend what they pretend to stand for, and postpone the Report stage until Monday of next week, or even to Friday, if that is preferable, to allow time for the Bill to be reprinted, and for the necessary consultations to take place. Nothing that is scheduled to happen on Monday is more important than this Bill. If Monday is a Supply day, I am sure that I could appeal to my Front Bench to give up that day to enable us to proceed with the Bill.
  The Financial Secretary was most guarded when he said that he would reconsider any points that we put forward. Twice, earlier on, I said that we would be able to return to certain matters on Report when the Bill had been reprinted. I purposely used that phrase because I had heard a rumour that the Government would adopt these tactics. Was there what I believe would have been an honourable approach on the part of the appropriate Minister? Did any Minister make it plain that there was no intention of having the Bill reprinted before we moved on to Report?
  As my hon. Friend the Member for Ormskirk (Sir D. Glover) said, this is the most adverse manner of proceeding in any form of Parliamentary operation. The Government cannot regard this as an example of good democratic government. I am surprised that my suggesting about sending for the Leader of the House has not been acted upon. Perhaps the Treasury Ministers do not want the right hon. Gentleman to come to the Chamber. The right hon. Gentleman may advise them of the basis of our argument and decide to give way to our plea.
  It is not as thought the Government's timetable is so full that it is necessary for them to force the Bill through tonight. This is the kind of maladministration that we saw at the end of last year. I did not like it then, but at least one could understand it. The Government claimed that there was no time to do things in any other way, but that is not the position now. That being so, it is abominable that the Government intend to push the Bill through tonight. That appears to be their intention, judging

  1771
  from the stony faces of the Ministers on the Front Bench.
  Mr. Charles Fletcher-Cooke: I am not sure that the Government appreciate the gravity of what it has done. It is true that there have been Bills of great importance and great urgency in which the Report stage has been taken immediately after Committee. That, I can understand, because Governments must do that when there is great urgency, but tonight we have not been told what is the urgency in this case. But, even if there is urgency, what the Government have not done as a Government always do in my experience, when they intend to adopt this procedure, is to move a Motion to modify Standing Order 48. If the Government wish to move directly from Committee to Report, then it seeks suspension of Standing Order 48 so that notice of Amendments and new Clauses may be given during the Committee stage.
  That is familiar and traditional practice and it is the one which the Government should have put into force on this occasion. What has happened? Obviously, the Government have had no thought for the rights of the House nor for the rights of the Opposition. No, the Government are so single-minded in driving this Bill through the House that they have not taken even this elementary precaution. Since they have not done so, it seems to me that they should pay the penalty for their omission. We should not debate the Motion which we are debating at this moment.
  Mr. Michael Shaw: I rise with a good deal of sadness. I feel that the Bill is very important indeed, but that the manner in which it has gone through the House has been hurried, to say the least. Obviously, there is not all the time in the world on this occasion, but, clearly, our rules give us time; and, presumably, when those rules were designed, they were designed in such a way that business which would be affected by those rules, and by the Ways and Means vote, could go through at a proper pace so that proper and due consideration could be given to all the various aspects of the legislation, whatever it might be.
  I refuse to believe that, extraordinary though this measure may be, such a
  1772
  measure was not envisaged when the Ways and Means procedure was laid down. I believe that there must be time for us to pursue this legislation throughout its various stages at a pace not only conforming with the dignity of the House, but at the same time, conforming with a procedure which permits of a sensible discussion of all the many problems raised.
  Many of us on this side of the House have been in great difficulty ever since the Bill first appeared. It was published late, and we suspect that we know the reason for that. Then, we went into the second reading and, at great speed rushed into the Committee stage. It was with the greatest difficulty that we managed to get into touch with different organisations throughout the country; organisations which had themselves to meet in order to discuss the implications of the Bill.
  A perusal of the Notice Paper will show that it was as late as last Monday that many Amendments were put down for the first time and even as late as yesterday we were getting many views pouring in from all over the country about the years held on the likely effects of this legislation in practice. In view of all the haste and the horrid manner in which we have had to draft Amendments, it is essential to have a pause before the Report stage.
  I am not sure whether the strongest case for this was not put by hon. Members opposite. All the comments have so far been sedentary, but they have been to the effect that hon. Members want to go home to bed. Of course they do, whether because they have other matters to attend to tomorrow or because they wish to return refreshed, after a night's sleep, to further consideration of the Bill.
  I agree with my hon. Friend the Member for Honiton (Mr. Emery) that it cannot be said that the Government's timetable this Session is too overloaded for us to be allowed another day. Many points have still to be decided, E.F.T.A. for one. How much better if, in the light of discussions here and outside, we could give further consideration on Report to what is still an inherently bad Bill, but one which, in the national interest, we should try to improve.

  1773
  We have not been wasting time. Many hon. Members have appeared for the first time at this late hour. I might call them the feet that vote. There has not been much evidence of their voices—
  4.0 a.m.
  Mr. Speaker: Order. The hon. Member must not narrate what happened in Committee. We are debating whether the Bill, as amended, be now considered. He must keep to that.
  Mr. Shaw: I will try to keep in order, Mr. Speaker. That shows that we are all affected by the lateness of the hour. The effect is not so apparent opposite, since one is not so tired when one can sit in the same position all the time.
  We should now have a pause, as a result of which there is a good chance that the Bill will be improved. We have already discussed 150 Amendments, but no Opposition Amendment has been accepted. I suspect that that is not because of any lack of merit, but because the Government are determined to get the Bill through in its present form without wasting another minute. The timetable is not that tight. We should not consider the Bill Immediately.
  Mr. Hugh Fraser: I am trying to move an Amendment on Report because it is only in the last few hours that I received representations from my constituents on points arising in the Bill. I propose to remain here until I am able to move that Amendment.
  This is typical of the situation in which not merely the Opposition but also the Government find themselves. The Bill affects trade amounting to about £3,000 million. It affects a great many importers who are constituents of hon. Members in all parts of the House. It is therefore important for the Government, who are not enjoying the maximum popularity, to be certain that the law being put before the people is as good as it possibly can be within the framework of policy. It is clear that some of the offers made by the Financial Secretary in reply to debates to which I listened cannot be put effectively into the Bill unless there is a pause for the Amendments to be considered. From reading the Bill and from the speeches, it has become clear that there are phrases in the Bill which lack clarity. Those drafting the Bill have had to work over-
  1774
  time and in some instances there has not been time for sufficient consultation with bodies outside Parliament. There is, therefore, strong argument for a pause.
  I know that it is important for the Government to get the Bill as soon as may be, but it cannot become law tonight; it still has to go to another place. Almost certainly it cannot become an Act until some time next week. The Government's position is protected by emergency powers and they should be able to delay the Bill for 48 hours, or even three or four days, in order to have a properly conducted Report stage, when the interests of so many people and such large sums are at the mercy of the Government—who have not had sufficient time to get the Bill into the best possible shape.
  Mr. Harold Lever: Nobody is more sensitive than I am to the charge that the Opposition have not had their proper rights and I am sure that hon. Members opposite are entirely sincere in supposing that they have some ground for complaint. I make that assumption, but I ask them to reflect on the realities of the situation, which I will outline briefly.
  First, the procedure which we propose to adopt, of taking Report and Third Reading immediately after Committee, was not challenged at all on the Leader of the House's business statement. If these constitutional rights, so hardly won by the forefathers at any rate of the hon. Member for Ormskirk (Sir D. Glover), are to be taken away, it is difficult to understand why no questions were asked by the hon. Member or any other hon. Member when it would have been open for them to ask them. I assure the hon. Gentleman and all other hon. Members that if, on the business statement last Thursday, there had been some complaint of this kind I, on behalf of the Treasury, would have done my best to accommodate them.
  What is the nature of the Opposition's grievance? They say they have been deprived of a vital constitutional right to move new Clauses on Report. We are led to suppose that, in their bosom, they have a number of new Clauses necessary to protect the citizenry from being ridden roughshod by the Government. Surely, it they have these new Clauses of vital importance to the citizens, they might have

  1775
  caused them to emerge in Committee, when they would have been in order in tabling them. If these new Clauses would be in order on Report, they would have been in order in Committee. Has this necessary protection of the citizens suddenly occurred to hon. Members? They neither objected to this procedure last Thursday nor brought forward these new Clauses in Committee, where we could all have joined together to protect the citizens.
  Sir D. Glover Sir D. Glover rose—
  Mr. Lever: I will not give way until I have finished.
  There is another point which gives me anxiety about the complaint of the Opposition that they have not had a Report stage when they could have brought forward these new Clauses and that we have deprived them of it. The truth is otherwise. There has been only one Amendment to the Bill, a Government Amendment, in Committee. The Government declared their intention of not accepting any other Amendment down on the Notice Paper. Unless I am misled, had the Government not tabled their Amendment, the Bill would have gone through Committee unamended.
  Mr. Patrick Jenkin Mr. Patrick Jenkin rose—
  Mr. Lever: I will not give way until I have finished.
  The Government Amendment was a concession to protect exporters from having a burden imposed on them. There would have been no debate on Report otherwise, because the Bill would have been unamended in Committee. Unless hon. Members want to gamble with the protection of the citizens by holding their new Clauses close to their bosom in the hope of a Report stage, the whole incident is remarkable.
  I want hon. Members to reflect on the picture they are projecting, even to a sympathetic audience like myself. First, if they really thought that a vital right was in danger, it was their duty to raise the matter on the business statement last Thursday. Secondly, if these new Clauses were vital for the protection of the citizens, they should have been tabled in Committee and discussed then.
  1776
  Thirdly, they have no cause to complain that the Government are depriving them of a Report stage because it was only the Government's action in tabling an Amendment and seeing that it was carried that gave them the right to have a Report stage at all.
  In these circumstances, it seems to me that hon. Members would do well to reflect on what I have said and ask themselves whether it would not be wiser from their point of view as well as ours now to proceed with the Bill, because the Bill contains, for the first time, the detailed instructions to the Customs and Excise which are so vital for the protection of our exporters, and I would like to see it on the Statute Book at the earliest possible moment.
  Several Hon. Members Several Hon. Members rose—
  4.15 a.m.
  Mr. Speaker: Order. The hon. Gentleman the Member for Ormskirk (Sir D. Glover) has already addressed the House. A number of his hon. Friends would like to speak. I would hope that he would let them.
  Sir D. Glover: On a point of order, Mr. Speaker. The Financial Secretary said just a moment ago that when he had finished his statement he would allow me to ask him a question.
  Mr. Speaker: I understand that. I was just appealing to the hon. Gentleman.
  Sir D. Glover: I want to clarify two of the points made by the Financial Secretary. First, he said that the matter was not raised on the business statement, and he is quite right—
  Mr. Speaker: Order. The hon. Gentleman cannot make a speech at this stage. It must be a brief intervention.
  Sir D. Glover: Then may I say that I am sure the hon. Gentleman's statement will be quite unsatisfactory to this side, because the whole basis of the Report stage is that the Government, in accepting an Amendment, by that very process accept the fact that the Bill is liable to further Amendment. To say that the Opposition should produce all our Clauses is not right, because the whole basis of our procedure is that these things have then to be considered.
  Mr. J. E. B. Hill: I found the Financial Secretary's explanation charming and courteous as usual, but somewhat unconvincing The claim that because on last Thursday's business statement no objection was taken to the House taking the remaining stages of the Bill immediately after the Committee stage, binds the Opposition, in the light of the events that have happened, is wholly unacceptable to me and, I suspect to my hon. Friends. Since last Thursday all of us have had a series of upsets. When I referred to them in Committee, the hon. Gentleman thought it rather churlish of me to mention all he troubles that have cropped up, but there has been a pattern of order, counter-order and disorder in the constituencies through the uncertainty of the central Government.
  How do we know that if there is an interval between Committee and Report our constituents will not raise all sorts of new troubles in tomorrow morning's post, or that we shall not hear of the issue of some new instructions to the Customs and Excise until tomorrow morning? We cannot know, and that seems to be a reason why there should be an interval between the stages.
  I should like to see the Leader of the House with us. I am sure that he would have had the precedents of where important Money Bills have had whole stages taken—not in time of war—in manuscript form when no Amendments are possible after the Bill leaves this House. Not only do we not have a printed amended Bill before us, but we cannot even look at the whole record of this Committee stage. I am sure that this procedure is wholly without Parliamentary precedent in peacetime. We must particularly bear in mind that the objectives of the Bill are secured effectively in the Ways and Means Resolution for provisional collection. I should like to see the Leader of the House here. I should like him to come armed with precedents—[HON. MEMBERS: "Where is he?"]—and no doubt armed for our better edification, perhaps for our reproof, with chapter and verse of occasions when this kind of conduct was previously pursued by the previous Conservative Government. I should like to know what those occasions were.
  1778
  What troubles me most is the point raised by my hon. Friend the Member for Westmorland (Mr. Jopling), because there are some of us, particularly those currently nominated by the House to study the import saving rôle of agriculture, who take the view that it is surprising that in a Bill wholly designed to discourage excessive imports, the Government should have included a Schedule which is wide ranging and which covers not just the indispensable basic foods, but somewhat sophisticated processed foods which we are satisfied could be produced in this country.
  Mr. Speaker: The hon. Member may not discuss now what he might have discussed in Committee, or what we may discuss on Report. We are discussing whether we have a Report stage.
  Mr. Hill: May I take it a little further, because it is a point of view which some of us hold and which I should like to have expressed on the record.
  Mr. Speaker: Order. The hon. Gentleman has got it on the record and he may not take it any further.
  Mr. Kenneth Lomas: In view of the importance which the hon. Gentleman obviously attaches to this part of the Bill, are we to assume that he and his hon. Friends intend to divide the House on this issue? May we have some guidance about that from the Opposition Front Bench?
  Mr. Hill: I cannot tell the hon. Gentleman what my right hon. Friends will do at the next opportunity for dividing the House. They may well be minded to do so.
  What worries me is that in Committee there was one opportunity when our views could have been expressed within the rules of order. Some Amendments could not be selected, because technically they were out of order in that they would increase or diminish the fiscal burden. For example, there was an Amendment in my name which would have given the Government power to subtract from the Schedule, whereas they now have power only to add to it. My Amendment could not be called and the only point at which one could legitimately question the content of the Schedule was on the Motion to agree to the Schedule.
  Mr. Speaker: Order. That took place in Committee, not on Report.
  Mr. Hill: Quite so. I should like to have time to study the record, because, although I was not present, I understand that when that point was reached the Chairman of the Committee ruled that that Motion should be taken formally.
  Mr. Speaker: Order. The hon. Member may not discuss in the House a Ruling which he did not like and which was given in Committee.
  Mr. Hill: May I put this to you, Mr. Speaker? Am I right in my understanding that the only ground on which the Chair may rule that a Clause "stand part", or a Schedule be agreed to, must be taken formally is when it has already been adequately debated?
  Mr. Speaker: Order. The hon. Gentleman has not understood what I have said to him. He may not ask Mr. Speaker to comment on the Ruling given by a Chairman in Committee. I had already said that before the hon. Gentleman asked me to do so.
  Mr. Hill: May I put it hypothetically? If the only occasion when certain matters can be raised and be in order is at the point when the Question on the Clause or Schedule is put, how can it be ruled that the Clause or Schedule has been adequately discussed?
  Mr. Speaker: Order. The hon. Gentleman is doing for the third time what I have told him he may not do. He must desist.
  Mr. Hill: I shall leave it there. [HON. MEMBERS: "Hear, hear".] Do hon. Members opposite understand the point? The difficulty here—I accept that it is a difficulty—in expressing a point of view which we should like to have expressed reinforces our argument that there should be an interval between the Committee and Report stages so that we may take advice about whether there can be opportunities for that view to be registered, either on Report, if possible, or perhaps at a subsequent stage in the passage of the Bill.
  It is a negation of our democratic processes that a genuine and widely held view among certain groups of us who have been studying this problem cannot be effectively recorded. That is a further
  1780
  reason for allowing time for the record to be printed and for further consultations and advice.
  Mr. Brian O'Malley (Lord Commissioner of the Treasury)Mr. Brian O'Malley (Lord Commissioner of the Treasury) rose in his place and claimed to move, That the Question be now put; but Mr. SPEAKER withheld his assent and declined then to put that Question.
  4.30 a.m.
  Mr. Blaker: I cannot let pass the suggestion by the Financial Secretary that, in some way which I do not understand, because the Opposition did not take exception last Thursday, at the time of the business statement, to the proposal that the Government should deal with the business in this streamlined way, we are now somehow estopped from complaining at the Motion to railroad the Bill through.
  As I remember, the Bill was published only on last Tuesday evening. On Thursday, immediately after the business statement, we had the Second Reading, within 48 hours of publication. I recall what I was doing at the time of the business statement. I was dashing about trying to collate the representations which were beginning to flood in from industry and from constituents in time for the Second Reading debate. How could we possibly know at that time what was going to pass after the business statement and until this moment?
  The Financial Secretary seemed to cast aspersions on the Opposition's motives in objecting to the proposal that we should now proceed to the Report stage. Why? I believe passionately that it would be wrong for the House now to proceed without an interval for reflection—[Interruption.]—and I resent, having sat right through our previous debates almost without leaving the Chamber—[Interruption.]—and having been present for more than half of the past 48 hours—
  Mr. Speaker: Order. We have had an interesting debate up to now. There is no reason why it should be interrupted.
  Mr. Blaker: I object to aspersions on my motives when I suggest that it would now be reasonable to take a pause.
  I would add my voice to the voices of my colleagues who have suggested that it would be in the interests of the House

  1781
  if the Leader of the House were present. It is some time now since we first asked that he should come. He is the Leader of the House, after all, and, surely, therefore has a responsibility to the House as a whole. If the Leader of the House cannot be obtained, then the Patronage Secretary, I believe, is now Deputy Leader of the House, and, therefore, if the Leader of the House—
  Mr. Speaker: I hope that the hon. Member will not run through the whole list of Ministers who might be here.
  Mr. Blaker: That might depend on how many Deputy Leaders of the House there are among Ministers. I do not recall.
  Reference has been made to the Ways and Means Resolution. The Government have power to take bonds, if not payment of cash their position is safeguarded. Some of my hon. Friends have suggested that that Ways and Means Resolution lasts for only 25 days. With respect to them, I do not think that that is correct. My understanding is that there is no limit of time. If I am wrong I shall be grateful to be corrected immediately by the Financial Secretary. My understanding is that there is no limit of time on the validity of the Resolution on which the Bill is founded.
  The House deserves a better explanation than that we have had so far; we have had only a very brief and, I thought, offhand explanation by the Financial Secretary, only a very cursory statement, about what the rush is. There was a reference by the Financial Secretary to the Customs requiring authority to proceed with certain actions. If this really is the difficulty perhaps the Financial Secretary will explain it a little more.
  Certainly, it is true that Customs and Excise are issuing instructions to importers and exporters, and one of those instructions raised some comment, and leads to some of the unfinished business which we shall have to consider on Report and which the Government are, I think, not now in a position to consider.
  Mr. Speaker: Order. There are too many informal debates going on at the moment.
  Mr. Blaker: This is a very fundamental Bill, and, as my hon. Friends have
  1782
  pointed out, it involves taking in a great deal of money. At a time when—I have the impression—hon. and right hon. Gentlemen on the Treasury Bench are just as tired as I am, when their judgment is just as fallible as mine is, and when their speech is somewhat slurred as mine is, I am rather shocked that they should now proceed as if we were at the peak of our judgment, and debate such a fundamental Bill.
  Sir K. Joseph: With your leave, Mr. Speaker, and that of the House—since I raised a point of order earlier—I would like to put a point of view to the Government. First, I would like to comment on the speech, the last part of which I heard, by the Financial Secretary. For once, the dulcet tones evidently deserted him. He has been courtesy itself throughout our discussion of the Bill, and we are most grateful to him, but in that speech he did not help us with some of his arguments and I would like to comment on some of them.
  If ever there was a Bill with which the Government themselves blundered, it is this Bill—from the start, when it was announced by the Chancellor, who did not seem to have heard of E.F.T.A. at all, when questioned on the effect of the Bill on the E.F.T.A. Agreement. Secondly, the Financial Secretary was quick to confess that the Bill in its preliminary form sought to impose a charge on the importer without any legal right in the Government's hands to take that charge. That was put right by the Resolution. Then, under the procedure, which admittedly the House accepted, for taking one stage immediately after another. the Government failed to suspend Standing Order No. 48 so that an hon. Member could put down a new Clause. Those are three failures by the Government.
  The Financial Secretary said that if we objected we should have raised our objection on the business statement. If he looks at what happened on the business statement, the hon. Gentleman will see that the Leader of the House announced that it was hoped to conclude this business on Wednesday, 4th December. We were not told that it was the Government's intention specifically to get this business by Wednesday, 4th December.

  1783
  At the end of Committee my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) raised the question of the need for manuscript Amendments, and was told that that was a matter for Mr. Speaker. The Government are in no moral position to play the virtuous party in this sad tale of a potential denial to hon. Members first of the chance to consider the Amendments and what needed to be amended after Committee, and secondly the chance to put down a new Clause.
  The House is now considering whether it is right to take Report. I would accept that it may be right that the Bill has been on the stocks, in Government hands, for some months. We have, after all, an import deposits print which has the date 1967 on its back. Although the Government may have had the Bill for some time, we have not and the country has not. The Bill was introduced only a week ago—
  Mr. Harold Lever: The right hon. Gentleman has asserted that the Bill has its date printed on the back—
  Sir K. Joseph: On the folder.
  Mr. Lever: —the date of 1967. I would like to ask him what authority he has for supposing that that was printed in 1967?
  Sir K. Joseph: If the Government deny it, I accept their denial, but the date is in. It may be a pure coincidence that the number is there.
  Mr. Taverne: This is an internal memorandum, not a date.
  Sir K. Joseph: I accept the denial, and I withdraw the point. The country, the importers and the Opposition have had very little time since last Wednesday in which to consider the Bill. We and the country are denied time to study what the Government have said in Committee, and it would be a disgrace if the Report stage were taken now.
  Mr. Brian O'Malley Mr. Brian O'Malley rose in his place and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  The House divided: Ayes 119, Noes 15.

  Division No. 29.]

  AYES

  [4.37 a.m.

  Allaun, Frank (Safford, E.)

  Gardner, Tony

  Morgan, Elystan (Cardiganshire)

  Allen, Scholefield

  Cordon Walker, Rt. Hn. P. C.

  Morris, Alfred (Wythenshawe)

  Archer, Peter

  Greenwood, Rt. Hn. Anthony

  Morris, Charles R. (Openshaw)

  Armstrong, Ernest

  Gregory, Arnold

  Morris, John (Aberavon)

  Ashton, Joe (Bassetlaw)

  Grey, Charles (Durham)

  Moyle, Roland

  Beaney, Alan

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Benn, Rt. Hn. Anthony Wedgwood

  Griffiths, Will (Exchange)

  Ogden, Eric

  Bennett, James (G'gow, Bridgeton)

  Hamling, William

  O'Malley, Brian

  Bidwell, Sydney

  Hannan, William

  Oswald, Thomas

  Bishop, E. S.

  Harper, Joseph

  Palmer, Arthur

  Blenkinsop, Arthur

  Harrison, Walter (Wakefield)

  Pavitt, Laurence

  Boston, Terence

  Hart, Rt. Hn. Judith

  Peart, Rt. Hn. Fred

  Brown, Bob(N'c'tle-upon-Tyne, W.)

  Haseldine, Norman

  Perry, George H. (Nottingham, S.)

  Brown, R. W. (Shoreditch & F'bury)

  Herbison, Rt. Hn. Margaret

  Roberts, Rt. Hn. Goronwy

  Buchanan, Richard (G'gow, Sp'burn)

  Horner, John

  Roebuck, Roy

  Butler, Mrs. Joyce (Wood Green)

  Howell, Denis (Small Heath)

  Ross, Rt. Hn. William

  Cant, R. B.

  Huckfield, Leslie

  Rowlands, E. (Cardiff, N.)

  Carmichael, Neil

  Hughes, Emrys (Ayrshire, S.)

  Shaw, Arnold (Ilford, S.)

  Coe, Denis

  Johnson, James (K'ston-on-Hull, W.)

  Shore, Rt. Hn. Peter (Stepney)

  Dalyell, Tam

  Jones, Dan (Burnley)

  Short, Mrs. Renée (W'hampton, N.E.)

  Davies, Ednyfed Hudson (Conway)

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Silkin, Rt. Hn. John (Deptford)

  Davies, Dr. Ernest (Stretford)

  Jones, T. Alec (Rhondda, West)

  Silverman, Julius

  Davies, Ifor (Gower)

  Leadbitter, Ted

  Small, William

  Dewar, Donald

  Lee, Rt. Hn. Jennie (Cannock)

  Snow, Julian

  Diamond, Rt. Hn. John

  Lestor, Miss Joan

  Swain, Thomas

  Dickens, James

  Lever, Harold (Cheetham)

  Taverne, Dick

  Dobson, Ray

  Lewis, Ron (Carlisle)

  Tinn, James

  Doig, Peter

  Lomas, Kenneth

  Urwin, T. W.

  Dunn, James A.

  Macdonald, A. H.

  Varley, Eric G.

  Eadie, Alex

  McGuire, Michael

  Wainwright, Edwin (Dearne Valley)

  Ellis, John

  Mackie, John

  Wallace, George

  Ennals, David

  Maclennan, Robert

  Wellbeloved, James

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Wells, William (Walsall, N.)

  Evans, Ioan L. (Birm'ham, Yardley)

  McNamara, J. Kevin

  Whitlock, William

  Faulds, Andrew

  Mallalieu, J.P.W. (Huddersfield, E.)

  Williams, Alan (Swansea, W.)

  Fernyhough, E.

  Manuel, Archie

  Wilson, William (Coventry, S.)

  Fitch, Alan (Wigan)

  Marks, Kenneth

  Woof, Robert

  Ford, Ben

  Mikardo, Ian

  Forrester, John

  Millan, Bruce

  TELLERS FOR THE AYES:

  Fowler, Gerry

  Miller, Dr. M. S.

  Mr. Ernest G. Perry and

  Freeson, Reginald

  Milne, Edward (Blyth)

  Mr. Neil McBride.

  NOES

  Blaker, Peter

  Hill, J. E. B.

  Page, John (Harrow, W.)

  Boardman, Tom (Le'cester, S.W.)

  Iremonger, T. L.

  Shaw, Michael (Sc'b'gh & Whitby)

  Emery, Peter

  Jenkin, Patrick (Woodford)

  Winstanley, Dr. M. P.

  Fletcher-Cooke, Charles

  Jopling, Michael

  TELLERS FOR THE NOES

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Joseph, Rt. Hn. Sir Keith

  Mr. Reginal Eyre and

  Glover, Sir Douglas

  Legge-Bourke, Sir Harry

  Mr. Timothy Kitson.

  Question, That the Bill, as amended, be now considered, put accordingly and agreed to.
  Bill, as amended, considered accordingly.
  4.45 a.m.
  Mr. Speaker: I have selected a manuscript Amendment standing in the name of the right hon. Member for Leeds. North-East (Sir K. Joseph). I will read it slowly. [Interruption.] Order. We are on a serious matter. Consideration of manuscript Amendments is quite a difficult matter both for the Chair and the House. The Amendment is in Clause 1, page 1, line 22, at end insert:
  "or, in cases where notice or notices of assignment of the right to return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."
  Mr. Eric Ogden: On a point of order, Mr. Speaker. I have never pretended to know procedure to the degree that other hon. Members do, but I put it to you that a manuscript Amendment supported by 15 hon. Members opposite is hardly a matter which should have serious consideration at this hour. [Interruption.]
  Mr. Speaker: I am going to deal with the hon. Member's point of order if the hon. Member will let me. He has suggested that this is not an appropriate hour to consider a manuscript Amendment, and he has also invited me not to consider a manuscript Amendment because only 15 hon. Members appeared in the last Division. The fact that an Amendment stands in the names of a considerable number or a small number of hon. Members is not a matter for the Chair when it is deciding whether an Amendment should be selected. Moreover, the selection of Amendments is a matter for the Chair which the hon. Member should not question at all.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. Three hon. Gentlemen tire trying at once to catch my eye.
  Mr. Ogden: With respect, I had not finished putting my point of order. I am not trying to challenge your Ruling in any way, but I suggest that a manuscript Amendment which can secure the support of only 15 people on the other side should not be seriously considered.
  Mr. Speaker: If I appeared to interrupt the hon. Member, I rose to deal with his point of order because I thought he had finished. What he says in his second submission adds nothing to the first and that has been answered.
  Sir D. Glover: The hon. Member for Liverpool, West Derby (Mr. Ogden) has raised an important matter with the Chair. He says, rightly, that there are few Members in the House. There is about one-fifth of the total number of hon. Members.
  Mr. Speaker: I have already dealt with that point of order. We must not debate it. I have ruled.
  Mr. John Page: Without in any way questioning your Ruling, Mr. Speaker, I have a manuscript Amendment which would have come earlier than the one which you have called. The object of this Amendment was to elicit from the Minister of State—
  Mr. Speaker: Order. The hon. Gentleman cannot now begin to discuss the purpose of Amendments which he wished to place before the House. If his manuscript Amendment came before the one I have now selected, the obvious fact is that I have not selected his Amendment.

Clause 1

  CHARGE OF IMPORT DEPOSITS
  Mr. Fletcher-Cooke: I beg to move, in page 1, line 22, at the end insert:
  "or, in cases where notice or notices of assignment of the right to the return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."

  1787
  After the House has heard my eloquent discourse in support of the Amendment, I am sure that many more than 15 hon. Members will be supporting it—[Interruption.] They are all over on the Government benches, because they realise that the question of assignability, to which I now return after having had some encouraging noises at one stage from the Minister of State in Committee and then some discouraging noises from the Financial Secretary, is obviously one which the Government have considered, but should reconsider, because I think that it is unique in the history of the law of obligation or of debt that somebody who will be owing a debt to a person—that is to say, the Government—and who refuses to allow the creditor—
  Mr. Michael Shaw: On a point of order. First, I am finding it difficult to hear my hon. and learned Friend. Secondly, in all sincerity, I have no clear idea what this Amendment is about—[An HON. MEMBER: "Wake up."] I attempted to write it down when you, Mr. Speaker, so kindly read it slowly, but I could not get it down verbatim. I would be grateful if I could—
  Mr. Speaker: Order. On the first part of the point of order, I am grateful to the hon. Member because it does not help in dealing with a difficult problem like this if we have noise from any part of the House.
  Secondly, it is worth observing that the Chair rarely accepts manuscript Amendments because of the very difficulty that the hon. Member has raised. Normally the House is in possession, in print, of whatever it is discussing. This is the purpose of Standing Order No. 48, which was referred to in an earlier debate. However, I will read it again. The Amendment proposed is in Clause 1, page 1, line 22, at the end insert:
  "or, in cases where notice or notices of assignment of the right to the return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."
  Mr. Jopling: On a point of order. I am sorry to weary the House at this stage, but we are in great difficulty, Mr. Speaker, as you know. May I ask, first, whether it would be possible for you to put that Amendment somewhere where hon. Members could see it? I am afraid
  1788
  that I have tried on two occasions to write it down, and I still have not got it down. I am sorry if I have not written fast enough.
  The second point I should like to raise is whether you could give the House some indication whether you will be selecting other Amendments which hon. Members have put down. I am sure that you know how difficult it is to prepare one's observations and thoughts on the spur of the moment on Amendments which might be called. It would be to the great convenience of the House if we could have some idea what Amendments you might be likely to call at some future stage.
  Mr. Emery: Further to that point of order.
  Mr. Speaker: Order. I will deal with one at a time. We are on a most complex matter. I could of course solve the problem by not accepting manuscript Amendments. This would give satisfaction to at least one side of the House but not to the other. If I were to announce what other manuscript Amendments I have selected at this stage, the House, which is finding it difficult to cope with one manuscript Amendment, would be utterly befogged. It will be possible for the hon. Gentleman who raised this point of order, if he has not grasped the manuscript Amendment which I have read twice, to come to the Table and see it in writing.
  Mr. Emery: On a point of order. I wonder whether it would be possible for this manuscript Amendment to be placed in the "No" Lobby so that anybody could copy it. In the same way it would be helpful, if Mr. Speaker had selected any further manuscript Amendments, if they also could be placed in the "No" Lobby. Hon. Members would then have the opportunity of copying them before they were called and we would not have the difficulty we have at the moment.
  5.0 a.m.
  Mr. Speaker: I am glad the hon. Gentleman has raised that as a point of order. I shall see that the manuscript Amendment we are discussing is posted in the "No" Lobby. I shall also post in the "No" Lobby any further manuscript Amendments which I selected during the debate we had on whether the Bill, as amended, be now considered.
  Mr. Lomas: On a point of order. Mr. Speaker, is it not farcical, and does it not bring the House into disrepute, that fewer than 7 per cent. of the Opposition and only one-twelfth of the Liberal Party are here and keeping the House awake at this time in the morning? Is it not time that we tried to bring this farcical situation to an end?
  Mr. Speaker: I am not happy when any hon. Member either talks about bringing the House into disrepute, or brings it into disrepute. The existence of a minority in the House of Commons is not something which brings the House of Commons into disrepute. What is happening is perfectly in order. I doubt whether the hon. Member's point was even a point of order.
  Mr. Fletcher-Cooke: Once again may I revert to the rivetting question of assignability, because we had an extremely interesting debate on this in Committee. We discussed, first, the nature of the document or receipt which the warehouseman is to give to the importer if he pays the deposit, or to the bank or whoever it may be who pays the deposit. My hon. Friend the Member for Harrow, West (Mr. John Page) did us a good service by calling attention to the nature of the document and the way it operates at present, and also by drawing attention to the many improvements which might be made. It is upon that document that the question of assignability turns.
  In the course of those debates we discovered that an assignment, if I can use the phrase broadly, is decided at the beginning of the six-month period. That is to say the payment of deposit may be made, not by the importer, but by a bank, and thus the importer's credit with Customs is as it were made by a third party, or it can be assigned, again using the phrase broadly and not technically, at the end of the six months because the person who paid the deposit can give a mandate to anybody to withdraw it in the way that my hon. and learned Friend the Member for Northwich (Sir J. Foster) suggested
  It is only during the period of the deposit that no assignment is to be permitted in the legal sense of the word. That is to say the Government will refuse
  1790
  to take notice duly given in writing to them as the debtor that the creditor has assigned his debt in the normal method of legal assignment. This will not prevent assignments. They will not be legal assignments, but equitable assignments. Assignments will take place without the normal legal assignment or advice, because that is the way business works. There will be a declaration of trust, and there will he other forms of equitable assignment which will be far less convenient than the normal method, because they will be less secure, and the rate of interest that will have to be borrowed on the security of this document will be much greater, because the security will be less.
  It will be another method by which interest rates will creep up, which I think will be very undesirable, and therefore we revert in rather more detail to this question of the assignability, in the proper legal sense of the word, of the debt which the Government will owe to the importer during these six months. The arguments about the increase in the credit base, the velocity of credit, and so on, we have heard; although I must say that we have heard them stated rather than argued and I do not believe that the statements amount to very much. I think that they will prove to be a small consideration when put in the scales against the ease with which debts can be assigned in the course of normal trade.
  The hour is very late and I will not expand further, although I must say that I think the minds of the three representatives of the Treasury have fluctuated about this. I would appeal to them once more to consider this again, because it is a bad thing to interfere with the normal course of trade unless it be for good and demonstrable reasons. I do not believe that the credit base, liquidity, and so on, are affected. I also do not think that the Treasury Ministers' arguments have been very weighty; hut, by continuing to talk at this hour, I do not suppose that I shall get any further and so I beg formally to move this Amendment.
  Mr. John Page: Very quickly, I would refer to the nature of the document or receipt which is to be given. Owing to the indecent haste with which this Report stage has been taken, there is not before the House any statement by

  1791
  the Financial Secretary on why, on looking at this again, he could not accept the whole of our argument on assignability. On Tuesday. the Minister of State did say that on Report, or at some later stage during our discussion of this Bill, he would give us further information as to the discussions he had had about the type of receipt which was going to be given to the depositor. I think that it is agreed by the parties in this House that merely a stamped extra copy of Form C.139 would be sufficient, but I think we should all like to hear about the form in which the receipt will be given.
  Mr. Taverne: I said that I would look at the form again, but the form is not part of this Bill and the form which this document can take can be considered at another time. That is what I intended to convey, and I can add that I will write to the hon. Member.
  Mr. Page: I thought that we were discussing the form of the receipt and not the form, which is a very different matter. The whole of the discussion was on the form of the receipt, and there was disagreement about whether the tear-off section was in any way a proper receipt. This is a most important matter in considering assignability. We should know the form upon which the assignable document is to be issued. The House deserves something more than it has so far received, and a letter from the Minister—although I shall be most grateful to receive it—is hardly adequate for the commercial life of our country.
  It is estimated that people will have on deposit a sum running at around £750 millions or so. They should be told whether they will get a proper receipt, as they might from a garage for petrol or from a shop for an article of clothing, instead of an inadequately stamped copy of another document. There must be a firm undertaking. It is one of the tragedies of this hurried Report stage that homework is not done and the Bill becomes a mockery.
  Mr. Emery: My hon. Friend the Member for Harrow, West (Mr. John Page) referred to the matter of consideration, and this relates to administration under the Bill and the Amendment. The Financial Secretary's argument is that no docu-
  1792
  ment should be assignable, and the problem of assignment is the problem of liquidity. One of the problems was that the assignee would not be known until the end of the process, and it may have gone through many stages beforehand. I give him those arguments, but would it not be possible to arrange an efficient procedure by which the small number of firms concerned could be issued by the Commissioners 30 days after the date of deposit with a single cheque, not negotiable, payable only to the payee? If, within that 30 days, the payee nominated a single payee, it could then be assigned—only once, because the payee would then be the person to whom it would be assigned.
  This would allow the cheque to be absolute notice, backing for the loan, but would not allow for negotiability or for continued assignment. I had hoped that an Amendment would have been selected on that, but apparently it was too long, and length is one feature of a manuscript Amendment which the Chair must consider. I should be grateful if the Financial Secretary could at least let me know later about that possibility.
  Mr. Harold Lever: I am sad that it should have been supposed that I question the sincerity of the Opposition in wanting this debate or in raising the points which they have. If I do not deal with them more extensively, it will not he out of discourtesy but because we have the audience who have heard most of the arguments before. The Minister of State gave his undertaking in complete sincerity. The three Treasury Ministers here present most earnestly conferred with officials and discussed this in great detail before we concluded that we could not agree to assignability. The point just made by the hon. Member for Honiton (Mr. Emery) was considered even before he raised it as a possible halfway house and I am afraid that we turned that down too.
  In the end, if we concede that assignability runs contrary to the liquidity pressure purpose of the Bill, of course one assignment is not as damaging to that purpose or as administratively difficult as many assignments. On the other hand, it merely mitigates the evil, and it does not meet the whole case against assignability. Without going into polysyllabic descriptions of the monetary system, the

  1793
  case is that it makes the deposit more mobile and active than is desirable to meet the purposes of the scheme.
  In a sense we have met the lion. Member, because although technically it is not assignable, we invite someone to put up the deposit for the first time, which is equivalent to assignment. The importer can invite somebody to subscribe the deposit who has nothing to do with the transaction. In a sense, we have one assignment.
  I assure the House that we have not looked at the matter with dogmatic antipathy but with sympathy, but we came reluctantly to the conclusion that we could not accept the Amendment, and I ask the House to reject it for the reasons which I gave in greater detail in Committee.
  5.15 a.m.
  Mr. Patrick Jenkin: The Financial Secretary was not altogether successful in hiding the personal disappointment which he felt in not being able to meet us on this important question of assignment, and for that we express appreciation. I will not speak at length, for. we have been on this Bill almost continuously for two days, but the Financial Secretary did not meet the argument put by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) that a right to receive a debt of this nature, although not in law assignable, can nevertheless be made the subject of enforceable rights by way of declaration of trust, of equitable assignment, of equitable charge.
  The only consequence of the Government's refusal to recognise the obvious convenience of having a document which on the face of it is assignable and to have a procedure in the Bill which recognises the obligation of the debtor to the Commissioners to pay the ultimate assignee is to add to the already complicated difficulties which importers are facing. In order to achieve what they will want to achieve any way, the task is made that much more difficult. I do not believe that this is the right way to deal with traders under the Bill.
  My right hon. Friend referred to the announcement of the scheme as a stroke of lightning upsetting and disrupting the plans of businessmen throughout the
  1794
  country, and the volume of correspondence which has reached us, even in the few days which have been available, is evidence of that. We have discussed the problems which these importers will face in raising the money and in getting exemptions where goods will be exported, and in claiming drawback if they have not been able to get refund of the deposit. These are all major administrative complications, and it seems to me that the Government are taking a very narrow and short-sighted view in not, at any rate on this minor point—it is a minor point in relation to the Bill—drafting machinery which would make it that much easier for the importer to overcome the problems. I do not believe that, by accelerating the mobility of capital, this would have the sort of impact on the gilt-edged market that the hon. Member suggested. I do not think that it would make a sufficient detraction from the general impact of the scheme to warrant its refusal. My right hon. and hon. Friends are bitterly disappointed that, even after this further reflection, the Government have not been able to accept the demand made in the Amendment. I do not think that it would be right at this stage to ask my hon. Friend necessarily to press the Amend-to a division, but I see no reason why he should withdraw it.
  Amendment negatived.

Clause 2

  EXEMPTIONS AND RELIEFS
  Mr. Emery: I beg to move, in page 3, line 17, at end insert:
  "(2) No import deposit shall be payable in respect of any goods which qualify for duty drawback."
  I move the Amendment—
  Mr. Roebuck Mr. Roebuck rose—
  Mr. Emery: The hon. Gentleman has been making a number of interjections from his seat. He has played no part in these proceedings and does not deserve to be considered in any way by anyone in the House at this stage. I do not intend to give way to him.
  Mr. Roebuck: Will the hon. Gentleman give way?
  Mr. Emery: No.
  I move this Amendment because I have received, from a number of management organisations concerned with the administration of the Bill on behalf of industry, requests for information, mainly because there is growing up within industry the concept that if anything qualfies already for duty drawback then, as a rule of thumb, this means that no import deposit need be paid.
  I have suggested to those who have approached me on the matter that, as a rule of thumb, this must be incorrect, because duty drawback in many instances cannot always be known until later on. Indeed, there are often long and protracted negotiations. However, where duty drawback is already being paid, it is being argued by many people that the Bill will ensure that no import deposit need be paid.
  It would be helpful both to industry and to the Government if we could have a clear statement tonight which could be publicised, and the easiest way to get that statement was to put down the Amendment.
  Mr. Harold Lever: I am grateful to the hon. Member for Honiton (Mr. Emery) for giving me the opportunity to make the situation crystal clear. First, I give a general assurance that there are no goods which qualify for drawback when exported that are not covered by the Amendment made in Committee. There are two meanings to duty drawback. If the hon. Gentleman means by drawback that it is intended to cover remission of duty at the time of importation, I assure him and the interests concerned that goods which qualify for remission of duty on entry will automatically qualify for remission of import deposit also. I think that this is the point he is after.
  As the hon. Gentleman recognises, if one uses the term "duty drawback" in the strict sense of repayment of duty at the time of importation, it is hardly practicable to secure that an import deposit should not be repayable on goods which qualify for drawback, but where it is not established at the time of importation whether re-export is to take place. These goods would automatically qualify for repayment of import deposit in the same way as they qualify for repayment
  1796
  of duty; always provided, of course, that the export takes place within 180 days before the import duty deposit has been repaid in the normal course. I do not want to reiterate the provisions we have made which widen that in respect of exports.
  In the second sense of a duty drawback there is a fall back position. There are other opportunities to exporters to establish a right to exemption from the payment of deposit. I hope that I have made the position clear to the hon. Member, I am sure that, if widely known, it is a very valuable point.
  Mr. Emery: I thank the Financial Secretary for his reply. I am sure that certain paragraphs of that reply will give the sort of assurance that industry wants. I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  5.25 a.m.
  Mr. Harold Lever: I beg to move, That the Bill be now read the Third time.
  I speak in all sincerity when I say that if I speak briefly it is because, apart from the anxieties on constitutional matters which seemed to me to lead perhaps to an unnecessarily extended debate, the Committee debate and the Second Reading debate were very rewarding, and the two sides can say that between us we have thoroughly examined principles and the detail of the Bill. In those circumstances, I should have thought that there was little to add, except to say, once again, as my hon. and learned Friend the Minister of State made clear, and as I think I myself made clear on Second Reading, that we brought in the Bill with reluctance, and only because it was required to speed up the move into surplus while the general strategy worked, but that bringing it in in no way must be taken to indicate any departure at all from the Government's adherence to G.A.T.T., E.F.T.A. and the liberalisation of trade on which we believe the future prosperity of the world and of this country will depend. I am sorry that it distresses my hon. Friend the Member for Harrow, East (Mr. Roebuck). but I urge the House to give a Third Reading to the Bill, it being a necessary, temporary and valuable assistance to the move

  1797
  into surplus, which is the urgent need of the country at the present lime.
  5.27 a.m.
  Sir K. Joseph: We have had such a rushed concentration on the Bill that it would be: useful to spend a few minutes on a summary of how this side feels about it. First, we would like to repeat to the Ministers who have handled the Bill our appreciation of their personal courtesy. Secondly, we must regret that despite the time and trouble taken, there are very few changes and improvements in the Bill. One such improvement is entirely to the credit of my hon. Friend the Member for Crosby (Mr. Graham Page), because it was as a result of his comments that the Government introduced a number of Amendments to make sure that Orders on delegated legislation under the Bill came before Parliament.
  The other improvement to the Bill is the welcome Amendment made by the Chancellor of the Exchequer allowing a remission of import deposit on exports. For that, we are and all concerned are grateful. But, at the end of two long days, we on this side are left with the question in our minds: is it all worth the trouble? On the one hand, we have to accept that there will be a marginal reduction in imports, and on the other we have to accept that that for the whole country there will be a severe increase in the credit squeeze. But at what cost?
  The Bill is marginally protective and thus makes us marginally less efficient. It will marginally reduce exports as well as reducing imports, and hon. Members have developed a number of instances to show the link between any cut in imports and a consequential cut in exports. [Interruption.] The hon. Member for Harrow, East (Mr. Roebuck) is full of muttering this evening. He has not taken the trouble to master the Bill as far as I know, and I wish that he would let those of us who have tried to master it briefly summarise it.
  I was saying that the Bill is marginally protective, that it will marginally cut exports. It will distort trade, and I will give an example which I believe the Financial Secretary will have seen in the Press. The Press carries stories of several substantial supermarket chains which, as a result of the Bill, are switching some
  1798
  of their imports from non-exempt to exempt goods. The Bill will distort the trading pattern of all sorts of businessmen. It will damage the less sophisticated importers, perhaps cruelly and even fatally in some cases. It will divert cash in the hands of the larger importers, cash which in many cases might have been reserved and earmarked for investment, into sterile import deposits, and on top of all those handicaps it will distract business men from their proper job of making their businesses more efficient.
  At the end of the day, the whole operation of a temporary palliative benefit to the liquidity and balance of payments of the country may be nullified by a surge in imports which is likely to follow the end of the period during which the Bill is operative. We think that it is a very nice balance whether the Bill is more damaging than beneficial. We cannot give it a welcome, but we repeat our appreciation of the courtesy which has been shown to us.
  5.32 a.m.
  Dr. Winstanley: Having sat up with the Bill all night and all last night, I do not feel inclined to let it disappear in silence. I shall not keep the House for more than a few moments, but there are one or two comments which I should like to make.
  My right hon. and hon. Friends and I are not happy with the Bill in many ways, as we have already made clear. We are not happy about its possible effect on small firms, nor about other aspects which we have mentioned. Not unnaturally, we believe that free trade is perhaps one of the answers to the problems of the moment, and it would be difficult to regard this as free trade, and we are frightened of any move in the world which could lead to an escalation of protectionism.
  I am happy to say that in the course of our discussions the Financial Secretary has done what he can to liberalise things, particularly for exports, and I should like to place on record our appreciation of what he has done, especially in what has come to be known as the liberalising Amendment which we discussed for so long this evening. For reasons which I fully understand—and I hope that he will not misunderstand me—the introduction of this liberalising Amendment has

  1799
  brought about a degree of delegation unparalleled in this context.
  We are placing immense responsibilities on Customs and Excise officials. When I made this point earlier, the hon. Gentleman seemed to think that I was being critical of those officials. I hope that he will acquit me of that charge if I say that some of my best friends are Customs and Excise officials, and I hope that I shall not be misunderstood when I say that, for some of them are. Customs and Excise officials already enjoy considerable powers, but they are of a different kind from these enormous responsibilities. They will now be able to make up their minds on very important matters on very little evidence and without any kind of check procedure, as the Financial Secretary will admit. We ought not to allow to pass without comment the fact that, perhaps for good reason, we have introduced into these matters a highly unusual degree of delegation.
  We wish the Bill all possible success, and we wish all possible success to the officials of the Customs and Excise. We have given them a lot of extra work. If the Bill is successful, much of the credit must go to the Financial Secretary to the Treasury for the manner in which he has approached it and for the way he has told us he will operate it at later stages.
  5.36 a.m.
  Mr. Hugh Fraser: As my Amendment was not called, I shall put the point about the abrasive industry—rather appropriate at this point, perhaps—to the Financial Secretary after the debate.
  I, too, thank Ministers for the way in which they have conducted their affairs and for their politeness to the House. I thank the Financial Secretary also for the helpful Amendment which he introduced. None the less, this Measure is a leap in the dark. No one knows how it will work. We hope that it will succeed, but there are inherent dangers.
  Although, initially, it may improve our balance of payments, through money lent here from overseas in the short period, the long-term effect must be to put up the foreign exchange price of many of our imports by about 2½ per cent. Second, when the money which has been lent
  1800
  comes to be recalled—the Bill has been called a moneylender's charter, and so it will be, with absolute certainty for one's money at 8 per cent.—we may well find, at the end of six or 12 months, that we have another problem on our hands even more tough than some of the foreign exchange problems we have had to contend with up to now. Finally, there is the danger to our own interest rate structure and even the gilt-edged market, which is in such terrible disarray now.
  Those by-products of the Bill may be more damaging than the slight fall in unnecessary imports is worth. From the national point of view, one must wish the Bill success. Nevertheless, one can understand why it has been bitterly opposed for so long by those in the Treasury who think they know better.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  INSPECTOR OF TAXES (CONDUCT)
  Motion made, and Question proposed, That this House do now adjourn.—[Dr. Miller.]
  5.38 a.m.
  Mr. T. L. Iremonger: The House will be grateful to the Financial Secretary for attending to answer this debate after answering long and detailed debates in two all-night sittings on the Bill which has just been passed. I thank him personally very much for the careful and thorough attention he has given to secondary details of the case which I have to put to the House, details which it will not be necessary to discuss this morning in the Chamber. The hon. Gentleman and I have discussed at length the matter which I wish to raise, but the House will wish me to explain the background in a brief narrative.
  My constituent, Mrs. Doris Richards, is a soldier's widow with a family of young sons whom she was working to support. She was a temporary civil servant working in the office of one of Her Majesty's Inspectors of Taxes. The Inspector made the suggestion, which she gratefully accepted, that he should give one of her sons tuition in mathematics. The boy visited the Inspector's flat for

  1801
  this purpose for some time, during which the Inspector took advantage of the arrangement to assault him sexually.
  The boy eventually told his elder brother, who told his mother. She caused proceedings to be instituted. The Inspector pleaded guilty and was given no sentence by the court. He was transferred by his Civil Service superiors to a similar post in another area.
  Mrs. Richards was outraged at this, and it so preyed on her mind that she eventually suffered a complete breakdown. Because of her absences from work through ill health she eventually lost her ob as a temporary civil servant. She now has great difficulty, in continuing ill health, in getting and keeping any job. She has been reduced to near destitution and dependence on public agencies for moral and financial support. This is the tragedy of a brave and capable woman absolutely broken by the devastating psychological shock of betrayal by the authority in which she had put her trust and of seeing, as it appears to her, the wicked flourish like the green bay tree.
  I want to ask the Financial Secretary two things. Firstly, that he should arrange an independent medical examination of Mrs. Richards and of her case history, to establish the degree to which the conduct of her superior officer was responsible for precipitating her breakdown, and, in that connection, I ask for an undertaking that she be compensated from public funds, as may be appropriate to the degree of responsibility established. After all, if a workman's life is wrecked by a fall from defective scaffolding his employer is liable for compensation, and I cannot see that the analogy with the wreckage of this woman's life is too far fetched.
  I should add just one thing. If I have been less than precise in describing Mrs. Richard's medical case history it is not because I failed to make proper inquiries about it, but simply because I do not think it fitting or fair to reveal all that has been confided to one about private and intimate matters. That is all I want to say about Mrs. Richards personally.
  The second thing I want to ask the Financial, Secretary concerns the public service, and it is simply that the Inspector in question should be dismissed.
  1802
  The seduction was—it could have been nothing less—a calculated, deliberate plan conceived by an inveterate paederast to inveigle this child into becoming his established catamite. The child in question was the child of a woman not only subordinate to the Inspector in the disciplinary hierarchy, but also peculiarly vulnerable by reason of her widowhood and her financial responsibilities.
  The violation of the slowly maturing personality of a child by a sexually mature person—for that is the nature of the offence, and the gender of the parties is of secondary importance—is an act of callous cruelty however we look at it. If we do not like to look at it from the point of view of John Gordon in the Sunday Express, we can look at it from the angle of Boris Nabokov. For no one has ever explained it more poignantly and perceptively than he did in his novel "Lolita". Altogether it would be impossible to imagine conduct more dishonourable, and, in the context of the public service, more unpardonable. And besides, by the nature of his office, an Inspector of Taxes, inevitably sensitive and susceptible to pressures and blackmail, should be required to be, as much as any officer of the Crown, sans peur et sans reproche.
  Music hall jokes apart, I think the general opinion in this country is that we are exceptionally well served by the officers of the Inland Revenue. Our tax inspectors are men of absolute integrity, I really believe, as well as of outstanding calibre of brain and mind. It is important that this standard should be jealously maintained, and it is important that it should be seen to be jealously maintained. I do not think that the sense of outrage and injustice expressed by the unhappy Mrs. Richards is in the least unreasonable. I think she has evinced a surer instinct for the true best interests and health of the public service than did the more merciful senior officials who decided not to dismiss this officer.
  I think a grave error of judgment was committed. It would be bad enough if no one had noticed or cared, but, in the circumstances, it cannot fail to undermine confidence in the standard demanded of public servants in responsible posts. It is painful and embarrassing for any hon. Member of this House to tread so close to the boundary of the Civil Service sanctuary, and I have been

  1803
  careful to avoid identifying any individual, to the extent that I could not myself, if asked, say who the officer is or where he is posted. I am not even aware of his name. I have no wish to pillory anyone. But I am concerned to protest against what seems to me a sinister indication of the lowering of standards required in servants of the Crown. I hope, therefore, that the Minister will be able to say that the officer concerned will be removed from the Service, to mark the gravity of this offence.
  5.47 a.m.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I am grateful to the hon. Member for presenting his case, to all of which I cannot necessarily assent, with moderation and great fairness, considering how strongly he feels in not involving the name of and means of identifying the officer concerned. It is a sad and sorry story of a delinquent Inspector of Taxes who misbehaved in the manner that has been established by the hon. Member. I need hardly say that we regret the happening of such improper and very saddening events in which this man committed an offence against a fellow employee's child.
  The court, however, became seized of this matter, and they are in a better position than I am to form an impartial judgment of the gravity of his behaviour. I think that I ought to be swayed by the view of the court, which certainly implied that he was not an habitual offender, and that it was his first offence. He was given a conditional discharge, and no monetary or other penalty was inflicted upon him. It is clear that the court wanted this man to redeem his offence and to restore his behaviour to that which would, as the hon. Member has said, be more suitable to a man occupying this position.
  The question is whether the Inland Revenue authorities ought to have dismissed him. I respectfully submit, although I can see that anyone else is entitled to another point of view, that it would have been wrong for the Inland Revenue to have dismissed this man, having regard to the view of his offence taken by the court, and of the court's anxiety that he should rehabilitate himself after this lapse. Had I the judging
  1804
  of the matter, which of course I have not except by way of review in the light of the hon. Member's representations, it would seem to me the wrong way of approaching this, at this point of a man's life when he has been guilty of this very grave offence and has been given by the court the opportunity to redeem himself, if I or the Inland Revenue were to make it more difficult for him to do so by turning him out of the means of earning his livelihood, for which he had the skills and the connection and, presumably, no alternative skill.
  It seems to me that the Inland Revenue authorities were obliged to ensure that the circumstances of his employment were not such as to involve them in responsibility for any further delinquency that might occur. There is no such risk; he does not come into contact with young boys in his employment. It cannot be said that the risks, such as they may be, inherent in this man's psychology have been enhanced by the Inland Revenue decision to let him go on earning his livelihood. Far from being able to go with the hon. Member in wanting to see him dismissed, I am obliged to endorse the decision of the Inland Revenue, which seems to me to be the only decision which they could have taken in the circumstances, having regard to the court's decision.
  The second question that I ought to answer is, are we responsible for the nervous breakdown of the mother of this boy? Most sincerely, I would express my deep sympathy for the lady, but, in spite of that, on the closest investigation of the matter, we cannot accept that we are responsible for her condition or are liable to compensate her.
  I am sorry to offer two disappointments to the hon. Gentleman. I see no reason to interefere with the decision of the Inland Revenue to retain this man at his post, subject to all suitable safeguards as to the nature of his job. I cannot accept that, in the circumstances of the case and having regard to the condition of the day concerned, the Inland Revenue is obliged to make some form of compensation to her for her nervous condition. I do not believe that it has been established that her condition is an attributable responsibility of the Inland Revenue. The Inland Revenue is not liable for the acts of its servants other than in the

  1805
  course of their employment. The fact that, incidental to his employment, he meets the child of this lady and she is disturbed or upset because of what happened subsequently cannot be laid at the door of the Inland Revenue.
  Mr. Iremonger: It would seem to me that this officer was in charge of the office. He was the superior in charge of all the staff and. therefore, Mrs. Richards was, as it were, a moral responsibility of his.
  Mr. Lever: But it was not as if he assaulted a member of the staff in the course of his duty or the opportunities of his duty. He became friendly with a member of the staff and, as a result, gained access to her home and met her son. But that is a different matter from acting in the course of his duty. One might as well say that if he had fallen in love with a lady on the staff and seduced her or promised to marry her and had not kept his promise and she had had a nervous breakdown, the Inland Revenue would be responsible for that. I could not accept that principle. It is only for actions arising out of and in the course of the employment of the inspector for which the Inland Revenue ought to have responsibility.
  In those circumstances, I could not feel justified in advising the expenditure of public money.
  I do not want to go into the details of the lady's health, any more than did the hon. Gentleman. It is clear, in my judgment, that no responsibility falls upon
  1806
  the Inland Revenue in these circumstances.
  I think that the Inland Revenue has a moral responsibility to try and help the lady over her disturbed period, because she was an employee of the Inland Revenue. Having investigated the case, I am satisfied that the Inland Revenue has been to extreme lengths of consideration—and I do not blame the lady, because she was not well—in its desire to help her retain her employment, but it became clear that, for one reason or another, her health would not permit it.
  I am sure that the Inland Revenue behaved rightly. It had to accept the decision of the court in spirit as well as in law. It has no obligation to compensate the lady. It had an obligation, which it discharged to the full. to give her great consideration after this unfortunate and criminal incident in an effort to help her return to work in the normal way. Unhappily, because of her condition, that was not possible. But I think that the Inland Revenue made every attempt which could reasonably be expected of it.
  I regret having to give a disappointing reply to the hon. Gentleman. I am afraid that I cannot go along with him on either of his two points, though I renew my expression of sympathy to the lady concerned and my deep regret that the incident ever occurred.
  Question put and agreed to.
  Adjourned accordingly at five minutes to Six o'clock a.m.