CHARGE OF IMPORT DEPOSITS (Hansard, 4 December 1968)

§ 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.

§ 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.

§ 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.