HC Deb 04 December 1968 vol 774 cc1710-86
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.
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- 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 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 (Stafford and Stone)

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 practical communication with Customs to ensure that effect is given to this provision.

Several Hon. Members rose

Mr. Lever

I am giving way in order. strictly from left to right.

Mr. R. B. Cant (Stoke-on-Trent, Central)

What about those at the rear?

Mr. Ian Percival (Southport)

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 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.

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 (Leicester, South West)

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 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 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.

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 (Pudsey)

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 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 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 (Poplar)

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 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


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.

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 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 (Dorset, South)


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 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- 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 (Norfolk, South)

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 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 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 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" 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 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 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 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 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.

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 (Cheadle)

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 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 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 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


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 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 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 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 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.

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—

  1. (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
  2. 1752
  3. (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 (Twickenham)

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 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. Blaker

May 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 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


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.

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 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 goes through its stages. Hon. Members have a duty—

Mr. Roy Roebuck (Harrow, East)

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 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


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 rose

Sir H. Legge-Bourke

I will give way in a minute.

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 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.

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, 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 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 (Ilford, North)

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 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 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 appear on the Notice Paper. This is one of the casualties of the procedure we are now discussing.

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 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.

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 from the stony faces of the Ministers on the Front Bench.

Mr. Charles Fletcher-Cooke (Darwen)

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 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.

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- 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 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 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 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. 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 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.

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 (Huddersfield, West)

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 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) 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 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 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.

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 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.
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 (Liverpool, West Derby)

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 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.

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