HC Deb 26 November 1968 vol 774 cc260-7

The new 50 per cent. import deposit looks like killing a move by a consortium of Midland steel stockholders to import sheet steel from Germany at prices well below those expected after the British Steel Corporation's new price schedules come into operation.

A spokesman for Digbeth Steel Stockholders of Birmingham, said his firm was largely a user of home-produced steel. Two German companies had offered particularly advantageous prices—better than could be expected or, the home market, even taking into account the loyalty rebate for buying at home."

Does the Financial Secretary seek to deny today that he is raising the price of British exports and making us less competitive overseas at a time when the Chancellor of the Exchequer is prating that we require expanded and enlarged sales of British manufactured goods all over the world?

I conclude with this comment from the same article: A building contractor importing Scandinavian timber sections said: 'Money is already almost non-existent to finance the small man. Who will be prepared to put it up for use as a deposit, to be tied up for six months without interest?'". The second major import affected by the Order with which I wish to deal is timber, which is the largest single commodity imported into this country. We bring in more than£200 million worth of it every year.

Most hon. Members think of timber as deals, sleeper blocks, soft woods, and so on, going to sawmills for reconversion, but that is not the true position. Timber technology has moved a great deal since the First World War. A major import of a wood product which is vitally concerned with our export trade is plywood. It is an interesting reflection that the Order delineates in items 44.01 to 44.12: Wood, not planed or further manufactured. That means deals, sleeper blocks, rough hewn and rough sawn timber, softwoods and hardwoods. They are exempted, but plywood is evidently classified as a manufactured product.

What do we do with the plywood we import—the tens of millions of pounds worth of it every year? Only about one-half of 1 per cent. of our total consumption of plywood is manufactured in Britain, and this comprises the fairly expensive grades of this commodity. The plywood that comes here principally goes to two end uses: first, for building—notably houses—and, secondly, for export packaging to save bulk in ships. Most heavy packages going overseas today which are beyond the range of a carton package are packed in plywood in preference to soft wood packaging because plywood saves a great deal in bulk.

The Order means that the Government will take millions of pounds in import deposits from plywood importers in respect of raw materials which arc then reconverted and used for packaging essential British exports on an economic basis to go, all over the world. [Interruption.] I am delighted to see the Financial Secretary whispering to his colleague the Minister of State at the Board of Trade, seated beside him. I note that the hon. Gentleman told his hon. Friend that I had made a good point in connection with both matters about which I have spoken. I lipread from a great distance.

Will the Financial Secretary exempt, before the Statute is enacted, these two major categories of British imports which are absolutely essential for the promotion of our international export trade? I refer, first, to rolled and re-rolled steel products and other steel imports and, secondly, to plywood. These should be included in the list and exempted from the import deposit scheme.

I do not intend to stray into the contributions I shall make on Second Reading and later stages of the Bill when it appears. I am completely opposed to this method of restricting imports into Britain, which I believe will result in a grave dislocation to our trade and a diminution, rather than an increase, in our exports. I hope, therefore, that my non. Friends will be unremitting in their opposition to the Bill when it comes before the House on Thursday and will vote against all its stages.

1.5 p.m.

Mr. John Page (Harrow, West)

I shall he brief because the House is anxious to hear the reply of the Financial Secretary.

The debate has shown that, from both the legal point of view and the list of exempted goods, it is disastrous to legislate on important matters in a hurry. We are told that importers may freely bring in commodities like caviare, lobsters, confectionery, avocado pears and even guano and strawberries without penalty, while the sensible importation of genuine raw materials will be penalised.

As we have heard that it will be possible to add to the list of commodities itemised when we debate the Bill, I hope that the Financial Secretary—and as the Minister of State at the Board of Trade is in his place, this will particularly concern him—will act on an illogicallity in the list. Under items 40.01, 40.03 and 40.04 we see that Natural rubber. Reclaimed and waste rubber are exempted. Significant by its absence is 40.02, synthetic rubber, in which I have an indirect interest as a user but not an importer. Nothing could be more absurd than to pretend that synthetic rubber is any less of a raw material than natural rubber. An even greater absurdity is that reclaimed and waste rubber is covered under items 40.03 and 40.04, whereas synthetic rubber is excluded. We have here an example of the exclusion of synthetic rubber, even though included is synthetic rubber which has had two or three extra processes involved in it.

This is a discrimination which I hope the Government will amend when the Bill is introduced. If not, industry which uses these products and which employs about 200,000 people will have an unnecessary burden to face. Nobody can say that there is any likelihood of synthetic rubber in its manufactured state being used for sale in the shops at Christmas or for any of the purposes which the Measure is designed to prevent.

1.9 p.m.

Mr. Harold Lever

I should like, at the outset, to clear up a point so that there is no vagueness or ambiguity about what the position will be in law in respect of the collection of deposits, the amendment of the list of exemptions, and so on.

As I have indicated in assurances to the House, the scheme will be operated so that from the passing of this Ways and Means Motion, this duty of Customs will be imposed in a way that provided that security is given to the satisfaction of the Customs—that Department will, of course, operate in good faith in assessing whether the security is reasonable; nobody must arrive with his prize bullock, however valuable it may be, as security—that will suffice to cover the period between the passing of this Motion and the legislation. I think that is what hon. and right hon. Members wanted, and that is what they shall have. No change will be made in this unless and until a Law Officer comes to the House, and an opportunity for a debate on the point is accorded.

Hon. Members will realise that this is a point of importance, but of narrow range, because as soon as the Act becomes law we take the cash, and no security of any kind. I do not want anybody to think that they can give bonds afterwards. I am dealing with the narrow but important period between the Ways and Means Motion and the Act. I do not want my undertaking to be extended to diminish the undoubted lawful powers of the Government from the passing of the Act—

An Hon. Members the Financial Secretary aware that there is some confusion in the Treasury even this morning? I attended a meeting at the Treasury, at which we wanted to know whether paper would pay the import deposit. The Treasury said that if it was imported after midnight tonight duty would have to be paid for the importation. Would the hon. Gentleman clear up this point immediately with the Treasury, because ii is creating confusion?

Mr. Lever

Without being unduly immodest, I can say that the House may assume that the explicit undertaking I have given to the House will be honoured, at any rate as long as I am a member of the Government—and, of course, ought to be honoured even if I were not a member of the Government. It is unlikely that this change is imminent. I can give the House the firmest possible assurance that a bond will be taken, if it is satisfactory in other respects, in the discretion, in good faith, by the Revenue until the Act comes into force. Where no satisfactory bond is available, cash will be adequate security. It would penalise the importer to hold otherivise—I think that is agreed on both sides.

I am not ruling on the law—I am not here in a legal capacity. I am ruling on what will happen in this case, with the assurance to hon. Members that when inviting them to pass the Ways and Means Motion I record the fact that if the House passes the Motion it does so on the faith of the assurance I have given.

The second point concerns exemptions. I must tell hon. Members who are anxious to urge deletions from the exemption list that even if the Motion gave power to delete from the list it would be a power exercisable only by Government and not by any hon. Member, since it would impose a Customs charge. It is very flattering that so many hon. Members want to give the Government power to move Amendments to narrow the list of exemptions. Since the Government have no such desire, even if I had widened the Ways and Means Motion hon. Members would have remained equally ungratified.

The exemptions stand, but can be increased by Amendment tabled by the Government or by hon. Members opposite. Any hon. Member. and many hon. Members have expressed very interesting points of view, can, when the Bill conies before the House, move Amendments to add exemptions to the list. The hon. Member for Worcestershire, South (Sir G. Nabarro) can be both a Dr. Jekyll and a Mr. Hyde: a Dr. Jekyll, with continued and obstructive noise—is one part of him—and Mr. Hyde, with very serious, congent, well-documented argument is the other. We have had him in both capacities—

Sir G. Nabarro

The Financial Secretary has put it the wrong way round.

Mr. Lever

Whichever it is, the hon. Gentleman has appeared in both capacities today.

I have listened with great care to what he had to say about the need for further exemptions, and this will be very carefully considered between now and the Committee stage. I only hope that the hon. Gentleman will not be intimidated by anything I have said this morning from exercising his full rights as a private Member, and will not feel obliged to remain silent throughout the Committee stage. As he has cogent and interesting points to draw to the attention of the Government and the House, I hope that he will feel encouraged to do so.

I will not weary the House with a detailed examination, because I have no power in this respect, of the many suggested Amendments to the list. The power can be exercised only when the Bill comes forward, and if it is any satisfaction to hon. Members there is a lubrication provision, which I have accepted, in the very short period between the Ways and Means Motion and the operation of the Act. Business firms can give bonds to secure their liability, and if something is exempted by the time the Act is passed, the bonds will be torn up or the deposit refunded immediately. For that reason, I hope that the House will forgive me if I do not discuss which articles might be considered for further exemption.

The hon. Member for Bristol, West (Mr. Robert Cooke) asked what we were to do about wines, for example, brought in bulk to this country to be processed and re-exported. Wines can be bonded and bottled in the warehouse, and in that case the deposit will not be payable, although it is payable—

Mr. Robert Cooke

I hope that the Financial Secretary is aware, or will find out, that this is quite unworkable in practice. If it turns out to be completely unworkable in practice it may well turn the trade from this country to the countries of origin, Spain and Portugal, and we will never get it back. I therefore hope that he will look at this point again, and will give an undertaking that, if necessary, the Government will themselves act, and not leave it to hon. Members to do so at a later stage.

Mr. Lever

I thought that I had made it plain that the Government would give consideration to everything that has been said in this debate. I did not want the more nervous Members, such as the hon. Member for Worcestershire, South, to feel that they were precluded from making a contribution when the Committee stage is reached. I hope that the House will not think it discourteous of me—because, as I say, I have no power —if I dc not go into the details, but there are one or two things I should say in answer to the debate.

There is, first, the question of bank help. As I understand, the Chancellor of the Exchequer has made it clear that in the initial stages, to cover people who imported without the knowledge of an import deposit being required, the banks will be asked to look sympathetically at those cases. The point has been taken that there should be clearer and more expanded information given to the public as well as to the banks about what our policy is on that aspect, and I will see that attention is given to it so that people and the banks will know where they stand.

I am now left with only one final point to deal with, and that is the complaint that this step is restrictionist; that it offends the spirit of the G.A.T.T. and of E.F.T.A. and that we are trying to do as much as we can get away with—as one hon. Member put it—within these treaties. This is certainly not the case. The House must bear in mind that this scheme, very reluctantly adopted by the Government, in relation to a selective pressure on the liquidity of importers is of a temporary nature.

Although one would not gather it from some of the speeches we have had, it does not, nor is it intended to, constitute an absolute barrier to any particular type of import. Some hon. Members addressed the House as though we were forbidding the import of a specially required piece of aluminium which is a small component, in the main, export fabrication. Nothing of that kind is involved here. Provided that half the cost of that article is deposited and left with the Customs for six months, the manufacturers may import it. Our action is intended to be the lightest possible interference with the normal free flow of trade that could be conceived—and even that on a temporary basis.

We think, on balance, that the contribution this will make towards swiftly reducing our imports and bringing our balance of payments into surplus will not merely be to our advantage but will be a contribution to the kind of monetary and economic stability which the world at this point in time so urgently needs. We are not doing this as a turning away from the liberalisation of trade. It is done temporarily, reluctantly and as a squeeze on the liquidity of importers. It is not a barrier to importation and there is no desire to destroy or derogate from the importance of the liberalisation of trade covered in E.F.T.A. and the G.A.T.T. Treaty.

Mr. Nott

The hon. Gentleman must make up his mind. Is it to reduce imports, or is the intention to maintain the maximum liberalisation of trade? It is one way or the other. Presumably, it has been put on with the specific intent of reducing imports. That cannot liberalise trade.

Mr. Lever

I said that it will presumably act to reduce imports temporarily. It will have been noticed that time of the powers we are seeking. It is temporary—

Mr. Nott

Like Income Tax.

Mr. Lever

Unlike Income Tax, it would not need another Act of Parliament to renew it. [Interruption.] I suppose that that is not so. All that I can say is in anything like the present circumstances I would find it deplorable to renew any form of restriction, and it is not our intention to do so. Our intention at present is to bring this to an end automatically after 12 months. It is true that during that period it will help to reduce imports. That is the purpose of it, but it will do so in the least restrictionist way, namely by impacting selectively upon the importer.

Sir G. Nabairo

What is the value of temporarily reducing imports, if as a corollary of that, our export trade is commensurately reduced by other countries taking reciprocal action against us?

Mr. Lever

I will go into this at greater length when time is not so pressing. The hon. Member for St. Ives (Mr. Nott) is surely wrong in supposing that any form of import substitution can only be obtained at the expense of diverting resources that would otherwise be exported. If that were true one could never secure any alteration in the ratio between one's exports and imports and we have to do so. In those circumstances, I hope that the House will now feel able to pass this Motion for the purposes I have outlined.

Question put and agreed to.

Bill ordered to be brought in upon the Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Diamond, Mr. Harold Lever, and Mr. Dick Taverne.