TEMPORARY RELIEF FROM IMPORT DUTY FOR CERTAIN COMMONWEALTH TEXTILES (Hansard, 5 July 1971)

§ The Minister for Trade (Mr. Michael Noble)
I beg to move, That the Clause be read a Second time.
The new Clause amends the Import Duties Act, 1958, to provide a new limited power for import duty relief. The need for this new power arises from our intention to go ahead with the previous Government's decision to impose a tariff of 85 per cent. of the most favoured nation rate on imports of cotton yarn and woven cotton articles from the Commonwealth Preference Area arriving in this country on or after 1st January, 1972.
The present import restrictions on the quantities of those goods exported from the developing countries will be discon 954 tinued at the end of this year. Because the quota restrictions are operated on the basis of the date of export, while the tariff must be related to the date of arrival, goods exported under quota from the Commonwealth Preference Area before the end of this year but arriving early next year would, unless the proposed power is enacted, be subject to both quantitative restraint and the tariff. To avoid this double penalty Commonwealth suppliers would have a strong incentive to ship all the quota entitlement to arrive before the end of this year, thus producing a lumping of imports which might dislocate the market. To prevent this risk of dislocation we propose to relieve such goods from import duty in the early part of 1972. The new Clause would give us the power to do so. The power will be needed only for the first few months of that year.
The Clause is purely enabling. It adds a further paragraph to Schedule 3 to the Import Duties Act, 1958, which lists a series of cases where relief from import duty may be made available by order under Section 5 of the Act. The necessary order will be made in due course subject to negative resolution procedure in accordance with the existing provisions of Section 5. The power is only available for cotton yarn and manufactures of woven cotton. The relief is deliberately restricted by sub-paragraph (a) to goods of the Commonwealth Preference Area, by sub-paragraph (b) to goods imported under a licence restricting the quantity to be imported, and by sub-paragraph (d) to goods of a kind which would have been admitted duty-free had they been imported on 31st December, 1971. Only goods complying with all these conditions would, unless relief were given under the Clause, became temporarily subject to the new double restraint of quota control and import duty.
In particular, sub-paragraph (b) excludes goods from Commonwealth countries which have not been subject to quota restriction, while sub-paragraph (d) excludes all goods, Commonwealth and non-Commonwealth alike, which are already subject to tariffs as well as quota restrictions.
In addition, sub-paragraph (c) makes the key provision that the goods first have to be certified by the Secretary of State—in practice, the Department of Trade 955 and Industry—to the effect mat he is satisfied that they were exported before the end of this year. Relief is intended only for goods exported under the current quotas up to the end of this year, and this sub-paragraph precludes relief for goods exported thereafter. Certification will be based on evidence of the date of export which has to be submitted to the Department of Trade and Industry before it issues import licences under the current quota controls. H.M. Customs and Excise needs such certification so that it can be satisfied as to the eligibility of the goods for duty relief.
A further effect of sub-paragraph (b) is that the power will effectively lapse when we cease to issue for the cotton textiles concerned individual import licences which embody quantitative restrictions, that is to say, as from 1st April, 1972, although such licences will in any case be issued freely for goods exported as from 1st January, 1972.

§ Mr. Tam Dalyell (West Lothian)
As the right hon. Gentleman knows, there is no cotton industry in Argyll and the Islands, or even in West Lothian. Therefore, in the presence of colleagues who represent cotton constituencies, I feel a little constrained about speaking on this subject. I do so simply to ask a question. I gather that the Indian Government are greatly dissatisfied at various developments which have taken place. What consultations has the Department had, through the Foreign Office, with the Indian Government, and what is the general philosophy of putting a certain constraints on imports of manufactured goods that can be produced by developing countries, which is perhaps a better way of giving finance to developing countries than outright aid? The House might be grateful for a short statement on the basic philosophy.

§ Mr. Barnett
Unlike the constituency of my hon. Friend, my constituency has a considerable textile interest. I appreciate the need for arrangements for the transitional period between quotas and import duties. My hon. Friend referred to India, and we know that the Government are in dispute with the Indian Government about the new arrangements. I should be interested to know what the position is now. I appreciate the point 956 made by the right hon. Gentleman that export certification will be required to ensure that imports after 31st December will come in free of duty but there are many in my constituency and in Lancashire who would be concerned if they thought that there was the likelihood of any evasion which would dislocate even more the Lancashire textile industry. Is it possible that after certification the exports could be held up, so that substantial quantities of duty free textiles came in after 31st December 1971? For example, India, and other countries, too, may not have been able to fulfil the quota for a variety of reasons. Is the right hon. Gentleman satisfied that there is no way of getting round the provisions so that there could be a flood of duty-free textiles into the country?

§ Mr. R. T. Paget (Northampton)
I understand that this is part of a general arrangement to protect our interests, even though it is at the expense of India's interests. I am all in favour of protecting our interests, but, if we were to go into the Common Market, I should equally be in favour of protecting our interests against those of Germany or Italy. Will the Minister confirm that nothing of this sort could be done?

§ Mr. Noble
The hon. Members for West Lothian (Mr. Dalyell) and Hey-wood and Royton (Mr. Barnett) have spoken about India. The Clause is designed to help the Indian market, because about 90 per cent. of the imports affected come from India, Pakistan and Hong Kong—I have not got the exact breakdown. Both hon. Gentlemen are correct in saying—and I must not stray out of order—that we are in dispute with the Indians over the waiver in the textile agreement, and there will be opportunities—I suspect fairly soon—for debating that when the appropriate moment comes. The Clause has been designed specifically to help these countries so that they are not in any way burdened by being afflicted both with the quota and with the tariff.
The hon. Member for Heywood and Royton asked whether difficulty might arise in Lancashire because of exports being held up after certification and so causing disruption. This is the exact point which the Clause is designed to 957 meet. This will not be so, because the key question will be: on what date were they shipped? Therefore, although there might be export certification, unless they were shipped by 31st December of this year there could be no question of their being allowed in as part of the quota and, therefore, free of duty.
In reply to the point made by the hon. and learned Member for Northampton (Mr. Paget) about protecting our interests, the provisions of the Clause have in the past been discussed by the previous Government with our textile interests, and it was felt to be right. The consultations that we have had since have shown that the textile interests still feel that this is an acceptable method of dealing with the point. Nothing in the Clause will affect us in any way when we come into the E.E.C. I think the hon. Gentleman may be satisfied that this is a purely temporary Clause to correct what might be a disruptive effect over the last few months of this year and the first three months of next year, and as such—

§ Mr. Paget
My point is that most temporary and necessary measures to prevent disruption of our trade will be available to us when we are in the Common Market.

§ Mr. Noble
I am not certain that I fully understand the hon. and learned Gentleman's point.

§ Mr. Barnett
Perhaps the right hon. Gentleman might explain to my hon. Friend that if we imported as few cotton textiles as the Common Market countries, my constituency in Lancashire would be highly delighted.

§ Mr. Noble
I am grateful to the hon. Gentleman for helping me. I was about to say that the Common Market has very strict quota arrangements and, presumably, we should have to deal with that problem when and if we entered it.

§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
New Clause 2–

§ Mr. Dalyell
On a point of order, Mr. Deputy Speaker. I do not, of course, complain about Mr. Speaker's selection: I only wish to say that the promoters of new Clause 1 are a little sad that it has not been selected.

§ Mr. Deputy Speaker
That is not a point of order. Selection is the prerogative of Mr. Speaker, and there cannot be any points of order raised against it. I therefore cannot accept as a point of order what the hon. Gentleman says. However, he is now on the record, and I cannot prevent that. New Clause 2.