CUSTOMS DUTY (PERSONAL RELIEFS) ORDER (Hansard, 26 June 1972)

§ Dr. John Gilbert (Dudley)
I will not seek to detain the House long. I under- 1148 stand that the changes incorporated in the order are basically drafting changes from the original order to which it refers. However, there are one or two points on which I should be grateful for explanation, although I have not given as much notice as I should have liked.
Paragraph 5 states: In article 2(2) of the Principal Order for the words "been so resident" at the end of the third line thereof, there shall be substituted the words "been outside the United Kingdom". I should appreciate an explanation of the distinction intended in that amendment.
Secondly, at various places running through the original order there is a catalogue of activities which if undertaken are liable to attract duty to the imported goods. In every case, with one exception, they read: the goods shall not be, or be offered, exposed or advertised to be, lent, hired, pledged, given away, exchanged, sold or otherwise disposed of in the United Kingdom;…". There is a difference with respect to the same catalogue of discouraged or forbidden activities under Article 6(1) of the original Order where "lent" does not appear. I should be grateful for an explanation on that.
Finally, paragraph 13 of the amending order appears to bring about a substantial amendment of Article 15(2) of the original order. We shall be grateful if the Financial Secretary will address himself to that matter. None of these points is of major significance but we should like a little enlightenment about them.

§ The Financial Secretary to the Treasury (Mr. Terence Higgins)
If the hon. Member for Dudley (Dr. Gilbert) and I were upstairs in Committee on the Finance Bill, where we were only a few moments ago and where we shall no doubt return, I should have simply moved this order by saying that it was essentially a question of drafting.
The hon. Gentleman has raised some specific points and perhaps it would be to the convenience of the House if I briefly outline the purpose of the order and then seek to answer the more specific questions which he has put to me.
The order was made by the Commissioners on 1st June under the enabling powers of Section 7 of the Finance Act, 1968, to come into operation on 1st July this year. As it restricts relief conferred 1149 by a previous order, Section 7(5) requires it to be approved by resolution of the House within 28 days after 1st June.
A number of duty and tax reliefs for tourists, and so on, have developed over many years. These were originally granted extra-statutorily, but they were formalised and made statutory under Section 7 of the Finance Act, 1968, which gives the Commissioners power to make orders conferring duty and tax reliefs on persons entering this country. The Customs Duty (Personal Reliefs) Order, 1970, which the present order amends, is one of the orders made under those powers and deals with reliefs for temporary visitors, for immigrants, and for visiting forces.
Experience has brought to light some defects of wording in the 1970 order, as. a result of which it may not in all respects have fulfilled the intention of covering, no more and no less, the scope of the former extra-statutory concessions to which it relates. The purpose of the present order is to correct these defects.
Briefly, its effect is to make clear: first, that a person is treated as having been resident abroad for a given period—one of the conditions of eligibility for relief as a visitor to this country—only if he has actually been outside the United Kingdom for that period; secondly, that the goods may not be treated as having been owned and used abroad by the importer for a given period—one of the conditions of eligibility for relief for long-term visitors and people changing residence—unless the importer himself has been abroad for that period; thirdly, that the condition—which applies to all goods admissible duty and tax-free under the order—that the goods shall not be offered for sale, hire, and so on, also precludes their being "exposed or advertised" for such purpose; and, fourthly, that relief allowed to members of visiting forces on the goods they import applies equally to goods they remove from bonded warehouses.
It is because, as a matter of legal construction, the first three of these changes may restrict existing reliefs that the affirmative resolution is required. But there will be little or no change in practice since, as I have explained, the order is intended merely to make the law say what until recently it had been under- 1150 stood to have said. This also applies to the fourth change which, being an extension of an existing relief, would not itself require affirmative resolution, but we thought it convenient to the House to include it in this order.
The hon. Member for Dudley asked three specific questions. I am not sure whether I have them in the order in which he originally asked them, but essentially one of them is concerned with residence abroad. This is a drafting Amendment. The hon. Gentleman referred specifically to paragraph 5: In article 2(2) of the Principal Order for the words 'been so resident' at the end of the third line thereof, there shall be substituted the words 'been outside the United Kingdom'. The original wording was not entirely clear. We believe that as the position has been brought into some doubt by a particular court case it would be advisable for us to define precisely what the expression we have used hitherto means. The weakness of the original order is that it does not specify what "resident" means. The only practicable way of administering the provision is to have regard to the time the importer was actually outside the United Kingdom. Therefore, we have amended the wording which now puts the position beyond doubt. We think that will be helpful.
Another point concerned the drafting of the original order. The provision with which we are concerned is the one I mentioned in my summary remarks. The order provides for personal reliefs, the philosophy being that the goods on which the reliefs are given are for the personal use of the importer or his dependants.
The order accordingly—in several Articles, for example, 8(i) and 10—makes it a breach of the conditions of the relief to dispose of the goods in this country. The crucial word is "dispose". It does so by providing that the goods shall not be, or be offered to be, lent, hired, pledged, given away, exchanged, sold or otherwise disposed of", and we are advised that the wording may be defective in that the phrase "offered for sale" has acquired a technical meaning and cannot necessarily be construed in its ordinary every-day meaning. An advertisement offering an article for sale is not "offering for sale" within the meaning of the laws of contract but is merely an "invitation to treat". To 1151 close this technical loophole the amending order inserts the words "exposed or advertised" in each of the relevant passages so that they will now read: the goods shall not be, or be offered, exposed or advertised to be, lent, hired", and so on.

§ Dr. Gilbert
I did not make myself clear on one point. It was on Article 6(i) of the original order. That paragraph says: the goods shall not be, or be offered to be, hired, pledged, given away, exchanged, sold or otherwise disposed of and so on. There is nothing about "being lent". In every other activity which shall terminate the relief the word "lent" appears. It is in Article 14(ii) and in Article 10 of the original order. I was interested in the omission of "lent".

§ Mr. Higgins
I appreciate the point made by the hon. Gentleman and I think that I can give him an explanation. I am advised that in that Article the word "lent" is not used because there is no objection to the goods being used by some other entitled person. This is allowed for by Article 5(c) of the original order which says: the goods are intended solely for his or his dependants' personal use or that of some other entitled person". These provisions do not apply in the context of the other Articles of the original order to which the hon. Gentleman has referred.
The hon. Gentleman raised a point on the status of forces in this country. Perhaps he would refresh my memory on that.

§ Dr. Gilbert
I have not studied this as closely as I should have done, but Article 13 appears to introduce a change of substance in Article 15(2) of the principal order, whereas I understood that most of the changes were of a drafting nature. There seems to be a clear difference about those parts of Article 15(i) of the original order which shall apply henceforth to members of visiting forces.

§ Mr. Higgins
I think that I can put the hon. Gentleman's mind at rest on this. I can see that it may seem to be a point of substance. It is concerned with visiting forces. The existing order provides conditional relief for goods imported by members of visiting forces. The NATO Status of Forces Agreement defines "importation" for this purpose as including withdrawals from Customs warehouses. We have been advised, however, that withdrawals from warehouses may not be strictly covered by the existing order, and Article 12 of the amending order puts this beyond doubt. A number of these provisions echo all the way down the line, and therefore this confirms existing practice by adding the words or removed by him from warehouse after the words "imported by him".
There are a number of consequential amendments to Article 15(1). Article 13 substitutes the paragraph to which I have just referred to achieve the objective which I have just outlined.
It was introduced because there was some doubt about the drafting in the earlier Articles. I am advised that this is a consequential amendment, which achieves the overall objective of simply putting beyond doubt the position of items which are removed from warehouses by people who happen to be members of visiting forces of NATO.
I hope that I have put the hon. Gentleman's mind at rest. This is largely a technical matter but we thought it right to tidy it up rather than that there should be any confusion about it in future.