Lords Sitting of 14 March 1957

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

GENEVA CONVENTIONS
3.5 p.m.
THE EARL OF WOOLTON: My Lords, with your Lordships' permission, I should like to postone until this day week the Question which stands in my name on the Order Paper, namely: To ask Her Majesty's Government whether, in view of the dissatisfaction expressed on all sides of the House and in the Press at the reply given on behalf of Her Majesty's Government to the questions addressed to them on 26th February concerning the delay in ratifying the 1949 Geneva Conventions, they will take an early opportunity to introduce into the House legislation to implement our honourable international undertakings to ratify these Conventions.

AIR CRASH IN BERKSHIRE
LORD LUCAS OF CHILWORTH: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government the purpose for which the twelve service personnel, the other passenger and the guard dogs were travelling in the Beverley aircraft which crashed at Drayton on 5th March, and how much petrol was being carried by the aircraft at the time of the accident.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD MANCROFT): My Lords, the Beverley aircraft which crashed near Abingdon on March 5 was bound for Cyprus to move important technical stores from there to another point in the Middle East. This freight was urgently required at its destination and was too bulky to be carried in any other type of aircraft available. In addition to the crew of five, the aircraft carried a slip crew and eight airmen posted to Malta, where it
564
was to stage, and Cyprus. The police dogs were also being taken to Malta and Cyprus. At take-off, the aircraft carried some 4,000 gallons of fuel.
LORD LUCAS OF CHILWORTH: My Lords, I am very grateful to the noble Lord for the fullness of his reply. May I ask him this further question? Does he think that, in the national interest, at a time when the civilian population of this country are suffering under very restrictive petrol rationing, great care should be taken in future, that, if possible, stores of this description could be sent by some other form of transport than by utilising one of the largest types of transport the R.A.F. has, carrying, as the noble Lord has said, 4,000 gallons of petrol?
LORD MANCROFT: My Lords, I think that is a perfectly valid point. But, unfortunately, the only two aircraft in the Middle East which could have carried this load were not available at the right time, and to have sent the goods by sea would have imposed an intolerable delay.
LORD LUCAS OF CHILWORTH: My Lords, I am fully conscious of the correctness of what the noble Lord has said, but what I have in my mind—and the noble Lord will be aware of it—is the undertaking given by his noble friend Lord Gosford, that the R.A.F. were cutting their petrol usage down by about 30 per cent. I hope that that is still in the mind of the R.A.F.
LORD MANCROFT: It is still very much in the mind of the R.A.F.

PETROL SUPPLIES FOR PRIVATE CARS
THE EARL OF ONSLOW: My Lords, for the convenience of the House, I have been asked to say that, at the request of the Government, the noble Lord, Lord Lucas of Chilworth, has kindly postponed his Question on petrol rationing for private cars which is down as last Business to-day. If there is any statement on this subject in another place before the House meets next week, my noble friend the Minister of Power will repeat it here as soon as the House meets.

PUBLICATION OF DEFENCE WHITE PAPER
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should like to ask the noble Marquess the Leader of the House the Question of which I have given him Private Notice: Whether he can now inform your Lordships' House on what date the Defence White Paper for the year 1957–58 will be supplied to Parliament?
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I understand that it is proposed to publish the Defence White Paper in the last week in March.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, that is not a very definite date. However, I am much obliged to the noble Marquess for his Answer. I hope that publication of the White Paper will not be further delayed. I wish to ask the noble Marquess whether it would not be wise to place on record that, whatever special circumstances may have arisen this year to delay publication, this should not be regarded as any precedent for departing from the custom which was introduced by my noble friend Lord Attlee of having a full White Paper and a considered overall Defence policy of the Government supplied to Parliament, and debated, before the presentation of Military Estimates of Supply.
THE MARQUESS OF SALISBURY: My Lords, I can assure the noble Viscount that this is not a change in the usual procedure. It was merely that there were special circumstances—that is to say, a new Minister of Defence. Clearly, he had to become master of his Department and see all the considerations involved before he produced a White Paper on policy.
Earl ATTLEE: My Lords, I hope the noble Marquess will not think it is a necessary precedent that there should always be a new Minister of Defence every year, or every few months, before the White Paper comes out.
THE MARQUESS OF SALISBURY: My Lords, that does not alter my point that
566
it is no good the Minister of Defence producing his White Paper until he has mastered his subject.
VISCOUNT ALEXANDER OF HILLSBOROUGH: But it is fundamental, from the point of view of Parliament, that it is well-established and good practice to have a considered statement of policy of the Government, and not merely of a new Minister of Defence, who is introduced before these very important Estimates of Military Supply are considered. We have now had to revert to what was purely a war-time practice of considering in another place large Estimates on account.
THE MARQUESS OF SALISBURY: My Lords, the noble Marquess can no doubt remember when he himself was Minister of Defence, and I am sure he would not have agreed to the publication of a White Paper before he himself was ready to approve it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should think the new Minister of Defence would be glad to be loyal to the overall decision of his Cabinet.

BUSINESS OF THE HOUSE
THE MARQUESS OF SALISBURY: My Lords, I beg to move the Motion standing in my name.
Moved, That Standing Order No. 41 be considered in order to its being dispensed with for the purpose of passing the Rating and Valuation Bill through its remaining stages.—(The Marquess of Salisbury.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we are very glad to accede to this Motion on this particular request. I am not at all sure whether it may not sometimes prove to be a valuable precedent, whatever Government is in office—and it is important to remember that. At the same time, I should like to place on record that I do not think it is the kind of thing we ought to have to revert to very often.
On Question, Motion agreed to, and ordered accordingly.

CUSTOMS DUTIES (DUMPING AND SUBSIDIES) BILL
3.11 p.m.
Order of the Day for the Second Reading read.
LORD MANCROFT: My Lords, I beg to move that the Customs Duties (Dumping and Subsidies) Bill be now read a second time. This Bill is a small but important addition to our trading armoury. I hope that, by the end of the debate this afternoon, your Lordships will agree that it is right and proper for the Government to take the powers it contains. It is of the utmost importance to us, as a great importing and exporting nation, that the trade in which we participate should be fair. For this reason, Her Majesty's Government have taken a leading part in trying to get internationally agreed rules on this subject, in, for example, the Organisation for European Economic Co-operation and the General Agreement on Tariffs and Trade. Your Lordships know that we have had considerable success in this field and we intend to continue our efforts.
As I have frequently informed your Lordships, and particularly Lord Barnby, whose absence from this debate we regret, we take the view that positive efforts of this sort to end such things as export subsidies at source are ultimately the soundest course. However, the danger of unfair trading practices still exists, and it is possible that in certain conditions they might be intensified. Your Lordships have debated this point on more than one occasion. Persistent or large-scale dumping could cause real damage to a domestic industry here, as, for example, in textiles or horticulture. The Government have therefore felt it right that they should have in reserve powers to deal with dumping and subsidies. The aim of this Bill is to prevent our industry from being exposed to unfair trading practices to a greater extent than the industries of its competitors, and to deter other countries from resorting to subsidies and deliberate dumping by providing defences against them. The proposal to take these powers, therefore, is fully in accord with the Government's general commercial policy, and your Lordships must view it as a contribution to the
568
efforts which we are making in the interests of our export trade to promote the reduction and elimination of barriers to international trade throughout the world.
In a sentence, the purpose of this Bill is to encourage freer trade by reinforcing the Government's efforts to secure fairer trade. These are sentiments which, I am certain, meet with the approval of the noble Lord, Lord Grantchester, and his colleagues on the Liberal Benches. The Bill is in no sense an attempt to impede, or to give additional protection against, legitimate trade, including legitimate low cost trade. That, in so far as it is necessary, is the job of the ordinary protective tariff—for instance, the 17½ per cent. tariff on imported cotton textiles. More harm than good, I am sure, would come from an indiscriminate use of the powers to impose additional duties on dumped or subsidised imports once the powers have been taken. It is for this reason that we are deliberately proposing in this Bill that the Board of Trade should be permitted to use these powers instead of providing for an automatic imposition of duty.
I believe that we have the support of industry generally for our intention that, while the powers we are seeking here should certainly be capable of effective operation where necessary, they should none the less be used sparingly and with care in the interests of our own export trade. One objection to our taking these powers at all might be that we are thereby encouraging others to do the same thing, with a consequent threat to our own export trade. We do not feel that there is much substance in this objection. Many countries, including the United States and most Commonwealth and European countries, already possess powers to deal with dumping and subsidies. It is in the use rather than the assumption of the powers that we have to exercise caution. Here, of course, we shall be bound by the international agreements to which we are a party, and in particular by the provisions of the General Agreement on Tariffs and Trade which sets out agreed rules in the matter of anti-dumping duties and countervailing duties—that is, duties to offset subsidies.
The present Bill, in short, is to a considerable extent based on the provisions of Article VI of G.A.T.T. Where it differs from G.A.T.T. or goes beyond it

569
I can assure the House that it is our firm intention to abide by the rules of G.A.T.T. in relation to all the countries towards which we have assumed full G.A.T.T. relationship. This is not only a question of an international obligation; it is also a matter of hard self-interest. About 80 per cent. of the United Kingdom's import and export trade is with G.A.T.T. countries and it is clearly in our interest that we and all members of G.A.T.T. should scrupulously obey the rules of fair trading prescribed by it, as web as the limitations which are laid down against arbitrary or excessive antidumping or countervailing action.
If the provisions of the present Bill go wider than G.A.T.T. in some respects, this is because we wish to be free, if necessary, to deal more stringently with dumped or subsidised imports from countries which are not members of G.A.T.T. In practice, we shall not do so except in self-defence—for example, if there were a deliberate attempt to harm our economy by persistent dumping. Normally, there will be no question of using these powers without a thorough investigation of each case on its merits. In addition to requiring firm evidence that dumping or subsidising is in point of fact taking place, we shall also have to be satisfied that this is causing or threatening material injury to a United Kingdom industry. This is a requirement of G.A.T.T. which we have now written into this Bill in respect of imports from countries with whom we have entered into full G.A.T.T. relationship.
But it is clearly sensible that, even in the case of non-G.A.T.T. countries, we should only take action where some real and significant harm is being done to our economy. Despite the rather gloomy industrial news in the papers these days, we all naturally hope that our economy will be so buoyant in the years ahead, and our industries so competitive, that they will not need the protection of these powers except in isolated cases.
Perhaps I might say a word here about a subject which is very much on all our minds—the proposed association of the United Kingdom with an Industrial Free Trade Area in Europe. I suppose certain sections of industry may fear that, if we participate in this imaginative project, there will be an increased risk of artificial aids to exports as the conventional tariff
570
barriers are progressively removed. I hope that this will not be the case. I hope that there will be agreed rules on such matters as the use of export subsidies. And, in theory, dumping should gradually disappear as an Industrial Free Trade Area develops, because, if goods can be shunted from one country to another without restriction or duty, any damping can quickly be pissed back and the original dumper can be undersold with his own goods in his own home market. In the transitional period, however, before tariffs are removed, there might be some incentive to cash in unfairly and resort to deliberate dumping on the part of certain industries in Europe, and the possession of the powers in this Bill will enable us to deal with such a situation should it develop.
But let me make one thing perfectly clear from the outset. These powers are not going to be a "soft option" for United Kingdom industry. We could not and would not use them as a substitute for the normal tariff protection which would be progressively removed in the Industrial Free Trade Area. To do so would be to cut right across the whole purpose of the plan. These powers are designed to deal with the strictly limited cases of dumping and subsidising proper—or, should I say, improper.
Let me say a word here about the Commonwealth and Colonies. There is nothing in this Bill which would prevent us, if necessary, from imposing additional duties on imports from Commonwealth and Colonial territories. Nearly all the Commonwealth countries already have legislation of this kind themselves. We naturally hope that there will be no occasion to use the proposed powers against goods of Commonwealth origin; but, in any event, we would, in accordance with our general policy in relation to Commonwealth trade, consult with the Governments concerned before making an order to impose a duty on their goods. Commonwealth Governments have been informed of our intentions, including that of consulting them before using the powers against their exports, and have raised no objections to what we propose.
We shall also be free to use the powers in the Bill on behalf of overseas countries which are members of G.A.T.T. if they are able to show that the import of dumped or subsidised goods into the

571
United Kingdom is causing or threatening material damage to an industry in their country whose exports to the United Kingdom suffer as a result. There is provision for such action in G.A.T.T. and in operating our Bill on behalf of a third country, we should, of course, abide by the rules of G.A.T.T.
I will turn now very briefly to the more detailed provisions of the Bill itself. Clause 1 empowers (but does not require) the Board of Trade to impose duties on imports of goods of any description from any country, if it appears to them that those goods have been dumped or affected by a subsidy. The definition of dumping closely follows that in Article VI of G.A.T.T.: goods would be regarded as dumped if their export price was less than their "fair market price" in the country of origin or export. Definitions of these terms are contained in subsequent clauses.
The term "subsidy" as in the G.A.T.T. is not closely defined: the definition is sufficiently wide to catch any practice where money is provided directly or indirectly to a manufacturer or exporter by a Governmental or other similar body. The Board of Trade may impose these anti-dumping or countervailing duties provided that they are satisfied that it would be in the national interest to do so. There is also a proviso which, in effect, says that, in the case of imports from countries with whom we have full relationship under G.A.T.T., the Board must be satisfied that material injury is being threatened or caused to a domestic United Kingdom industry or to an exporting industry in another G.A.T.T. country.
The terms "material injury" and "industry" are reproduced again from Article VI of G.A.T.T. In practice, of course, the Board of Trade would not be prepared to use the powers in the Bill if only one or two firms within a national industry were injured unless those firms represented a substantial proportion of the production in that particular industry. Perhaps I might remind your Lordships that, although the Board's discretion may seem to be very wide, any decision to introduce an order imposing an anti-dumping or countervailing duty would be subject to approval in another place. Parliament, therefore, would have
572
the last word and I think your Lordships would agree that it is very important that this should be the case. Clause 2 of the Bill contains the provision that the Board of Trade's powers to impose and vary duties shall be exercised by order. Orders must describe the goods to which they apply, by reference to the country of origin or country of export. They may also be framed to apply only to goods produced by particular persons or firms in a country. Any duties imposed will, of course, be chargeable in addition to any ordinary Customs duties.
Clause 3 empowers (but does not require) the Board of Trade to give relief from duty to importers of goods on which an anti-dumping or countervailing duty has been imposed, where the importers can show that the particular goods they had imported are not dumped or subsidised; or not to the extent of the duty charged. This relief provision is necessary in order that we may comply with Article VI of G.A.T.T., which requires that the duty on any particular consignment must not finally exceed the margin of dumping or the amount of subsidy. The Board of Trade will endeavour to fix the duty at this margin in the first place. But there will inevitably be occasions when some consignments of goods which attract duty by their description will turn out either not to be dumped or subsidised at all, or to a less extent than the amount of duty imposed. In such cases, the Board may authorise a total or partial refund of duty.
Clause 4 empowers the Board of Trade to make orders allowing drawback—that is the repayment—of anti-dumping or countervailing duties on goods which are subsequently re-exported. In deciding whether or not to include this provision, a balance of advantage has had to be struck. United Kingdom industries might find themselves at a considerable disadvantage in overseas markets if the imported raw materials or semi-manufactures which they used were subject to anti-dumping or countervailing duties, while their foreign competitors were able to purchase the same materials at lower prices. United Kingdom entrepôt and export trade might be adversely affected if the Government were unable to operate drawback schemes, as under ordinary tariff arrangements. The powers

573
are purely permissive and there is no suggestion that drawback would be automatically granted without a thorough investigation for the need for it in every case.
The next four clauses are concerned with the operation of orders once they are made and with the definition of "export price", "fair market price", and "country of origin". It is the provisions of Clause 7, concerning the definition of "fair market price", which should make this Bill more effective in operation than Part II of the Safeguarding of Industries Act, 1921, which did not work satisfactorily and was repealed in 1930. In our Bill we are being "tougher" on the dumper than we were in 1921. Alternative yardsticks are established here for the ascertainment of dumping, including, in the last resort, the power to estimate the cost of production in the overseas country concerned, whereas the old Act had a much narrower criterion.
Let me give an illustration of how Clause 7 will work. Let us suppose that Ruritania is manufacturing cocked hats and exporting them to Great Britain at £1 each. We suspect this to be dumping. The first thing we do is to see what she is selling the cocked hats at on her own home market. We find the price is 30s. There is, therefore, dumping to the extent of 10s., and this 10s. will be the margin of dumping. Suppose, however, we find that there is no home market for cocked hats in Ruritania, but that she is exporting them to Plaza Toro and charging 27s. 6d. Then the margin of dumping is 7s. 6d. If, however, we find that there was no home market, we need not necessarily look to Plaza Toro for our yardstick, there is another available to us This is the cost, or estimated cost, of production of the cocked hat in Ruritania and we take profit and distribution costs into account. I have given this rather extreme but accurate example so that no home industry should think that any particular reference was intended to them.
As I have said, it is our intention to make sparing use of these powers: every complaint about alleged dumping or subsidisation will be carefully scrutinised, and action will be taken only where the facts are satisfactorily established. The onus of proof will rest with the firm or industry lodging the complaint. They
574
will have to show that dumping is taking place according to the criteria in the Bill, and that there is at least prima facie evidence of a subsidy. They will also have to show that the dumping or subsidy is causing or threatening material injury to the home industry. In carrying out the responsibilities which fall to them under this Bill, the Board of Trade propose to apply these tests strictly and with full regard for the interests of our exporting industries.
My Lords, to sum up, we think this Bill is an important addition to our economic defences and a necessary adjunct to our policy of working for the reduction of trade barriers. We are confident that it is capable of effective operation, should this be necessary, and I can assure your Lordships that the Board of Trade will not hesitate to use their powers under this Bill in any case where they are satisfied that the conditions prescribed in the Bill are clearly fulfilled and that such action would be in the national interest. I would emphasise, however, that industry must not regard it as a reason for sitting back, doing The Times crossword, and giving up the competitive struggle. The best way to deal with foreign competition, from the standpoint of both the producer and the consumer, is to make the goods better and more cheaply ourselves, and deliver them on the day the customer wants them. The Bill is designed to deal with genuinely unfair trading. As such, I commend it to your Lordships.
My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Mancroft.)
3.26 p.m.
LORD LUCAS OF CHILWORTH: My Lords, first of all may I draw your Lordships' attention to the fact that on the Order Paper this Bill is designated a certified Bill. I do not know whether the noble Lord wishes to tell us that for that reason we cannot amend this Bill. I do not read it in that way. In any case, before we can amend it we must understand it. I hoped that, after the noble Lord's speech, I should understand it a little better than I did previously. But I suppose to understand this Bill properly one has to understand the fiscal policy of Her Majesty's Government; and if you

575
do not understand that you cannot understand the Bill. Having failed in the first, I do not see much hope of succeeding in the second. I thought the noble Lord got to the heart of the matter during his last few words when he entered the realms of musical comedy—because that is almost what this Bill amounts to. The Duke of Plaza Toro played a real part in his speech. So far as my knowledge goes, that gentleman led his troops from behind; and he found it less exciting.
The noble Lord told us how this Bill was designed to encourage freer trade. He then led us right through the activities of the dumper, the rights of the dumpee and what was going to happen. I am afraid that I could not follow him, but I will try further to enlighten myself, and perhaps incidentally, as I go on, your Lordships, by asking the noble Lord two questions. I intend to ask him one that I have asked him before when I have been in opposition to him on matters emanating from the Board of Trade and dealing with the trade and commerce of this country—that is, will he please tell me once again what is a subsidy, and what constitutes dumping?
If your Lordships will look at Clause 1 you will see that subsection (1) says:
" Where it appears to the Board of Trade—

(a) that goods of any description are being or have been imported into the United Kingdom in circumstances in which they are under the provisions of this Act to be regarded as having been dumped, or

(b) that some Government or other authority outside the United Kingdom has been giving a subsidy affecting goods of any description which are being or have been imported into the United Kingdom,"

then the Government can take action. Then in subsection (2) we see these words:
"For the purposes of this Act imported goods shall be regarded as having been dumped—
(a) if the export price from the country in which the goods originated is less than the fair market price of the goods in that country…"
and so on. Let us get away from cocked hats and come down to the facts. Would the noble Lord agree with me that a considerable amount of our imports from Commonwealth countries come into this country at a price far lower than that at which they are sold on the markets of
576
the countries from which they emanate? Are these goods dumped? I do not see how we are to stop there, because what are regarded by one country as dumped goods are not so regarded by another.
May I give the noble Lord a case in point? When I was in the United States of America at the beginning of last year, various accusations were flying about that we were dumping motor cars into that country. The Americans considered it to be dumping because the British manufacturer, in order to overcome the obstructionism and resistance of American manufacturers, who would not allow the distributive trades there to sell British goods, had to give twice the amount of remuneration—in other words, discount—on sales of his cars there as was paid to those who sold those cars on the home market. Would the noble Lord agree that that is dumping?—for he has to think carefully in this Bill. If we start imposing a considerable number of these duties, what about retaliation by many of these other countries? The noble Lord has to realise that the biggest potential dumpers in this world are our American friends, who, if they have the slightest recession in trade, can export their unemployment, to the serious loss of countries in Europe.
Would the noble Lord also explain to me what is going to happen when we reach, as I suppose we are going to reach sooner or later, this idea of European free trade? How is this machinery going to work? I can understand how it works in relation to the provision in G.A.T.T. which he mentioned, but are we, then, to have, within the European countries, no export subsidies, no duties or tariffs? How is all this going to work? The noble Lord put a horrible thought into my mind when he said that under this Bill Her Majesty's Government can increase the import duties upon Commonwealth produce which we import into this country. Where is that going to lead us? I should have thought that we have enough trouble on our hands as it is, reconciling the interests of the Commonwealth and European countries. Turning to another clause, I hope the noble Lord will explain the meaning of Clause 3 (3). My interpretation of it is that a manufacturer or producer in this country who feels that he has been affected by dumping can get a rebate from the Customs and Excise. Am I correct?
LORD MANCROFT: He can apply for an anti-dumping Order.
LORD LUCAS OF CHILWORTH: He can apply for it, but he does not necessarily get it?
LORD MANCROFT: The manufacturer has to make out a case.
LORD LUCAS OF CHILWORTH: Admittedly, but I should think there will be a queue of producers a mile long, all of whom could make a really good case against what they would consider unfair foreign competition; and what they really want is an increase in the import duty.
The principal thing that puzzles me is Clause 8. Nothing can happen under this Bill unless the facts can be ascertained. The facts must be ascertained by the individual who feels himself affected, and he can go to the Customs and Excise or the Board of Trade and get all the information from them. That is my interpretation of Clause 8. I want to ask the noble Lord: how do the Customs and Excise do it? Do they have an army of detectives finding out whether cocked hats are made in the country of the noble Lord's imagination or, if they are not made there, how they reach there? If your Lordships will turn to Clause 8 (1) you will see the words:
" Goods shall be regarded for the purposes of this Act as having originated in a country—

(a) if those goods were wholly produced in that country, or

(b) if some stage in the production of the goods was carried out in that country and the cost of carrying out such stages, if any, in the production of the goods as were carried out after those goods last left that country (but before the import of the goods into the United Kingdom) was less than twenty-five per cent. of the cost of production of the goods as so imported,".

So anybody can get round this Bill by dumping goods from one country into the next, adding 25 per cent. to the price paid, and then dumping them in this country. The goods are then entirely outside the scope of this Bill. All that has to be done is to put a third party in the middle. Frankly, I cannot see how this Bill is going to work. I do not know how we are going to defend many of the things we are doing if other countries take notice of this Bill.
I return to my original question: will the noble Lord tell your Lordships what
578
is an export subsidy and what constitutes dumping if an export subsidy is made? Will the noble Lord bear in mind that there are countries who consider us to be among the greatest export subsidisers the world over; who consider that the imposition of purchase tax on home-produced goods for sale in the home market constitutes an export subsidy upon those goods when they are exported? What about British exporters who have to increase and inflate the price of their home market product in order to be able to cut their prices so that they can compete with other countries in the export market? We ourselves could be brought "into the dock" under many of the provisions in this Bill. From his experience at the Board of Trade the noble Lord will know that the home market manufacturers of many of our major exports are insistent to-day, in their representations to the Government, that purchase tax in this country must be reduced because the whole of their export prices are broadly based upon having a good and sound home market. We know very well that the prices of a great many of goods sold on the home market are high in relation to the price of those same goods when sold in export markets. So where do we get to?
We on this side of the House are very much puzzled; and, while we shall not oppose the Second Reading of this Bill, we do not at the moment feel inclined to try to amend it, because, frankly, we think it is completely unworkable. The Bill is to be brought into operation only as and when Her Majesty's Government think it is necessary. When they think it is necessary I believe they are going to stir up such a hornets' nest that they will never do it; and I have a shrewd suspicion that some of the purists in your Lordships' House will say that this is an attempt to put the clock back at least fifty years.
3.40 p.m.
LORD GRANTCHESTER: My Lords, the noble Lord who introduced this Bill anticipated some objections which I might raise to it, and I should like to thank him for the moderate manner in which he did so. I quite expected him to say in advance that any objections that I might make would be out of date or behind the times, or that I was still a believer in laissez faire, which is so

579
often misinterpreted by its detractors; therefore I was agreeably surprised at the moderation with which he moved the Second Reading. I am sure he is not desirous of keeping up the cost of living by preventing anyone from buying anything cheaply in this country, but that really will be the effect of this Bill. By all the canons by which those who believe in "the rule of law" should judge, this Bill is bad.
It is also, as I think and as Lord Lucas of Chilworth has said, quite impracticable. It is bad because it introduces administrative discretion in determining what is in the national interest. At least it introduces administrative initiative in moving that some trading is contrary to the national interest. I am always suspicious of any Bill which starts off by bringing in the national interest. Usually we assume that if any legislation is introduced it is considered in the national interest. When it has to be put into the Bill it is usually because there is some doubt whether it is in the national interest at all. If it is in the national interest, why put it in? Surely it is a first principle that Parliament alone is the judge of what is in the national interest, which varies from time to time.
When intervention is alleged to be in the national interest it should be precise and specific—which is exactly what this Bill is not. I agree with the noble Lord who moved the Second Reading that this is to some extent mitigated by the provision that the Orders made under it have to be approved in another place. He has said that the provisions of this Bill are "permissive"; that imports uncertainty, particularly on the question of drawback to which the noble Lord, Lord Lucas of Chilworth has referred. It makes it impossible for any trader to know where he is. He has to make an application, and no one can tell what the result of that application will be. In the meantime, it is impossible for him to fix prices.
The powers are to be exercised when it is considered by the administrative body that injury is being caused by the trading in question. That I can understand, for injury is something possibly capable of proof. But this Bill goes further than that. It also brings in "threatened material injury". Surely that is the vaguest of provisions. "Threatened injury"—how is anyone to prove that?
580
The provisions of the Bill turn on what is defined as "a fair market price". For this the Department will need to have knowledge of prices at which all goods imported into this country are sold in their country of origin. I shudder to think to what extent the Board of Trade or whatever Department is concerned will have to employ additional staff not only to collect but to keep up to date all the information that will be required to administer this Bill if it becomes an Act. Surely that is quite impossible and impracticable. Lord Lucas of Chilworth has already referred to the possibility of the weapon being used against us, and asks what "subsidising" means. I think it would be possible to say that almost everything we produced in this country was subsidised—food, coal, steel and industry generally—by the manner the social services are provided. Have we not here all the elements of hidden subsidy? Then what about American aid? Is not that the biggest form of dumping in the world? Is not the whole system under which American aid is administered the greatest example of dumping in the world?
The noble Lord referred to G.A.T.T. and to the proposed Common Market in Europe. In the consideration by O.E.E.C. through the Working Party on the Common Market there have been laid down what are called "rules of competition." Surely that is the right way to deal with this matter, in the countries concerned, as has been agreed also in G.A.T.T. That is the way to secure fair trading. I wonder whether Her Majesty's Government would, if negotiations for our entry into the Common Market are concluded, accept an Amendment to this Bill to exclude goods imported from countries which adhere to the Common Market for which rules of competition and fair trading are laid down. Perhaps, as Lord Lucas of Chilworth has indicated, the best that we can hope for is that this Bill, being just so much window dressing, will, if it is passed, be put into a pigeonhole and forgotten.
3.49 p.m.
LORD JESSEL: My Lords, I welcome this Bill, and I am confident that industry as a whole shares my view. There are one or two suggestions that I should like to put forward for the consideration of Her Majesty's Government.

581
First, the essence of the Bill is speed. Any action taken under it, when it becomes an Act, in order to be effective must be quick. There must be the minimum of delay between the receipt of a complaint of alleged dumping and the taking of necessary action by Her Majesty's Government. For dumping can be of two kinds. There is what I think is called "rush" dumping, where you have a sudden rush of goods in a few days and then it stops. Secondly, there is "intermittent" dumping, in which goods come in for a week or so, then stop coming, and a few months later the whole process starts all over again. Both these types of dumping call for quick action. The Minister of State in another place made a very satisfactory statement, I thought, showing that he realises the great importance of speed and efficiency under the procedure provided by this Bill. Industry sincerely hopes that this well-intentioned policy will be carried out in practice by the Board of Trade.
I think there is a good deal of uneasiness concerning Clause 4. This clause deals with the drawback of anti-dumping duties. Admittedly there are strong arguments for and against this, but there is in this clause an obvious danger to suppliers of raw materials and semi-processed goods. If these are to be imported at dumped prices for manufacture into goods for export, there may be severe repercussions to interested suppliers of similar materials in this country. Of course, it suits the British exporter to receive these dumped semi-processed goods, but what about the processing industry itself in this country? That has to be considered, or it may be put totally out of business. I know that the noble Lord, Lord Grantchester, would not mind this, but I must remind your Lordships that in time of crisis, in time of war, manufacturers would suddenly find themselves deprived entirely of their source of raw materials or semi-processed goods. So I think we must keep a nucleus of these suppliers going. What is needed, I respectfully suggest, is an assurance from Her Majesty's Government that there will be no order for drawback unless the industries involved are previously consulted.
Clause 8 deals with goods which originate in one country, are dumped in another and then sent on to Great
582
Britain. According to the Bill as I read it, if 25 per cent. is added to their value in the second country, they are not considered to be dumped when they reach this country. I am glad to see that the noble Lord, Lord Lucas of Chilworth, nods agreement. I know that a great many industries feel that 50 per cent. added to the value would be a minimum safeguard, but personally I do not mind if the figure of 25 per cent. is left in, provided additional powers are given to the Board of Trade to vary the percentage in cases of emergency. These additional powers probably would never be used, but I think hat it would be useful for the Board of Trade to have them up their sleeves and I believe that that would go a long way to deter intending dumpers. If we are going to join a European Free Trade Area, it is essential for industry to have confidence in this Bill and to be sure that it is really going to operate an effective safeguard, otherwise any advantage of joining the European Free Trade Area would be jeopardised.
3.54 p.m.
LORD MANCROFT: My Lords, perhaps I might try to offer one or two words of explanation in reply to the questions that have been asked in the course of the rather guarded welcome that your Lordships have given to this Bill. The noble Lord, Lord Grantchester, was suspicious of any legislation which included the expression "national interest". I forget who it was who said that the more a man talked about his honour, the faster we counted the spoons. I see what the noble Lord is concerned about, but I feel that he has slightly missed the point. Any order making use of these powers will not be brought into operation for the benefit of one section or one part of industry, but for the whole of industry. We have to take the broad view. The noble Lord dislikes the idea of the Board of Trade or any administrative Department having power to make these orders, but we have taken the obvious precaution of making them subject to Parliamentary scrutiny. I do not think that we could possibly have done more than that.
The noble Lord, Lord Jessel, asks whether these powers can be brought into effect in a hurry. We see the need for that. If, for example, there were a sudden emergency in the horticultural world—

583
say, in tomatoes—the Board of Trade would have to bring an order into effect in a hurry, and I can assure the noble Lord that they are perfectly prepared to act very quickly if need be, subject always to the proviso that there must be careful scrutiny to see that no injustice is done. But the Board of Trade and those who work in these industries are closely in touch with conditions and are not likely to be surprised: they would probably be forewarned before the trouble occurred.
LORD LUCAS OF CHILWORTH: My Lords, I presume that the noble Lord and the House are aware that any order made under this Bill, when it becomes an Act, need be presented to only one House of Parliament.
LORD MANCROFT: That is perfectly true. As I mentioned in my opening remarks, it would be presented to another place, by a Parliamentary technicality of which the noble Lord is well aware.
The noble Lord, Lord Lucas of Chilworth, made lighthearted fun of subsidies in this Bill. He knows that we have debated this across the Floor of the House on many occasions. The last occasion was when the noble Lord, Lord Rochdale, raised a short debate on what help could be given to the export industries, and we ran straight away into this problem: how to give help to our export industries without running into subsidies and dumping. On that debate, the noble Lord raised the question of purchase tax. Purchase tax remission is clearly not a subsidy, and G.A.T.T. specifically recognises this fact. But the noble Lord made a perfectly valid point when he said that the border-line in these cases is very fine. As I tried to emphasise in my opening remarks, that is a difficult matter, and great care must be exercised to make certain that no injustice is done. Undoubtedly there will be extremely difficult cases. The noble Lord mentioned the particularly difficult point of how we should ascertain the manufacturing price without having a horde of spies to go into a country to find out what it is.
LORD LUCAS OF CHILWORTH: I hope the noble Lord will forgive me for asking another question. I do so only because I think that it would be helpful
584
to your Lordships. In the conversations which the Government have obviously had with their fellow members of G.A.T.T. and others, what about the American subsidy on shipping? We all know that every foreign-going ship built in America is subject to a 50 per cent. subsidy by the American Government. Is that not an export subsidy?—because it allows goods to be carried in American bottoms more cheaply than British ships can carry them.
LORD MANCROFT: I quite see that point, and I know that there are people who think that. But, conversely, as the noble Lord himself pointed out, there are people who think that some of our practices are subsidies. There cannot be any final decision on this, and it can only be a matter for international amity, if some sort of agreement can be arrived at about what is and what is not dumping. Noble Lords have expressed the fear that this Bill will start off a chain of retaliation. We are, however, about the last country to take these steps: others have taken them well before us, so I honestly do not think that this is going to expose us to retaliation. I cannot see how taking powers recognised and approved by G.A.T.T. will expose us to retaliation.
LORD SILKIN: My Lords, before the noble Lord passes from that point, I wonder whether he would explain what is meant by "the fair market price" of goods in the country of origin? Does he mean the market price as sold retail, the market price as sold wholesale or the price as produced by the manufacturer? This term is rather vague, and it is difficult for the ordinary person to judge what is meant by "the fair market price".
LORD MANCROFT: It is not easy to judge. Roughly, the figure we are trying to get is the comparable price in the overseas market.
LORD SILKIN: Then why do you not say so?
LORD MANCROFT: It is not quite so nice an expression as "fair market price", which I think is reasonably definable. I would return to the point of how we are to find out what is the fair market price and whether an army of spies will be needed. I tried to meet that point in my analogy about cocked

585
hats, about which the noble Lord was pleased to make good fun. I realised that if I had taken any other practical simile, of carpets or fruit or something of that kind, I should have been accused of taking actual examples. The noble Lord asked about the fair market price. That, I think, is defined fairly dearly in Clause 7 of the Bill; but if it is not sufficiently clear for the noble Lord, we might possibly look at it again.
I want to return to the point I was making before the noble Lord, Lord Silkin asked his question. If we use these powers wrongly or inaccurately, there is always the fear of retaliation; and we do not want that. After all, we are taking them purely to protect our own interests, and are sticking strictly to our international agreements under G.A.T.T. and putting them, so far as we can, into the Bill. I do not think that all the disasters noble Lords think may fall on us will happen.
Let me conclude on this note. The noble Lord, Lord Grantchester, said he hoped this Bill would be put back into a pigeon-hole. He meant that unkindly, but I take it rather as a compliment to the Bill. I think that if this Bill, by the threat that we could use these counter-powers, carries out all that we intend it to do, then, like one or two other Bills that we have seen in the past, its mere existence will do the trick. Therefore, there is no harm in its being in its pigeonhole. It is the mere fact that our rivals know it is there, and that they cannot take unfair advantage of us without our doing the same, that will do the trick. I want to emphasise that the Bill cannot deal with low-cost competition. If a country sends us goods which undersell our own manufacturers' goods, not through a hidden subsidy or through dumping but merely because those countries have made the goods more skilfully or cheaply than we have, then we shall have to roll up our sleeves and produce the goods more cheaply ourselves. This is a valuable measure. Admittedly, it covers a difficult ground where there is room for such arguments as the noble Lord, Lord Lucas of Chilworth, has put forward, but it will be a most useful piece of legislation.
LORD LUCAS OF CHILWORTH: My Lords, before the noble Lord sits
586
down—he has answered the questions with great frankness and courtesy—perhaps I may ask him a further question on one of the dangers that might arise. If the Board of Trade and the Customs and Excise have to act as detectives and appraisers of market values all over the world, what increase of staff will this mean for the Board of Trade? Does it mean the setting up of a huge new department, with experts and detectives, and slide-rule calculations? Some of the formulæ in this Bill are very complicated Perhaps the noble Lord could reassure us about that.
LORD JESSEL: My Lords before the noble Lord replies, does not the noble Lord, Lord Lucas of Chilworth, know that manufacturers in this country have some idea of the cost of production of their competitors abroad?
LORD LUCAS OF CHILWORTH: But knowing the Board of Trade as I do, I cannot believe that they will take as even prima facie evidence the complaint of a manufacturer who considers he has been unduly competed with and who produces a set of figures from his sources abroad.
LORD MANCROFT: The noble Lord, Lord Lucas of Chilworth, is getting more cynical than I am used to. I can assure him that there will be no increase in staff whatever in the Board of Trade. As my noble friend Lord Jessel rightly points out, most of the manufacturers in the areas which are likely to be concerned are in touch with the Board of Trade and discuss their problems with them. They go abroad to a particular country, and when they come back they literally gossip with the officials of the branch of the Board of Trade dealing with the particular part of the world they have been to; and both will have a shrewd idea of what is going on. I am certain that no slide rules or electric computers will be necessary to work out these calculations in the broad way that the Bill requires. I would conclude by reassuring the noble Lord once again that not a single extra man will be required in the Board of Trade.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HOMICIDE BILL
4.6 p.m.
Considered on Report (according to Order).

CHURCH OF SCOTLAND (PROPERTY AND ENDOWMENTS) BILL [H.L.]
House in Committee (according to Order): Bill reported without amendment.
SOLICITORS BILL [H.L.]
Amendments reported (according to Order).

RATING AND VALUATION BILL
4.8 p.m.
Amendments reported (according to Order). Then, Standing Order No. 41 having been dispensed with (pursuant to Resolution):
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER): My Lords, I beg to move that this Bill be now read a third time.
Moved, that the Bill be now read 3a.—(The Earl of Munster.)
LORD JESSEL: My Lords, on the Second Reading of this Bill I drew attention to the heavy additional burden which had been placed on the outdoor advertising contractors and owners of piers. They get no relief under this Bill, and are faced with the certainty of increased poundages of their new assessments, partly as the result of the relief given to others under the Bill. I did not put down an Amendment on the Committee stage, because I appreciated that nothing could be done this year, as we are now too near the new rating period. However, there is no reason why an adjustment should not be made in time for the financial year 1958. I hope the Government can promise that this matter will be sympathetically considered when the comprehensive rating Bill which we are told will be introduced before the end of the year is brought forward.
THE EARL OF MUNSTER: My Lords, I appreciate fully what my noble friend has said, and I will convey his observations to my right honourable friend to see whether the point which he has made can be included in the major measure which will be coming along in the new Session.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.
House adjourned at ten minutes past four o'clock.