IMPORT DUTIES BILL (Hansard, 18 February 1958)

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I see that I am next on the list to speak on this Bill, if your Lordships have finished questioning the First Lord of the Admiralty. I do not propose to say many words on this subject. My noble friend Lord Pethick-Lawrence has satisfied me that there is nothing very Machiavellian about the Bill, although I am certain that the noble Lord who introduced the Bill here felt that he was making a really great move towards preparation for the European Free Trade Area.
Ono is a little anxious about Clause 13 (4) and about the laying before Parliament of the report on the impositions, the increases, the variations, and so on, after they have been in operation for the whole or part of the year. This is the first time, apparently (apart from the general provisions) for certain of the Orders to be laid and for there to be opportunity to annul them in certain cir-circumstances. One is to be permitted, for the first time, a sort of "look back" at what has happened and given the 782 opportunity to be able to move Amendments. I hope that the remarks already made by my noble friend Lord Shepherd will be taken into account. He is not pressing for a reply to-day, but I thought his remarks were important. I suppose that there will be no Committee stage upon this Bill, and we can leave anything else we have to say until Third Reading.

§ THE EARL OF SWINTON
My Lords, I want to intervene for one moment. I think that this is a good and practical and sensible Bill, and I agree with what the noble Lord, Lord Pethick-Lawrence; has said about it. I consider it important that there should not be any variation of duty, certainly not any increase of duty, without the approval of another place. I think that Clause 13 is clear in its provisions. As regards the Negative Resolution procedure, I think the point made by the Leader of the Opposition is not a sound one, because it rests with the Opposition to be vigilant, as the Opposition in this House is, and there is no need for anything to be allowed to continue for a year without objection. It is true that if something goes on for a year and nobody has objected to it, it then becomes the law of the land. But a vigilant Opposition, or any vigilant Member of Parliament who wishes to take exception to something that is embodied in an Order, can immediately table a Motion for a Negative Resolution and that matter then has to come forward for debate. Once there is a general tariff, whether you like it or not, adjustments have necessarily to be made from time to time, and those should be made with rapidity, provided they are adequately known and discussed. I, therefore, commend the Bill.
I was greatly interested in the point raised by the noble Lord, Lord Shepherd. I think it is relevant to this Bill, because it can well be brought within a Second Reading discussion of the question of drawbacks, which is dealt with by one of the clauses in the Bill. That is a point of cardinal importance. I very much hope that the Minister of State, if he is not able to answer it to-day, will answer upon another occasion; and if the noble Lord, Lord Shepherd, will raise the question on another occasion I shall be glad to support him, in a desire to obtain clear elucidation on this point. Let it be made perfectly clear both what 783 the law is, or has been hitherto, and what has been at any rate the intention of Parliament.
Where there is a great sterling area who are bankers in the trading centre of the world, it is very desirable that trade should be as free as possible—in the sense that all the mercantile and financial institutions of London, Liverpool and Manchester, indeed of the whole Kingdom, should be used as widely and as freely as possible. That is certainly so, and for that reason the whole system of having goods placed in bond, and of drawbacks and so on, should be made as easy to work as possible, so that the maximum of international trade will be conducted in sterling and through the machinery of this country.
I have been concerned a good deal in years past in making trade agreements, quota agreements and otherwise. I was concerned with many agreements made with Japan, which the noble Lord has mentioned. Let us be quite clear as to the intention of such agreements. Where there are currency difficulties and import restrictions are imposed by other countries, then the Government of this country has to enter into agreements, covering the following year, on the amounts to be imported and exported, the amount of currency that is to be used—the amount of foreign currency in Japan, for example, and so on. In that connection one has to drive as good a bargain as one can.
But let us be perfectly clear about one thing: the currency that the Japanese propose to use is Japanese currency, or the sterling or dollar currency at the disposal of the Japanese. The object of what may be called a quota agreement is that, in return, the Japanese get a number of concessions concerning what may be imported from Japan. There is a certain amount of difficulty in Lancashire about that; but there has to be this kind of agreement, and on the whole it works well. However, such agreements work well on this clear understanding on what the Japanese buy; they agree that we shall be free to export into Japan so many million pounds' worth of British merchandise every year in return for the concessions that are made to the Japanese. Just as the Japanese have no intention, I am sure, of letting some other country benefit 784 at their expense by the currency arrangements they have made, so it should be perfectly plain that what is sent into Japan under an agreement (and we are limited as to the amount that goes in by the agreement) should be British goods and nothing but British goods. It would be intolerable if the drawback and bonding arrangements made in this country, as the great trading centre of the world, were used—or abused, I would say—in order that the Japanese, or any other, quota intended for British goods should be filled by goods of some other country. There is not the faintest doubt that that is the whole purpose of these agreements. It is the business of the Government which negotiates them to make sure that the agreements are carried out in that manner. I rise only to ask that my noble friend Lord Mancroft, who I am sure is as much alive to this as the noble Lord, Lord Shepherd, or myself, should give us a complete assurance, either on this occasion or on some early occasion, that the spirit and intent of these agreements is in fact being carried out.

LORD SALTOUN
My Lords. I think that every one of the Back Benchers in your Lordships' House must welcome a measure which is intended to, and I think will, render more intelligible and simple a large branch of our taxation procedure. What I should like to ask my noble friend is whether the Government have it also in mind to gratify the equally long-established, insistent and necessary demand for the modification and simplification of the Income Tax Acts.

§ LORD MANCROFT
My Lords, of course, the noble Viscount, Lord Alexander of Hillsborough, is quite right: there is nothing Machiavellian whatever about this Bill. The noble Lord, Lord Pethick-Lawrence, wondered whether it would impose anything fresh or take delegated legislation any further forward. I must be strictly accurate and admit that Clauses 5 and 13 probably are an increase in delegated legislation, but only in a small, technical way.
I am glad that in his helpful intervention the noble Earl, Lord Swinton, dispelled some of the small but sinister doubts that may have been in the mind of the noble Viscount, Lord Alexander of Hillsborough, on this point. If I may 785 say so, with respect, I think that the noble Viscount was confusing the working of Clause 4 with the working of Clause 13 (4). Under Clause 4 the Board of Trade have to lay before Parliament a report on the year's working of this new measure and the attendant orders and regulations, but Clause 13 (4) does everything possible to give Parliament the power of expressing an opinion on these matters. Roughly speaking, anything which increases or imposes a new burden is subject to the Affirmative Resolution procedure; anything which withdraws or lessens the burden is subject to the Negative Resolution procedure. I am sure that that must be right.
The noble Lord, Lord Shepherd, raised an interesting point about the drawback for Japanese trade, a subject which I remember his discussing with me in an aeroplane flying out to Singapore. That is a very difficult matter, and I should be grateful if he would let me have full particulars of the case which he has in mind.

§ LORD SHEPHERD
My Lords, I am sorry; I have tried to find out, so as to have evidence which I could put before the Minister; but the noble Lord will appreciate that one would have to be a member of Scotland Yard (and even then one would have great difficulty) to produce this sort of evidence. All I can say is that as an exporter I have been asked to bring goods from Germany into this country and to ship them to Japan. The licences would be for British goods; therefore, they would have to come into this market without their country of origin stamped on them. I would issue my own invoices, and payments would be in sterling. I am certain that this is going on, but, frankly. I cannot produce evidence. That was one of the reasons why I mentioned this question this afternoon, in order to ask whether the Board of Trade would make inquiry into the matter, because I think that they are far better equipped to do it than any individual.

§ LORD MANCROFT
Yes, my Lords, the Board of Trade are well aware of this difficulty, and I should be only too happy to help the noble Lord in this 786 respect. The reason I asked for the details is because it is so difficult to get anywhere in this matter without as much corroborated evidence as One can lay one's hands on; and it is not easy to find it. The noble Lord need make no apology for raising this matter on the Second Reading of the Bill.

§ THE EARL OF SWINTON
My Lords, may we have it perfectly clearly from the noble Lord that it would be completely illegal, under the drawback law of this country, for a merchant, whether British or alien, to export from here goods which had been put into cold storage or bond from a foreign country in order to fulfil a British quota?

§ LORD MANCROFT
My Lords, as I understand the law, the noble Earl is correct, but I should like to go into this matter carefully. It is important, and it comes up time and time again, not only in regard to Japan, but in regard to other countries as well.

§ LORD SILKIN
My Lords, I do not want to be finicky, but the noble Lord. Lord Mancroft, referred to "helping" my noble friend Lord Shepherd. Surely this is a matter of public interest. My noble friend did not raise it in his own interest; he raised it in order to be helpful to the national interest. I am sure that the noble Lord, Lord Mancroft, appreciates that.

§ LORD MANCROFT
My Lords, of course I appreciate that. I said that I should like to help the noble Lord, Lord Shepherd, in a conversational tone because it was he who raised the matter, and it is to him I should like primarily to give my answer. I said that I would help the noble Lord, but of course I realise that there are others similarly concerned in trade in the country. I fully appreciate that. The noble Lord, Lord Shepherd, need not apologise for raising this matter on Second Reading or for the relevance thereof. If the noble Lord, Lord Saltoun, can put in a plea for the simplification of the taxation laws of this country on the Second Reading of an Import Duties Bill, then I think any noble Lord can raise anything.