Temporary Import Charge

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 1 November 1965.

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The following Question stood upon the Order Paper:

Photo of Mr Derek Page Mr Derek Page , King's Lynn

To ask the Chancellor of the Exchequer what proposals he has to simplify the formalities required for the drawback of temporary surcharge on chemicals used in the manufacture of products for export.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

With permission, I will answer Question No. 80.

No further general simplifications are contemplated at present, but the Customs are always willing to consider any special problems. If my hon. Friend will let me have the details of any difficulties that exporters are experiencing, I will see how they can be assisted. I should like to convey to the House my apologies for my absence last Thursday when this Question and Question No. 81 were called.

Photo of Mr Derek Page Mr Derek Page , King's Lynn

I am most grateful to my right hon. Friend for that reply. Is he aware that many firms feel that the cost of going through the formalities for the drawback virtually outweighs the value of the drawback? Is he further aware that the demand for these chemicals, which are not made in this country, is singularly inelastic and therefore not amenable to financial control in this way? Would it not, therefore, be better to adopt my original suggestion of treating these chemicals as raw materials and exempting them altogether from the surcharge?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I expected that supplementary question. I would remind my hon. Friend that the surcharge was not designed as a protective duty and, there- fore,it has not been possible to carry out the steps he proposes. There will be an apportunity to debate this matter again, and then, perhaps, I will be able to answer him a little more fully.

Photo of Mr Jo Grimond Mr Jo Grimond , Orkney and Shetland

Is the Chancellor aware that there is fear that what was imposed originally as a temporary expedient will become permanent? May we have an assurance that it is still the intention to remove the surcharge as soon as possible and that it is not intended to become a permanent part of our restrictive machinery?

The following Question stood upon the Order Paper:

Photo of Hon. Grenville Howard Hon. Grenville Howard , St Ives

To ask the Chancellor of the Exchequer, when the temporary surcharge will be lifted.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

With permission, I will answer Question No. 81.

As our progress warrants it, that is to say when we have corrected the imbalance of the economy and in our external payments.

Photo of Hon. Grenville Howard Hon. Grenville Howard , St Ives

While thanking the Chancellor for his courteous letter to me about the unfortunate episode last week, may I ask him three questions?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. This is being treated as an ordinary Question. The hon. Gentleman must put one supplementary question.

Photo of Hon. Grenville Howard Hon. Grenville Howard , St Ives

Can the Chancellor tell me the effect that this is having on our exports? Was this discussed during the E.F.T.A. meeting last week? What opinions were expressed about it then? Lastly—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Gentleman has already asked three questions when I asked him not to, and he cannot now ask a fourth.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

The answer to the first part of the hon. Gentleman's supplementary question is "None". The answer to the second part is, "Yes". In answer to the third part, I would refer him to the communiqué that was issued.

Photo of Mr William Clark Mr William Clark , Nottingham South

Is the Chancellor not aware that, on 11th December, he said that the surcharge would save £300 million, but that on 29th July the President of the Board of Trade refuted this figure and said that it was never mentioned? Does not this show complete lack of liaison between the Treasury and the Board of Trade? What action is the right hon. Gentleman taking to prevent a recurrence of such a blunder?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

I am sorry that the hon. Gentleman missed his chance last Friday when I made my statement and answered a similar question. However, I will repeat the answer. Apparently it has escaped the hon. Gentleman's attention that the surcharge was reduced from 15 per cent. to 10 per cent. early last summer. That, of course, affected the estimates of the effect.