Clause 3. — (Exemption of E.F.T.a. Goods from Duties on Hop Oil and Hop Extracts.)

Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 15th June 1966.

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Question proposed, That the Clause stand part of the Bill.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Again, I rise simply to ask if we may have some explanation of this Clause. It seems on the face of it to be fairly straightforward, inasmuch as it appears to extend E.F.T.A. exemption of Customs duties to hop oil and hop extracts. The question arises, first, what will be the effect on our own hop growers? Last year we exported about 1,000 tons of hops and, I understand, earned over £500,000 in the process, and we imported virtually none.

May I ask the Financial Secretary what he expects will be the effect on our balance of payments as a result of this change? Does he think that there will be any significant increase in the import of hop oil which last year, I understand, was only 151 ounces? Could we have some idea whether he thinks this is a purely nominal change which is unlikely to affect the pattern of trade, or whether it will effect an increase in imports and presumably a reduction in our exports?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

The effect on the balance of payments will be practically nil. There will be no real effect on hops because they are excluded, being agricultural products. The purpose of the Clause is to fulfil, as I am sure the hon. Member understands, an obligation under the E.F.T.A. Convention. The effect is to remove the duties on imported hop oil and hop extracts which originate in and are consigned from the European Free Trade Area.

These duties were imposed in 1925 to help the hop industry get going after the First World War. They are entirely protective in character and under the Convention there is an obligation on us to remove protective elements in revenue duties on imported goods other than agricultural products. As hops are an agricultural product, they are not involved. The removal of duty will apply only to hop oil and extracts.

As I have said, the effect on the balance of payments is negligible. In trade terms, as the hon. Gentleman himself hinted, I think, the whole thing is quite insignificant.

Photo of Mr John Biffen Mr John Biffen , Oswestry

One cannot suppose that this is one of the monumentally significant Clauses in the Bill, but there is one question I should like answered. The British hop industry is one of the most highly controlled, through the Hop Marketing Board. Although the Clause does not itself refer to hops, I assume that both hop oil and hop extract must come from hops, so that any change in duty on these imported products must to some extent have an effect upon the balance of home production.

My question is this: was there any consultation with the Hop Marketing Board? Is there any likely implication for United Kingdom hop growers?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

There were no consultations, and we have had no representations from the Board. The trade in these two products is so small that I do not expect that we shall have any representations.

Question put and agreed to.

Clause ordered to stand part of the Bill.