Clause 9. — (Customs Procedures: Hover Vehicles and Related Matters.)

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

There is one main point which needs to be clarified on this Clause. In the earlier debate on Clause 1 we found ourselves in a position where the actual interpretation of the Clause, as to whether it was contrary to G.A.T.T. or not, seemed to be given largely to the Commissioners of Inland Revenue. We now find ourselves in a position where once again the commissioners are given very broad powers to control the movement of hovercraft. It is particularly on this point that I want the Chief Secretary to spell out the explanation in rather more detail.

Subsection (3) provides that The Commissioners may by regulations impose conditions and restrictions as respects the movement of hover vehicles and the carriage of goods by hover vehicles, and in particular—

  1. (a) may prescribe the procedure to be followed by hover vehicles proceeding to or from a port or any customs airport or customs station, and authorise the proper officer to give directions as to their routes."
It seems that the commissioners are being given great powers to regulate the actual way in which hovercraft move and the routes they follow. Is not this power drawn rather more widely than it need be simply for the purpose of protecting the Customs?

It is true that the hovercraft is a rather unusual craft inasmuch as it can travel freely over both land and sea, not needing an airport at which to land. Certain regulations are necessary, but would it not be possible to draft the Clause in such a way that the Customs did not appear to be given permission to regulate the movement of hovercraft within the country as well as, apparently, outside it? As far as I can see, there is no limit providing that these powers shall be restricted to hovercraft moving over the coast or across the border of Northern Ireland.

The later parts of subsection (4) deal with the movement of hovercraft from places which are not actually ports but at which hovercraft may be stopping during their journey. Is it the Government's intention to restrict the movement of hovercraft to certain areas? As the Clause now stands, would it be possible for them, for instance, to import or export goods from a bonded warehouse situated anywhere in the country rather than from such a wharf or warehouse at a port or airport at present used for the operation of ships or aircraft?

We should like answers on those two points, and we are concerned, also, about one or two other matters which arise on the Schedule relating to the Clause.

Photo of Mr John Peyton Mr John Peyton , Yeovil

This is a Clause of some importance, and I am glad that the Chief Secretary is here to answer the debate. I recall that on several occasions last year he was so impressed by the weight of my arguments that he gave way, and I am confident that he will tonight follow the same path.

If I may say so without intending any offence—this does not apply only to the present Government—the Clause shows the utter absurdity of our procedures. A provision of this kind is incorporated into a Finance Bill, with all the associated secrecy and mystique, and the result is that any discussion with the only people who have experience of running and managing hovercraft is inhibited. It is quite ludicrous, and the more so as there can be no possible urgency in the making of this provision. One prophecy I make is that there is most unlikely to be an ugly rush of hovercraft round our shores during the next 12 months putting upon the Customs and Excise an intolerable burden of administration. There will not be this problem. In my view, before such an ugly Clause had been introduced, it would have been much better if there had been reasonable discussion with those people who had some experience in the management and running of these new vehicles.

9.45 p.m.

The development of hovercraft is of immense importance to this country. We have a lead in the development. It is a matter of pride to us. I make no apology for referring to the fact that it is a matter of great importance to my constituents and to all connected with the British Hovercraft Corporation, particularly Westland Aircraft. It is so nice to be able to say to the Government that they have a record of which they can afford to be proud in this development. They have not been unhelpful, and I am prepared to say this. It would be a great pity if they were to sully their record.

This Clause awakens in me some suspicions. I have the impression that the Customs and Excise are concerned, not so much with the possibility of the efficient operation of a new service of this kind, but with the tidiness of their own administration to an almost exclusive extent. I do not want to go through the Clause line by line. That would be a form of torture for the Committee, and I should not wish to subject it to that. However, I draw attention, particularly that of the Chief Secretary, to subsection (7), which provides that: Goods to which section 47 of the said Act applies (drawback goods, etc., and goods subject to restrictions or controls on export) shall only be exported in a hover vehicle if it is of a class or description for the time being approved by the Commissioners and subject to such conditions and restrictions as they may impose …". It depends entirely on the intentions of the Commissioners. But it seems to me that under the Clause the Commissioners are empowered to impose the most onerous and intolerable restrictions on a new and infant but very important development.

I am being very reasonable in my request to the Chief Secretary. I am asking him, not to withdraw his Clause, but for an explicit assurance before Parliament and written into the record that the very wide powers conferred on the Commissioners to make regulations will be used with the utmost restraint and that it is not the Commissioners' intention to discriminate against this new form of transport as against ships or aircraft.

I ask the Chief Secretary to tell us, in particular, whether a bona fide commercial operator would be given the benefit of Sections 47, 50, 107, and 173 of the Customs and Excise Act, 1952. I should not like to weary the Committee by going through those Sections in detail. I am sure that the Chief Secretary is familiar with them. It would be wholly wrong if a bona fide operator of this immensely important new development were inhibited in his undertaking. I hope that the right hon. Gentleman will experience no difficulty whatever in giving me the very modest assurance for which I have asked, namely, that these powers, so lightly conferred on the Commissioners, will not be used in any exceptional way so as to place any unusual or hindering burden upon operators of these vehicles.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

May I, first, reply to the point raised by the hon. Gentleman the Member for Worthing (Mr. Higgins) about subsection (3). These are largely parallel conditions to those already existing relating to ships and aircraft. In addition to that, one has to bear in mind that one is dealing with a new kind of animal. If it were not for this we should not be talking about this Clause at all. One has to meet the needs—and I particularly address this remark to the hon. Gentleman the Member for Yeovil (Mr. Peyton)—of the operators of this new kind of transportation.

Whereas at present one can only be required, for Customs purposes, to have regard to airports and ports, with this new kind of vehicle one has to deal with inland yards, warehouses, and other areas where it might suit their commercial convenience and the convenience of their customers to provide a place at which goods could be subjected to Customs clearance. It is to meet that need that subsection (3) provides something additional to what would be expected if we were providing for ships and aircraft only.

Turning to the three points raised by the hon. Member for Yeovil (Mr. Peyton) he said, first, that there was no urgency. There is an urgency inasmuch as passenger services are already operating. There are as yet no goods services, but passenger services are in operation and one has to take account of that. He suggests that the Clause is drawn in such a way that one could say that it is to suit the administrative convenience of the Customs and Excise.

I can assure the hon. Gentleman that he and I—and I speak for the Government on this—are at one in our desire to help. He was good enough to say that we had helped, and we propose to continue to help in the full development of this new method of transport. There is no question of subjecting the operators of hover vehicles to difficulties caused by administrative convenience. Quite the contrary. It is the Customs which is going to considerable lengths, as provided in this Clause, to suit the needs of the operators, after full discussion with them. I can assure the hon. Gentleman that there was very full discussion.

I am delighted that he has asked me to give an assurance on behalf of the Government on the future treatment of hover vehicles. He wanted an assurance that hovercraft operators will not be put to any disadvantage in relation to competing forms of transport of goods and persons. I can give him a precise assurance that there is no intention of putting commercial hover vehicle operators at a disadvantage compared with ships or aircraft. I give the assurance with pleasure.

The hon. Gentleman referred to bona fide operators, and, of course, we are talking about such operators. In short, I think that both sides of the Committee are at one on this. It was right that I should explain the words and what is behind them. The proposed arrangements are sensible and that they have been arrived at at the full discussion. They will develop more fully as this form of transport develops. It is for that reason that the Customs is retaining its discretionary rights so that, as we see this new form of transport developing, the discretion can be used in an appropriate way. I am quite sure that this will be a suitable method, and I hope that the Committee will be good enough to approve this Clause.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I think that my hon. Friend the Member for Yeovil (Mr. Peyton) has done a very useful service in putting down his Amendment and in raising this debate. He speaks as an expert on this matter; I do not; but it seems to me, listening to the debate, that there are questions I should like the right hon. Gentleman to try to answer.

I accept that even the right hon. Gentleman could find them somewhat difficult to answer, because we are dealing with a new form of transportation. However, he said that it would not be put in an inferior position compared with ships and aircraft. I would have thought that at this stage of its development it should be put in a much more favourable position than ships and aircraft. Ships have a long-established system of working—of going into ports where there are Customs sheds and where there is speedy clearance of passengers and freight and so on, and there is an established flow.

What worries me is that the hovercraft is an entirely new vehicle. It does not go into a quay. It does not operate as a ship. It does not operate as a car. It does not operate as an aircraft. It can, in fact, land on open beaches. Therefore, it may mean that Customs and Excise will have to have very flexible arrangements for clearing in places where there are no facilities such as they have for ships and aircraft.

It is all very well for the right hon. Gentleman to say that there will be discussions about this. The difficulty about discussions is that it all depends on how long they take. As my hon. Friend the Member for Yeovil said, there would not seem to be any great urgency about them because the number of hovercraft which will operate in the next 12 months will not be enormous, and if the passengers in them were to bring in goods duty free in the next 12 months that would not kill Customs and Excise because the amount involved would be small.

What does the right hon. Gentleman mean by discussions? The people who are now trying to develop this new form of transportation want to be able to work out schedules and to provide adequate services, and they do not want to be delayed while having long discussions with Customs and Excise before agreed procedures can be evolved before their services can operate. What they want to do at the present moment is to get their services into operation, even though there may be very great inconvenience in Customs and Excise in supervising a hovercraft when it comes to our shores.

Although I am not an expert on this matter I am disturbed to read in the newspapers of the progress being made in other countries with this new form of transportation, and if our people are trying to develop it with the head start they have got they ought not to be handicapped in making their plans for their scheduled services and bring them into operation, or inhibited in providing these services for the public, because of discussions which are to take place with Customs and Excise. Such discussions can so often take many months before a mode of operation is worked out, and they could he a great disadvantage to hovercraft services.

Therefore, I hope that the right hon. Gentleman, in his assurance to my hon. Friend, did mean that that help was to be given, and that there will be speedy solutions, even if, in fact, the solutions are not administratively easy for Customs and Excise. I think that the first priority in this case should be to get this new machine working, and so allow us to get valuable commercial experience, even if it means that Customs and Excise work under disadvantage during the next year or two while getting the system into operation.

10.0 p.m.

Photo of Mr Victor Goodhew Mr Victor Goodhew , St Albans

The Chief Secretary was good enough to give an assurance that there was no intention on the Government's part to put this type of vehicle at a disadvantage compared with ships or aircraft, but he did not endeavour to explain why these provisions were wanted by Customs and Excise. While I can understand that it may be necessary for these vehicles to operate subject to certain conditions and restrictions which Customs and Excise may wish to impose where the vehicles make a landfall and where Customs are readily available, I cannot see why it is necessary for the Commissioners to approve the class or description of any hovercraft.

I do not know whether the Customs and Excise already have the right to approve any particular type or description of aircraft, or any type or description of ship which may bring goods into and take goods out of the country.

If that is not so and the Commissioners do not have that right of approval in the case of ships and aircraft, it occurs to me that there is a distinct disadvantage being put at the hands of those who are hoping to do good trade for the country with hovercraft, and it makes one wonder whether this is not a case of people being frightened of something new and wanting a man with a red flag in front of it, as happened with the motor car.

I am not happy, and I hope that the Chief Secretary will be able to assure me that this is a requirement to be made on those who are operating ships and aircraft and that in the Clause we are not going to deal further than we should with those operators.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

In replying to the points raised by my hon. Friends, I wonder whether the Chief Secretary could also confirm or deny that the Clause does riot give the Commissioners powers about hovercraft moving purely within the United Kingdom. Could he tell us if it gives the Commissioners that power, or whether their powers are restricted to hovercraft moving from the United Kingdom outside territorial waters and coming back in the opposite direction?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I must try once more to resolve the anxieties which I am sorry to see still exist. They should not exist. I repeat that it is the Government's intention and the intention of the Commissioners of Customs and Excise to assist in the development of this new form of travel, to give it every flexibility so that it shall not be incommoded, and to have due regard to both the needs of the Revenue and the needs of the developraent of the traffic as well.

With a new form of transportation, one has to have a flexible approach, and the way one has done it has been as I have shown. One has gone on the basis of ships and aircraft, but one has said "after consultation"—not prior to consultation. I am not talking about discussions that will take place, but about discussions that have taken place with tie trade interests and with the operators.

One then goes to the further point in saying that as a hovercraft may want to land its goods at a place other than a seaport or an airport, one must not merely be satisfied with the convenience of the Customs, who would say, "Let us have a seaport or an airport with the usual warehouses and arrangements to which we are used". One must provide for new arrangements and new places at which goods can be inspected, so as to give the greatest possible encouragement to the development of this kind of traffic. That is all that is happening here. I assure hon. Gentlemen opposite that that is what the Government's desire is.

In response to the point raised by the hon. Member for Worthing (Mr. Higgins), it is true that the Customs and Excise has the same powers over a hovercraft which is moving within the country as a hovercraft which is moving outside the country, for the simple reason that one cannot contain a hovercraft. It can start off on dry land, go over muddy flats and then proceed over the water. It cannot be contained and, therefore, one has to have reasonable protection for the Revenue in the way indicated in the Clause.

There is nothing here more than is appropriate at this stage in the development of a new form of transport. Certainly, Customs and Excise has its normal powers, but I have repeated that it has the discretion to which the hon. Member for Yeovil (Mr. Peyton) referred. It has these powers of discretion in exercising its responsibility and it is in relation to that that I gave the assurance, and I repeat it word for word, that there is no intention to put commercial hover vehicle operators at a disadvantage compared with ships or aircraft. It is almost impossible to go further than that in demonstrating our desire to be as helpful as we possibly can.

Dr. Bennett:

I appreciate the courtesy and the co-operativesness with which the Chief Secretary has treated this problem. I think that the difficulties and misgivings on this side of the Committee might be met if, in subsection (3), there were some suggestion that it is hover vehicles entering from abroad or leaving the country which are really intended to be regulated by the commissioners in orders about the direction and places to and from which they can move.

I know that the point is that Customs should be able to control internal movement because, as the Chief Secretary said, the hovercraft cannot be contained. But it can be contained by one strand of barbed wire, because it cannot jump, so it is not an uncontrollable vehicle. I think that the objections from this side of the Committee would be met if the Chief Secretary could see some way of implying that it is hovercraft entering or leaving the country with which he is concerned in subsection (3).

There is no suggestion in the Clause that it is hovercraft going abroad, or coming from abroad, with which the Chief Secretary is concerned, and I do not think that the right hon. Gentleman has told us whether, under subsection (7), ships and aeroplanes have to be similarly controlled in so far as ships or aeroplanes of a certain class or description can carry dutiable goods. That is what is implied for hovercraft under subsection (7), but I do not believe that it is intended to apply to hovercraft alone.

Photo of Mr Victor Goodhew Mr Victor Goodhew , St Albans

I do not doubt the Government's good intentions, any more than I doubt their good intentions with regard to the Selective Employment Tax, but the result of that may be terrifying compared with their intentions. The same thing applies here.

The Chief Secretary made no attempt to answer the two points I put to him. I asked why the Commissioners required to have any right of approval of the class or description of hovercraft that is to be used for export vehicles. Nor did he answer my question about whether this applies to ships or aeroplanes. I cannot believe that it does, and I cannot believe that at a time when we are anxious—and the Chancellor of the Exchequer must be most anxious—to export as many goods as possible, we should put any obstacle in the way of people trying to do that vital thing. I hope that with the comings and goings of P.P.S.s we shall get a reply to these two points about which I am most unhappy at the moment.

Photo of Mr Hector Monro Mr Hector Monro , Dumfriesshire

I support my hon. Friends, because Scotland is the home of the hovercraft, and for the last year or two we have had an excellent hovercraft service on the Clyde. I cannot for the life of me see why the commissioners should have any rights over hovercraft plying in the Clyde estuary. I think that it is a valid point to make under subsection (3) that hovercraft within the territorial waters of the British Isles should be exempt from examination by the Commissioners.

The Chief Secretary has been most helpful so far, and I think that he should go further and remove any of the problems for hovercraft, because this craft is a dramatic invention and we should give it its head in every possible way. Designers and firms operating hovercraft will regard these provisions as restrictions on their operations. These people should be helped in every possible way, rather than restricted.

Photo of Mr Victor Goodhew Mr Victor Goodhew , St Albans

I hope that the Chief Secretary will answer these important points. We may have the greatest trust in the intentions of the Government, but we cannot be expected to accept another Finance Bill with mistakes which have to go on being rectified for more than a year afterwards. If there is something wrong and greater powers are being sought in the Bill than those which apply to ships and aircraft, he ought to be honest with the Committee and say so. I feel most unhappy at the idea of allowing the Clause to pass, because we have had no answer to this important question.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I support what my hon. Friend the Member for St. Albans (Mr. Goodhew) has said. The point which worries us is not whether hovercraft are in the same category as ships and aircraft, but whether they are in the same category as railway trains and lorries. It appears that the powers given in the Clause will enable the Commissioners to determine the routes which hovercraft follow when they are in the United Kingdom. I should be grateful if the Chief Secretary could clarify that point. He speaks of hovercraft not being able to be contained. Am I wrong in thinking that this would also be the situation of a light aircraft which was said to be going on a domestic flight and did not do so?

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

The reason I did not rise immediately was because I thought that the hon. Gentleman wanted to address the Committee further and I was anxious to hear his further comments and did not want to seem to edge him out.

I repeat that what we are doing is to assist and not to restrict. In answer to the hon. Member for Worthing (Mr. Higgins), ships are required to satisfy the Revenue, and small ships are required to do so in exactly the same way.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

Not aircraft, but small ships. The reason why we are doing this is that a hovercraft can do any of these things. It can perform as a ship or it can perform as an aircraft, and up to a point it can perform over dry land. If cne is not to restrict its movement, one has to take steps to control the transporting vehicle itself. Otherwise, one would he compelled to restrict its movements so that the Customs could exercise the full responsibility which the House puts on it with regard to dutiable goods.

In order not to restrict the movement cf the hovercraft, and having regard to the fact that it is a developing form of transportation and is the ideal smugglers' vehicle—it can do everything that a smuggling vehicle can do and more—[Interruption.] I wanted to put it fairly and I am not making special points. I am giving the Committee everything that it wants to know. Having regard to the fact that it can do what a small ship can do, we have to put the same restrictions on it. That is reasonable.

That being the basis of the matter, and the Government's desire being not to Emit its development or its routes, and not to put a barbed wire round the whole country to prevent it coming in or out, for we would regard that as some restriction of our liberties—[Interruption.] I am trying to explain to the Committee the Government's attitude and I am finding it a little difficult. If people do not accept what one says, there is not much point in repeating it.

I repeat for the last time that we are doing everything we can to help in the development of the hovercraft. There has to be a certain flexibility, because it is in the development stage. I have given the precise assurance for which I was a3ked, and I have repeated it twice. I hope that the Committee will now feel satisfied that we are doing everything that we reasonably can to encourage the development of this vehicle.

10.15 p.m.

Photo of Mr John Peyton Mr John Peyton , Yeovil

What the right hon. Gentleman said earlier went a long way to satisfying me. Unlike some of my hon. Friends, I was disposed to feel that the assurances—subject to what they might look like in print—which he was good enough to give, and with great courtesy were a great help. But the last remarks which he has made caused me some dismay. What he has since said on behalf of the Government is that the hovercraft is an ideal smugglers' vehicle. He has obviously caught from the Customs and Excise the contagious malady of seeing a smuggler under every jetty and concealed behind every buoy.

I am disappointed that the right hon. Gentleman should have taken this attitude. I hope that he will not go too far along this road. I do not know what my hon. Friends think about this, but I would be disposed to accept the assurances the right hon. Gentleman gave, as far as they go. I hope that he will do his best to move this immense colossus—this great edifice—of the Customs and Excise away from the suspicion that everybody is evading some small items of Customs duty. The really important thing is to encourage new enterprise. If suspicions are to be heightened to the extent that we start by viewing this vehicle as the ideal equipment for a smuggler, the whole position will be very menacing. I am sure that this is not the right hon. Gentleman's attitude.

I am sorry that late at night he should have caught a whiff from some very bad quarter and given voice to such monstrous sentiments.

Photo of Mr Victor Goodhew Mr Victor Goodhew , St Albans

I am sorry to delay the Committee still further. I do not understand the Chief Secretary's remarks about smuggling goods and about this vehicle being an ideal smugglers' vehicle. Subsection (7) mentions goods which shall be exported, not imported. Why is there so much anxiety about smuggling goods inwards, when the Clause is concerned with goods to be exported? Subsection (7) says that goods shall only be exported in a hover vehicle if it is of a class or description for the time being approved by the Commissioners". What has this to do with imports and smuggling?

I return to my comment that it is unbelievable that the Government are so full of suspicion of this vehicle that they do not know what to do next, apart from putting a man in front of it with a red flag. The Chief Secretary has said, "This is a new vehicle. Therefore, we must be careful. We must ensure that nothing terrible happens with it". It is an absurd state of affairs if people who are trying to export goods have to go to the Commissioners of Customs and Excise to get their vehicles authorised. A Government who have talked about technological revolution, the scientific age, and one thing and another, take cover—or, rather, run to the Commissioners of Customs and Excise—at the site of a hovercraft. It is absurd.

I hope that, even at this late stage, the Chief Secretary will tell us that this provision was not meant to be there. I can understand the necessity for the provision that the vehicle shall be: subject to such conditions and restrictions as the Commissioners may impose". However, I hope that the Chief Secretary will undertake that the Government will reconsider the matter complained of before Report.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

Like my hon. Friend the Member for Yeovil (Mr. Peyton), I was very much convinced by the Chief Secretary's original speech. His second intervention frightened me to death about the future of the hovercraft. It is obvious that deep down the Government view this development with the gravest suspicion: because it is something new, therefore it must be viewed with great disfavour, because it might put the railways out of operation or might do damage to our old-established industries.

The right hon. Gentleman mentioned barbed wire. This is exactly the mentality of the Germans, who spent about £200 million fortifying the Channel Islands, from which we withdrew voluntarily before the Germans arrived. Why they should have thought that that money was necessary, I have never understood. The right hon. Gentleman and his colleagues are approaching this project, a new development, in exactly the same frame of mind.

The right hon. Gentleman said that the hovercraft was the ideal smuggler's vehicle. Was not the right hon. Gentleman in the House when we were given a demonstration of a hovercraft in the Thames? We had to stop it, because every Committee in the House had to stop work. Yet this is the stealthy vehicle coming in the silent night and of whose presence no one is aware. Even a man who is stone deaf could hear a hovercraft from 10 miles away, yet it is supposed to be the ideal smuggler's vehicle.

A smuggler's vehicle is something which comes in by sail—it is silent. The right hon. Gentleman will now measure every hovercraft before it can get into the cave. He is viewing the whole problem from exactly the wrong point. As my hon. Friend said, the problem of hovercraft from the point of view of the Customs and Excise is a minor one, certainly during the next 12 months.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

I should have thought that if anybody knows anything about smuggling it is we in the West Country. We would certainly never use a hovercraft. We would use a small boat, very silently.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I ask the right hon. Gentleman to look at this again. He has convinced most of us. There was no hostility about this on this side of the Committee, half an hour ago. It is only since his last intervention that this hostility grew up. We thought that the Government were sincerely going out of their way to provide every help to the new developing hovercraft. What the right hon. Gentleman said in his last intervention created on this side of the Committee a facade of co-operation, but deep down there is a great deal of suspicion in the Government's mind about what use these vehicles would be put to.

I am certain that many of the regulations which will be brought in under the Clause are not necessary. They must have created an entirely wrong impression among those pioneers producing hovercraft, when they are told at this moment that it is the ideal smuggler's vehicle. If this is the ideal smuggler's vehicle, the Chancellor needs to be worried very much less about carrying contraband. I would not start to bring in contraband in a hovercraft. The Customs and Excise and law enforcement officers would have me in clink before I had finished my first trip, let alone any others.

Question put and agreed to.

Clause ordered to stand part of the Bill.