I beg to move,
That the Import Duties (General) (No. 3) Order, 1967 (S.I., 1967, No. 468), dated 23rd March, 1967, a copy of which was laid before this House on 31st March, be approved.
This is a very small Order. It makes a minor change in the definition of flake graphite which comes in duty-free. It is designed to provide a clear legal basis for the interpretation of the tariff on this product and it also gives a tolerance of 2 per cent. on the specified 85 per cent. carbon content of duty-free graphite. The industry mainly concerned has requested that this tolerance should be allowed.
The Order achieves the first of these objectives by supplementing the density test in the former tariff sub-heading by a second test which ensures that only graphite in particles large enough to be seen to be flakes will be classified as flake graphite in the tariff. It achieves the second objective by reducing from 85 to 83 per cent. the carbon content required for flake graphite classified to the duty-free sub-heading.
The Order therefore satisfies the need of the consumer industry for a tolerance, makes the legal position clear and simplifies the administrative work of Her Majesty's Customs.
I wish to ask the Minister of State only one question. I note that the density test specified in the definition is in metric dimensions whereas the additional clarification which the right hon. Gentleman mentioned has been added to the qualification is in inches. The Government's policy is that we should convert entirely to metric units and we are in process of doing this over a period of years. I wonder why it has been necessary to use inches in this additional definition. If the right hon. Gentleman can give an explanation, I shall be grateful.
I am grateful to the Minister of State for his extremely clear explanation of the purpose of the Order. No doubt the right hon. Gentleman will have satisfied himself with his own eyes about how the test is carried out and that there is no substantial change in the method which is being employed.
I agree entirely with the point raised by the hon. Member for Orpington (Mr. Lubbock). This might have been a classic opportunity to make a wholehearted switch to the metric system. I assure the hon. Member and the Minister, however, that the ultimate result will be the same whichever system is employed, because this is more or less a traditional method which has been going on for a very long time.
I should like to ask the Minister one or two questions. First, why and on what evidence has he made the switch from 85 to 83 per cent.? What percentage of the flake graphite imported into this country is affected? The right hon. Gentleman will, I think, find that the bulk of flake graphite which is imported does not bear duty in any event and is well below the 83 per cent. tolerance, let alone the 85 per cent. tolerance.
I am tempted to ask the Minister, for the benefit of the large and attentive House which is listening to him, to give us a lecture on the properties of flake graphite and how it differs from amorphous graphite. No doubt he will be able to do so. If, however, he cannot, I should be delighted to do it for him.
Furthermore, how did the demand for the change arise? This should be stated. The Minister has spoken of the industry, but he might be a little more specific about the reason for the change, as well as giving one or two more general details which I would like to have.
I, too, was intrigued by the point which caught the attention of the hon. Member for Orpington (Mr. Lubbock). This seems an extraordinary definition, mixing the metric and inch systems haphazardly. I understand that there are no objections to the Order on the part of any United Kingdom interest and therefore perhaps I may add one or two more brief points.
First, my researches have shown that the intention of altering this tariff heading was notified as long ago as 20th September, 1963, in the Board of Trade Journal of that date on page 618. It is now almost exactly three and a half years later. It seems an unconscionable time to have taken in reaching the revised definition which, as the right hon. Gentleman has said, adds one or two new points to those there already.
Secondly, we are left with a position in which graphite that does not come within the terms of the tariff heading set out in the Order comes under other graphite and as such is subject to a 10 per cent. duty. I understand that there is no United Kingdom production of graphite, and this therefore raises the question of why one needs a tariff on it at all. I imagine that there must be some Commonwealth interest.
In that context, I would point out that the common external tariff in the Common Market for all graphite is nil. Presumably, therefore, this will be something that negotiations will have to cover—I am not aware that the matter was dealt with in the previous negotiations—or, alternatively, no special arrangements will be made and, if we join, all graphite will enter this country tariff-free.
The explanation as to the mix-up of inches and grammes and cubic centimetres was given by the right hon. Member for Reigate (Sir J. Vaughan-Morgan). This is the traditional definition and until the industry has moved over to the metric system completely, it was thought advisable to keep the definition as it is. I agree that it is a narrow point of timing. When we switch to the metric system generally, the definition, along with very many others, will have to be changed. But at the moment it is just a matter of judgment whether we change it now or wait until more general changes are being made.
Surely it would be easier, when opportunity arises, that the change should be made as and when rather than that it should be left until the vast task which the right hon. Gentleman has just described gets under way. Surely it will be more difficult to make all these changes simultaneously rather than as opportunity occurs.
There is something in that argument, but until there is much wider change, particularly in linear measurement, which is still very much in inches in this country, there is an argument for keeping this definition as it is for the time being. But I take the point.
There is a lot of substance in what the Minister of State is saying, but this cannot be left only for the industry. I suggest that when such Orders come forward the equivalent in metric measurement should be given with the inches. This has been the practice in large parts of the industry dealing with this material and it would be much appreciated and understood.
I take that point and will pass the suggestion on to those concerned. The right hon. Gentleman asked me if I knew the difference between flake graphite and amorphous graphite. I would be glad to listen to any lecture on the subject he cares to give. I know that this is of considerable interest to him.
The reason that we have to note the difference in this context is that amorphous graphite is produced in the Commonwealth. It is an important item in the economy of Ceylon. This also explains why there has been what appears to be a considerable delay in bringing the Order forward. Discussions with Commonwealth countries, particularly the emerging countries which are moving over to an industrial economy, take a considerable time, as I am sure the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) appreciates, particularly because these countries are looking to their future economy rather than coming to decisions based on past experience or perhaps present practice. These discussions took longer than we wished for the very good reason that the new definition had to be discussed with Commonwealth interests.
This leads me to the point made by the hon. Gentleman about what would happen if we were to apply to join or entered the Common Market. I speak here without really careful thought, but I would imagine that, where a Commonwealth interest such as this was involved, there would be further discussions in dealing with a commodity in which, for example, as the hon. Gentleman pointed out, the E.E.C. tariff was nil. The reason why we are dealing with flake graphite in this way is that some firms in this country would prefer a lower definition than 83 per cent. They would prefer the carbon content specified in the definition to come down to 75 per cent. That proposition has been opposed by Ceylon on the argument it would injure Ceylon's graphite industry. Therefore, we have concluded that the best thing is to give the 2 per cent. tolerance that firms in the industry first asked for.