Charge of Import Deposits

Part of Clause 1 – in the House of Commons at 12:00 am on 3rd December 1968.

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Photo of Sir John Foster Sir John Foster , Northwich 12:00 am, 3rd December 1968

It has been pointed out that to impose any brake on world trade is contrary to the spirit of the E.F.T.A. Convention, and Article 19 provides the conditions justifying stringent measures when there is a balance of payments crisis. The legal argument can be fitted into the spirit of the E.F.T.A. Convention in this way, but the Attorney-General advanced a very interesting argument. He said, "It is called a duty in the Bill, but it is not really a duty. It has been called a duty for technical reasons." The technical reason is that the Act of 1968 requires it to be called a duty for the purposes of the Ways and Means Resolution.

6.15 p.m.

There are many occasions in ordinary life and in law where a certain rule lays down that such-and-such will happen in certain cases. The person, in this case, says to the Attorney-General, "Look—it is a duty." "No," the Attorney-General replies, "It is not really a duty." There are cases both ways. In some cases a person will say, "You cannot be heard to say that it is not a duty, because you have called it a duty," but there are other cases where a person can say, "It is quite true that I have called it a duty, but it is not really a duty—therefore it is not a duty."

I submit that in this case it falls the other way because of the spirit of the E.F.T.A. Convention. The argument about whether it is a duty or not really a duty is nicely balanced, but here the balance falls right down against the Attorney-General, because he has called it a duty. In deciding whether he is bound by what he has called it, one has to look at the spirit of the E.F.T.A. Convention, and that says that we shall not put trammels on world trade; that we shall not impose duties or charges.

Let us look at the word "charge". The Attorney-General says that it is called a charge and, as my hon. and learned Friend the Member for Southport (Mr. Percival) has so cogently pointed out, it is called a charge all the way through the Bill. Is it a charge? The Attorney-General says, "No, it is called a charge, but it is not really a charge because it is refundable." The argument is much more "dicey"—if I may use the word—for the Attorney-General, because it is very doubtful indeed whether a charge does not become a charge when it is refundable. Deposits on bottles of bitter lemon are usually called deposits on the bottle because they are refundable and I do not think that the grocer calls that a charge but, in most cases, where a charge is refundable it is still a charge.

My hon. Friend the Member for Harrow, West (Mr. John Page) very kindly said of the Attorney-General that he was courteous and that he talked slowly and clearly, but I would remind the right hon. and learned Gentleman that it was said of one Attorney-General that he was courteous, that he was slow, that he was always wrong. Therefore, let the Attorney-General beware of my hon. Friend.

The Attorney-General's case falls rather on the side of the Income Tax case in which a property company used to deduct the interest it had to pay on its developments. Up to a point, the tax inspectors said, "Yes, you have to pay interest, so it is deductible". After a year or two the inspector looked at the published accounts and saw that in order to present a more attractive picture to the shareholders the company had capitalised the interest and had said that the interest, for the purpose of the accounts of shareholders was not a revenue deduction but was capitalised. The courts, when I last left the Bar—they may have reversed their decision since, as it was some years ago—had said, "If you call it a capital expenditure, it is a capital expenditure. It does not matter that you say that it is not really a capital expenditure although you have called it so". I think that it was known as the Chancery Lane case.

I do not care whether or not the decision has been reversed, because my view is that the test is, if it is contrary to the spirit of the E.F.T.A. Convention, can you be heard to say, "Although I call it a duty, it is not really a duty"? Then those concerned with the E.F.T.A. Convention see that this Measure is obviously meant to catch not only duties and charges but everything of the sort that puts a kind of brake or impediment on foreign trade.

That is what destroys the Attorney-General's legal argument which, in vacuo might have held water. It might have been said, "I call a cat a dog, but it is not really a dog, it is still a cat". The Dogs Act of 1906 gave an example of that because, in Section 7, it is said: the expression cattle' includes horses …