Exemptions and Reliefs

Part of Clause 2 – in the House of Commons at 12:00 am on 3rd December 1968.

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Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford 12:00 am, 3rd December 1968

I beg to move Amendment No. 29, in page 3, line 30, at end insert— (6) No import deposit shall be payable in respect of goods referred to in section 6 of the Import Duties Act 1958. It is interesting to see how far our debates now are following almost exactly the chronology of the debates on the Finance Bill of autumn and winter, 1964. I find that on 1st December, at about 11 o'clock at night, we discussed goods in transit and we followed on to deal with goods subject to temporary duty exemptions. In one respect we are less fortunate. It is now three o'clock in the morning. In another respect I hope that we shall be as fortunate. I do not know whether the Financial Secretary will be replying. No doubt he will see that his predecessor, the hon. and learned Member for Derby, North (Mr. MacDermot) made some concessions to the Committee when the matter was dealt with four years ago. I confidently look forward, therefore, to hearing what further concessions the Financial Secretary is prepared to make on this occasion.

These Amendments deal with particular categories of imported goods where, for one reason or another, special circumstances exist which warrant the exclusion of those goods from the import deposit scheme.

The three Amendments refer to three different categories of goods, and I will briefly describe them.

Amendment No. 29 deals with goods subject to the temporary exemption procedure under Section 6 of the Import Duties Act, 1958. The Committee will remember that this Section replaced the old Safeguarding of Industries Act, 1921, when key industry duty disappeared in 1958 and the Section 6 procedure took its place. This relates to special categories of goods which in 1921, and again in 1958, it was felt required on occasions special protection in order that the industries could become established here. The first group includes aircraft, machinery, optical and scientific instruments, measuring and checking instruments, a lot of organic chemicals, principally dyestuffs and organic intermediates, and so on.

The second group, covered by Amendment No. 104, relates to a much more general category of exemptions under Section 3(6) and Section 13 of the Import Duties Act, 1958. This deals with cases where the Treasury can make orders, on the Board of Trade's recommendation, to exempt particular goods from import duty for a prescribed period. Applicants for duty exemption under this head are successful if the Board of Trade is satisfied that the United Kingdom or Commonwealth production is nil or negligible. The temporary exemption system applies mostly to chemicals, many of which require further processing. The goods temporarily exempt from duty are listed under tariff headings. I make this point to indicate that there is no question of uncertainty. It would be very easy for importers and the Customs to identify the tariff headings for the goods covered by a temporary exemption order which could, therefore, easily be made free from the import deposit.

The third category, covered by Amendment No. 30, is a rather different one. These are goods already subject to Board of Trade import licensing control. The Minister of State to the Board of Trade—I am glad to see him here—will know that the categories principally covered are goods imported from Iron Curtain countries. These are countries with which we have bi-lateral trade agreements where maximum quantities are laid down. This, therefore, is closely linked with the volume of exports that we can make to those countries. It would seem, on that ground, that this category must be excluded from the import deposit. If goods covered by these agreements are kept out, the inevitable result will be that exports will fall as well.

3.0 a.m.

The other two, the Import Duties Act cases, are based on the proposition that manufactured goods which are for any reason temporarily exempt from import duty are by definition those goods which are not available in this country, or at any rate not available in sufficient quantities, and which therefore have to be imported. They are goods which, if the manufacture based on them is to continue, will have to continue to be imported. The only effect of the import deposit will be to add extra costs.

Those two categories and the licensing category are all groups of goods in respect of which there will be two separate forms of Government control—either scrutiny by the Board of Trade and exemption plus the import deposit, in the other case, the bilateral trade agreements and the licensing system, plus the import deposit. A point which one might make in relation to the licensing one is that these goods come mostly from Iron Curtain countries. These are not goods for which the exporter will be able to provide any extra credit, and therefore this gateway will not be open to the importer.

Those all seem to be cogent reasons why these categories of goods should be exempt, and in this context I was interested to read what the Permanent Secretary to the Board of Trade, Sir Antony Part, said to the Session of G.A.T.T. only last Friday when he had to make reference—unhappy man—to the fact that this import deposit scheme had been introduced. He assured those who were listening to him that the scheme was designed to do as little damage as possible to international trade". Sir Antony is a highly respected civil servant, and if those words are to be taken at their face value the Government must meet the case of these goods which have to be imported, because, by definition, they are not available in this country.

Here are categories which are easily and readily definable, where none of the problems of uncertainty exists, and where there seem to be the most cogent reasons why they should be exempted from this deposit scheme. If the pledge to G.A.T.T. is to be fulfilled, it is essential that the Amendments should be accepted.