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 Harold Lever Mr Harold Lever , Manchester Cheetham 12:00 am, 3rd December 1968

When there is an exemption from duty under this power, that exemption is based upon the non-availability domestically of these goods, so it is not a protective duty which is removed, because there is nothing to protect. If, for example, there were a duty on Zanzibar spice not producible in this country, even with a 100 per cent. tariff, then if there is a tariff on its importation, that is not a protective duty. It is rather like the Customs duty on whisky, even though in the form of a tariff.

There is no point in keeping that on, and the Clause enables us to take it off, if we are satisfied that the goods are not available domestically, but if, in selecting our list of exemptions, we take that into account and establish it as a criterion, this becomes not a general pressure on imports but a selective pressure of a protective kind—that is to say, we are showing that we are not applying this pressure to goods except where we can make the goods ourselves in competition with the foreigner.

I can assure the hon. Gentleman that it would be very ill-regarded by E.F.T.A. and G.A.T.T. if we were to apply what are in effect protectionist criteria, that is to say, exempting goods where there is no domestic production challenging foreign importation and not exempting those which we can make at home, and the import deposit would act as a protective duty. I hope that this point goes over, even at this hour.

For this reason, we cannot accept the criteria of the Amendments. But I offer this consolation: the Government have taken power in the Bill—this might be an inducement to hon. Members to enact it speedily—to make further exemptions, though not to remove any. We shall certainly look at the whole area of exemptions—this will have to be my answer on the Schedule, later—and what is the best package we can get up for using the exempting power by Order. I cannot promise any particular exemptions under the Clause, but I can promise that they will be candidates for early and urgent consideration. I hope that, with that crumb of comfort, and my argument for not giving this flavour which would be ill-regarded by our E.F.T.A., G.A.T.T. and Irish friends, the hon. Member will feel able to dispose of these Amendments.