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Machinery (Duty-Free Licensing)

Volume 531: debated on Thursday 29 July 1954

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expenditure of a disproportionate amount of time and effort.

Following is the list:

in a position to make a statement about the Wilson Smith Committee Report on duty-free entry of machinery, which has recently been published.

Yes. The Government accept the Report as a whole and, with one reservation, propose to put into effect the committee's recommendations as from the 4th August. The basic recommendation is that some discretionary system to permit the duty-free entry of machinery in suitable cases is in the national interest, but the Committee does not recommend the continuation of so general and widespread a scheme as that which obtained before duty-free licensing was suspended in 1952. The Government accept this recommendation and propose to resume duty-free licensing of machinery under Section 10 of the Finance Act. 1932.

The report recommends four main changes in previous practice. The first of these is that the applications eligible for consideration should be confined to consignments of similar or closely associated machines where the value of the machinery otherwise eligible for a duty-free licence required by the individual user is not less than£2,000. The Government accept this value limit of£2,000 as recommended by the committee.

Secondly, as regards similarity of machines, the Report recommends that the suitability of machines for the particular work for which they are required should be taken into account in cases where the applicant can establish that the machine is to be used to a very substantial extent for this special purpose, but that duty-free entry should not be allowed unless the imported machine has a definite and marked technical superiority for that purpose.

This recommendation will, as the Report recognises, give rise to some formidable difficulties in administration. Previously, machines were compared solely on the basis of their general use, and this criterion provided a clear rule which made it possible to ensure and demonstrate that all applicants were treated alike. The criterion now recommended cannot be expressed as a clear-cut general rule. Decisions will have, to a much greater degree than under the previous arrangements, to depend on the individual circumstances of each case, and may thus appear to be somewhat arbitrary in character. The Government nevertheless propose to adopt this recommendation. The criterion will, as the Committee recommends, be strictly administered.

Thirdly, the Report recommends that the responsible Department should set up a consultative committee containing representatives of industry whose functions would be to keep under review the broad policy followed by the administering Departments and to represent industry's views to the Departments. I propose to appoint a consultative committee as soon as possible.

The one recommendation on which the Government must for the present reserve their decision is the one for the extension of the duty-free entry provisions to cover plant. Legislation would be necessary before this recommendation could be put into effect, and I propose to explore this matter further with the consultative committee as soon as it is appointed.

In addition to these definite recommendations for changes in the previous rules and methods of administration, the Report also suggests that the administering Departments should consider whether the rules formerly followed in dealing with applications made on the ground that delivery of United Kingdom machines is protracted could be made somewhat more flexible, for example, by varying the qualifying period according to the type or value of the machinery. This suggestion will be examined with the assistance of the consultative committee.

The Report recommends that the other rules followed by the Departments in administering duty-free licensing since the war should be retained. This decision to resume the duty-free licensing of machinery on the above basis will apply to machinery which has not been delivered from Customs charge before the 4th August, provided that the applicant, before delivery of the machinery from Customs charge ( a) has ensured that an application for a duty-free licence is received by the Board of Trade, ( b) has informed Customs about the application. Applications (which may be lodged forthwith) should be made to I.M.1 Division, Board of Trade, Horse Guards Avenue, S.W.1, from whom application forms can now be obtained. A notice to this effect will appear in this week's Board of Trade Journal.

I should like to add that there will probably be a heavy flow of applications at the outset, and there is likely, therefore, to be some initial delay in dealing with them. Delays in the issue of duty-free licences do not mean that the importer has to delay the import of the machine since, provided that the application has been received before clearance through Customs, the importer can obtain clearance by paying the import duty, which will be refunded if a duty-free licence is issued.

I would like to take this opportunity to express the Government's thanks to the chairman and members of the committee for the valuable public service they have rendered in their examination of this complex problem.