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Import Deposits

Volume 774: debated on Monday 25 November 1968

The text on this page has been created from Hansard archive content, it may contain typographical errors.

10.14 p.m.

That there shall be charged on all goods imported into the United Kingdom on or after 27th November 1968 (or so imported before but entered on or after that date), other than goods of the descriptions in the table below, a duty of customs of fifty per cent. of the value of the goods, which shall be repayable after such period, and in such circumstances, as may be provided by or under any Act imposing the duty, and that—
(a) the duty so charged in respect of goods entered for warehousing shall (as in the case of goods entered for home use) become chargeable at the time when, under section 28(2) of the Customs and Excise Act 1952, the goods are so entered for warehousing,
(b) the provisions of the Customs and Excise Acts shall apply to the duty subject to such exceptions and modifications as may be provided by or under any Act imposing the duty, and
(c) any such Act may contain supplemental and incidental provisions, including provisions excepting goods of specified descriptions, and provisions for the repayment or remission of the duty and for the making of orders—
(i) reducing or further reducing the rate of duty, and
(ii) adding to the descriptions of goods exempted from the duty.

Description of goods (employing the Customs Tariff 1959)Title of tariff chapter, or summary of tariff heading
Chapter 1 (all headings)Live animals.
Chapter 2 (all headings)Meat and edible meat offals.
Chapter 3 (all headings)Fish, crustaceans and molluscs.
Chapter 4 (all headings)Dairy produce; birds' eggs; natural honey.
Chapter 5 (all headings)Products of animal origin, not elsewhere specified or included.
Chapter 7 (all headings)Edible vegetables and certain roots and tubers.
Chapter 8 (all headings)Edible fruit and nuts; peel of melons or citrus fruit.
Chapter 9 (all headings)Coffee, tea, mate and spices.
Chapter 10 (all headings)Cereals.
Chapter 11 (all headings)Products of the milling industry; malt and starches; gluten; inulin.
Chapter 12 (all headings)Oil seeds and oleaginous fruit; miscellaneous grains, seeds and fruit; industrial and medical plants; straw and fodder.
Chapter 13 (all headings)Raw vegetable materials of a kind suitable for use in dyeing or in tanning; lacs; gums, resins and other vegetable saps and extracts.
Chapter 14 (all headings)Vegetable plaiting and carving materials; vegetable products not elsewhere specified or included.
Chapter 15 (all headings)Animal and vegetable fats and oils and their cleavage products; prepared edible fats; animal and vegetable waxes.
Chapter 16 (all headings)Preparations of meat, of fish, of crustaceans or molluscs.
Chapter 17 (all headings)Sugars and sugar confectionery.
Chapter 18 (all headings)Cocoa and cocoa preparations.
Chapter 19 (all headings)Preparations of cereals, flour or starch; pastry-cooks' products.
Chapter 20 (all headings)Preparations of vegetables, fruit or other parts of plants.
Chapter 21 (all headings)Miscellaneous edible preparations.
22.10Vinegar and substitutes for vinegar.
Chapter 23 (all headings)Residues and waste from the food industries; prepared animal fodder.

Description of goods (employing the Customs Tariff 1959)Title of tariff chapter, or summary of tariff heading
24.01Unmanufactured tobacco.
Chapter 25 (all headings)Salt; sulphur; earths and stone; plastering materials, lime and cement.
Chapter 26 (all headings)Metallic ores, slag and ash.
Chapter 27 (all headings)Mineral fuels, mineral oils and products of their distillation: bituminous substances; mineral waxes.
Bromine and iodine within 28.01.
Silicon, selenium and tellurium within 28.04.
Mercury within 28.05.
Arsenictrioxide within 28.11
Natural sodium nitrate within 31.02.
Basic slag within 31.03.
All goods within 31.04 except potassium chloride (analytical reagent quality).Mineral or chemical fertilisers, potassic.
Fertilisers within 31.05 consisting solely of natural potassium nitrate and natural sodium nitrate.
32.01Tanning extracts of vegetable origin.
32.04Colouring matter of vegetable origin or animal origin.
33.01Essential oils (terpeneless or not): concretes and absolutes; resinoids.
All goods within 35.01 except casein gluesCasein, caseinates and other casein derivatives.
35.02Albumins, albuminates and other albumin derivatives.
Edible gelatin within 35.03.
37.04, 37.05, 37.06 and 37.07Exposed film and plates.
Flux calcined diatomite within 38.03.
38.05Tall oil.
38.06Concentrated sulphite-lye.
38.07Spirits of turpentine and other terpenic solvents; crude dipentene; sulphite turpentine; pine oil.
38.08Rosin and resin acids and derivatives; rosin spirit and rosin oils.
Calcined bauxite within 38.19.
40.01Natural rubber.
40.03 and 40.04Reclaimed and waste rubber.
41.01Raw hides and skins.
Leather within 41.02, 41.03, 41.04 and 41.05, other than dressed leather.
41.09Leather parings and waste.
43.01Raw furskins.
44.01 to 44.12Wood, not planed or further manufactured.
45.01 and 45.02Natural cork and waste cork.
47.01 and 47.02Paper-making materials (pulp and waste paper).
49.01 to 49.07Books, newspapers, maps, charts, manuscripts, typescripts, stamps, etc.
Trade advertising material within 49.09 and 49.10, being material the primary purpose of which is to stimulate travel outside the United Kingdom.
Trade advertising material within 49.11, being publications, illustrated or not, the primary purpose of which is to stimulate study or travel outside the United Kingdom, or to advertise exhibitions held outside the United Kingdom, and less than full-size reproductions thereof.
Printed matter within 49.11, being-less than full-size reproductions of articles falling within49.01 to 49.07 or

Description of goods (employing the Customs Tariff 1959)Title of tariff chapter, or summary of tariff heading
less than full-size reproductions of trade advertising material within 49.09 and 49.10, being material the primary purpose of which is to stimulate travel outside the United Kingdom, or
parts of books or booklets in the form of printed pictures or illustrations not bearing a text and less than full-size reproductions thereof, or
printed documents, printed diagrams and printed architectural, engineering and similar industrial designs or plans not being trade advertising material, and less than full-size reproductions thereof.
Photographic prints within 49.11 im-ported in a packet not exceeding 8 ounces in gross weight which does not form part of a larger consignment.
50.01, 50.02 and 50.03Silk worm cocoons, raw silk and silk waste.
53.01Sheep's or lamb's wool, not carded or combed.
53.02Other animal hair, not carded or combed.
53.03 and 53.04Waste of sheep's or lamb's wool or of other animal hair.
53.05Sheep's or lamb's wool, or other animal hair, carded or combed.
54.01 and 54.02Unspun flax and ramie.
55.01, 55.02, 55.03 and 55.04Raw cotton, linters and waste; cotton, carded or combed.
57.01, 57.02, 57.03 and 57.04Unspun hemp, jute and other vegetable textile fibres.
57.06Yarn of jute.
Yarn, of coir within 57.07, not containing man-made fibres.
57.10Woven fabrics of jute.
Hand-made knotted carpets, carpeting and rugs within 58.01.
Coir mats and matting within 58.02.
Jute sacks and bags within 62.03.
Chapter 63 (all headings)Old clothing and other textile articles; rags.
71.01 to 71.10Pearls, synthetic and natural, precious and semiprecious stones and precious metals not fully manufactured.
71.11Waste and scrap of precious metals.
Chapter 72Coin.
73.01Pig iron, cast iron and spiegeleisen, in pigs, blocks, lumps and similar forms.
73.03, 73.04 and 73.05Iron and steel waste, scrap, shot, grit and powder.
74.01 and 74.02Copper matte; unwrought copper; copper waste and scrap; master alloys.
75.01Nickel mattes; unwrought nickel; nickel waste and scrap.
Unwrought nickel electroplating anodes within 75.05.
76.01Unwrought aluminium and waste and scrap.
77.01Unwrought magnesium and waste and scrap.
Waste and scrap beryllium within 77.04 and unwrought beryllium within 77.04.
78.01Unwrought lead; lead waste and scrap.
79.01Unwrought zinc; zinc waste and scrap.
80.01Unwrought tin; tin waste and scrap.
Chapter 81 (all headings)Certain base metals employed in metallurgy and articles thereof.

Description of goods (employing the Customs Tariff 1959)Title of tariff chapter, or summary of tariff heading
Aircraft within 88.02 of a maximum total weight exceeding 18,000 lbs. (maximum total weight to be that authorised in the certificate of air worthiness in force in respect of the aircraft or, if there is no such certificate in force, ascertained in such manner as the Commissioners may direct).
Ships and other descriptions of goods within 89.01, 89.02 and 89.03, if of a gross tonnage of 80 tons or more (ascertained in accordance with the Merchant Shipping Acts or, if not ships with a gross tonnage under those Acts, ascertained in such manner as the Commissioners may direct).
Fishing vessels within 89.01 of the kind commonly known as Danish-type seiners with a fuel carrying capacity of not less than 500 gallons.
89.04Vessels for breaking up.
Sound recordings not produced in quantity and not for general sale, within 92.12.
Chapter 99 (all headings)Works of art, collectors' pieces and antiques.

This Resolution provides for the introduction, as from Wednesday, 27th November, of the scheme of import deposits which has been referred to during today's debate, as announced by the Chancellor of the Exchequer last Friday. A Bill to give statutory effect to the Resolution will be introduced forthwith.

Would the hon. Gentleman tell us what "forthwith" means, because the idea is that the Bill is to be debated on Thursday? When can we expect to see the Bill?

"Forthwith" means as soon as practicable after the House—[Hon. Members: "When?"] I will try to find out, within hours and minutes, for the right hon. Gentleman, while the discussion is continuing. Hon. Members should not rejoice prematurely at my temporary solitude in this matter. I say to them that the Bill will be introduced "forthwith" and the time "forthwith" will be such as to give the House ample opportunity to study it in detail before we begin the debate.

The purpose of this import deposit scheme is, as the Chancellor has said, to operate as an additional selective measure of credit restriction, for a limited period. The effect of it broadly is that people importing goods into the country will have to deposit one half of the cost of those goods with the Customs, to remain there for a period of 180 days. The Resolution describes import deposit as a duty on Customs, but this is a technicality, making it possible to apply the machinery provisions of the Customs and Excise to the collection and general control of these deposits, and this avoids unnecessary extensive legislation.

The Resolution fixes the initial rate of deposit at 50 per cent. ad valorem. The Bill will make it possible to reduce the rate, but not to increase it, by Treasury Order. Hon. Members might find that an agreeable precedent in happier times to come, to apply to other taxation measures where the option on government is by Treasury Order to reduce the impact of the tax rather than to have two-way movement. Paragraph (a) provides that when goods are entered with the Customs for warehousing the deposit is payable at the time of entry and not when the goods are removed later from the warehouse. This varies normal Customs procedure and is necessary so that the operation of the deposit scheme should be immediate and the impact—

Order. It is difficult for any hon. Member to address the House against a background of sustained conversation.

I am grateful to you, Mr. Speaker, for increasing my audibility.

Paragraph (c) allows the Bill to include certain reliefs from the deposit. As has been announced, there will be a relief for goods that can be shown to be intended for export. There will also be relief for goods, to be used in shipbuilding and ship-repairing, and as components of large aircraft, and for small import consignments not exceeding £50 in value. That does not purport to be an exhaustive list of reliefs, but the full details will be in the Bill which hon. Members will have forthwith.

The table sets out the list of exempted goods which include food, feedingstuffs, fuel, leaf tobacco and basic raw materials. The Bill will give the Treasury power to add to this list of reliefs, but not to subtract from it, by Treasury Order. The Customs notice containing this list is available for the information of importers and others, together with another notice explaining briefly the machinery and the operation of this scheme. Local Customs officers will do their best to help people who have some puzzlement about the details of the scheme, in the usual way.

Can the Minister make arrangements for copies of these Customs notices to be available both in the Library and the Vote Office? It is rather unfortunate that even now there are no such notices available for hon. Members, unless hon. Members go to the Stationery Office and collect them.

In their capacity as Members of the House, hon. Members would not get them except from the Stationery Office. As importers, they could have had them. I will see that copies of these documents are placed in Library and made available to hon. Members in the Vote Office.

It is desirable to take the opportunity to remind the importers that their goods will not avoid the deposits unless they have both arrived in this country by tomorrow, Tuesday, and also been entered by the Customs by the close of business tomorrow. I hope that that will be widely understood. It is not enough if the goods are in the country by tomorrow. They have to be entered with Customs by the close of business tomorrow, otherwise they will be liable to release only upon the appropriate deposit.

The Minister said that there would be exemptions for imports related to our export markets. My hon. Friend the Member for Colne Valley (Mr. Richard Wainwright), earlier, raised the question of capital machinery which could not be purchased in this country, but which was vital to our export industry. As that does not appear in the Schedule on the Order Paper, are we to take it that such machinery is expressly excluded?

If it is not in the list it is not exempted. There is power in the Treasury to add to the list, and when the Bill is brought up for debate it will be found that we have drawn the Ways and Means Resolution in a way which allows hon. Members to have a full discussion about any addition to the lists concerned. I should have thought that when the Bill has been produced forthwith—which means tomorrow—will be the opportunity to examine the matter rather than on the Ways and Means Resolution. Hon. Members will then be in a position to go into it in greater detail.

The main point which I wish to emphasise is that goods must not merely have arrived in the country; they must be entered with Customs, which means that the appropriate form must have been filled in with Customs by close of business tomorrow, if they are to be exempt from the scheme.

Order. The attention of hon. Members should be called to the fact that I have had the Resolution reprinted because there was a slight misprint in the rubric between lines 60 and 65 and a misprint of a letter between lines 170 and 175. For the purpose of accuracy, I thought it better to have it reprinted.

10.23 p.m.

In the main, the Schedule on the Order Paper which will be covered in the Bill refers almost exclusively to raw materials. I can understand that. But in certain industries the raw materials are, in fact, semi-processed goods. A number of companies import semi-processed goods which are finished here and either sold here or re-exported.

I will quote one example which arose today when I was looking at a company which imports semi-processed materials which are not manufactured in this country, cannot be obtained in this country, and are one of the essential parts of the food industry. They are used very largely in the food industry. When I looked at this company it seemed to me that it would have to find about £250,000 in deposits loaned to the Government over the six months. For a modest-sized company—and there must be many similar—this will present a considerable problem. Without these imports the company cannot function at all. No alternatives are available in this country. These materials have to be imported.

I hope that I may have the Financial Secretary's attention on this matter, which is important. Has this type of problem been brought to his attention? Is it the kind of problem of which he will take note, and will he add this to the list of exemptions in the Bill?

10.25 p.m.

I gather from the Financial Secretary's remarks that the Bill will be published tomorrow. Can he give an assurance that the Committee stage will be taken on the Floor of the House and that it will be possible for us at that time to table Amendments to decrease the number of exemptions?

I am particularly concerned with the exemption of dairy products. A great many dumped dairy products are now coming into Britain to the detriment of our agriculture. The Minister of Agriculture, Fisheries and Food in numerous speeches, has called on the farming industry to expand its production. Now the Financial Secretary is provided with an ideal opportunity, in the dire and unhappy situation of the country, to remove from the list of exempted goods dairy products like cheese and dried milk products. During last week alone there was an increase in the importation of these commodities totalling about £3½ million.

I appreciate the Financial Secretary's difficulty in saying categorically tonight that these items will be removed from the table of exempted goods. If he will say that in Committee we shall be able to table Amendments to exclude them and debate the matter in full, I will be satisfied at this stage.

The hon. Gentleman emphasised that goods will not qualify for exemption unless the necessary Customs forms are filled in by tomorrow evening. This would seem to be an incredible impost on the importers of some goods, who may not have sufficient time in which to make the necessary arrangements. I am asking him to review this provision. Will he also give the timing of the various stages of the Bill, so that we may prepare Amendments to prevent exempted goods from being dumped in this country?

I hope that the hon. Gentleman is listening to these remarks, because the necessary deposits should be paid on dumped goods if we are to benefit our agricultural industry and the national economy.

10.27 p.m.

I support the remarks of the hon. Member for Wycombe (Mr. John Hall) about the list of exempted goods. The list reads like a catalogue of raw materials which we were importing 100 years ago. The table refers to guano, casein, rosin and resin acids and derivatives. Many of the raw materials of industry today are themselves either semi-manufactured or wholly manufactured goods which, after use, are re-exported in other forms.

I am particularly concerned about the chemical and plastics industries. Many of the raw materials which we import go to make up the exports of these industries. The list of exempted goods needs re-examining, particularly since it reads like a list of industrial commodities of a century ago.

I appreciate the need for provisions of this kind at this time. They will have my support if they will hold back the importation of luxury and other unnecessary goods which, in the main, we can manufacture ourselves.

10.30 p.m.

I support my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) in his comments on the contents of the list. I cannot understand why dairy products are classed as exempted goods. Just after we have received a report from the agricultural N.E.D.C., showing us ways in which the farming community can substitute imports and that it is necessary that some steps should be taken in this direction, it is nonsensical to class dairy products as exempt. The list is not only out of date, but includes things like birds' eggs and natural honey.

Many additional articles should be excluded. Not only are we concerned with dairy produce, however. Our farmers could produce a great deal more meat and cereals. All that is lacking is encouragement from the Government.

I hope that I can have the Financial Secretary's attention. I reinforce what my hon. Friend the Member for Derbyshire, West said about dairy produce. Every day a flood of foreign dairy produce pours into the country. On average, British cheese producers are forbidden to produce cheese for 30 or 40 days a year simply because of the extra amount of foreign cheese coming on to the market. Here is an opportunity to implement the Government's hopes of arresting existing imports, especially those in certain food classes. The farmers at home can meet the demand.

I hope that, when the Bill comes before the House in Committee, a suitable Amendment on these lines will be accepted by the Government. In our critical balance of payments situation, it would surely only be simple common sense.

10.32 p.m.

I have two small points to make, and I hope that I can have the Financial Secretary's attention.

A number of hon. Members seem to suppose that, because I am actively pursuing answers to their questions, they do not have my full attention. I can save time by informing all hon. Members that they do have my full attention in this important debate.

I am sure that every hon. Member recognises the courtesy which the hon. Gentleman always pays to the House. I had forgotten for a moment that he has two ears. So often I have been able to see only one.

On the first point, I must declare an interest. I am connected with a firm which imports books, which are included in the Schedule of exempted articles, and I was somewhat confused by what the hon. Gentleman had to say in trying to understand whether the exemption is automatic or has to be claimed if the articles concerned are on the list. If they are on the list, does exemption still have to be claimed?

I think that there is some confusion here. I said that goods which are not exempt and are subject to the deposit are still exempt if they are here by tomorrow and are entered with the Customs by tomorrow. Non-exempted goods will be exempt until tomorrow night provided that they are in this country and entered in the Customs by tomorrow night. But all goods on the exemption list remain exempt throughout the whole period of the operation of the scheme.

I am grateful to the hon. Gentleman. That is what I thought he meant, but there seemed some doubt.

Secondly, the right hon. Member for Devon, North (Mr. Thorpe) raised a point about machinery that is not produced here but is used for export purposes. One instance has already been referred to me from my constituency. My constituent informs me that the machinery he uses can be obtained only from West Germany, but that 50 per cent. of its production goes out in export from Britain. He is now in West Germany, negotiating a purchase. Machinery of this sort should surely be considered for the exemption list. I hope that the hon. Gentleman will be able to introduce a suitable Amendment to the Bill if it is possible to draft it in such a way as to make it watertight.

10.35 p.m.

This import deposits scheme may or may not be necessary; I do not wish to argue that. If it is necessary, the only reason is the incompetence of the Government.

I should like certain of the items taken out of the list. Dairy produce is the most obvious case. The "Little Neddy" has stated that it is of the greatest importance that we should cut imports of food by £200 million. Not a week ago, the Minister of Agriculture, Fisheries and Food accepted the "little Neddy" report to the extent of £160 million. I ask that a large amount of agricultural semi-manufactured and manufactured goods, such as cheese and milk products, should be taken out of the list. Then there would be fewer imports of these products which we produce in plenty at home. We need to expand our dairy herds. If the deposit had to be paid on these, it would be less easy to import them.

Presumably, birds' eggs include domestic hens' eggs. I would go a little further as I see no need to import malt or products of the milling industry. That we should have to import straw and fodder when on practically every farm in the Eastern Counties this year we have been burning straw because there was no market for it, seems quite ridiculous. Chapter 16 mentions preparations of meat and fish. "Preparations of meat", I assume, are manufactured or meat byproducts of a luxury kind. They are very pleasant, but we could do without them in this country at present. I should also think we could do without importing cement.

With the country in its present state we should seriously consider taking out of the exempt list live animals, dairy products, birds' eggs, products of the milling industry and malt. I should like to know why straw and fodder should be included in the list. We produce a large mass of these items and could produce far more of them.

10.37 p.m.

I can well understand that in the troubles to which we have been brought we must make some sacrifices, but I am not at all satisfied with this table. It seems that the Government have taken advantage of the situation to introduce a table with the most undesirable ideological bias.

Why is the import to be encouraged of edible meat offals, birds' eggs, certain roots and tubers, edible nuts, gluten, oleaginous fruit, straw and fodder, and vegetable saps and extracts? I dare say that these are foods which the Government would have us eat, but it seems most unfortunate that the opportunity should have been taken of such a serious crisis in our affairs to introduce such a measure. I am reminded of Sir Winston Churchill, who said, "Take away this pudding; it has no theme."

This table is also ill-advised. Why should we encourage the import of
"material the primary purpose of which is to stimulate travel outside the United Kingdom "?
Further, the table seems to be entirely random. Why should we have to encourage the importation of old clothing and rags, as mentioned at line 179—

Does not my hon. Friend realise that at any moment now that will be all that we shall be able to afford?

—while line 180 encourages the import of pearls? This list seems to have been compiled in an unnecessary hurry, based, no doubt, like the Selective Employment Tax, on categories which were devised for quite another purpose.

Next, whatever the Chancellor may have said, this list will place a serious strain on bank credit. The amount of money which will be tied up by these deposits cannot possibly be found from any source other than bank credit. Indeed, a deposit of this nature is precisely the type of borrowing for which banks were invented, that is to say, a temporary affair, and short-term borrowing. No firm would dream of raising permanent capital to finance these deposits, and therefore it is absolutely certain that this money will be raised through the banks.

The Chancellor says that the sum total of the squeeze is about £250 million, but that simply is not so. The whole of these deposits will fall, in the first place, on bank credit, and the sum total of the squeeze will be about £850 million. This will mean a great shift of trade. What has worked for Italy may not work for us, because we are essentially a trading nation. We live through trade and do not trade simply to eat; we trade to earn money as well.

We are told that these deposits will be repaid after six months, but will they, in fact, be repaid in such a period? The amount is large and this is very material. I have a letter from a constituent saying:
"It can take up to 18 months to obtain Customs drawback repayments on re-exportation of imported equipment."
If that period of repayment is copied, the strain on firms and the strains on credit will be greatly increased. It is important that before agreeing to this measure we have an absolute assurance that repayment in six months means repayment in six months and not six months plus an unspecified period.

What about imports of spare parts? Many people are in possssion of machinery bought from abroad which they must maintain—they have no option. Are manufacturers, who may be wholly engaged in the export trade, to tie up their working capital in import deposits for the bits and pieces which they need to keep their exports going? I see no mention of that in the table.

Finally, this measure has the supreme disadvantage of being absolutely counter to Tory policy. It is grossly protectionist. There is a grave risk and we have seen it already—General de Gaulle, whom not all of us in all respects admire, has at least done what we apparently are unable to do, which is actually to cut Government expenditure—at least, he has said that he will—but he, too, has made noises about protectionist policy. Are we to touch off a whole series of protectionist measures among all nations? If we do, it will certainly not end to our advantage. The best that one can hope for from this confused and ill-advised measure is that it will not be copied abroad.

10.45 p.m.

I am glad that I came into the Chamber as the hon. Member for the Cities of London and Westminster (Mr. John Smith) was addressing us, because his speech made me cast my mind back to many previous debates in which I have taken part, in the House and elsewhere, on the effect of imports on this country.

At the outset, I make clear that I am no protectionist in the sense that the old Tory Party was protectionist, but I am at least a Lancashire Member who has had to deal at close quarters on this very problem with my right hon. Friend the President of the Board of Trade. [Interruption.] Does the hon. Member for Horsham (Mr. Hordern) wish to intervene? I shall give way if he does. If I say anything which is controvertible, I shall not stand on ceremony but I shall follow the usual courtesies of the House which hon. Members opposite extend to me.

The hon. Member for the Cities of London and Westminster referred to the table of exempted goods, and I am prepared to admit that, if one goes through the thing with a fine-toothed comb, one can find some absurdities, just as one can find them in, for instance, the schedule of Purchase Tax applications and other forms of taxation. But the hon. Gentleman mentioned one item which interests me, that dealing with old clothes and rags. There might be a very good case for leaving that item in the table. Hon. Members may not know that the greatest importer of old rags and clothing in Europe is still our neighbour Italy. Italy does it on a fantastic scale.

I am grateful, Mr. Speaker. I thought that we were following a line of argument which was apposite to the Motion and, therefore, in order. If we are to examine this matter, and if hon. Members support their arguments by citing particular cases, surely it is reasonable for me, speaking off the cuff and unprepared, to reply to the points made? That is all I am doing.

Order. The hon. Gentleman may speak about the importing of rags into this country. He must not seek to debate an equivalent Italian Ways and Means Motion or the rag industry of Italy.

Perhaps I might assist. It may be convenient if I point out that the Ways and Means Motion is drawn in a form which permit amendments which add to the exemptions list but it does not permit amendments which would delete items from it. In other words, my hon. Friend the Member for Westhoughton (Mr. J. T. Price) may be satisfied that rags and old clothing will remain on the exemption list, assuming that the House resolves the Motion, and the item cannot be taken off by amendment.

If I still have the Floor, perhaps I had better press on to what I wanted to say, apart from the reference to rags. If rags are contraband and not to be discussed, I pass to something much more important to me as a Lancashire Member.

When I was a boy, the great cotton industry of Lancashire was based in Manchester. Not only was that the place where the finished goods were put into great warehouses to be sold to all countries of the world; it was also the place where all the merchanting was done, where all the foreign trade was done and where the machinery of exchange was to be found. I used to carry bills of exchange, first, second and third bills, to all the exporting firms in Portland Street and elsewhere.

Over the past years, however, with all the new techniques of business invented by the City of London, the merchanting of Lancashire textiles has been moved from Manchester, its home, down to London, the City of London which the hon. Gentleman represents. Most of the merchanting of cotton textiles and other textile goods made from the new fibres invented by modern science is done in London. The result is that there are people in London who have set themselves up purely as merchanting organisations and are more concerned to suck in by vast unrequited imports great masses of textile materials from all the four corners of the world, regardless of the needs and demands of the home-based industry.

The effect of this process, as everybody who has lived with it knows, is that between 36 and 40 per cent. of our home market is occupied by imported textile goods. This is a matter of history. There is nothing that we can do about it here tonight, but it has a strong bearing on the Motion. Not only the scores of thousands of workers who have been forced out of our native industry by this process, but also the people who have provided the capital—the entrepreneurs and the manufacturers, who are worthy men in Lancashire—may have had their faults, but we have had a common platform on this.

Has the hon. Member observed that in line 179, "Old clothing and … rags" contains also the ominous words "and other textile articles"? What I and, I am sure, the hon. Member want to know from the Government is whether that excludes from the necessity for import deposits the whole of the textile imports. If not, what does it exclude?

The hon. and learned Member has raised a valid point, but I have been warned off that point and it would be difficult for me to venture into it and incur further displeasure from Mr. Speaker. Perhaps my hon. Friend the Financial Secretary will deal with that in replying to the debate.

Just a moment. If I get much more of this, I am quite capable of going until half-past eleven without any prompting. I know that hon. Members opposite are straining at the leash to have a few words in the debate, and I had no intention to intervene until I heard people talking airily about importing rags into this country as though they were of no importance when great industries are based on rags.

If we in this country—I am not dealing now with Italy, because I am not allowed to—sufficient quantities of woollen rags as practised by many of our competitors overseas, we have the starting point for a new industry without importing vast quantities of best Australian tops and things which are expensive and take our foreign exchange. If we start with the rags and put them through the carbonising process, the wonders of modern science will produce the short fibres which will produce the finest textile goods.

I did not mean to speak disparagingly of rags. I simply thought that we had enough here.

It all depends what the hon. Member means by rags. [An Hon. Member: "Glad rags."] I am trying to be objective and fairminded and not controversial. I never deliberately set out to be controversial in this House. I have lived here long enough to know that the best way is to put a valid point pleasantly and forcibly.

And quickly, of course. I am not sure what my hon. Friend from the North-East Coast has to do with this question. I thought that I was dealing with textiles.

When I see a situation in which 36 to 40 per cent. of our home market is occupied by vast amounts of imported textile goods from all the four corners of the world that we can make much better ourselves here, I begin to wonder.

I will make way for the queue presently.

When the hon. Member for the Cities of London and Westminster (Mr. John Smith) goes into the rarified atmosphere of how these demands of the Treasury will be financed and how the money will be furnished to provide 50 per cent. of the import value of the bills of lading for the goods coming in, I say to him seriously that it is not the purpose of this exercise to place any great extra demands on the banking system. The purpose of this exercise, as a short-term remedy, is to call a halt to many of the imports of things that we do not need. I shall be grateful at the end of the day if the Chancellor, with a smiling face and not so overwrought, says that there has not been a great demand made by the banking system because instead of importer Mr. Y who operates in Aldgate or somewhere in the East End of London—

Will the hon. Member allow me to make my own speech? I do not need any prompting. The purpose of the Motion, which I applaud, is to stop unnecessary imports into the country, to ensure that goods are not put on tramp steamers in foreign ports and sent to British ports where it is hoped that they will be bought. This is the result of importers making a damn sight more out of importing foreign goods than by selling British made goods. Everyone in Manchester knows this. I apologise to the House for saying this so robustly, but it is none the less true.

At the end of the day I hope we shall begin to see daylight. I am never optimistic about the statements of Chancellors of the Exchequer, or of other Ministers of whatever party, because they are the captives of the civil servants behind the scenes. I am never over-optimistic but always sanguine. Until the country stumbles on the fact, which it is our duty to impress upon them, that we must get out of debt and stop living beyond our means and importing goods we do not need which we cannot afford, we shall not begin to see daylight. That is my simple way of looking at it; it may be very crude by comparison with Oxford dons on both sides of the House who have had an expensive education on how the financial machinery of the world works. I sometimes feel—and I say this seriously and not flippantly—that it would make more sense if we transferred the financial machinery to the Bookmakers' Protection Society, who know the rules affecting the gambling propensity of the world. I opposed gambling in this House—

I am on record as doing so, as the hon. Member for Ormskirk (Sir D. Glover) knows perfectly well.

Order. There is a limit to what even the hon. Gentleman can get into this debate.

Mr. Speaker, I am most obliged for being brought back on the target, as it were. I have no intention of detaining the House. I hope my hon. Friend gets the Motion tonight, or whatever he wants to do with it. I am so often in the position of having to criticise—

I so often have to criticise my hon. Friends that it is a pleasure for once to be able to support the Front Bench, and I do so wholeheartedly.

10.59 p.m.

The Financial Secretary said that equipment to be used for shipbuilding and ship repair would be exempt, but I do not see that mentioned in the Motion. I presume that he was anticipating the Bill which will be published tomorrow and, if this is so, he is implying that the Bill will have a completely different Schedule and that it will not slavishly follow the 1959 Schedule. If this is so, will all welding equipment and electrodes which are primarily used in shipbuilding be exempt? They can of course be used in atomic energy, construction and so on. This is an important matter which should be cleared up.

My second point relates to lines 29 and 30 of the Schedule, which say specifically that Chapters 7 and 8 (all headings) are exempt. Those are the horticultural chapters of the 1959 Customs Schedule, and they contain a great many items which might be reconsidered. Will the Financial Secretary undertake to discuss with the Minister of Agriculture—

My hon. Friend did not hear the Financial Secretary. He informed the House that, under the terms of the Motion, we can add to but not delete from the Schedule.

That is precisely what I am seeking to do. The Financial Secretary has said that we are to have a Bill tomorrow. He has also implied that the Schedule to tomorrow's Bill will not be the precise twin of tonight's Schedule. Between now and when we come to consider the new Schedule in Committee, can the Financial Secretary consult with his right hon. Friend the Minister of Agriculture?

Turning to Chapters 7 and 8, I suggest that, instead of exempting subheading 07.01 G, chicory, and H, mushrooms, they could well carry the duty. We have an adequate home production of chicory and mushrooms.

It might assist if I repeat what I said. I do not think that it has been taken on board by the hon. Gentleman. The Ways and Means Motion as drawn permits hon. Members to move Amendments which will add exemptions to the list. It permits neither the Government nor hon. Members to delete exemptions. That is how the Motion has been drawn. It is useless asking me to consult my right hon. Friend the Minister of Agriculture, with the Motion drawn as it is.

That might be relevant to a debate on another Motion. It will not be much to the point on this one.

I am sure that the House is grateful to the Financial Secretary. As usual, he treats us with great courtesy. My hon. Friend's problem is that, advertently or inadvertently, the Government have tied our hands. Can the Financial Secretary say whether that is the deliberate intention of the Government or whether there is a means whereby another Motion can be tabled including words which allow us to remove items, if at a later stage the Committee wishes to do so? I am not convinced that it is necessary to make such changes, but that is not the point. The House should be allowed to make changes later in the Bill if it wishes.

I am grateful for that helpful intervention, and I am anxious not to get out of order on the narrow and parsimonious drawing of this Ways and Means Motion. All that I can do now is to draw the attention of the Financial Secretary to the bad way in which it is drafted. He has told us that there is to be a new Schedule tomorrow. Cannot we have that one drawn in such a way as to enable us to give proper attention to these agricultural and horticultural products?

11.5 p.m.

In general, I welcome the conversion of my right hon. and hon. Friends to the concept of some import control, although many on this side would prefer physical controls to this measure, for sound reasons.

The 50 per cent. deposit for six months means that firms making these imports will have to pay about 8 per cent. for the money, and that, in turn, will mean an overall increase of about 2 per cent. on the cost of the imports. If import costs are to be increased, it should be done by duty, not inadvertently as a measure of control. In this respect, physical controls have a distinct advantage and are far more selective than this Measure.

My hon. Friend the Member for Bedford (Mr. Brian Parkyn) mentioned the effect on the chemical industry. I must declare an interest here. It is imperative that certain chemicals, at least, be exempted from the duty, because a great many of the chemicals which are classified as manufactured goods are not made here, but are vital for the production of chemicals used both here and for export. These are not luxury consumer goods which we can afford to do without.

I mention two random examples. First, ethylene diamine, which is not made in this country, but is essential for the manufacture of sequestering agents used in the textile and other industries. It would be nonsense not to exempt this kind of chemical, because we must have it for the support of other industries.

Secondly, propionic acid. That is not made here.

Of course it could and should, be made here. The point is that, to the best of my knowledge, it is not. The plants cannot be brought into operation overnight by waving a wand. This raw material is vital for making weed killers, which are exported on an enormous scale.

These two examples are sufficient to illustrate the point without boring the House further. The list simply must be re-examined concerning the chemical industry. If it is left as it is, the cost of these raw materials will be pushed up by 2 per cent. The chemical industry, more than any other, is very price sensitive. Time and again I have known contracts lost because of a fraction of 1 per cent. on the export cost. We cannot afford that risk. We should lose appreciably.

I hope that my hon. Friend will reexamine the position of manufactured chemicals and consider exempting from the list certainly those chemicals which are not manufactured here. I believe that we shall have serious trouble in the industry if this is not done.

11.10 p.m.

We have heard a lot about foodstuffs and various vital liquids, but nobody so far has said a word about wine. I hope I have the attention of both the Chancellor and his hon. Friend, because the question I want to ask is not about wine imported for home consumption but wine imported for blending here, and bottling, and then exported. The House will be aware that there is a growing demand, particularly in the United States of America. for wines imported into this country, bottled here and then exported. My own city is proud to take part in the sherry trade. I believe that 20 per cent. of the consumption of alcoholic liquor in the United States is accounted for by the sherries sent over there from the United Kingdom.

I do not see anywhere, among all these substances listed, any mention of wine or the exemption which I am seeking for wine exported. I have looked very carefully. I see mentioned such substances as lemon juice and vinegar, but wine is absent. Tobacco seems to be safe. It would seem that wine, which accounts for a very substantial amount of our export income, should be listed also. I hope that the right hon. Gentleman will be able to give a clear answer to this question this evening, because it would be quite wrong that those who are concerned in this important industry should be left in doubt for a single day. I repeat, I am not making a plea for wine brought in for consumption in this country, but for the very significant amount which comes here to be blended, bottled, and exported.

11.12 p.m.

I want to raise with the Financial Secretary a question, not as to the merits of this Motion, but as to the power under which it is made or, perhaps, is purported to be made. As the House will appreciate, it purports to come into effect on Wednesday next, 27th November; that is, the day before the House will be asked to give a Second Reading to the Bill. The question I want to ask the Financial Secretary is a simple one, to which there may be a simple answer, under what powers he is proposing on Wednesday to levy taxation solely, apparently, on the authority of a Resolution of this House.

I do not know whether the hon. Gentleman is going to call in aid the new Act, the Provisional Collection of Taxes Act, 1968. If he is, let me say at once that it seems to me on a reading of that Act that that Act does not empower this Resolution to come into effect on Wednesday. Very briefly, my point is this. If one looks at Section 1 of that Act one sees that it relates only to an order first of all continuing an existing Act, and secondly, containing a declaration that it is expedient in the public interest that the Resolution should have statutory effect under the provisions of the Act.

Neither of those conditions is satisfied in this case, and therefore I think that before the House can possibly go through what may turn out to be only the form of passing the Resolution we must be satisfied that the hon. Gentleman, in bringing it forward and asking the House to carry it, is doing something which can validly be done. As a general proposition, I do not suppose he would dispute that a mere Resolution of the House, as opposed to legislation, does not authorise the imposition of taxation. There is required to be some Statute such as the Provisional Collection of Taxes Act or the old Gibson Bowles Act, or the new one, such as we are familiar with at Budget time, but there is no citation in this Resolution of the Provisional Collection of Taxes Act or of any such statutory power enabling the Resolution to impose it.

There may be a simple answer. I have been long enough at the Treasury to know that the Treasury has many weapons in its armoury; though Customs and Excise sometimes think they have but are not always right. I really should like to know—we have not been told—just what these powers are under which the hon. Gentleman, being fortified only by a Resolution of this House, will start imposing, from Wednesday, this new tax with no Statutory authority quoted.

Motion made, and Question proposed, That the proceedings of this day's sitting be suspended—[ Mr. McBride.]

Order. I have to accept the Motion when it is put, under the Standing Order.

Question put forthwith, pursuant to the Standing Order (Sittings of the House (Suspended Sittings)).

The House proceeded to a Division. Mr. MCBRIDE and Mr. IOAN L. EVANS were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. SPEAKER declared that the Ayes had it.

Question agreed to.