HC Deb 10 November 1958 vol 595 cc154-64

Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]

10.1 p.m.

Mr. William Teeling (Brighton, Pavilion)

I want for a few minutes to talk on the subject of allowances for travel abroad during the coming year. I think that my hon. Friend the Economic Secretary to the Treasury, who is this evening taking his first Adjournment debate in his new post, will agree with me that there was some shock felt in the country when we were informed, after all the other things that we had been told about the easing of the financial situation, that allowances for travel abroad were to remain the same, not just temporarily, but for a whole year from 1st November.

That seemed to me and many of my hon. Friends to be excessive. We fully understood that it might not yet be possible to make an alteration, but that the present state of affairs should be continued for a whole year seemed rather excessive. It is because of that, having asked a Question in the House and having got an Answer which was probably the only Answer which could be given in the short time allowed, that I decided to seek permission to raise this matter in more detail tonight.

I cannot but be reminded of as far back as 1947, when I was a Member but when the present Minister of State, Board of Trade, my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan), had not yet been elected. He asked me to help him over the following story. It had happened to two American friends of his, who were great friends not only of this country but of Europe as a whole, and who had decided to visit Europe.

So as not to cause any embarrassment or trouble, they decided to bring with them almost everything that they could possibly need on the journey. When they reached Southampton—the boat was going on to France—they decided, not having been to England for years, that they would stay here for a few days. Having none of these restrictions in the United States, they went through Customs, there being told that they would have to pay duty on the things they had brought with them.

They explained that those articles were not meant for England and that they were continuing on their journey to France later. The Customs official said that the goods would have to be sealed and that when they reached Dover on their way to France they could pick them up again, but that, temporarily, they would have to deposit about £100, which would be the equivalent of the duty. He assured them that they would be able to get back that money when they reached Dover.

They explained that they did not have £100 and had simply decided to get off the boat for a few days. The Customs official said that they would be able to pay in dollars and travellers' cheques. They handed over dollars to the equivalent of £100 and obtained a receipt. The Customs official explained that if none of the goods had been opened when they reached Dover they would get their money back.

The two Americans went to the Savoy and had a quiet time in London. They finally arrived at Dover, where they asked for their dollars to be returned. "No," said the Customs official, "You cannot have dollars. You can certainly have £100." The Americans said, "We do not want £100. What use will that be on the Continent? We want our dollars back." The Customs official told them that he was sorry, but they could not have them, because it was not allowed. Being very fond of England they shrugged their shoulders and said that they would take the £100, and with that money in their pockets they moved towards the boat, whereupon a detective came up to them and said, "I am very sorry, but you are allowed to take only £5 each out of the country." There they were—absolutely stuck.

My hon. Friend the Member for Reigate asked whether I would raise the matter in the House. I took it up with the late Sir Stafford Cripps and the Americans got back their £100 in dollars, but that was about six months afterwards, when their visit to the Continent was over.

That was in 1947. We are now in 1958, but the position is almost exactly the same. A person can take £10 instead of £5 out of England now, but surely we have advanced more than that in those ten or eleven years. The British Travel Association organises trips and tries to help to bring dollars and other currencies into this country, and to persuade people to visit Britain.

Until quite recently my hon. Friend was very largely responsible for doing everything to help the British Travel Association; in fact, he was responsible for the conference which took place in the summer, and when I asked the B.T.A. to give me some figures on this matter I was intrigued when I received from them a document which I know was almost entirely connected with the organisation and the meeting for which my hon. Friend was very largely responsible.

One of the things that the B.T.A. said in this document it feels very strongly about is that the maintenance of an adequate foreign currency allowance for travel by British residents, available for all countries, including the dollar area, is necessary for the full development of the travel industry and will, in the long term, increase traffic in Britain. A few weeks ago, my hon. Friend agreed with that statement. I should like to know what the Treasury's attitude to it is now.

There is no doubt that the average person who goes abroad spends nothing like £100. I am told that the figure is about £40. In another place Lord Gifford raised this question the other day, and I believe the Government went so far as to say that the £100 was up to 75 per cent. used and, therefore, there was no need to worry or to change the law. But if it was used only as to 75 per cent. why should we worry about allowing those people who want it to have the extra sum that they feel they need?

Hon. Members like myself, who constantly travel abroad, find, on going through the Customs, that somebody there spends his whole time asking persons what they are taking abroad with them. That person could be far better employed doing something else, because most people will not tell him that they are taking more than their bank has warned them they can take. Yet almost everybody knows that a person who really needs more than £100 gets it. Nobody knows that better than the Treasury. I am not talking about excessive sums, and of gravely abusing the situation; I am talking of little amounts over the limit. These are easily obtained. We all know that people are taking extra sums with them. It may be that one in a thousand people are searched in this connection.

A few years ago a person was not allowed to take her jewellery abroad. I believe that the wife of one hon. Member had her engagement ring taken from her, and fur coats were also taken. That practice has now been stopped, but we still have this silly and very arbitrary limit of £100, which becomes especially arbitrary in the case of the United States and Canada. It may not be so arbitrary in respect of France, Italy and other European countries. In those cases, most people do not spend more than £100 per head.

When it comes to going to the United States or to Canada £100 will not get us very far. It would not see us through 10 days in the United States, although if we go on business we get an extra allowance. The idea surely is to bring together the British and the Americans in friendship and understanding. Many people do not get an opportunity of travelling to the United States. It is quite time, if we are to remain united, that we knew a lot more about what is going on in that country, and especially so when we manage to get there.

Still more important is Canada, which is also in the dollar area. After the visit here of the Canadian Prime Minister during the last few days it is vitally important that the British should understand about life in Canada and should go there. I have always advocated that young people should go to the Empire, especially to such countries in the Commonwealth as Australia, New Zealand and Canada. Canada is in the dollar area, and £100 would not see us very far over there.

We are now strong financially and our condition has substantially improved. I can remember how shaken I was before the war when my German friends came here and said, "We have only a few pounds. We are not allowed to bring money out." We felt that something must be wrong with the currency of their country. It is, therefore, wrong, when our people go to the United States or to Canada, that they should have to borrow or be dependent upon the charity of their friends and relations. People there will say, "How is it that Britain, which is supposed to be doing so very well, is still in this position?" Why should we not waive this idea of £100 and bring the limit up to £250 or even as far as £1,000? The British Travel and Holidays Association feels that that would greatly help in getting people in those countries to come here in return.

I could never understand why, in Scandinavia, one is allowed so much money. That goes back to the days of Sir Stafford Cripps. It cannot only be that a few people go there, because a great many people go Ito places like Denmark and other countries in that area. There must be reasons for it which I do not understand. The figures which have been given to me by the British Travel and Holidays Association show that in Germany, defeated by us in the war, they can now have an unlimited amount of money to come to this country. In Denmark, the amount is unlimited. In Italy, a country which was also defeated by us, the amount is £171 per year as distinct from our £100. In the Netherlands it is £188, and there is an unlimited additional allocation in approved cases. In Portugal, the amount is unlimited; in Sweden it is £345 per year; and in Switzerland, Belgium and Luxembourg it is unlimited. Why should we have a limit of £100?

It is not only the question of tourists, but sick people. I know of someone in my constituency who wants to go abroad on doctor's advice. She is to be allowed £7 for herself and £3 for her companion, that is, £10 a day, the same as is allowed for a business allowance. Surely there is nothing to stop her having more, particularly as she has money abroad which is "frozen" and which she is not allowed to use. It seems to me very unfair. After we have waived so many restrictions I hope that before this Parliament is over we can put ourselves into the position of saying that an adequate amount of money should be released for travel. Most people would be glad, and we should find that the privilege would not be abused. I believe that £250 at least would not be too much.

10.15 p.m.

Mr. Geoffrey Rippon (Norwich, South)

I wish briefly to support the argument of my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling) and to congratulate him on taking the initiative in raising this matter.

I sincerely hope that the Government will take action forthwith to raise the foreign currency allowance. I see no justification whatever for the present restrictions, which are utterly unreal. They are tolerated only because the vast majority of people cannot afford to spend more than £100 per head. Although the businessman can obtain a special allotment from the Bank of England, why should he have to go through that rigmarole when he is merely going to increase the trade and exports of the country? Businessmen may be in considerable difficulties if they have not been able to plan all the details of their itinerary in England and all the details of their transportation costs.

This case was forcibly made in a letter in the Daily Telegraph by the Assistant General Manager of Thomas Cook and Son. The limit of £100 in the dollar area is absolutely ludicrous, even accepting that there must be some limit pending full convertibility. Whatever allowance is made, it should bear some relation to the internal purchasing power of the dollar.

Perhaps the Economic Secretary may be able to say what is the cost of this procedure to the banks, including the Bank of England, but—more important still—will he direct his attention to the cost to the nation of allowing it to be thought abroad that we are on our beam ends?

10.17 p.m.

The Economic Secretary to the Treasury (Mr. F. J. Erroll)

My hon. Friend for the Pavilion Division of Brighton (Mr. Teeling), as we always expect of him, made an agreeable and pointed speech. He was supported by my hon. Friend the Member for Norwich, South (Mr. Rippon) with some extremely cogent remarks, some of which I thought I had read in an earlier letter in the correspondence columns of the Daily Telegraph, and the letter to which he referred was doubtless a reply to his own letter.

My hon. Friend who initiated this debate made three points. First, he said that this limit of £100 on the basic travel allowance was an unwarrantable restriction on the freedom of individuals to go where they liked, particularly to Canada and the United States of America. Then he said that British prestige abroad was harmed to some extent by the continuance of this restriction. He also made a very important point about the allowance for those going abroad for health reasons.

I am sure the House thoroughly enjoyed his story of the experience of two American tourists in 1947. Fortunately, I have not got to answer for them at this Box tonight. What went on then was in the days of an Administration which was dismissed by the country no less than seven years ago and which does not seem very likely, on its present form, to find its way back. I admit straight away that there may be some cases in which a limit of £100 on the basic travel allowance may cause inconvenience or difficulty; nevertheless, that allowance can provide a very reasonable holiday for most people.

Perhaps I might give an example. Take the case of a man, his wife and two small children who wish to spend a holiday in the South of France. For that purpose they could draw altogether, basic allowance of £340, a further allowance of £35 for local car hire, self-drive or chauffeur driven, and they could pay their return air fares in sterling outside the foreign currency allowance.

The fares in this case would amount to £120 at the family tourist fare rate. This man would thus be spending just short of £500 for his family's holiday abroad, and this would amount to about one-fifth of his net income after tax if he were earning as much as £3,500 a year. I doubt whether many people in this country are prepared to spend as much as one-fifth of their net income on their annual holiday

This would perhaps account for the fact that the average amount taken by travellers, drawn from a sample during the third quarter of last year, amounted to £55 per head for Scandinavia, £47 per head for the rest of Europe, and £69 per head for America and Canada. This supplements the figures given in his speech by my hon. Friend the Member for Brighton, Pavilion. The point made by my hon. Friend about the greater allowance permitted for Scandinavia is valid, but I should like to point out that, as the higher allowances have been fixed, there seems to be no reason to reduce them again to the lower general rate when the average figure is only £55 per head for Scandinavia.

If the amount available for the United States and Canada is not enough, it is surprising that the average taken is as low as £69 per head. My hon. Friend referred to the importance of British people visiting the United States and Canada, a matter in which he has my full support, but it must be remembered that it is not only a question of what one spends there, it is also a question of the cost of getting there, which is considerable and which can be paid for entirely in sterling before one makes the journey. The sum of £100 made available is, as shown by the average, not fully taken up in all cases.

I do not want to pursue the question of averages lest it be taken as a reason for increasing the maximum on the ground that so much of the total allocation is apparently not used. I should like to remind hon. Members that, although we cannot be absolutely exact in our figures, our estimate of the total cost of the basic allowances in 1957 was no less than £78 million out of a total cost of £104 million for travel. The total figures involved are very considerable. Further freedom was restored to the private traveller in the middle of 1957 when the basic travel allowance became available for spending in the dollar area. This year other relaxations which we could afford have not unreasonably taken priority over private travel.

In so far as other countries notice these matters at all—and I suggest that my hon. Friend is perhaps making too much of the suggestion that the limit on the private traveller makes us look like a poor country—they will surely note with approval the other important relaxations to which we have been able to give effect this year. If I may give one or two examples, we have removed the control on the importation of sterling notes into this country, a matter on which many foreigners felt very strongly in the past. We have also freed from control a wide range of imports from the dollar area. Furthermore, we have introduced a scheme which enables United Kingdom residents to send small cash gifts abroad.

We have also to take into account, when considering the cost of removing exchange control restrictions, the very considerable burdens which we have assumed on overseas account by our promises to contribute further to Commonwealth development and to increased quotas for the International Monetary Fund. When my hon. Friend refers to what the Germans, the Dutch and certain other nations can do, I should like to point out to him that they are not taking on commitments of this sort on anything like the same scale as we are taking them on.

Looked at against this general background, it is surely not unfair to say that the private traveller is as well provided for as most people would consider justified. Nevertheless, the Chancellor hopes to increase the basic travel allowance as soon as possible, but he is convinced that the decision not to make an increase this year was the right one.

My hon. Friend mentioned travel abroad on health grounds, and quoted the case of a friend, or of a constituent of his—

Mr. Teeling

Both.

Mr. Erroll

He is very lucky to have someone who is both a friend and a constituent.

Popular attention naturally concentrates on the basic travel allowance of £100, but it should be borne in mind that many people who have to go abroad for purposes other than for private holidays can get the foreign exchange to do so. Broadly speaking, there are satisfactory special allowances for travel on business, for health or educational reasons, for attendance at conferences, for professional work and the like.

I must admit that these special allowances do require some examination of individual applications, but I can assure my hon. Friend the Member for Norwich, South that the formalities associated with this have been gradually reduced to the point where they are no encumbrance on the bona fide applicant, and we can go no further in this direction while continuing to restrict the allowance for the ordinary tourist.

For a person wishing to go abroad for health reasons, the maximum daily rate is £7, where the person is accompanied, or £4 if he is unaccompanied. This is in addition to the basic allowance of £100. A slightly larger allowance is made available for the American account area, and, according to the particulars that my hon. Friend has just given us, his constituent seems to have done rather well.

Details of these allowances, and of the accompanying medical certificates required can, of course, be obtained by any individual from his own bank, and I assure the House that the formalities are not at all complicated or difficult to comply with. I hope the House will agree from what I have said that, in the present circumstances, the allowances for travel are reasonable, particularly when one takes into account the many other commitments into which the Government have entered.

Mr. Teeling

Can my hon. Friend explain what he means by saying that the Chancellor intends to change this later? Does he mean in the coming year? Further, when he mentions the amount of money spent on Commonwealth development and so on, can he tell us the cost of increasing the allowance to, say, £250?

Mr. Erroll

I did not go quite as far as my hon. Friend has suggested in committing the Chancellor. I said that he was hopeful of increasing the allowance, but I did not say when he would do it because that, of course, depends on the picture as a whole, which I have tried briefly to sketch.

As for the cost of increasing the allowance to the figure suggested by my hon. Friend, any such estimate of the increased cost must be entirely hypothetical, because one cannot tell to what extent it would be taken up, or to what extent it would affect the other special allowances at present granted. I hope that my hon. Friend will look carefully at the points that I have made, because I think that he will agree that the present arrangements are the best that we can offer at the present time.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.