§ Q3. Sir R. Russellasked the Prime Minister what reply he has sent to the letter he received from the Chairman of the South Africa Executive Committee of the, London Chamber of Commerce, expressing concern at the Government's decision not to supply aircraft and naval vessels to South Africa.
§ The Prime MinisterI have replied to the effect that there is no reason to think that United Kingdom exports of non-military goods will be jeopardised by continuing the policy which we have followed since 1964 and that we want this important market to be developed by British exporters.
§ Sir R. RussellIs the Prime Minister aware that in the first two months of this year our exports to South Africa were £4 million less than in the corresponding period last year, and were no higher than our imports? In view of this deteriorating position will be reconsider the whole policy?
§ The Prime MinisterThe hon. Gentleman will be aware that our exports in 1967, despite the interference in the concluding months by the dock strike, were £257 million compared with only £236 million in 1964, when the arms embargo was introduced. As to the early months of 1968, obviously they would be affected by the dock strike.
§ Mr. John LeeCould my right hon. Friend do something about reducing imports from South Africa so as to help this country and hurt South Africa at the same time?
§ The Prime MinisterNo, Sir. In general, obviously devaluation provides an incentive to a general reduction of imports, but I was not thinking that it should be applied in respect of individual countries. My hon. Friend will be interested to know that both exports and imports with South Africa have risen very substantially over the last three years.
§ Mr. HeathIs the Prime Minister aware that the favourable balance of trade with South Africa, which is what matters, taking both exports and imports into consideration, has steadily declined in 1965–66 and 1967 and in the first two months of this year has declined still further? It is this trend which has to be changed by these additional exports.
§ The Prime MinisterI have already commented on the first two months of this year. The imports are now revalued at a higher price, as is general with most of our imports. While we must all have concern about any worsening of trade to all markets, I totally disagree with the right hon. Gentleman if he thinks that the way to fill that gap is to breach the agreement we made with the United Nations, following the decision of the United Nations.