HC Deb 10 July 1968 vol 768 cc491-4
1. Mr. Crouch

asked the President of the Board of Trade what are his latest estimates as to the volume and value of imports in the second half of 1968; and how they compare with those given in the Financial Statement.

The President of the Board of Trade (Mr. Anthony Crosland)

I would refer the hon. Member to the Answer given in this House on 25th June by my right hon. Friend the Chancellor of the Exchequer.—[Vol. 767, c. 217–8.]

Mr. Crouch

That does not take us very much further forward. I remind the President that we witnessed in the first quarter of this year an increase in imports due to a spending spree; we witnessed in the second quarter of the year—[HON. MEMBERS: "A question."]—I am coming to the question—and in the second quarter we witnessed a still further increase due to restocking. I ask the President of the Board of Trade if he can expect a down-turn of these figures for the second half of this year.

Mr. Crosland

The Question related to whether the Government would give additional forecasts for the second half of the year beyond what was given in the Financial Statement by the Chancellor of the Exchequer, to which my Answer was to repeat his, namely, "No". I think the Government have a good record in publishing the bases of its forecasts. Since it is only a very few months since it was forecast, we had better see how we go.

2. Mr. Crouch

asked the President of the Board of Trade by how much imports are at present running at a rate in excess of that implied in the forecast published in the Financial Statement in March.

Mr. Crosland

Imports of goods and services in the first quarter of this year were some £70 million higher, at 1958 prices, than the rate forecast for the first half-year.

Mr. Crouch

That is extremely disappointing and I hope that we can hear something more encouraging from the Government—

Mr. Speaker

Order. The hon. Member must put a question.

Hon. Members

"Is he aware?"

Dame Irene Ward

Do not worry, he is not aware.

Mr. Crouch

Perhaps, Mr. Speaker, I was not sufficiently awake, I hope you will excuse me. Is the right hon. Gentleman aware that there is concern in the House least he should resort to panic measures later this year by way of import controls to try to right the balance which seems to be getting out of hand?

Mr. Crosland

I am aware that the figures for the first few months of this year on imports were not as many of us would have hoped. I think it will take some time for devaluation to have its effect. I am certain that it will have its effect. In the meantime I have no intention of taking any panic measures.

Mr. Cant

As the upturn in the import cycle is always the Achilles heel of the visible balance, will my right hon. Friend commission a study into the prior deposit system for imports, as no study exists in this country at the moment?

Mr. Crosland

I do not think my hon. Friend's assumption is right that imports are always the Achilles heel. On the contrary, if he looks—as no doubt he has done—at the findings of the recent Brookings Study he will see that if one takes a long period what is peculiar about the British experience is not the behaviour of imports but the behaviour of exports.

Mr. Blaker

Is it not a fact that to some extent high import figures are caused by the fact that suppliers of manufactured and semi-manufactured goods overseas have been cutting their prices to offset the effect of devaluation? If this is so, is not the effect likely to continue permanently?

Mr. Crosland

It is certainly true that overseas suppliers to this country, as one might have expected, have been cutting prices in the post-devaluation situation and naturally wish to preserve their share of the market in the new conditions, but this is only one of the factors causing the increase and it is much too early to say that the long-term trend will be substantially different from what we expected a few months ago.

Mr. Sheldon

Since following devaluation we anticipated that the effect on imports would be much more certain than the rise in exports and this has not happened to anything like the extent that was hoped for, is it not time to look at the problem more carefully and to make sure that we avoid taking action too late, as has happened too often in the past?

Mr. Crosland

I can assure my hon. Friend that I look at the matter carefully and almost continuously, but he must accept that devaluation cannot be expected to operate rapidly on the state of imports. Many of the imports now coming into the country are still imports ordered before devaluation and it must take a considerable time for the pattern of trade in these matters to alter.

Mr. Patrick Jenkin

Is there not now evidence that much of the stock-building of imports going on is due to the fear of import controls, and is not this gravely affected by the continual harping of some of the right hon. Gentleman's hon. Friends who desire to impose import controls?

Mr. Crosland

It is extremely hard to say from the figures whether there is any precautionary element due to a feeling that there might be import controls or restrictions of any kind, but if this feel- ing exists let me make clear that the Government do not have any intention of imposing import controls.