FOREIGN TRAVEL ALLOWANCE (£50 LIMIT)

HC Deb 30 June 1969 vol 786 cc48-97

4.6 p.m.

Mr. John Peel (Leicester, South-East)

I beg to move. That the £50 travel limit is unworthy of Great Britain and should be abolished. I am very glad that after many attempts over nearly 12 years in the House to be successful in a Ballot my name eventually came out of the hat first and thus enabled me to move this Motion.

I regard this limit on our travel freedom as a typical piece of frustrating Socialism. It is an obstruction to one of the dearest freedoms of the British people, namely, our ancient freedom to travel and to move amongst other peoples and in other countries where and when we want. It should never have been reimposed in 1966, 21 years after the end of the last war and seven years after it had been abolished. It is bad on every count, and should be removed forthwith.

I shall submit a number of general reasons for my Motion and a number of more specific ones. It is understandable that during war it is necessary to have foreign exchange control. But when war is over free countries should remove it at the earliest possible moment. It is a badge of dictatorship.

Mr. Eric S. Heffer (Liverpool, Walton)

Rubbish.

Mr. Peel

Such control was first introduced before the war by the Nazi Government of Germany. No other Government felt it necessary to introduce it in those days.

We remember the old saying, "How are the mighty fallen". Britain's power and strength, economic influence and influence amongst other people, and her greatness were created by the adventurous desire and readiness of her people to move out of their small island and travel far and wide. It is a very sad commentary that she should have dragged her feet—

Mr. Heffer

The idea that all the British people were able to travel all over the world is a lot of rubbish. Millions of our people who did not earn sufficient to keep body and soul together could not travel to the next town, never mind all over the world.

Mr. Peel

But the fact still remains that this small island would never have reached the stage it did reach if many millions of its people have not travelled abroad.

One of the saddest commentaries is how Britain dragged her feet after the war in getting rid of this obstacle. Instead of being in the forefront of the movement to get rid of it, she was very slow to follow others. However, she did, and I am glad to say that it was under a Tory Government in 1959. One of the great condemnations of Socialism and its restrictive philosophy in regard to people's freedom of choice is that it led a Socialist Government in 1966, with hardly a twinge of conscience, when they got into economic difficulties, as they always do, to reimpose this shackle upon us. It was a serious backward step and was both unnecessary and unforgivable. I hope to be able to show that it was entirely unnecessary.

Although a waiver may have been obtained for it under Article VIII of the International Monetary Fund Agreement, it is clearly against the spirit of that agreement. Even the then Chancellor of the Exchequer, the present Home Secretary, seemed a little aware of this when, in answer to a challenge in January, 1966, from my right hon. Friend the Member for Barnet (Mr. Maudling) as to whether he intended to impose new restrictions on the travel allowance, he replied: The silly season has arrived rather early this year. Let me say at once—in order that Mr. Maudling may sleep soundly in his bed tonight—that I have no plans to cut the the travel allowance. Six, months late, he did—not untypical of the Government. He cut the allowance to £50.

This was derisory enough, but devaluation has made it even more so. Its retention for so long is a serious indictment, although now only one of a lengthening list of this Government's economic mismanagement's of our affairs, and it is altogether a shameful business that the Government of a great country like ours should impose it at all.

We are, more than most, a great trading nation, dependent for our standard of living and for our very lives upon countries outside our borders and upon the confidence of the inhabitants of those countries in us and in our economic management. Quite rightly, the Government are constantly urging upon our businessmen and industrialists the need to export more. All the time we hear the cry go up. We are pressed to get up and go abroad to sell our manufactures and the important part of this effort and this educative process—it is educative, since many millions of people in this country do not naturally tend to go abroad—is to visit other countries and peoples.

I do not mean just on business, but also on holiday and on extended sabbatical leave, because many executives of big firms would like to combine business and pleasure and go abroad to learn the ways of others, to study their customs and their needs, their likes and dislikes, to get to know them and for them to get to know us. Otherwise, confidence does not grow.

When I say this, I do not just mean all the package tours along the well-worn beaten tracks with gaggles of their own countrymen—

Mr. Heffer

What rubbish!

Mr. Peel

—and little contact with the people of the countries visited, although these are not unimportant. They have their uses from the point of view not only of holidays, but of cultural contacts as well, but in a limited way and to a limited extent.

Mr. Heffer

Oh.

Mr. Peel

If the hon. Member wishes to interrupt, I am ready to give way. I am tired of listening to him interrupting from his seat.

Mr. Speaker

Order. It is always best to intervene in a Parliamentary way.

Mr. Heffer

It is obvious that the hon Member for Leicester, South-East (Mr. Peel) does not like anyone making any comments at all. I am prepared not to make any further comments during his speech. I will make them if I am called in the debate. I had no intention of speaking, but after hearing this tripe I feel that I must say something.

Mr. Peel

I am delighted that the hon. Gentleman wants to intervene in the right way. I am only too delighted to have him intervene. I have no objection to his doing so, but I wish that he would do it in the proper manner, because it is slightly easier to answer him if he does, quite apart from it being slightly better mannered.

Captain Walter Elliot (Carshalton)

He has not got any.

Mr. Peel

What I think is important is that the people of our country should have the freedom to move along lesser known ways, some of the byeways of other countries, to come into closer contact with their peoples and to see and learn and communicate with them and to study their art and their culture.

The Government are, quite rightly, working for an increasingly united Europe, despite some of their hon. Friends below the Gangway, and they are not having an easy passage. But sometimes we have only ourselves to blame for many of our difficulties. I meet lots of our Continental friends through the Council of Europe and the Assembly of Western European Union and many are understandably suspicious of our insular attitude and sense that there is a strong reluctance on our part to regard ourselves as genuinely part and parcel of Europe. The restriction on the travel allowance tends to increase their suspicion and deprive us of many more opportunities for dissipating them.

The Government may and do say that there are plenty of opportunities for holidaying abroad within the sterling area, but Europe is not within the sterling area and the Government keep saying that we are good Europeans. I ask that we prove it. Furthermore, I believe that there are many parts of the sterling area where sterling is not necessarily saved and where, in one way or another, it is converted into foreign exchange. Such places are those which lie at the crossroads of the sterling and dollar areas, like the West Indies, Bermuda and the Bahamas, and other places like Hong Kong and Australia.

These are some of the general reasons why I consider the travel limit to be bad. I want now to look at some of the more specific objections to it.

First, a paltry sum like this is positively demeaning for a country like Britain. Foreigners tend to regard it as quite despicable and contrary to the whole spirit of trade liberalisation. They tend to pity us like poor relations and feel that perhaps they should try and make special terms for us or give us special hospitality or make special allowances. In some instances they do not particularly care whether we go to their hotels or not, because they know that we have to be careful when it comes to giving tips and other rewards.

The whole process involved in getting foreign exchange is tiresome, takes time, is frustrating and costs money. Those whose duties or businesses take them abroad fairly frequently may well be caught by the legal obligation to sell back their foreign currency and exchange allowances within a month of their return to this country, and quite soon thereafter may have to go abroad again, which entails more time and further expense in acquiring fresh foreign exchange. So the tedious process goes on, tedious for all concerned, bankers, travel agents and travellers.

Like all bad laws, especially those that restrict our freedom, this will have many legitimate ways of getting round it, of being avoided. I am sure that many people find those ways. I have no doubt that the Minister of State can tell me of many himself. It is not a particularly easy or dignified law to enforce.

Frankly, I find it difficult to believe that the removal of this pettifogging restriction would make all that difference to our balance of payments. Some time ago, we heard that the Government thought that it might save £50 million, but then it appeared that it was saving no more than £25 million. Compared with the amount of foreign exchange which the Government themselves spend abroad, those are small figures. I understand that the average Briton abroad seldom spends more than £40 to £45. If that is so, it is pointless to have a restriction which is meaningless to the majority of holiday makers.

Like so many restrictions, it is full of anomalies. We allow individuals, after they have paid their lawful taxes, to spend as they like—and it amounts to considerable sums of money—on expensive foreign goods, on foreign luxuries—perhaps £8,000 or £9,000 on a foreign car—on dresses, tobacco, drinks and many other items. But they are allowed to spend only £50 on travel in the countries from which these things come and to meet the people who come from those countries.

I understand, too, that people may obtain £150 to go abroad to watch a football match, but that if they want to take a healthy holiday ski-ing in the winter, they may have to pay as much as £2 10s. or more a day for ski-lifts for which they can obtain no extra allowance. No doubt in many ways it is noble to watch a football match, but it is better for our people to take healthy exercise, so why should there be this distinction? This should be considered. I understand that it affects about 40,000 people a year. If they have to pay £2 10s. or more a day for ski-lifts, they will find it difficult to spend 10 days or a fortnight abroad on £50. In these ways we have our priorities all wrong.

If it is necessary to reduce expenditure on foreign travel, in a free country it should be done in some other way, for example, by taxing expenditure on such travel. That is more appropriate to a free country than putting a bar on the travel allowance. The Americans considered this and rightly discarded it.

In paragraph 11 of the recent Letter of Intent to the International Monetary Fund, the Chancellor said that he would abolish this restriction as soon as the balance of payments allowed. Surely that has always been the case. There could not possibly be any reason for having it if the balance of payments were right. But what did that mean? Will it be as soon as we have a surplus, however small, or only when we have a large surplus? Is the Chancellor thinking in terms of a surplus now of £300 million, down to which he has come after talking to the because no doubt we shall whistle for that as long as we whistled for the £500 million? That is not good enough.

I have tried to show that we should not have this kind of restriction in a free country in peace time, let alone in a country which, like Great Britain, depends upon its foreign contacts, upon foreign confidence and upon knowledge of other lands, and I beg the Government to get rid of it now.

4.26 p.m.

Dr. David Kerr (Wandsworth, Central)

I suppose that it is inevitable that a subject like this should have a summer garden air about it. Even your attempts to call the House to order, Mr. Speaker, smacked pleasurably of the noise of a bee buzzing in one's ears more than your usual rather disciplinary bringing of the House to order.

I cannot help feeling that our ennui, if that is a permissible word in HANSARD, was fed by the deliberations, and I use the word advisedly, of the hon. Member for Leicester, South-East (Mr. Peel). This subject is a veritable fool's bladder with which to hit the Government. What a trivial little Motion the hon. Gentleman has chosen! On the one occasion when, as he has so proudly told us, he was selected out of the hat, with matters of great pith and moment surrounding us, he has chosen to attack—that is not the right word to describe his speech, but it is the one which comes most readily—the Government's record on foreign travel allowances.

The hon. Member was guilty of some extraordinarly lapses from normal logic. We are accustomed to odd processes from hon. Members opposite, but he cited the average Englishman spending only £45 per head while abroad as a justification for increasing the allowance still further. That seems to be lacking even the sort of common sense which we have the right to expect from Her Majesty's Opposition.

Mr. Peel

If the hon. Gentleman himself is so good at logic, he must know that the average man does not represent every man in Britain, thank goodness.

Dr. Kerr

For the sake of the hon. Member's own protection, I dare not give way to him again. That was even jucier than the last.

The hon. Member made some rather palsied references to the way in which the £50 travel allowance fails to work and he made many ambitious, inaccurate and misleading references to the way in which Britain had been a travelling country, quite overlooking the fact that it is only since the war that foreign travel has been extended to the great mass of the people in this country, thanks to the cheapening of communications. Moreover, it strikes me as a little—[Interruption.]

Mr. Speaker

Order. We are getting a little Continental.

Dr. Kerr

I was saying that it strikes me as a little naive that an Opposition Member should blankly ignore the interests of our own tourist trade. There has been such a fight about the Develepoment of Tourism Bill that one would have thought that a Member choosing this subject might at least have paid some lip-service to a desire to promote the interests of the British seaside resorts, the British hotel interests and certain other interests to which I shall refer.

To suggest that we have always been a nation of seafaring travellers since time immemorial, is a load of nonsense. We are a nation which has certainly developed foreign travel for the purposes of colonisation, for exploitation of the native people whom we went to visit, and whose culture we went to study. [HON. MEMBERS: "Rubbish."] Even the history books of hon. Gentlemen opposite could scarcely have taught them otherwise, if they had spared the time from slamming the Government, to study them. This has been the story of British travel, of British naval travel and military expeditions—not of great mass excursions to the fried fish and chip shop on the Costa Brava, which is what we are now witnessing as part of our mass communications.

We have to look at the purposes of foreign travel. The hon. Member waxed loud and enthusiastic about the sabbatical year taken by directors of large enterprises to study the language and modes of living and business opportunities, and so on. He failed to point out that many a director is fortunate enough to be able to be accompanied by his wife, for the purposes of the trip attached to the company's payroll as his secretary. For such trips as these there is often considerable generosity on the part of the Treasury, and a lot more than £50 per head in travel allowance is obtained.

When it comes to most of the other exceptions, non-holiday exceptions, I would like to assure the hon. Gentleman that the opportunities for legal extensions of the £50 sum are enormous and are seized with an enthusiasm which corresponds to the resources of the person so seizing them. That does not include most of the people of this side of the House, nor those we seek to represent.

Those who do enjoy very large travel allowances are those who have resources to match and can go to their doctor and get a certificate to say that they need a prolonged spell of convalescence in Nice, or Dubrovnik, or Sochi, or the other centres of capitalist tourist exploitation. Let me assure the hon. Gentleman, and any of his colleagues who feel that they are in need of treatment for alcoholism, bad liver or senility, that I would gladly extend to them my own professional courtesies and assist them to obtain this extension.

Mr. Kenneth Lewis (Rutland and Stamford)

Is this not the very reason why the £50 restriction should be removed, because there are so many people getting the advantages? Why should there be only a limited number of people so restricted?

Dr. Kerr

The hon. Gentleman has rather spoiled by peroration, but that was not the argument put forward by his hon. Friend, who said that he was now feeling the spur of charity, that other countries were bending to make sure that he and his colleagues would not be deprived of the services of the Black Eagle, or the hotels in Nice and that they were having to adopt a more charitable, and, therefore, unacceptable attitude, which made it difficult for him and his colleagues to accept this allowance with equanimity.

There are certain divergencies of view on the other side about what the allowance is about. I want to make a plea for the allowance, first and foremost on behalf of the British holiday resorts. It is, alas, a fact that whatever may be said from the other side, the figures do not suggest that foreign travel has diminished significantly as a result of this measure. It has done something similar to the prices and incomes policy, it has made people think a little. If it discourages them from going to a country like Spain or Greece, then the £50 allowance would be justified for that reason alone.

Unfortunately, it also discourages people from visiting friendly, responsible and democratic countries where we should like to see them go. But they go there, and there seems to be very little restriction of the growth of package holidays abroad, save for the very unfortunate and in my view unacceptable regulations of I.A.T.A. There is now a case for looking at this country's sense of responsibility to I.A.T.A. and the way in which these regulations benefit the very large airlines to the detriment of airlines operating in countries like our own. We could considerably increase our opportunities for cheap travel within the £50 allowance. This is something at which we might take another look.

I am sorry that with all of his sweeping imagination the hon. Member devoted to his speech he failed to make one important point. As he says, the average man in Britain is not the average man in Britain. What he is saying is that there is a wide range, that the problem of the individual travelling abroad alone is not the same as the family man going with three children. For most family men the opportunity to take £250 plus the fare is more than he needs or can afford. For the individual there may be a good case for looking more sympathetically at this problem. I would like to ask my right hon. Friend whether any thought has been given to a sliding scale allowance whereby it would be possible to give a group or family going abroad slightly less per head and to allow those travelling abroad as individuals slightly more. Could we not, for instance, say that a man going abroad with five children should have his £45 a head, which he will not spend, to allow the individual, or the man and wife travelling solus to have £55 a head?

This seems to be a reasonable way of recognising the different degree of expenditure faced by these two different groups, and the hon. Member has lost opportunity to recognise these difficulties. I make good his omission.

I also want to make a plea for the advantages of camping. My right hon. Friend could do a good deal to keep people here if he recognised the quite extraordinary growth of camping, not only here but on the Continent. Not only is there a tremendous growth of this outdoor activity here, but the way in which people in Holland and Germany flock south to lavishly equipped camping sites in Italy, Yugoslavia and the South of France makes the movements of swallows look ridiculous by comparison.

Why are we not grabbing a large part of that market here? If there is an argument for encouraging people to stay at home rather than travelling widely abroad, let us do more than we are to ensure that camping enthusiasts here are well catered for. The capital necessary to compete with other interests, on which there may be a higher return, might be provided by municipalities rather than private camping interests. This is one way of justifying an allowance which we recognise is a nominal feature.

It would perhaps be improper to go in to all the ways of avoiding this allowance illegally. It must be common knowledge that the right to take out sterling to the amount of £15 is flouted to an extraordinary degree, which no sort of intelligent control at our points of exit could ever hope to restore to what we want it to be.

Perhaps there is an argument for looking soon, as we have undertaken to do, at this restriction, but I do discount all this blather and nonsense about restriction of freedom. The facts are that there are more people travelling abroad, and people are able to do so within the allowance. If there is any disadvantage it is to those travelling individually or in couples, and there might be an exemption given in such cases. I can only hope that in looking at this aspect of travel by Britons abroad we will not lose sight of the importance of assisting travel by foreigners into Britain.

This involves foreign expenditure of a different sort, and, in view of the opportunities which arise particularly for young people in Continental countries to come here, I urge the Government to adopt a very generous attitude towards this kind of operation.

I discovered an argument in Berlin last year in favour of a restricted travel allowance. In company with one or two hon. Members opposite, I found myself touring Berlin in the vain hope of discovering some night life. At one point we found ourselves in a near-beer bar. There were three very attractive young ladies who offered us a variety of facilities, some of which were on the menu and others which even my scanty knowledge of German led me to believe could not have been printed on the menu. We then noticed that whisky was priced at £15 a bottle. It was with great relief that we were able to claim that the restricted travel allowance did not allow us to stay in that place one moment longer.

4.42 p.m.

Sir Charles Taylor (Eastbourne)

I am grateful to my hon. Friend the Member for Leicester, South-East (Mr. Peel) for raising this matter, because it is very important.

The hon. Member for Wandsworth, Central (Dr. David Kerr) talked a great deal of nonsense. He seems to want a travel allowance graduated according to party loyalties. All that he seems to want are controls and more controls, which I do not want. During his speech I wondered whether even in the House of Commons he was allowed to advertise the fact that he was a doctor, whether it was permitted by the General Medical Council and whether he could arrange for people who were ill to get a good travel allowance. Perhaps he will have a queue of patients tomorrow wanting to go abroad. I should not have thought that the General Medical Council would think very highly of that.

I represent a British seaside resort, but I do not believe in forcing people to go to British seaside resorts for their holidays. They should encourage people to go to them because of their amenities. About six weeks ago I attended in Dublin an international conference of hotel keepers. Over 70 nations were represented at it. The hotel keepers unanimously decided to send a resolution to the United Nations stating that they hoped that 1970 would be declared the year of freedom for travel. They were not considering their own seaside resorts, towns and cities. They believed that freedom of travel was necessary in this modern world and that it was one of the rights of human beings that they should be able to travel throughout the world if they wished.

Dr. David Kerr

Would the hon. Gentleman make plain to me and perhaps to some of my colleagues whether that resolution referred to restriction on financial expenditure or to the kind of imprisonment which is occurring in Greece and Spain and other countries with tyrannical Governments who were not allowing foreign travel?

Sir C. Taylor

The resolution referred to all these things. It also referred to imprisonment behind the Iron Curtain. Freedom of travel means not only the people are allowed to spend their own money in travelling, if they have any, but that they should be free to go to other countries provided they behave themselves and act in accordance with the rules and laws of them.

At a meeting in Germany two or three years ago I was talking with some of my German hotel friends who said that they had given up exhibiting British Travel Association posters because British people had only a £50 travel allowance. Travel arrangements must be reciprocal and, therefore, they were putting up posters urging people to go to France, Switzerland and Austria where there was no travel restriction. The £50 travel allowance for British people is doing us harm, because travel must be reciprocal. If others countries know that the British traveller will be allowed to take abroad only £50 a year, why should they advertise the "Come to Britain" campaign, which has been done so well by the British Travel Association?

I should like to ask the Minister whether this travel allowance is contrary to the Bretton Woods Agreement. I believe that it is. Has the International Monetary Fund said to us, "You must stop this nonsense about not allowing your people more than £50 as a travel allowance"?

The Government are making us appear paupers in the world. It is unpleasant for English people, having contributed very largely to winning the last war, to appear to be paupers when they travel round the world. Let me give one example of the narrow-mindedness of the Treasury. Members of the British Parliament paid a visit to Switzerland in January. Those Members who could ski were asked to ski against members of the Swiss Parliament.

For many years the Swiss Members of Parliament have entertained their British counterparts at a small good will get-together. I understand that the members of the British Parliamentary team applied to the Treasury for a small grant to entertain, for a change, our Swiss colleagues. It was turned down. This is absolutely outrageous. The Treasury said, "This is a jolly" It was not a jolly; it was a good will visit. We got to know our Swiss colleagues very well, which is very helpful in this difficult world, but we were not allowed even a few pounds to give them a little hospitality in return for the hospitality which they had given us over the years.

It is no wonder, when that sort of thing happens, that there is no confidence in our country or in the continuance of the value of the £. In other countries we are made to appear paupers. When we go abroad, we are made to feel as though we are criminals because we want to take some of our money abroad.

When we had sweet rationing in the days of the Socialist Government after rile war—and, of course, during the war—everybody said, "I am entitled to this ration of sweets and, therefore, I shall buy it". Everyone bought his or her ration of sweets. When sweet rationing was done away with by the Conservative Government, however, the consumption of sweets fell. I suggest that although, before we had the rationing of money, many people who wanted to go abroad spent only £35 or £40, they now insist on their ration of £50.

I know this to be a fact. It is only penalising the so-called rich, who, at their own expense, may be going out to pay good will visits here and there or whatever else they do. It does not matter what they are doing. They should have freedom to travel. I believe firmly that if the Government did away with this silly restriction, it would cost us no more in foreign currency.

I am grateful to my hon. Friend the Member for Leicester, South-East for raising this matter. It is one of great consequence. I hope that the United Nations will make 1970 a year of freedom to travel for all nations.

4.53 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I had no intention of participating in this debate. I wanted to hear what was said, because I have some sympathy with the idea of raising the limit and ultimately abolishing it. I thought that we would have a rational debate on those lines. Then, however, I heard what I would regard—and I am sure that most of my hon. Friends would agree with this—as amazing statements from the hon. Member for Leicester, South-East (Mr. Peel), who initiated the debate.

The hon. Member talked about its being a badge of dictatorship to have a travel allowance of £50 and said that the greatest freedom we had was the freedom to travel. I intervened to point out to the hon. Member that there were millions of people in this country who, during periods of depression and unemployment, and even during periods of full employment, never earned enough to travel to the next town, never mind to travel all over the world. I have never found it a great embarrassment to have a travel allowance of £50, neither do the overwhelming mass of people.

We were told when the £50 travel allowance was introduced that it would mean a great restriction on our people going abroad and meeting the French, the Italians, the Spaniards, and so on. The fact is that just as many go now as ever went before. [HON. MEMBERS: "How does the hon. Member know?"] Because the figures prove it.

Mr. John Hay (Henley)

But how ninny more would like to go?

Mr. Heffer

Hon. Members opposite are talking about a small minority of people—their friends, the ones whom the hon. Member for Eastbourne (Sir C. Taylor) was honest enough to bring out in the end, the few rich, who naturally feel restricted and upset that they can have a travel allowance of only £50.

Mr. Kenneth Lewis

Absolute nonsense.

Mr. Heffer

We are told that they feel like paupers—of course, they have larger sums of money—unless they participate, as we were told, in the many ways in which they can get round the law. Perhaps they have money abroad anyway and they draw—

Sir C. Taylor

It was the hon. Member for Wandsworth, Central (Dr. David Kerr) who said that.

Mr. Heffer

The hon. Member for Eastbourne also said it. I listened carefully to him. That is the truth of it.

Hon. Members opposite are raising the question of the £50 allowance because it is their friends, the small minority, who are upset about feeling that they are paupers when they go abroad. The overwhelming mass of people have not been writing to hon. Members, passing resolutions at union branch meetings or holding demonstrations at Westminster to demand the lifting of the £50 allowance. I have seen many other demonstrations on all sorts of issues, but not on this one, because the average working man or woman who goes on holiday abroad finds that the allowance is sufficient to meet his or her needs. It may be that they would like a little more, but it is not those people who talk about the badge of dictatorship.

Sir C. Taylor

Government by restriction.

Mr. Heffer

The hon. Member talks about restriction. My people have been restricted for generation after generation. For the first time in their lives, some of them are going abroad and enjoying things which they have never enjoyed before. They are doing it at this moment.

I will tell hon. Members opposite how the ordinary working man went abroad in the old days. He did it the way my father went abroad, as a soldier. He went to India and Burma as a soldier. He would never have been able to secure sufficient money to travel in those countries. He went as part of the Armed Forces. That was how the average working man went abroad. Or he went as a seaman. He did not travel the world enjoying the sights and the luxurious nightlife that my hon. Friend the Member for Wandsworth, Central (Dr. David Kerr) found in Berlin. He went not on the basis of his own money, but as part and parcel of the Armed Forces or as a seaman. The hon. Member for Eastbourne is talking about the minority of people.

I accept that there is a case for lifting the limit. [HON. MEMBERS: "Here we go."] But the hon. Member for Eastbourne was not asking for that. He said that it should be abolished. Then he spoke about the overwhelming mass of people, the average person, whom he dismissed in a way which, I thought, was cavalier and disgusting, because he was talking about his snobby friends. They are not my friends, because my friends are not complaining.

Then we were told that the Tories got rid of this restriction. They got rid of it in 1959. They came to office in 1951. It took them eight years to get rid of it. They had to keep the restriction for a period because of the economic circumstances.

We ought to have serious debates in the House. If hon. Members opposite want a debate of importance, they could have had a debate on something on which the hon. Member for Leicester, South-East touched in passing and on which I, like him, feel passionately—the concept of building a united Europe.

Mr. Hay

On £50?

Mr. Heffer

The hon. Member is being utterly stupid—

Mr. Hay

Thank you very much.

Mr. Heffer

—absolutely stupid, because if the hon. Member thinks that the restriction to £50 is any way stopping the concept of a united Europe, then he lives in a world entirely different from the one I live in.

When we argue about a united Europe we argue about important political and economic implications and difficulties we have to overcome. That is a very important debate, which we could have had. We could have seriously considered the whole question of the new situation arising out of the new French Government; and we could have considered the possibilities of a further approach in relation to the Common Market as a first step towards a united Europe. But no, the hon. Member was not prepared to have a serious debate on this question. He just wanted one more little stick with which to try to beat the Labour Government. That is all he wanted. This debate is sheer political propaganda, and he and his hon. Friends know it.

Mr. Patrick Jenkin (Wanstead and Woodford)

I am interested in the accusation which the hon. Member has made against my hon. Friend. He said a few minutes ago that the only reason for the introduction of this debate was that a few of our very wealthy friends felt themselves restricted, but now he is saying that this is a great exercise in political propaganda. He really must make up his mind which it is.

Mr. Heffer

Hon. Members opposite have been speaking on behalf of their friends outside the House and whipping up their feelings. That is all that this debate has been for. There is no serious motive behind it at all. Hon. Members opposite all know that there is no serious motive behind it. I have never heard so fiddling and ridiculous a Motion in all my life. I hope that hon. Members will not have this Motion put to the vote; I hope that they will not be so silly; but if they are I hope that the House will have sufficient sense and intelligence overwhelmingly to reject it.

5.1 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

We have had from the hon. Member for Wandsworth, Central (Dr. David Kerr) and the hon. Member for Liverpool, Walton (Mr. Heffer) the accusation that this debate is, on the one hand, unimportant, and, on the other hand, that it is stupid. All I can say is that, however unimportant or stupid it may appear to them to be, between now and the General Election—even if there is not an announcement from that Box today—there will be no £50 restriction on currency for people going abroad, and the hon. Member for Walton knows that if this announcement is made by the Government it will be to help him and his hon. Friends to help the Government to get more votes.

However, this is a serious subject. This restriction has been on a very long time now and there are many good reasons why it should come off. The fact that the Government have hinted that it may come off or be lightened is a credit to my hon. Friend. We did not hear any such hint until the Motion had been put down on the Paper, and so at least my hon. Friend has had an effect in jogging the Government's memory on the subject and making Ministers concern themselves with what is likely to happen next year. I hope that when the Minister replies to the debate he will give an indication in good time so that the tour companies can organise themselves on the basis of an increase in the allowance next year.

I suppose that, like the hon. Member for Wandsworth, Central, who is issuing certificates to all sorts of people so that they can go to the South of France to improve their gout situation, or whatever it may be, I, too, must declare an interest. I have a travel organisation, but I am not involved in tours.

However, what this £50 is doing is to turn us into a nation of international trippers, because most people now, if they want to go abroad, have to go on a package tour, whether they like it or not. A large number of people, not only middle-class or rich people, but also ordinary chaps working in the docks in Liverpool, like to think that they can go abroad by themselves. They like to book in at an hotel, and not to have to take part in a package tour with a lot of other people, perhaps people whom they see day by day. They do not want to go on holiday and meet the people they meet five days a week. They want to meet other people. They cannot do this because the £50 does not stretch to meeting the individual room charges of hoteliers compared with the charges hoteliers provide for people booking in groups of 30 or 40. Removing the restriction would give a little more freedom to people when they go abroad who would like to go abroad as individuals rather than en masse.

The Minister will probably say that the whole exercise has been justified because the balance on currency now available to us is in our favour. I accept this. It is coming into our favour. But I would say that if the restriction has a little to do with it, it does not have everything to do with it, as the Minister well knows. In case he does not spell out the different things which have helped to give us this balance, I will do so.

First of all, as he knows, devaluation has helped to give us this balance, because people going abroad from this country are not spending so much. Devaluation is against them. Their money does not go so far. People coming into this country from abroad, however, are at a great advantage, and this has brought a large number of visitors into England. We are cheap. We are. perhaps now second only to Spain and Portugal and some other countries whither, as the House knows, British people go because, they say, "There we can have the sun and things are cheap" Now people are coming here because we are getting the sun and because things here are cheap. They are coming in droves from France, going to Marks and Spencer's and buying goods at prices which we think are expensive but which, for them, are at low prices. This is all because the Government have devalued the £, and the £ is now, to them, an advantage currency, not as high in rating as the dollar or the mark. So more money is coming into this country, and this helps us with foreign currency. It would be a disastrous situation if after devaluation we had not gained an advantage of this kind.

More over, there has been a natural growth in world travel, ever since the £50 restriction was introduced three years ago. Year by year, international travel has increased. It is not only people travelling from this country abroad but people travelling here from Europe and from America and from even farther away—people coming from Commonwealth countries to see the Mother Country. This will continue. This is the second advantage to us, the natural growth in travel, which has helped our currency advantage.

Then we have an increase in hotel accommodation available. Even prior to the Development of Tourism Bill, introduced by the Government, there had been in London considerable increases in hotel accommodation, and this has helped to make it easier for people to come and stay here.

Another reason why we should now get rid of the £50 restriction is that the restriction is really a bad thing for our prestige abroad. If we want to exude confidence—and part of our trouble arises from the fact that the Government have not been able to get the balance of payments right because there is a lack of confidence—restricting currency is not really a good way of doing it. To make ourselves about the only country in Europe where the people are restricted in what they can spend when they go abroad, so that they cannot afford this or they cannot afford that, perhaps even the most modest gifts, is wholly bad.

I was challenged about this when I mentioned it in Committee on the Development of Tourism Bill the other day, but it must not be underrated. There are charter companies having to shop around abroad and squeeze foreign hoteliers right down to the last cent. Foreign hoteliers know about this restriction, and they reduce their prices for parties as much as they can. Because of the £50 limit our companies have to get prices down to the rock bottom, and the foreign hoteliers know that. They know that if they do not concede on pricing they will not get the bookings. They equally know that this has nothing to do with the tour companies; it has to do with the restriction imposed on them because of the Government's currency restriction. There should be open bargaining between the tour companies and hotels overseas. I am all in favour of the tour companies getting the best bargain, but it should not be a bargain on the basis of forcing the hotels to concede the lowest possible prices because of the currency restriction.

Mr. Heffer

The hon. Gentleman is putting up a much better case than did the hon. Member for Leicester, South-East (Mr. Peel); at least it is a serious case. But, surely, on the basis of his argument, if the tour companies are doing this, then our people are getting a very good bargain?

Mr. Lewis

Yes, I accept that they are getting a good bargain, but this can be conducive to bad relations between the tourist industry in this country and the tourist industry abroad. This is two-way traffic and good relations should exist, but they cannot so long as this restriction continues. Hoteliers abroad understood that the restriction would continue for a year or so; they certainly did not expect it to continue for three years.

Mr. Victor Goodhew (St. Albans)

Will not my hon. Friend agree that the hoteliers abroad who are squeezed down to a low figure are bound to lower the standard of food served to British tourists and that this is a bad bargain for the tourist?

Mr. Lewis

This is absolutely true. People going abroad on package tours are often served a course light, or the food is not of the best Continental standard because the hoteliers are unable to provide it within the restricted amount.

I have accepted that in the beginning there might have been a case for this restriction, but it is a bad restriction if it continues for too long. It results in many side-effects. It discourages air travel, except package tour air travel. There is no reason why I should plead this, but it has a bad effect on the passenger-carrying possibilities of the nationalised airlines since it restricts the number of people who can go on scheduled flights. It pushes people on to charter flights and also into their motor cars. By taking a motor car abroad people are able to get another £25, and this is an additional advantage.

The longer the restriction goes on, the more people will learn how to get round the regulations. There cannot now be many people who do not know that they can go to a doctor if they have had 'flu and say that they need a holiday to recuperate. I am sorry that the hon. Member for Wandsworth, Central is no longer here. I know of a doctor in practice who has bought an interest in a travel business. People can go to his surgery and get from him a certificate and a prescription for which they have to pay 2s. 6d., but when they reach the recuperation stage the doctor can tell them to take a holiday and send them down below to the travel business, and so he wins in every direction. This has, of course, a humorous side but it happens to be true.

The longer this restriction is continued the more opportunities there will be for people to get round it. The Minister knows that business men can get a considerable allowance, but not for a holiday. He will understand, however, that it is possible for a business man to go abroad on a business trip and tag on his holiday at the end. This is perfectly legal. He is entitled to do this and he will get the business currency advantage to help him to have a better holiday.

I turn now to Provision 1 which is related to package holidays and to the £50 allowance. I had a Ten-Minute Rule Bill down for Wednesday which I have withdrawn because I thought it would be better to raise the subject now than waste the time of the House on Wednesday.

The Tour Operators Study Group, which is representative of all the tour companies and package tour companies in the country, has made representations to the President of the Board of Trade to look at the impact of Provision 1 in so far as it restricts upwards the price of package holidays. The President of the Board of Trade made a statement in which he said that he would make certain concessions in the winter period, but the Edwards Committee Report on British air travel in the 70s went a good deal further than this.

The British Tour Operators Study Group, having looked at the Edwards Report, has now stated its own view. I know that the package tour companies would like the Minister to go a long way towards removing the restrictions. It must be recognised, as the Edwards Report stated, that a free-for-all cannot be allowed. Package tour companies cannot suddenly be told that thy can charge what they like on any route they like. That would be accepting that there was no case for scheduled fares, and there is a case for scheduled fares in certain circumstances.

The nationalised air companies are contemplating entering into charter operations. I hope that the Minister will make an early announcement about this whole matter, not necessarily today but in time for the 1970 programme, so that the package tour companies know where they stand. I hope that the President of the Board of Trade will look at the routes which have been put to him and the proposed reductions of fares and make an early announcement.

Will the right hon. Gentleman also bear in mind the possibility of a certain amount of horse-trading? Since the scheduled companies wish to go into package tour operations, if the Minister restricts the package companies he should be prepared also to maintain restrictions upon the scheduled companies operating package tours, or he can lift restrictions on the package companies. It would be quite improper for him to allow a benefit to one and refuse the other.

Paragraph 704 of the Edwards Report states: The past policy of the British Government towards inclusive tours has been to take a liberal attitude towards their development but to endeavour to ensure that its charges did not undermine the fares for scheduled services on the same routes. The Minister, the House and the country should know that the great expansion in cheap overseas travel has been made possible through the efforts of free enterprise, not in the main through the efforts of the nationalised airlines. It has been made possible because certain people were pioneers and have developed travel abroad to such an extent that extraordinarily good bargains are now available and people can have holidays abroad almost as cheaply as holidays at home Nothing should be done to restrict this We have seen this development in Europe and in countries near to these islands. We now have an opportunity to expand this further afield. Today Questions have been put to the Minister of Overseas Development and he has been pressed to increase grants to underdeveloped countries. The best way to help these countries is to expand tourism so that more and more British people go abroad, to the Middle East, Asia and Africa. So far as our people go and spend money there, we are taking money to them which they can re-spend here and so purchase things they want. The best way to do this is to encourage package companies by taking off some of the restrictions on the far flung routes. This offers new development which might take another five to 10 years, but when it comes to fruition it will provide the opportunity of tourist development which will be to our advantage as well as to the advantage of these other countries. It will provide an exchange of peoples and a subsequent exchange of goods.

This has been a useful debate and I am grateful to my hon. Friend the Member for Leicester, South-East (Mr. Peel) for giving us the opportunity to raise this subject. I hope that the Minister will really say something this afternoon and will not, once again, be putting off a decision. I hope he will indicate the way the Government's mind is working upon this matter. If the limit is kept on too long, it must be understood that when eventually the Government take it off it will be regarded as a piece of pure electioneering. It ought to be taken off now. The sooner the better.

5.21 p.m.

Mr. Edward Milne (Blyth)

The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) has been fortunate in this debate in that he has managed to roll three speeches into one. He has dealt with the subject of the Motion on the Order Paper, the abolition of the £50 holiday allowance; he has managed to bring in the Edwards Committee's Report and has given us an advance speech on that; and he has also been able to make some free time on Wednesday by withdrawing his Private Member's Bill on charter flying and package foreign travel. We are grateful to the hon. Member for bringing some realism to bear upon this subject. He will realise when he reads his speech tomorrow that he has taken up the Government's case.

The hon. Member made two interesting observations. He said that he agreed with the limit when it was introduced, but he felt that the time was now approaching for it to be removed. Whether that time has now come, or whether the £50 limit needs to be raised, is a litle uncertain at the moment. But there are one or two categories of persons in this country whom the Government should consider in relation to raising the limit. At the moment people over 70 are given an extra allowance. But there is no reason why retired people below the age of 70 should not also be given the extra allowance. A considerable number of people who intend to travel abroad when they retire would welcome an increase in the allowance. Some changes could be made even within the framework of the existing arrangements.

The hon. Member for Leicester, South-East (Mr. Peel), in opening the debate, talked about skiing holidays, as did the hon. Member for Eastbourne (Sir C. Taylor). He said that those who wished to take more than one holiday were being held back by the £50 restriction. I should like hon. Members opposite to look at the matter of the restriction of individuals' freedom, which was a theme that ran through most of their speeches in relation to holidays. In terms of the holiday agreements which operate in so many trades in this country, even with an increased holiday allowance it would be impossible for the vast bulk of wage earners in this country to take the double holiday to which the hon. Member referred. Therefore, if they are keen and sincere—and it is all very well for the hon. Member for Eastbourne to shake his head—

Sir C. Taylor

rose—

Mr. Milne

Will the hon. Gentleman wait a moment? I want to develop the point he made.

Sir C. Taylor

I did not make that point. Will the hon. Gentleman allow me?

Mr. Milne

No.

Sir C. Taylor

The hon. Member referred to me. Will he not allow me to answer?

Mr. Deputy Speaker (Mr. Sydney Irving)

Order. The hon. Gentleman is not giving way.

Mr. Milne

I will deal with this matter in my own way, without any assistance from the hon. Member for Eastbourne. If he says that he did not make that point, then I will leave it entirely alone.

Sir C. Taylor

Thank you.

Mr. Milne

But when the hon. Member reads HANSARD tomorrow he will possibly be more in agreement with me than he is now.

Sir C. Taylor

No.

Mr. Milne

Without referring to whoever said it or did not say it—

Sir C. Taylor

The hon. Member should get his facts right.

Mr. Milne

There is no harm in some of us getting our facts right. We have not had many good examples of getting facts right from the other side, particularly from the hon. Member for Eastbourne. Therefore, he need not shout about getting facts rights right. I will make my speech in my own way without any assistance from him. The point has been made in this debate, in regard to the restriction on the £50 limit, that persons who want to have a double holiday are restricted.

Sir C. Taylor

On a point of order. Is it in order for the hon. Member for Blyth (Mr. Milne) to impute both to my hon. Friend and to myself things that we have never said and then to shout us down. This is outrageous.

Mr. Deputy Speaker

I am afraid that is not a matter for the Chair.

Mr. Milne

The hon. Member for Eastbourne has described this as outrageous. I have made it quite clear that if the hon. Members concerned assure us that they did not make those points, I would merely make the point in the debate. Certainly many people have argued that the £50 restriction prevents people from having an extra holiday abroad.

The point that I make is that, if hon. Members opposite are really concerned with personal freedom, the holiday agreements which exist in the majority of trades and professions in this country prevent people from having a double holiday in the course of the year. A general move towards the extension of holidays, as well as an extension of the travel limit itself, would be helpful. This is the only point I make in this respect.

Nobody has yet made the point that the £50 limit is not the maximum. There is the £25 car allowance, and in addition to the £50 there is also the £15 allowance, which can be taken out by a traveller on every occasion he leaves the country. It is an extra entitlement in terms of currency.

Mr. Peel

I have listened to the hon. Gentleman very carefully. I am not sure whether the hon. Gentleman was here when the debate opened, but I assure him that I have been present the whole time and I have heard nobody talk about double holidays. Now that more and more holidays and longer holidays are becoming available, there is no need to take a double holiday in order to require more than the restricted allowance. If lion. Gentlemen opposite claim that only a few rich people want more than the £50 limit, why have it at all because the effect on our exchange must be minimal? The hon. Member has the matter quite wrong. One does not need to bring in the argument about the double holiday to justify the removal of this restriction on our freedom.

Mr. Milne

Although the hon. Member has taken advantage of my giving way in this debate, he has not in his intervention dealt with the points I was making. As for my being here at the outset, I confess that I missed the first five minutes of the debate. I was at the Board of Trade with representatives of firms in my constituency. The hon. Gentleman will understand that I followed most of the remarks that he made about his speech, so that there was no need to make that spurious intervention in order to demonstrate that an hon. Member was not present to hear him open the debate. I was absent for only five minutes of his speech. Whether I regret that or not is another matter.

Coming back to the £50 allowance, a number of factors have to be looked at when considering the arguments raised during the debate. The £50 restriction has not proved to be a limitation on the expansion of the holiday trade. It is true that the bargaining with overseas hoteliers, coach-owners and others has contributed to the expansion, and I agree with the hon. Member for Rutland and Stamford that those in the travel business have done an outstanding job in providing holidays of this description. However, when hon. Members opposite argue that the £50 limit is not sufficient to enable people to have holidays abroad, which is flying in the face of the figures with which we have been provided over the past three years, it is quite illogical at the same time to argue that people spend more money as a result of the £50 limit. After all, the average price of a holiday abroad is between £44 and £45 per person, depending on the country visited. Many of us who have been abroad have seen people lining up on ferries and at airports to spend the remaining few pounds of their holiday allowances. Some of them feel that they have to spend the whole of the allowance when they are on holiday.

I hope that the Government will consider two of the main points which have been made in the course of the debate. The first is that not everyone wants a package holiday. Some people like to make their own arrangements and move around a country or countries when they are on holiday, and certainly that is not confined to people in the upper income bracket. The second point is that, as a result of the growing facilities for travel, people in future will want to travel more widely than they can at the moment with the £50 restriction.

When I commented earlier about existing holiday agreements preventing people from taking double holidays—and possibly the hon. Gentleman will take the point now—whereas the present limit may be reasonably good for the purposes of the average fortnight's holiday, the possibility of extending it to three weeks obviously increases the difficulty of keeping within the £50 limit.

I do not believe, as some hon. Members have said, that the limit has reduced the number of people coming here from abroad following their experiences with British travellers overseas, with no tipping, and so on. I am not against tipping simply because I am a native of Aberdeen. I was bold enough to say that in the course of our debates on the Development of Tourism Bill. It appears that most countries in Europe which are developed in terms of tourism have done away with tipping in any event, and there is no question of the number of people from abroad coming here on a reciprocal basis being adversely affected by the Government's £50 foreign currency allowance.

Unlike some of my hon. Friends, I am glad that the hon. Member for Leicester, South-East, initiated this debate. It is not just a matter of making a protest about the allowance, saying that it is insufficient and that we ought to scrap it. We should be looking at the wider development of the holiday trade and at the opportunities provided to our people in the shape of holidays abroad. I am a firm believer in the theory that the more of our people who become accustomed to visiting various countries on the Continent and elsewhere, the more we are likely to attract the expanding tourism which we need and which the Government have helped towards by the Development of Tourism Bill.

One would think from some of the discussions during the various stages of that Measure that the Government have done nothing to assist tourism, but the reciprocal visits of people to and from this country can only be of advantage to us all in the long run.

5.36 p.m.

Mr. Edward M. Taylor (Glasgow, Cathcart)

The hon. Member for Blyth (Mr. Milne) may have been surprised when some of my hon. Friends objected strongly to one or two of his points. Perhaps I can reassure him by saying that his arguments were a good deal more weighty than those of his hon. Friends who preceded him, because I was astonished to hear some of their arguments. The hon. Member for Liverpool, Walton (Mr. Heffer), for example, seemed to think that if he and his constituents cannot obtain expensive foreign travel, no one else should.

We had, too, the astonishing speech of the hon. Member for Wandsworth, Central (Dr. David Kerr) who said that we should not bother about the travel allowance because all sensible people knew how to evade it. My hon. Friend the Member for Leicester, South-East (Mr. Peel) was right when he said that this restriction is an aspect of bureaucratic Socialism. Nowadays we have rules and regulations which "fly" people know how to fiddle and twist. That, surely, is one of the troubles which beset the country today. We have more and more rules, regulations and restrictions, with the consequence that we are rapidly becoming a nation of fiddlers and twisters. That is just one reason why this restriction should be scrapped quickly.

I am sorry that the hon. Member for Wandsworth, Central is not present to hear what I say about him. Among his other arguments, he said that the travel restriction was a good idea in that it stopped British tourists visiting countries of whose regimes we disapprove, and he mentioned specifically Greece and Spain. I have rarely heard a speech which was based on such a lack of knowledge of the facts. On 12th June, the Foreign Secretary gave details of the number of visitors to Spain since the introduction of the £50 restriction. In 1964, 700,000 British people visited that country. In 1965, the number was 800,000. In 1966, 950,000 British people visited Spain. In 1967, the figure was over 1 million. In 1968, it reached the grand total of 1,282,000. If the restriction has had any effect, it has been to increase substantially the number of people visiting Spain. It is one of the countries where it is possible to have a cheap holiday. If we were concerned about trying to relate our holidays to political views and attitudes—and I do not think that we should be—the £50 allowance must have brought joy to the heart of Spain, and certainly it must be a worry to those in Gibraltar who are suffering from the restrictions and sanctions imposed by the Spanish regime on that territory. I do not think these were good arguments at all.

I bitterly resent the attack that was made on my hon. Friend the Member for Leicester, South-East who, quite rightly, suggested that travel restrictions were very much related to freedom and freedom of movement.

Only this morning I had a letter from one of my constituents who is a member of a church which is organising a visit of 10 young Czechoslovaks and their minister from a church in Czechoslovakia. Arrangements had been made for these youngsters to come in mid-August. Word has just been received that it will be almost impossible for them to come because of a savage restriction on currency spending imposed by the Czechoslovak Government. We are trying to find ways around this restriction. These young people will be allowed to bring with them precisely £2 for their stay of two weeks in this country. We are trying everything possible to find the money. The important thing is that countries like Czechoslovakia are using restrictions on spending specifically for the purpose of curbing foreign travel. Although I should not suggest that the Government are doing the same, it is a bad example which can be quoted in other countries.

It has rightly been said that travel and currency restrictions are not new. We had them in the 1950s when the ceiling moved from £25 to £100, and then between 1959 and 1966 it was virtually abolished.

We now have restrictions again. The main reason advanced in 1966 for bringing in the £50 allowance was because we had difficulties with our balance of payments and because the balance in foreign travel was very much against us.

Since 1938, when we began to keep figures of the amount that our holiday makers spent abroad and the amount that foreign holiday makers spent here, we have had a deficit. I understand that in 1961 we had a deficit of £38 million. In 1966. at the end of a period of unrestricted spending, we had a deficit of £95 million. I am glad to hear from my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) that this is now moving the other way. But we have a deficit in travel comparing home and foreign spending.

On the other hand, there is every reason, as my hon. Friend the Member for Leicester, South-East so eloquently argued, for removing or substantially increasing the allowance. If we accept that £50 was a reasonable allowance when it was imposed, we must remember that certain things have happened since.

First, we had devaluation, which has had a very substantial effect on the value of the allowance. But, more important, there has been inflation not just in this country, but in all the countries which our people visit. For example, £50 now buys only about two-thirds of the services which it could buy in Portugal in 1966.

Spain devalued with us, but, despite that, £50 buys 14 per cent. less in goods and services than in 1966. To that extent, even if we said that all things were equal and there had been no changes, there is a very good case for an immediate increase in the allowance.

The argument about the few rich who are helped by it cannot be justified, because we all know what has been happening. The people with a lot of money who want to go for expensive holidays have been changing the places to which they go. They now go to Malta or to the Bahamas or places where there are not the same restrictions. They can even go to Abu Dhabi if they find it a satisfactory place to have an expensive holiday. Instead of going to certain places, the wealthy are going to other places. To that extent the Government cannot say that the nation has been saving a great deal.

The £50 allowance has probably expanded foreign travel more than it has restricted it, because more people have found, for the first time, perhaps, that they can have a good or a reasonable holiday abroad on £50. There has been a dramatic extension in foreign travel not entirely unrelated to this restriction. In these circumstances, it is impossible for the Government to say that this really is worth while. They have argued that they are not trying to restrict foreign travel but merely the amount spent abroad. This is often very minimal indeed.

As the hon. Member for Wandsworth, Central pointed out—I am sorry that it has been pointed out so much—there are many ways round the allowance. If a man has a doctor's line, whether from the hon. Member for Wandsworth, Central or any other member of the medical profession, he can get an allowance of £7 a day in foreign currency. The suggestion made is that a man simply goes along to a doctor and says, "I want an injection for cholera." Then, when he has had his injection for cholera, there is more than ample justification for a doctor giving him a line saying, "You need to convalesce abroad to recover from the injection." There are many arguments like this.

I have been told by someone whose word I trust how he got round the allowance. He went to a West Indian island where there was a casino. I do not go to casinos and I do not like them. But this man went in at one end, bought some chips with sterling, walked to the other end of the casino and cashed those same chips for dollars without gambling one penny or spending one chip. This was told to me by someone who claimed to have done so. I see no reason why it could not be done.

I am not justifying people being dishonest or shady in trying to find their way round the rules. But it is ridiculous that by restrictions like this which really have a minimal effect on the economy, we should force so many people to resort to twisting and finding ways round regulations.

Let us consider spending. The Minister recently gave me the figures for the amount of cash spent in Spain alone. In 1964 £38 million was taken abroad by British tourists. That was a time when we did not have restrictions. Last year, when we had restrictions, British tourists took £48 million—over £10 million more. I feel that, no matter what is said, the effect is minimal.

The numbers of foreign holidays are increasing substantiailly. The wealthy are spending their holidays elsewhere or finding ways round the regulations. What point is there in having such restrictions, particularly in a free country. if there is little saving in currency and we simply encourage people to evade by finding ways round the regulations, if we are simply restricting travel to countries like Spain? Only last week the Foreign Secretary at the Dispatch Box pleaded with the people of Britatin to examine their consciences to see whether they could not try to stay away from Spain for their holidays. But where else, apart from Spain and certain other limited choices, can people go on a £50 allowance?

All the arguments lead to the fact that we should abolish this restriction. If the Government cannot bring themselves to abolish it altogether, there should be a substantial increase so that we can have freedom of choice in our holidays, so that we do not have to twist and evade and find ways round the restrictions, and so that we can bring back some sanity into what has become more bureaucratic and more annoying as each day passes.

5.48 p.m.

Mr. Hector Hughes (Aberdeen, North)

Britain today is in a very particular and peculiar financial position. That is one reason why I oppose the Motion.

The Motion is typically anti-British. It is, therefore, unpatriotic and should be defeated. It is designed to drain from Britain money which is badly needed at home.

It used to be said that it was necessary for one's education to travel abroad. That is no longer necessary. We have the amenities, the instruction and the advantages of countries all over the world without travelling. As Shakespeare said, we have, England, bound in with the triumphant sea, Whose rocky shore beats back the envious siege. There is no need today for people to go abroad to obtain what used to be called the advantages of travel.

I oppose this wrong-headed Motion on several grounds which I shall state briefly and seriatim. First, we need the money at home. Secondly, our holiday camps need holiday workers and holiday makers. Thirdly, our hotels, both at the seaside and in the country, need visitors and money. I know that the beautiful city of Aberdeen, which I have the honour to represent, could do with more visitors than it gets today. In the present international situation Britain needs attention at home, both at work and in play.

In our present circumstances we should not pour our largesse abroad. We live in particular circumstances when such money as we have in Britain should be retained. The time may come when the authors of the Motion will have their way and we may pour money into foreign countries. Where are we to go? To dictatorships? To Spain? To Greece? No; I say we should keep our money at home and enjoy the advantages and the fruits of Britain.

It is old-fashioned nonsense to say that we must go abroad for our education. We have at home all that we want. The other evening on television I had the advantage of seeing pictures of five countries. In our modern libraries there are books of a descriptive character. We have every advantage at home without pouring our money abroad into foreign countries. Butlins and other holiday camps offer not only education but enjoyment to people who want to stay at home. It is wrong for the authors of the Motion to try to induce the Chancellor to change his beneficent rule about the £50 allowance. Let us stay at home. Let us protect our industry. Let us encourage trade, industry, commerce and employment here, instead of spending our money abroad.

I promised to be brief. In view of the time, I have been brief. I hope that the Motion will be defeated.

5.53 p.m.

Captain Walter Elliot (Carshalton)

The hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) gave a very fine exposition of Socialist dogma, in that he indicated strongly that he knows what is best for people better than they themselves know; he said that foreign travel is not necessary and that people should stay at home. The answer to the hon. and learned Gentleman is that, whether he likes it or not, millions of people want to take their holidays abroad.

Most of the points I had intended to make have already been covered, but I want to ask the Government a few questions about the £50 allowance. The reason for the restriction is, I understand, to save foreign exchange. Has it been worth while. The Government have quoted figures to show that the balance is in our favour. Are those figures conclusive? My hon. and learned Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) mentioned devaluation and spoke of the large numbers of people who come to Britain and spend money here. There are other factors, too. We may stagnate at home, but people abroad are growing wealthier and travelling much more. That is another reason why more people, particularly Germans, are coming to Britain.

I understand that the package tour business is booming. My hon. Friend the Member for Rutland and Stamford gave as the reason that people were forced to go on package tours because individual holidays were far more expensive, whereas package tour operators are able to get the best terms for holiday makers. I have studied some of these package tours. I have never been on one. It strikes me that by a variety of procedures package tour operators are able to get round the regulations. The holiday maker seems to be able to pay a large proportion of his bill in sterling in Britain. I suppose that in the end it is inevitable that Britain must pay, by one means or another, for a holiday abroad.

I should like to know from the Government how package tour operators are able to achieve this. If they can achieve it, why cannot a private individual? My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) mentioned evasion. We all know that there is a variety of ways. Would I be acting illegally if I opened a bank account in Ireland and started my holiday by going from England to Ireland and then on to another country?

Did the Government consider other methods of imposing restrictions on our spending abroad in an effort to right the balance of payments? Is it more desirable to buy a foreign motor car or foreign wines than to take a foreign holiday? I cannot see that there is much difference.

Mr. Arthur Lewis (West Ham, North)

Might it not be more advantageous to have the holiday rather than buy the car, because an imported foreign car might do more harm to our car industry than a holiday abroad?

Captain W. Elliot

The hon. Gentleman has raised a good point. The argument could be extended over a vast number of articles. It may be argued, though, that an imported car carries tax whereas a foreign holiday does not. If there has to be a restriction on foreign holidays, perhaps it would be better to tax them, though God forbid. It might be argued that that would help the wealthy or the better off. I believe that any talk about a small minority is rubbish, but if it was thought that to tax foreign holidays would help the better off as opposed to the less well off it should be possible to have a progressive tax so that the amount of tax paid would rise in relation to the amount taken from the country. It seems to me that this solution of an overall limit is a very blunt instrument and I am sure that there are better ways of solving the problem.

My final point concerns the effect of the travel restriction on the nation and the people. There is no doubt that it is humiliating to both. More important, it gives entirely the wrong impression abroad. I have been talking to an Australian and, although this is perhaps not especially relevant, I am sure that it applies in all countries. He was telling me what a bad Press we get in Australia and how different he finds things when he comes to this country. I believe that we get a bad Press all over the world because of these petty restrictions, and that we shall continue to do so unless the Government are able to show that they are really worth while.

When people are abroad on their holidays they naturally count aloud how much they can spend on a particular article, whether it is a meal, a drink or a souvenir. That tends to destroy confidence in ourselves and in this country in the eyes of the rest of the world. This may seem intangible, but it is of vital importance. If we can get rid of these little restrictions it will make all the difference to this country.

6.2 p.m.

The Minister of State, Treasury (Mr. Dick Taverne)

It may be convenient if I intervene at this stage, although there are a number of hon. Members who wish to speak and who, no doubt, will seek to do so after I have finished. A number of points have been raised and I think it would be convenient if I were to deal with them now in case they are repeated later.

The House will be disappointed if it expects me now to make a promise of relief, or, for that matter, to convey an enthusiastic defence of the restrictions. The disadvantages of these restrictions are plain. Some points that have been enumerated in the debate are, perhaps, more telling than others. The most important disadvantage in the travel limit is the personal restriction which it involves. It may be justifiable but it would have to be justified. There are, of course, other restrictions in the way in which people spend their money but they, too, have to be justified. Quite apart from the personal restriction involved, there are also irritations without which, normally, we would be better off. Nevertheless, the question is whether or not the justification in this case exists and how far some of the arguments against the restriction have been made up.

A number of points were raised by the hon. Member for Leicester, South-East (Mr. Peel) to whom we are grateful for this opportunity to discuss this subject. Some of those points were amongst the least telling ones which have been made. He said that this was clearly an example of Socialist restrictionism and that it was a badge of dictatorship and contrary to the way in which the Conservatives approached the problem. He has conveniently forgotten the history of this matter. In the early 1950s this was a weapon which the Conservative Administration regarded as just as necessary for the preservation of our balance of payments as do the present Administration. It is not just a case of the Conservative Administration continuing a restriction which had been previously imposed. At the time when the Labour Government left office in 1951 the foreign travel allowance limit was £100, but early on it was reduced to £50 by the Conservatives and early in 1952 it was reduced further to £25. In 1953 it was raised to £40 and it did not return to the £100 limit till the new travel season of 1st November, 1954. Therefore, this is not just something which only the Labour Government have found a useful weapon for protecting the reserves and our balance of payments. It was used before, and indeed quite savagely.

Mr. Peel

I hope the hon. and learned Gentleman will allow the record to be put straight. I did not claim that the Conservative Government were antagonistic to this limit. I simply said that when it was lifted a Tory Government were in power. I did, however, deplore the fact that after the war we were so slow in getting rid of it, and that applies to all Governments.

Mr. Taverne

I agree that the hon. Member made the point that it was lifted by a Conservative Administration, but his charge that this was a badge of dictatorship and was an example of Socialist restrictionism is not borne out, because the limit was lowered by the Conservative Administration when it came into power.

It has been said that this has led to suspicions of our good intentions towards Europe, because on the Continent an unfavourable contrast was drawn with the lack of similar restrictions in the sterling area. Here I should say something about the international position, because the hon. Member for Eastbourne (Sir C. Taylor) asked how far this was contrary to our international obligations. It is not contrary to Bretton Woods. Under Article 8 of the Fund agreement, which was quoted by the hon. Member for Leicester, South-East, member countries must obtain prior consent before imposing restrictions on current payments. This consent was obtained in July, 1966, and it was renewed on 1st November, 1967, and again in 1968. There has to be consent, which is why it is mentioned in the letter, but the Fund has been assured that it is our intention to remove these restrictions as soon as the balance of payments position allows.

Mr. Eldon Griffiths (Bury St. Edmunds)

I am grateful to the hon. and learned Gentleman for having referred to Article 8 of the I.M.F. Agreement. I accept that consent has been sought and granted. But is he saying that it is in the spirit of the letters exchanged with the that the restrictions should be continued for so long?

Mr. Taverne

No. It is recognised that this is a legitimate weapon to use to protect our balance of payments. That is why it has been used and why consent has been granted.

So far as the O.E.C.D. is concerned, there is specific provision under the code to allow foreign currency freely for travel purposes, but this may be derogated from if there is a deterioration in the balance of payments. None of the members of the O.E.C.D. has objected to our restriction in this field. They have understood the reasons why we have had to use the restriction. It is not regarded as an anti-European gesture.

Again, the special position of the sterling area is understood. It would be impossible to impose travel restrictions relating to the overseas area without restrictions over the whole of exchange within the sterling area, and this is something which, under the present sterling area system, cannot be done and is not done. The sterling area position is understood, and there is no question of suspicion about our European intentions.

It was said that there was a special allowance of £150 in the case of the World Cup. This is very much in line with the arrangements made for the Olympic Games, both under the previous Administration and recently. The reason is that these are exceptional individual occasions—exceptional in their importance in the sporting world. No other sporting events have received similar treatment or have required similar treatment. They have always been regarded as exceptional.

The question was asked by the hon. and gallant Member for Carshalton (Captain W. Elliot) and by the hon. Member for Leicester, South-East: why not allow foreign holidays when foreign imports are allowed? The whole argument on imports is quite separate. Exchange control arrangements exist, and they are widely accepted. There is a fundamental argument on which sometimes the Government do not find themselves totally at one with some of my hon. Friends: namely, whether or not import quotas would be a solution to our problems. I do not want to go into the arguments now as they involve questions of administration, of how far this is a long-term prob. fern and of the possibility of retaliation. They are quite separate from this field in which there is no question of retaliation.

It has been suggested that these travel restrictions do no good, and this is perhaps the most important argument that has been advanced. I must point to a contradiction in the arguments. It is said that the effect of these restrictions is to make people live too cheaply, and also that they do mean that people are spending less. There is obviously a clear contradiction in these arguments. It was said by my hon. Friend the Member for Blyth (Mr. Milne) and by the hon. Member for Eastbourne that it makes people spend to the limit. If one considers the average amount spent by visitors overseas, one finds that the reverse is the case. In 1966, before restrictions were imposed, the average spent by persons going abroad was £42. In 1967 it was £37 and last year it was £36. Therefore, there is no case for saying that people are spending more than they did before. In fact, the average has gone down.

Mr. Edward M. Taylor

Is that on holidays?

Mr. Taverne

This is the average, all expenditure by persons abroad.

The crucial question is how far this measure has helped the balance of payments. In a very fair speech, the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) suggested that it might have been of some help but nevertheless he wanted the restriction removed. There is no doubt that the amount spent on holidays abroad was increasing annually, as one would expect. In 1958 it was £152 million. In 1965 it was £290 million. In 1966, the last year before the restrictions were imposed, it was £297 million. In the two subsequent years, for which we have the figures, that is, 1967 and 1968, total spending abroad dropped from £297 million in 1966 to £275 million in 1967 and £272 million in 1968.

Mr. Edward M. Taylor

Is that holidays?

Mr. Taverne

This is total expenditure, most of which is on holidays.

Mr. Arthur Lewis

Can my hon. and learned Friend give what one might term the import figures? What about money brought in by people coming to this country? How does it balance up?

Mr. Taverne

I shall come to that. Perhaps I may first look at the amounts spent abroad. This includes expenditure both within the non-sterling area and within the sterling area. There has been a particularly sharp drop, as one might expect, in the non-sterling area, from £220 million in 1966 to £193 million in 1967 and £184 million in 1968. There has been a rise in the sterling area, on the other hand, from £75 million in 1966 to £82 million in 1967 and £88 million in 1968.

Those figures are based on the international passenger survey, being figures in the possession of the Board of Trade. It would appear that the rising trend of overseas expenditure which was taking place has been halted. But there are a large number of different factors. One cannot be dogmatic about the effect of the travel restrictions—I recognise that—but it would appear that there has been a useful effect, which has been estimated as £25 million to £30 million a year.

It has been suggested that one must look at the other side of the picture. Does it not adversely affect travel to this country? In fact, one finds that in the growth of world travel, to which the hon. Member for Rutland and Stamford pointed, there has been a considerable increase in the number of visitors and in expenditure by foreigners in Britain. In 1966 earnings from overseas visitors were £219 million. In 1967 the figure was £236 million, and in 1968 it was £282 million, which shows, on the face of it, a surplus on this particular account. But it would be wrong to judge it as a separate trade account; one could not do that. It was a question which was raised, so I have produced the figures. One must, however, look at the trend of expenditure abroad and see how far it has been affected.

The average amount spent has always been under £50. It has been pointed out that the allowance is not £50; it is £65. There is £15 sterling in addition, of which one might expect that at least £10 would be spent. In the past, about one quarter of those taking their holidays abroad spent more than this, and it is in that sector that it appears that the measures have had some effect.

Mr. Peel

I hope that the hon. and learned Gentleman will not overlook that the £15 in cash can be exchanged only at a poorer rate of exchange. It is something which people abroad are not very keen to have; they would much rather have it in other forms.

Mr. Taverne

It is true that it does not carry quite the same rate of exchange as travellers' cheques, though I do not think that it is right to say that it is not a popular form of foreign exchange for one to have. One sees frequent exchanges of dollars into pounds in this country, and I do not believe that there is any objection when dollars are exchanged into pounds.

I turn now to another aspect of the matter. There has been some evasion, but it is pursued, and the penalties, when cases are caught, are heavy. There are more than 7 million visits abroad each year. The vast majority of people spend less than the total in any event. The vast majority of people are reasonably honest. Again, hon. Members cannot have it both ways and argue, on the one hand that these are totally ineffective restrictions and, on the other, that they are indefensible because they act as restrictions. All the evidence is that they do act as restrictions on most people.

As I said at the outset, this is a restriction and, therefore, it calls for justification. The question to be considered is: how far is it justified? How far does the situation permit it to be relaxed? It is not unreasonable to hope that the restriction will be removed soon, but, equally, it would be unreasonable at this stage for me to make a definite promise that it will be removed shortly. I am sure that the House, looking at the matter seriously and soberly, will agree that one must see how the balance of payments develops over the next few months. It will be considered again in the autumn, and an announcement will be made in good time before the next travel year begins.

As I have said, there appears to be good evidence justifying the restriction, but it is something which one does not wish to continue one moment longer than it is needed. I hope that, in the circumstances, the hon. Member for Leicester, South-East will not press his Motion to a Division.

6.17 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

Before commenting on the Minister's speech, I add my voice to the congratulations already offered to my hon. Friend the Member for Leicester, South-East (Mr. Peel) on his luck in the Ballot and on his decision to table a Motion on the subject of the travel allowance restriction. I was glad that both the hon. Member for Blyth (Mr. Milne)—he is not in his place at the moment—and the Minister of State took the same view, thereby clearly dissociating themselves from what I thought were the un. fair remarks made by the hon. Member for Wandsworth, Central (Dr. David Kerr) and his hon. Friend the Member for Liverpool, Walton (Mr. Heller), who seemed somehow to think that it was unnecessary or even improper that we should have a few hours to debate a matter of considerable consequence to a large number of people.

It so happens that the debate is well timed, coming as it does shortly after the publication of the Letter of Intent signed by the Chancellor of the Exchequer to the Managing Director of the International Monetary Fund, in which, I was glad to see, the Chancellor undertook that the Government would abolish as soon as the balance of payments allows the restrictions which it currently maintains on travel expenditure". Obviously, that is a very carefully worded passage, as the whole Letter was, and it has aroused, I think, justifiable optimism that this may be the last time we have to debate the travel restrictions.

The trade in particular will have been disappointed that the Minister could not go further than he did. I emphasise a point made by my hon. Friend the Member for Rutland (Mr. Kenneth Lewis); namely, the need for the Government to give early warning of their intention to remove the restriction. I am told that already the brochures for next summer's holidays are either at the printers or will shortly be going to them, and they have had to assume the continuance of the restrictions. But the planning for the winter holiday season, 1970–71, is already under way. Plans will have to be laid fairly soon. Any advance warning that the Government can give will be of immense value to the tour operators, travel agents and others, including the airlines, who have to plan their programmes well in advance.

It has been put to me that there would be an advantage in the Government's indicating, perhaps earlier than they would otherwise do, that it would be their intention to lift the restriction as from the beginning of the holiday season next November, even if they have to issue at the same time a clear caveat that if the balance of payments does not improve sufficiently to enable that to be done the decision might have to be revoked. It came as a surprise to me that the trade would welcome even a qualified and guarded statement of that kind. But that is the position that has been put to me, and I put it to the Government in the hope that they will feel able to take note of it.

The Minister's speech boiled down to a case for the restriction that was typical of the case repeatedly made; namely, that the gain to the balance of payments is about £25 to £30 million a year. It is remarkable that no Minister who has had to deal with the matter has ever been able to be any more specific, and no Chancellor, despite repeated questioning, has felt able to publish his calculations in arriving at this figure.

I very much welcomed the Minister's recognition that merely to rely on the bald figures of British tourists' expenditure abroad and the corresponding figure of foreign tourists' spending here is not wholly reliable. The whole debate—not today's debate but that which has gone on in the country ever since July, 1966, when these measures were reintroduced—has been marked by a great haze of doubt surrounding the value of the restrictions as a method of saving foreign exchange. What it boils down to is that after the restrictions were imposed there was a dip in the published figures of expenditure on travel outside the sterling area. The Financial Times pointed out in an article on 27th August last year that this was a very simpliste inference to draw. The article continued: It is an elementary statistical precaution to ask what else was happening at the time, before jumping to the conclusion that the departure from trend was all due to a particular act of policy". It is essential to ask what else has been happening over the recent period.

I invite the Minister to ask any travel agent what factors led to the down-turn in spending. He would be told that there were many other factors of much more immediate causative effect than the restrictions on currency, especially the liar! h deflationary measures with which they were accompanied. These are bound to make people much more careful in their spending on all sorts of things, particularly those parts of their budget which are flexible, and for many people, holiday spending is about the only part of their annual budget that can really be regarded as flexible. This restriction operated at the time when bookings were being made, and the figures clearly reflect that the down-turn in forward commitment in holiday travel very closely accompanied the introduction of deflationary measures, with the rise in unemployment and everything else that accompanied them.

There is added evidence. The travel business has shown clearly that the largest setbacks came among the relatively cheap package tour operators, and especially with tours that have a low foreign currency content. By definition, they are almost wholly unaffected by the currency restrictions. I am glad to have the assent of the hon. Member for Walton, because I am sure that he will appreciate that this goes a long way to destroy the Minister's argument justifying the continuation of the restrictions.

It is well known that any degree of political uncertainty or civil strife in a country immediately turns off the tap of foreign travel. Look at what happened to the hoteliers of Paris at the time of the May disturbances last year. It was months before they began to recover. Some of that business will have gone elsewhere. But many people will have cancelled their plans, been unable to put anything else in their place, and stayed in this country.

Reference has been made to travel to Spain. I was most interested in the figures my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) elicited. The Gibraltar imbroglio will have had some effect on travel to that country.

Looking at the other side, which country has enjoyed the biggest percentage increase in British travel overseas? The answer is the United States of America, right at the expensive end of the spectrum. Bearing in mind that the very expensive translantic fares do not come into the currency restrictions, and that almost the whole of the £65 is bound to be spent in almost every case, one can begin to recognise that the reduction of outflow of sterling is hardly proven.

Even the case the Minister made was qualified, and when account is taken of all these other facts it becomes of very doubtful validity indeed.

One's scepticism is further increased when one studies international comparisons. Here we have the advantage of a fairly recently published study, "Freedom to Travel", headed "An Economic Study of the Advantages of the Development of International Tourism without Restrictions", published in March by the European Travel Commission. It gives a much more penetrating analysis of the United Kingdom's situation over the past few years than anything the Minister of State gave us in the debate, and makes clear that before we strike a balance of advantage we must take many other things into account.

Among the most vocal critics of the Government's policy in this country have been the airlines, both nationalised and private, because they have lost substantially as a result of the Government's restriction. Yet there was not a whisper in the Minister's speech that any account has been taken of the loss to the nationalised airlines as a result of the falling-off in traffic because of the travel restrictions.

What about the investment that has been made overseas by British travel operators in travel facilities, such as hotels? Has any account been taken by the Government of the loss of earnings to this country because these facilities have been under-utilised as a result of the restrictions? These are all facts which have to be taken into account.

Again, when looking at the balance the other way—and I am glad that the hon. and learned Gentleman made the point that it is wrong to look at tourism as a single, isolated balance of payments figure—one has to have regard to the results of devaluation on increased spending on purchases in this country by tourists coming here. The conclusion of this highly reputable international body is this: In summary, the travel balance argument in relation to U.K. tourism earnings and expenditure requires closer analysis in order to take account of all the factors which can ultimately determine a `true' balance on the travel account. Restrictions on travel can affect U.K. air lines and U.K. hotel investors abroad, will reduce income to these principles and this reduction will be substantial in the future, particularly in relation to the air lines. I do not believe that the Government have taken these factors into account. Nothing that the hon. and learned Gentleman said gave any indication that he had done other than take a broad inference from the figures of spending.

I do not need to stop there. When one is going to weigh the speculative balance of payments advantage against the powerful and compelling arguments to which the hon. and learned Gentleman referred, one must bear in mind two further points. First, the spending by British tourists overseas is a tiny proportion of the total expenditure on goods and services. In 1961 it was 3.9 per cent.; in 1965 it was again 3.9 per cent.; in 1967 it was 4 per cent.; and I am prepared to accept that in 1968 it may have fallen back a little because devaluation will have sharply put up the cost of imports.

If one bears in mind the marginal effect, which is all it is, that travel restrictions may have even on this tiny proportion of the total spending overseas, one begins to see that one is juggling over a miniscule share of the total spending overseas.

Second, it is wrong to look at the tourist balance in isolation, just as it is wrong to look at the visible trade balance in isolation. In fact, many countries regularly run tourist deficits, including the United States, Canada, France, West Germany, Holland, Scandinavia, Belgium and Luxembourg. These countries together regularly provide more than half our tourist earnings. In 1964 a total of 56 per cent. of our earnings came from this group of countries in 1965 the figure was 57 per cent.; in 1966 it was 58 per cent. and in 1967 it was 60 per cent. We are a major beneficiary of other countries' tourism deficits, and it is taking a narrow, myopic view of our future as major participants in the growth of international travel to justify these petty, irksome restrictions by reliance on our balance of payments on tourism.

The Minister of State's case, even at its best, has been shown to be founded on a shaky statistical basis. Against it, I see three powerful arguments. First, the present arrangements are riddled with loopholes and there is no doubt that they are subject to widespread evasion. The hon. and learned Gentleman gave the impression, as did the Chancellor the other day, that he does not know what is going on. It is a perfectly legal form of avoidance to get the medical certificates which the hon. Member for Wandsworth, Central said that he was so free with. Who can say that his health will not be improved by a trip overseas, especially after one of our fouler British winters? I understand that in many areas certificates are readily forthcoming and are always accepted without question, because bank managers are too busy to make their own investigations. Even on a small scale, most of the cross-Channel ferries are offering vouchers for purchases on board so that one does not have to touch the £15 allowance, which is then available to be spent overseas. These are the legal ways. There are illegal ones.

Cash is smuggled out—and this does not come into the figures at all. I was struck by a paragraph in an article in the Daily Mail of 16th October in which Mr. Vincent Mulchrone wrote In Greece earlier this year our travel editor, Peter Whelpton, questioned 40 English tourists. Four out of five admitted that they had brought extra cash. This is not evasion on a tiny scale. This is simply the manner in which the tourist, if he is going to have a holiday in a country like Greece, has to provide himself with the necessary cash, and it goes out stuffed in his socks. We know of cases of business allowances which are not fully spent and are deposited in banks abroad. Travellers' cheques are exchanged in an overseas sterling area country, such as Malta or Jordan—and one goes to Jordan first before going on to Israel because Israel is outside the sterling area. Many of my hon. Friends have also mentioned the West Indies as another example. It is just one more example—and here I echo the words of my hon. Friend the Member for Cathcart—of a restriction that is petty, pointless and damaging, which is making criminals of us all and bringing the law into disrepute.

The second major objection is that the restriction represents a severe incursion on individual liberty. It was good to hear the hon. and learned Gentleman acknowledge that point. But it is right that we should answer the point made by the hon. Member for Walton that because the great majority-75 per cent., on the Minister's figures—find that they can manage their holiday within the allowance, that is the end of the matter. I do not accept the argument that an injustice ceases to be an injustice because only a few people are affected. On the contrary, the people hit by this are the "loners"—those who want to get away from the beaten track, who want to explore on their own, perhaps with a car, and perhaps stay rather longer than most people are able to do. This applies particularly to those who have just retired. It is becoming increasingly the custom in the United States that on retirement one has a long holiday overseas, maybe the only one of one's life. This is something which these restrictions make impossible. These are the people one hits. It is the mark of an uncivilised attitude to believe that if only a few people are affected one can accept the situation with equanimity and say that it is not really important. This country is almost alone in feeling no qualms at restricting its people from travel.

Then, of course, there is the question of confidence. No doubt the Government will remember Lord Cromer's letter to The Times last year. I realise that Lord Cromer is not perhaps the favourite banker of Treasury Ministers, but he wrote: If confidence in Sterling is at issue no measure in itself could be contrived more effectively to disseminate more widely in the world at large an unfortunate and uncalled for belief that Sterling is not a good currency to hold…The pleading of poverty of foreign exchange by British tourists abroad in hotels, restaurants, and elsewhere does not enhance confidence in Sterling or in a Government which causes its citizens to debase themselves into begging special consideration. That sentiment was repeated, in different word, by The Guardian last October: Britain's reputation abroad is undoubtedly damaged by the restrictions put on British tourists, eking out their francs and lira to cover a whole fortnight: nothing more effectively impresses on the minds of the Europeans that Britain is still in a precariously bad way. If the Government had wanted to set about undermining confidence in the pound, if they wanted to blazen abroad to ordinary people like the French hotelier, the German restaurateur, the Italian taxi driver or the Swiss ski instructor, by giving the impression that our economy is in a dangerously parlous state, they could not have devised a more effective method than to send out millions of our people counting every centime, every pfennig, every lira or every cent they spend. If, as I believe is true, confidence is a critical weapon in the fight for prosperity, the sooner these niggling, irksome, illiberal and petty retrictions are abolished the better.

Question put and negatived.