§ 5. Mr. Blakerasked the Chancellor of the Exchequer if, in view of the latest trade figures, he will now reduce the rate of import deposits to 30 per cent.
§ Mr. Roy JenkinsI have nothing to add to what I told the hon. Member on 17th February.—[Vol. 796, c. 184.]
§ Mr. BlakerIn view of the fact that the Chancellor said in the Letter of Intent last May that it was his policy to abolish the import deposits scheme as soon as the balance of payments permits, and the fact that the E.F.T.A. Council last November expressed concern at its continuation, has not the time now come for at least a start on the process of reduction of the rate?
§ Mr. JenkinsWe started on the process of reduction last year. On the whole, the bodies of international opinion have been somewhat more understanding of the value of the scheme than has the hon. Member. I will consider all these factors.
§ Mr. John HallWill the Chancellor agree that this forced interest-free loan not only has its effect on industrial costs, but, worse than that, it has effects on cash flow and reduces the rate of capital expansion? Does he not regard this as regrettable?
§ Mr. JenkinsI am not quite sure what the hon. Member means by capital expansion. It is an element in growth restriction, and growth restriction has been responsible to some extent for the turn-round in balance of payments, accompanied by a 10 per cent. increase in the rate of fixed investment in the past year.
§ Mr. DickensIn view of the February figures, will my right hon. Friend agree that if we are to have a much higher rate of economic growth this year it may suck in more imports and that is one very good reason for retaining the import deposits scheme at its present level for the foreseeable future?
§ Mr. JenkinsThere are a number of factors, as I indicated in my original Answer, to be taken into account although I would not regard the February 178 figures as either unsatisfactory in themselves or as something which would change my view of the overall situation.