HC Deb 26 January 1971 vol 810 cc307-8
15. Mr. Madel

asked the Chancellor of the Exchequer what effect he estimates the termination of the Import Deposits Scheme will have on the balance of payments.

17. Mr. Dykes

asked the Chancellor of the Exchequer what is his estimate of the effect of the Import Deposits Scheme both on the volume of imports and on currency flows into the United Kingdom.

Mr. Maurice Macmillan

Ending the Scheme is not likely to cause any signicant increase in imports. Therefore the effect on currency flows should also be insignificant.

Mr. Madel

Would my hon. Friend accept that the immediate requirement is for rapid industrial expansion? Will he consider immediate adjustments in purchase tax and hire-purchase restrictions so that industries such as the motor industry may run at much nearer full capacity?

Mr. Macmillan

That is an entirely different question, as I hope my hon. Friend is aware. As he is concerned about liquidity, I will point out to him that the effect of ending this Scheme and the progressive release of deposits over the six months from 4th December will have a beneficial effect on company liquidity.

Mr. Dykes

Since it appears, on all the evidence, that the Import Deposits Scheme's main characteristic was that it had no effect on import flows into the country, either at the beginning, at the middle or at the end, does not my hon. Friend agree that the economic management authorities may be in a position to take more of a risk with the economy than they have so far by faster expansion?

Mr. Macmillan

I do not think that the Scheme had very much effect one way or the other and I do not think, therefore, that its removal has very much effect one way or the other.