HC Deb 14 October 1976 vol 917 cc617-8
12. Mr. Gwilym Roberts

asked the Chancellor of the Exchequer what study he has made of import deposit schemes and if he can make an estimate of the effect a 50 per cent. import deposit scheme would have on the balance of payments.

Mr. Denzil Davies

Examples such as the 1968–70 United Kingdom scheme and the recent Italian scheme suggest some deferment of imports but only very small net effects. The main balance of payments effect would be temporary foreign financing of some part of the total amount of deposits, which would be reversed when the scheme ended.

Mr. Roberts

Does not my hon. Friend agree that, even if he does not like this particular form of scheme, in view of our enormous deficits on the balance of payments with the EEC countries, with Japan and with many other parts of the industrialised world, it is time some form of import control was operated on manufactured goods? Although the Chancellor has just said that import controls are not themselves Socialist, does he not agree that, even so, they are humane if they can keep up the level of employment and the standard of living in this country?

Mr. Davies

My hon. Friend's Question related to import deposits. Again, I would point out that the effect on industry and its liquidity might he damaging if import deposits were introduced and that they might not have much effect on the balance of payments. As for the humanity of import controls, of course by introducing general import controls we would act in a way detrimental to the interests of many poor countries.

Mr. Nelson

Is the Minister aware that his indecision on this matter and his failure to rebut at an early stage suggestions and calls for import controls, quotas and deposits of this kind are having the short-term effect of pressurising many importers into increasing their orders and, therefore, having a damaging effect on the short-term balance of payments position?

Mr. Davies

This Government have made it clear time and time again and are making it clear again now that we do not see any form of import controls as any way of solving the basic problems of the British economy.