HL Deb 15 April 1969 vol 301 cc2-5

2.38 p.m.

LORD BOOTHBY

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government, whether, in view of the failure import levy scheme to produce the desired results, they will now consider imposing import quotas on unnecessary manufactured goods and luxury goods generally.]

THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN)

My Lords, I do not agree with the noble Lord that the import deposit scheme has failed to produce the desired results. While it is true that we cannot put a figure on the effect of the scheme, we believe that it is achieving its purpose, which was to produce a marginal but nevertheless significant effect on imports and thus accelerate usefully the improvement in our balance of payments. Her Majesty's Government do not believe that import quotas, whether general in coverage or applied as the noble Lord suggests, to "unnecessary manufactured goods and luxury goods" are desirable.

LORD BOOTHBY

But, my Lords, may I ask the noble Lord whether it is not a fact that the balance-of-payments deficit continues, and that the Chancellor of the Exchequer expected it to be well over by this time? The situation is much worse than was anticipated by Her Majesty's Government. Since excessive imports, rather than falling exports, are the primary cause of this continuing balance-of-payments deficit, is it not a fact that this problem can be solved in an international context only by agreements covering both monetary and trade policies with other countries? I am merely asking whether the Government would take an initiative in this direction.

LORD BROWN

My Lords, the import figures, reading the three-monthly moving averages, have gone like this since July, 1968: 640, 640, 654, 655, 656, 657, 650, 651, 656. Those are very steady figures—

LORD BOOTHBY

On the wrong side.

LORD BROWN

It has to be remembered that this steadiness has taken place in the presence of the rising level of activity in this country, which would normally have been expected to increase those imports. In the second place, were we to begin considering the restrictions which the noble Lord suggests, of the import of unnecessary manufactured goods, et cetera, it has to be remembered that many of our exports would fall into that category when exported overseas, and we could certainly expect retaliation; we could certainly be taking a part in putting international trade on that slippery slope which led to such disastrous results in the 1930s.

LORD BOOTHBY

My Lords, if the noble Lord will forgive me for adding this, we could hardly expect to derive great satisfaction from contemplating a steady figure of deficit year after year; and that is what we are getting now, according to the noble Lord himself.

LORD BYERS

My Lords, is the noble Lord aware that he is to be congratulated, and so are the Government, on resisting the suggestion that unilateral import quotas should be put on by this country? Further, is the noble Lord aware that this would be bound to lead, as he said, to the slippery slope and to retaliation throughout the world, and is therefore very much to be voted against?

LORD NUNBURNHOLME

My Lords, would the Government consider that in future imports must be related to exports, all imports and exports paid through a central bank and the balance against us withheld until exports equal imports?

LORD BROWN

My Lords, in my view that would be a grossly retrograde step; one that would lead to similar measures by other countries and would lead back to the position of the 1930s which would he so dangerous to international trade.

LORD CARRINGTON

My Lords, does not the noble Lord think it rather anomalous that anybody who has £3,000 can walk into a shop and buy a Mercedes Benz, while anybody who has £60 cannot spend it in Germany?

LORD BROWN

My Lords, I am afraid I really have not quite grasped the import of the question. I wonder whether the noble Lord would mind repeating it.

LORD BYERS

My Lords, is not the noble Lord trying to say that the travel allowance is only £50 but one can buy an imported car? However, is not the real answer that one can also buy British cars—Bentleys, Jaguars and others—in Germany?

LORD CARRINGTON

My Lords, I wonder whether I might have an answer from the Government.

LORD BROWN

My Lords, if the noble Lord cares to put his question quite simply, instead of asking it in riddles, I will do my best to answer it. I am indebted to the noble Lord on the Liberal Benches for clarifying the question, which frankly was put in very obscure terms indeed. I understand that the noble Lord is questioning the validity of the travel allowance limitation.

LORD CARRINGTON

My Lords, if I may say so, I will remember in future that the noble Lord is a simple man.

LORD BROWN

My Lords, I am grateful for the compliment.