§ Mr. Gouldasked the Chancellor of the Exchequer what advice he has received on the likely effect of an import deposit scheme on the Italian or any other model on (a) imports, (b) exports, (c) the money supply and (d) production.
§ Mr. Robert SheldonExamples such as the 1968–70 scheme and the recent370W Italian scheme suggest some deferment of imports, but only a very small net effect in the long run. There would be no direct effects on exports but some risk to them from possible retaliation or emulation by other countries. 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.
As regards the effect on the money supply, I have nothing to add to my answer to my hon. Friend on 18th October.—[Vol. 917, c. 324–25.]
The effects of an import deposit scheme on economic activity and production would depend on the precise circumstances in which such a scheme was introduced but would almost certainly not be large.