Orders of the Day — 5. Tax Rebates for Exports

Part of the debate – in the House of Commons at 12:00 am on 11 November 1964.

Alert me about debates like this

Photo of Mr William Clark Mr William Clark , Nottingham South 12:00, 11 November 1964

If it is necessary—and I have not accepted that it is—to impose a 15 per cent. surcharge, it should not be imposed on all imports. I have given one example, that of machinery, which provides a clear-cut case of imports necessary to activate the modernisation programme, and someone could be penalised by the surcharge for importing such machinery. This is what I mean by saying that the Government should have been a little more discriminatory. It was not a question of being discriminatory between one country and another. It was a question of discriminating over a whole range of goods.

I do not think anyone in the Committee will deny that over the past 12 or 13 months we have been expanding our economy. Everybody in the Committee knows that before one can start exporting the raw materials must be bought to manufacture the goods to send abroad. Stockpiling has been going on. No one can deny that. Coupled with that fact, it was known that there was to be a General Election in October. There was no manoeuvrability about that. We knew that it had to be in October. [Laughter.] Hon. Members may laugh, but it is terribly serious to our economy. The result of it will be far more serious. With many of our industrialists fearing a change of Government and fearing that some sort of restriction would be put on imports, not only was there normal stockpiling, but there was additional stockpiling as a hedge against any sort of restriction on imports. Consequently, we have a balance of payments deficit, which I do not deny. Nobody knows whether it is in fact £700 or £800 million. I should have thought that it was much less than that. These two factors—normal stockpiling and extra stockpiling—would obviously enlarge the figure.

I should not have thought in the circumstances that this is necessarily a crisis. I am sure hon. Members on both sides will agree that it is quite all right to get an overdraft from one's bank provided one does not spend the money. If I get an overdraft of £100 from my bank and then invest the £100 in stock, I am not any worse off than I was before getting the overdraft. The fact that I owe £100 does not mean that I am bankrupt. That is the position in this country. Too much emphasis has been placed on the fact that there has been a crisis. [Laughter.] Hon. Members may laugh, but I draw the comparison between borrowing from the I.M.F. to pay for stockpiling and borrowing from the Americans and spending the money. We have not in fact spent our stocks. I am convinced that in the succeeding months our stockpiling will show results and exports will rise. I believe that this will become clear when this month's figures, next month's figures, the figures for January, February and March, and so on, are known.