Thank you very much, Commander Donaldson.
The Committee now moves to Clause 3 which deals with the imposition of the temporary surcharge. This Amendment, as, I think, the Committee will agree, is important, dealing with the dating of the surcharges. Nevertheless, it is an Amendment the point of which can be made to the Committee comparatively briefly.
What does the Amendment do? It limits the period in which the surcharges will run to the end of next March, 1965, instead of to the end of next November, 1965. In other words, a period of just under six months from the imposition of the surcharges would be the limit for their first period. Under subsection (12) the Government would be able, by securing an affirmative Resolution, to continue the surcharges. By Amendment No. 17, this would be limited to a period of a year, but would give them the opportunity of continuing the surcharges till March, 1966. I think, therefore, that these two Amendments ought to be considered together; at any rate, the latter should be borne in mind. I think that the purpose of the Amendment is quite clear, but I should like to say a word about its importance.
First, it gives an opportunity to the Minister who is to reply, perhaps the Minister of State, Board of Trade, to explain exactly what the intentions of the Government are towards these surcharges. It is of great importance that this Committee of the House of Commons should be told exactly what the Government's intentions are. There have been a very large number of indications in capitals of other countries of various hints given to other Governments about the length of time for which the surcharges are to run.
It was even said that in the E.F.T.A. meeting certain undertakings were given to the member Governments about the length of time for the surcharges. We all recall that the President of the Board of Trade, before his flight across the Soviet Union to Peking, stopped at Copenhagen, whence he was reported as saying that a special arrangement would be made for E.F.T.A. by a more rapid deduction from E.F.T.A. countries, to offset the surcharges. This was a very inept move, because immediately it led to the accusation of discrimination. It was followed by indications that E.F.T.A., at any rate, had been told the length of time the surcharges were going to run. Perhaps the Minister of State could tell us quite clearly what the intentions of the Government are.
The Chancellor of the Exchequer himself, during Second Reading of the Bill, said:
While it is not possible to fix precise dates for reducing or eliminating the charge, it is intended that this process will begin in a matter of months."—[OFFICIAL REPORT, 24th November, 1964: Vol. 702, c. 1094.]
The general implication of that, of course, must be that the surcharges are here for a comparatively short time, and if this is the case then I would suggest to the Minister of State that to bring the date forward to the end of March, 1965, is the right way to deal with this matter, as far as Parliament is concerned. In other words, if it is to be a matter of months we should in the Bill fix the end of March, and if the Government then feel they wish to continue the surcharges for a longer period they can go back to the House of Commons for an affirmative Resolution in order to be able to continue them. I hope, therefore, that the Minister of State will feel that this Amendment fits in with the Chancellor's plans and purposes as he described them in his Second Reading speech.
The second point I should like to make is that this Amendment fits in with the importance of the subject itself. I do not think that anybody, after the history of the last 46 days—if that is what it is now—could have any doubt about the importance of the surcharges in the economic history of this country and of Europe and in the life of this Government, and I think that the importance of this matter is such that it ought to be brought before Parliament again at the end of March if the Government want to carry on with them. The Chancellor himself said that they affect some £1,700 million worth of our trade on the estimates which he made for trade for 1964. Surely something which is described as temporary, a matter of months, and which affects £1,700 million worth of imports into this country, is a matter which Parliament ought to be able to reconsider at the end of March before he brings forward his next Budget.
Of course, the effect of this will depend on the extent to which other Amendments put down by my hon. and right hon. Friends are accepted by Ministers, but at the moment the importance of this measure is increased by its breadth and the consequences of imposing it. After all, it is a measure which is imposed on goods already ordered and which have got to come in and it is imposed on goods which are in transit and which have got to come in, and on many fundamental raw materials even though they have been primarily processed in some form or another, materials which are essential for building, which are essential for manmade fibres, and essential for printing. All these things will be covered by the surcharges, and unless our Amendments are accepted the surcharges will be a very great burden on those items for industry, and they are of great importance to the price level in this country. Therefore, because of their importance I feel that the House of Commons should have an opportunity of considering them again before the end of March.
The third reason is that these surcharges, as the Government have now frankly stated, are in breach of nine different international agreements. The emphasis has, perhaps, been on the fact that the imposition of the surcharges is a breach of the agreements, and naturally attention has been focussed on the animosity which this has aroused in a number of countries in the G.A.T.T., E.F.T.A., the Commonwealth, and so on. What has been less emphasised is the fact that we are continuously in breach of these agreements all the time the surcharges are in action. Surely we do not want to be in breach of the agreements a moment longer than necessary, and if we are continuing in breach of the agreements the House ought to have an opportunity of looking at them again, and looking at them again in a matter of months, which is the period the Chancellor of the Exchequer himself spoke of in his Second Reading speech.
Another reason why I emphasise the importance of bringing this back to the House of Commons is that these surcharges are fundamentally protectionist. They add another 15 per cent. of protection for British industry, in many cases a number of times the tariff protection industries are getting. They have suddenly got another 15 per cent. of protection with the surcharges.
I do not think the Government have quite realised the impact of one of the sentences in their original White Paper, The Economic Situation, published on 26th October. In paragraph 6 they said that:
So far as imports are concerned a sharp distinction must be drawn between the increase in raw material imports required to service an expansion in production and the disturbing increase in manufactured goods most of which this country should be perfectly capable of producing on a competitive basis.
That phrase "most of which" applied to manufactured goods has undoubtedly given the impression abroad—and the Prime Minister's past utterances, of course, bear this out—that the Government think that we import raw materials for goods and we export industrial products and that the modern development of post-war trade, which is an exchange of industrial goods between industrial countries, has been completely overlooked and the Government want to stop it.
This fundamentally was the basis of so many of the anxieties of the countries which are affected by the surcharges. They believe that the purpose of the present Government is to have a protectionist system going back to the prewar arrangement by which we imported raw materials which enabled us to supply ourselves entirely with manufactured goods and to export manufactured goods as well. As this means grave damage to the trade of industrialised countries, naturally they are strongly opposed to it.
It is to demonstrate what quite certainly the Chancellor of the Exchequer has said, to demonstrate that the Government are prepared to consider reducing the charges, that the House of Commons should have a fresh look at this, and I suggest that that is a very strong reason why it should be looked at before the end of March, in order to dispel the idea that this is a protectionist measure deliberately imposed by the Government for this purpose.
Of course, we must not underestimate the pressures under which the Government will be once they try to remove or reduce these surcharges when costs have been allowed to rise meantime. The pressure from business, from manufacturers, and, above all, trade unions, against removing this protection will be very great indeed. There is no doubt about that. Therefore, from the point of view of the Government themselves this has to be realised, that the longer this goes on the more difficult it will be to get the surcharge off, because industry, management and trade unions, will have become acclimatised to this additional protection. I would suggest that it is in the interest of the Government themselves that they should have this additional weapon of saying that they must bring the matter to the House of Commons before the end of March. They will, in getting a further Order, have the utmost difficulty with all those who want to see an increase in world trade and not a limitation of it through protectionism. Therefore, this Amendment would strengthen the Government's own hand in dealing with the protectionist pressures which they will have to fight.
For the reasons I have given, and in order to show a proof of their good will, as expressed in the words which the Chancellor of the Exchequer spoke, I hope that the Government will accept this Amendment, which brings the whole matter back to the House of Commons before the end of March, in the last few days of March, and which will give them the opportunity for renewing the powers thereafter for a year. This will do something to ease the difficulties which have been encountered amongst so many of our friends abroad. It will take many years to recover from the alienation of our friends abroad, due to the way in which these surcharges were imposed and handled.
I am unconvinced by the many statements of right hon. and hon. Gentlemen opposite that no consultation was possible. It was possible in a very brief time, through the existing organisations, to consult these countries, to get their views on the matter, to get them in secrecy, and to take account of them. The Government have taken account of some factors. I hope that they will take account of more during the debates on the Clauses which follow.
This wound will take a long time to heal. The Government could do something to help by saying that they are prepared to bring the matter back to Parliament before the end of March—nearly six months after the charges were imposed—and not wait until the end of 1965.
The right hon. Member for Bexley (Mr. Heath) said at the beginning of his speech, quite properly, that he came here this afternoon to discover the purposes and intentions of the Government, as he has every right to do. I came here today to discover the purposes and intentions of the Opposition, which I also have a right to do, particularly because of the confusion which they have shown on this aspect of the measures taken by the Government.
I am not at all surprised that the right hon. Member for Barnet (Mr. Maudling) is not present. I do not make any criticism of him on that count, but, of course, it is evident that the right hon. Member for Bexley and the right hon. Member for Barnet take an entirely different view about the imposition of the surcharge, and therefore, no doubt, they also take a different view about how long these surcharges should be maintained. However, I shall come to that aspect of the matter in a moment.
In putting his case this afternoon, the right hon. Gentleman excelled his own standards of disingenuity, because he suggested that he had come here to help the Government, to ease their passage and to dispel these rumours that the Government had imposed these surcharges for protectionist purposes. In the country and in the House the right hon. Gentleman has been the foremost member of the Opposition in suggesting that these surcharges were imposed because the Government were protectionist, The right hon. Gentleman has made great, if rather ineffective, play with the statement of the Prime Minister that some people might call him a little Englander. It seemed quite a genial remark in the context, but the right hon. Gentleman uses that as a great declaration of policy.
For the last four weeks the right hon. Gentleman has been using all his considerable powers to persuade the country, and such foreigners as may pay much attention to him, that the Government are protectionist, and it is really hypocrisy for him to pretend this afternoon that what he is really trying to do is to dispel this unfortunate impression which has somehow got abroad, he knows not how. The right hon. Gentleman might have put his case a bit more openly than that.
We shall come to each part of the right hon. Gentleman's argument. What I was complaining about, and I thought with every justice, every good ground, was that the right hon. Gentleman was seeking to suggest that he was helping the Government by trying to dispel the idea that these proposals are protectionist, when, in fact, he has been trying to tell people at the top of his voice that these charges and the whole purpose of them are protectionist, or at any rate that a large part of their purpose is protectionist. If he really wanted to assist the Government in these difficulties, he might have emphasised that the surcharges were not imposed for any protectionist purposes. Nobody can deny that some of their effect is protectionist, but, obviously, they were not imposed for this purpose.
I deal next with the right hon. Gentleman's second proposition, that if we accept his proposal now it will help the Government, and the Government will have to come along in March to seek a fresh mandate for the maintenance of these surcharges. I dare say the right hon. Gentleman suspects—none of us knows for certain—that the Government will reject his proposition, because, if they accepted it, it would mean that they were taking power to maintain the surcharges for a very few months.
It is a question of how much is a few months. The period from December to March does not cover many months, but what will happen now is that if the Government insist, as I think they have a right to do, that they will maintain the surcharges without having to come to the House again for six months and reject the right hon. Gentleman's proposal, he will be further assisting the spread of the idea that the Government have protectionist purposes in the maintenance of these surcharges. In other words, his proposal, so far from assisting the Government in dealing with the eco- nomic position of the country, will only injure them further.
I understand the right hon. Gentleman's view in this matter. I only complain about the lack of candour at the beginning of his speech. He is opposed to the surcharges root and branch. In a speech that he made in the House on the Budget debate we had many words from him on other matters, but he was bitterly opposed to the surcharges. In some respects, the right hon. Gentleman is a free trader, although he tried to get us into the most severe protectionist system the world had seen for many years. He tried to get us into the de Gaulle Zollverein. There are arguments as to who are free traders, but the right hon. Gentleman was bitterly opposed to the surcharges right from the beginning, and he wants to get rid of them as quickly as possible.
That, however, is not the view expressed by the former Chancellor of the Exchequer who, after all, is an authority on this matter of the surcharges. On 4th November, 1964, he said:
As part of their short-term measures, the Government have decided, in the light of estimates in front of them, that the time has come to employ these measures to operate directly on the balance of payments. I entirely agree with them that if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken, then they are right to act directly on the balance of payments and not by 'stop-go' or deflation."—[OFFiciAL REPORT, 4th November, 1964; Vol. 701, c. 239.
That was a statement by the former Chancellor of the Exchequer, that he would not oppose in principle in any way at all the imposition of the surcharges. That is not the view of the right hon. Member for Bexley.
We all know what happened. We all know that after the former Chancellor of the Exchequer made a speech of that character and they heard the more rebellious note sounded by the right hon. Member for Bexley there was a revolt by Members on the benches opposite who complained about the lackadaisical manner in which the right hon. Member for Barnet made his non-attacks on the Government. They had a meeting at which they complained about it and said, "We must be more vigorous in future", so they cast aside the under- taking which had been given by the former Chancellor immediately after the Government came to power, namely, that in his view the Government were fully justified in going ahead with the proposals which they made about the surcharges, and I imagine that if the right hon. Member for Barnet thought on 4th November that the Government were fully justified in imposing these surcharges to deal with an extremely serious balance of payments crisis he would not be so foolish as to come along a couple of days later and say that the surcharges should be limited to the period ending in March.
That is one explanation why he is not here. The conduct of the right hon. Member for Barnet is one reason for the distress which we detect on the faces of hon. Members opposite. They are very concerned that the balance of payments crisis has been shown to be much bigger than they were told. They would not have been surprised if the right hon. Member for Monmouth (Mr. Thorneycroft) or the right hon. Member for Bexley himself had been found guilty of cooking the books, but not dear old, comfortable, ruminating Reggie. To be deceived by him is like being suddenly bitten by a shaggy family pet. Naturally they are very distressed, and naturally they say, "We cannot have a shaggy family pet leading the Opposition when they are trying to deal with this problem."
I have been trying to work out from the right hon. Gentleman today, and from his previous speeches on the matter, exactly how he thinks that the Government should have dealt with this situation. The surcharge that we are debating is one of the central parts of the Government's plan for dealing with the difficulty. The surcharge was approved, first of all, by the right hon. Member for Barnet. What is the alternative? I gather that what hon. and right hon. Gentlemen opposite are suggesting—and here there is absolute unanimity between the right hon. Member for Barnet and the right hon. Member for Bexley—is that the Government should have come to power and then should have issued a statement after a few days expressing their overwhelming gratitude for the very strong financial position which they had been left by their predecessors. It is suggested that the situation would have been helped if a statement had been made by the Prime Minister that our economy had seldom been stronger.
They would have preferred that, and then, following such a statement, they would have wanted us to go to those European countries and ask them to agree to our imposing a surcharge. The principle of the surcharge is accepted by the right hon. Member for Barnet, but not by the right hon. Member for Flint, West (Mr. Birch). His objection is that we are breaking international obligations. He must argue that point out with his right hon. Friend the Member for Barnet, who does not take that view, because on the first occasion that he had the chance of giving his estimate of what should be done he advocated the imposition of the surcharge, even though it involved serious breaches in our international obligations.
What was it that the right hon. Gentlemen were recommending that the Government should have done? They were saying that, somehow, having told the world that our situation was no more serious than the present Leader of the Opposition was saying during the General Election campaign—although we had discovered that the figure was at least £100 million and possibly £200 million greater than any figure ever presented by the former Chancellor—we should have gone to these European countries in order to get their agreement to the imposition of the surcharge. We were to say to them, "Our economy is very strong, but we want your assistance in imposing a surcharge of 15 per cent., which we think will help us out of our difficulties. We want to make sure that you have sufficient time for consultation, and we should be grateful for your views on the matter."
What would have been the situation then? The Danes, the Swedes and all the other European countries concerned would have said, "We cannot possibly agree—first, because you do not need any of these measures, on your own reckoning and on the statement of your former Prime Minister, backed by your present Prime Minister." They would also have said, "Of course we cannot agree. We have our own electorates and our own Houses of Parliament to convince. You have asked us in advance to agree to the imposition of a 15 per cent. surcharge, and we are bound to say 'No'. If somebody gets up in our Parliament, after the British Government have imposed this surcharge, and says, 'Were you ever consulted by the British Government on this matter?' we would have to say Yes and then we would be asked, What was your reply?' and we would have to say, 'Our reply was that we did not like it at all, and opposed it strongly.' Then they would say, You should have opposed it more strongly.'" The proposition that the Government could impose this 15 per cent. surcharge by the method described by the right hon. Gentleman is utterly absurd.
What the Government have had to do since the imposition of the surcharge is to send Ministers to every sort of gathering in Europe in order to explain what they have done. They have been met with the greatest animosity, because this action was taken before they said anything to any members of E.F.T.A.—to which organisation we belong—or the G.A.T.T., or the Common Market, or other countries affected. Surely it would have been better if the Government had followed the normal course of going to the Permanent Council of E.F.T.A., which can be summoned at a moment's notice, and going to the Permanent Council of the Community, in Brussels, which can be summoned at a moment's notice, and to the Permanent Council of the G.A.T.T., and making their explanations there before taking the drastic step of imposing this surcharge, rather than try to pick up the bits afterwards.
On these matters the right hon. Gentleman disagrees with his right hon. Friend. That is one answer. The other is that if we had done that in respect of the E.F.T.A. countries, the countries associated with the G.A.T.T. and the other countries concerned, what would they have said, especially if we had already made all the statements that the right hon. Gentlemen suggest we should have made about the strength of our economy? They would have said, "Of course we will not agree." In the meantime the run on sterling would probably have started a good deal earlier.
In this debate I cannot go into other reasons why the run on sterling began. It was because of the nature of the Budget. Right hon. Gentlemen opposite have stated on many occasions that that was what caused it. But it was not the measures in the Budget that they disliked that persuaded the financiers to put the screw on this country; it was precisely those items which hon. Members on this side of the Committee found best about the Budget, namely, the measures for improving social benefits. Previously, whenever there has been a financial crisis of this character we have not put on surcharges of the type that we are debating today. They are abnormal. They have never been taken in connection with a balance of payments crisis before. The right hon. Gentleman says that we could have dealt with these matters in the same way as in the past. But this was an abnormal measure—an emergency measure—to deal with an emergency which the right hon. Member for Barnet acknowledges even if the right hon. Member for Bexley will not.
To my recollection my right hon. Friend has never discussed the question of consultation. We have had to discuss emergency matters with E.F.T.A. before. When the decision to enter into the European negotiations was taken it required immediate discussions with the E.F.T.A. countries, and we carried them out in 24 hours, with complete secrecy, and then the announcement was made in Parliament directly afterwards. The same could have been done in this case.
That was a very different proposition. The right hon. Gentleman is trying to compare the proposals in respect of the terms on which we were to enter the Common Market with those for the imposition of a temporary surcharge. During the period when the right hon. Gentleman was negotiating to get into the Common Market there was not a balance of payments crisis all the time. This Government had to deal immediately with a balance of payments crisis, and they had to take emergency measures to do so. What we are now discussing is one of the emergency measures which the previous Chancellor of the Exchequer said we were entitled to do—as I have tried to drill into the heads of hon. and right hon. Gentlemen opposite, although it seems to require an old-fashioned surgical operation to do so.
In his first speech from the benches opposite, the right hon. Gentleman said that the gap in the balance of payments was wider than he had ever been told by his advisers. So the right hon. Gentleman's idea of how this surcharge could have been operated is not, in my opinion, valid, and I do not think that anybody who has listened to his account of how this crisis could have been dealt with can really think that it was a serious proposition. Ever since the election the right hon. Member for Barnet and his hon. and right hon. Friends have played politics—ever since the first day. I do not complain very much on that score. That is what I expect. I think they want to scramble back to office by any possible means, and included among their means they are quite prepared to back the view of every country in Europe or every country in E.F.T.A. or every country in the Commonwealth against this country.
The right hon. Gentleman talks about the good faith of this Government. He says that it will be years before we can repair the alienation in those countries. He says that and thinks that he is, at the same time, trying to assist this country. One of the most interesting things to notice when hon. and right hon. Gentlemen opposite cross from this side of the Committee to that is how quickly and easily they shed their patriotic cloaks. They become not only the friends but the passionate lovers of almost every country but their own. They embrace Dr. Verwoerd, they blow kisses to General Franco, and they even, at the last moment, start making ogling glances at President de Gaulle. The right hon. Member for Bexley, of all people, is paraded before us as the man whose delicate and tender advances could have dealt with this situation in such expert fashion, this Don Juan before whom every political maiden surrenders without a tussle, this irresistible suitor, this Casanova from Kent. But he is not the real person to lecture my honourable and puritan Friends at the Treasury about conducting their affairs in Europe.
The right hon. Gentleman in his tenure of office was in charge of the negotiations with these countries. He consulted them, but he should know over many years how strong and passionate was the opposition to the measures which he proposed among Commonwealth countries, among some of the E.F.T.A. countries and among European countries. Or is he trying to tell us that in the face of all his skill even the sweet and chaste Marianne swooned before his feet? No, this was not the case. Right hon. Gentlemen must learn that they have lost the election. They are very poor losers. We thought that that was the one thing they learned at their public schools. They ought to learn to take their defeat with a better grace and, in the meantime, not to retire to the City but, better still, to retire to Trappist monasteries. That is where they might really carry out reforms which might equip them, not to run the affairs of this country but to make a little intelligent opposition.
I have seldom heard a speech of such amusing character which set out from the very word "go" to say that we have international treaties, and that if we do not like them, then what we want to do as a Labour Government is break them here and now. That is exactly what seemed to be a major part of the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). He says that we have a treaty, and that we cannot consult; if we cannot, it does not matter, although it may be written into that treaty that consultations shall take place.
If the hon. Member for Ebbw Vale thinks that it is in the best interests of this country not to do that, then we should break that treaty. What are international treaties about? They are about matters of confidence between one nation and another, and, whether the Labour Party like it or not, in Europe confidence in this country has been shattered by the action of the Labour Government. If I may, I should like to suggest that one of the greatest surprises has been among our real friends in Europe. It is the people who really trusted us, it is the Norwegians, it is the Danes, it is the people who through thick and thin have always stood by us, who were the most greatly surprised by the action of the Labour Party.
I have had sent to me by an extremely pro-British Norwegian the only Norwegian business publication, by name Formand. It is a monthly which is circulated to nearly every business house in Norway. Its leading article, the first since the sure larges, says:
The British Labour Party has given E.F.T.A. co-operation a shock it probably will never overcome. Even if the 15 per cent. import duty should be discontinued after a relatively short time, we are nevertheless afraid that the psychological basis for a further development of E.F.T.A. co-operation has disappeared.
The article continues:
It is not only the faith in the sanctity of international treaties that has been weakened on this occasion; it is the faith in England. Among those nations Norway trusted to keep their international commitments, England took the first place. Or, to say it the other way round: the last country we expected voluntarily to disregard its international commitments, is that same England. If we cannot trust England which nation can we trust?
This is from some of our greatest friends in Norway. How can Members from the opposite benches get up and say that this does not matter? How can they possibly argue that this is something which can be put aside?
That is one of the reasons why I hope the Government will accept this Amendment, because the very basis of it is to try to define what is meant by the word "temporary". It is only meant to be a "temporary" surcharge. Surely, in most people's minds, 12 months is longer than "temporary" for surcharges which are breaking a treaty. We are suggesting in this Amendment that a six months' period will begin to defend the good words of the Government politicians at the moment touring Europe. They could be brought down to base on a six months' period. If they mean what they say, if they really intend to carry out what they say, then surely this Amendment, with, if necessary, an extension of a further 12 months, would put us entirely into the position of having a temporary surcharge.
The last point I should like to take up is again a matter raised by the hon. Member for Ebbw Vale. He suggested that it was impossible to consult—that we could not go round. It is quite surprising that if there had been a moment's thought about the method of bringing this in, half the animosity in Europe could have been avoided. If it was so essential—I do not accept that it was—to do it immediately, why did not the statement from that Dispatch Box say, "We shall bring it in for eight weeks, while we consult with our European treaty partners and with the Commonwealth." This does not limit one to having it for eight weeks only, but at least it gives the impression abroad that we really mean to live up to our treaties.
In order to define what the Labour Party mean by "temporary", I hope very strongly that the Government will accept the Amendment.
I cannot believe that the speech of the hon. Member for Ebbw Vale (Mr. M. Foot) has helped this country to sell one kettle, pot or pan. It was one of the most irresponsible speeches against the good trade relations of this country that I have ever heard. The hon. Gentleman twitted us about crossing from the benches opposite to these benches. We have seen him cross from these benches to the Government back benches, and he is still below the Gangway. We now know that his right hon. Friend the Prime Minister was probably right to keep him below the Gangway because of his irresponsibility.
I support the Amendment because I hope that if the Government accept it we may repair some of the damage which has been done to our export trade. There is no shadow of doubt among those of us who are engaged in the export trade that it is the good will of the countries to whom we sell and the good will of their merchants and importers which matters very much. Before I became a Member of the House I travelled to many of the market places of the world in different countries selling goods. I do not suppose that any one of the Ministers on the Treasury Bench has actually gone out to sell the goods that we make in this country. If they had, we might have had a different approach to this matter. It takes a long time to build up good will. One may well meet a customer after breakfast in his office and go off with him to lunch and then come back, and then after a break, perhaps even after dinner, if one produces a contract, the customer may say, "We absolutely agree with everything, come to the office tomorrow morning at 9 o'clock". Then one has to start all over again.
These are difficult negotiations for our exporters, and nothing that has happened so far as a result of the surcharge has done other than make the task more difficult. We know that at the moment the pipeline is full of orders, but I wish to sound a note of warning to hon. Members opposite. After their behaviour it may be difficult to maintain a high rate of exports this time next year. That is the situation which faces the country. Making this surcharge really temporary would be one way in which we might recover some of the good will that this country has lost. It is an indication of the hurried manner in which this surcharge was imposed that it was clamped on all goods whether they were on the seas or in ships berthed and ready to discharge their cargo. That shows that the party opposite was simply trying to upset some of our best customers.
I hope that the Government will accept this Amendment. They would be wise to do so, because its acceptance would go some way to repair the damage which they have done. Hon. and right hon. Members opposite never seem to learn what our trade is really about. They seem to think that the Chancellor need only call together a committee of people who sell exports and make a lot of speeches. That of itself does not sell exports. Hon. Members opposite talk about productivity and they think that if cars are at the dock-side, they are sold. But not only have exports to be sold; they must be sold in the right markets. That is what matters. During the last Parliament we had instances of hon. Members opposite wanting us to sell to countries which were not creditworthy. It is not until we have been paid for the goods and the money is in the bank that the transaction is completed.
On a point of order, Sir Samuel. I hesitate to interrupt the hon. and gallant Member for Eye (Sir H. Harrison), but it seems to me that he is slightly out of order. Would not his remarks be more appropriate in respect of Clause 4, about which some of us may have something to say? We are here dealing with imports and not with exports.
The hon. Member for Ebbw Vale (Mr. M. Foot) was prolix to the extreme. His speech was drivel, but it was very long. I suggest that if the hon. Member proposes to speak at such length on the Finance Bill the Prime Minister may find it wise to have "three feet" in his Government, otherwise it will take a long time to get the business through.
As the hon. Gentleman very rightly said, I am opposed in principle to this surcharge and would have been whoever had introduced it. I believe that it is absolutely wrong. Quite apart from the question of breaking agreements, I believe that it is unacceptable economically.
I do not know whether the hon. Member for Ebbw Vale read it, but some hon. Members opposite may have read a recent issue of the publication of the National Institute of Economic and Social Affairs, which goes into this question of the effect of the surcharge and reaches the conclusion that it would add very considerably to the inflationary pressure in our economy.
What will happen is that potential imports that we should have had, if the surcharge had not been imposed, will simply find their way abroad and as soon as the surcharge is taken off they will come into this country with a rush; so that our final state will be worse than the first. The pressure in the economy will have been increased and the capacity to suck in the imports which have been held back.
It is significant that the run on sterling did not start until after the surcharge had been imposed. The surcharge was supposed to stop any run on sterling. I think it important that the Government should indicate their intentions more clearly. When the Foreign Secretary and the President of he Board of Trade approached the E.F.T.A. countries they spoke about the surcharge being withdrawn in a matter of months. They probably did that to get out of a very difficult situation. We do not want to be caught out again breaking agreements and misleading people. If they did say "in a matter of months", and meant it, a way to show that they meant it would be by accepting this Amendment. If the Government do not accept the Amendment I think that the E.F.T.A. countries will reach the conclusion that they were simply being kidded along and, in fact, that might well have been the case.
I cannot see why the Government should not accept the Amendment. Its acceptance would, at any rate, be an earnest of good faith and do something to repair the damage which has been done. I hope that we shall press this matter to a Division.
Life is full of surprises. I must confess that I never thought that I should witness the hon. Member for Ebbw Vale (Mr. Michael Foot) dressing himself in a Union Jack and lecturing the rest of the Committee on patriotism and loyalty to country and party. It is a sorry sign of the weakness of the Government's case that they have had to rely on someone to spring to their aid so fervently who is not exactly noted for springing to the aid of his own party.
From what the hon. Member for Ebbw Vale said, one would assume that what is felt by members of the Tory Party has been invented by ourselves and that foreigners have no reason to feel upset. If that is so, why did the Foreign Secretary, Mr. Gordon Walker, tear off to Geneva and practically plead almost on bended knees with all the members of E.F.T.A., including Labour Governments, for their support and help? If this is all imagination on the part of hon. Members on this side of the Committee, why did the Foreign Secretary do that? Why did he say that this was all a vast plot by the City, the banks and the Tories—which is the usual thing? On the contrary, practically on bended knees he tried to get himself out of the mess which had been achieved by the method adopted by the Government in handling the matter.
The hon. Member for Ebbw Vale knows very well that it is not a question of my right hon. Friend the Member for Bexley (Mr. Heath) influencing foreigners by his speeches. One cannot find any foreigner who does not feel outraged by the situation at the moment—and that ranges right across the whole of our trading partners.
I should, therefore, like to ask a question which was answered by no means satisfactorily at Question Time today. Does it not seem that the Government gave prior communication to the United States? If so, I was told something which was incorrect today, to put it no more impolitely, and if it was possible to convey some prior information to America I do not see why it was not possible to convey some information to E.F.T.A. and the Commonwealth. If information was given to one, why was it not given to the other? Instead of the sort of cheap tirade launched by the hon. Member for Ebbw Vale, he should have considered why foreigners feel so upset about the surcharge. Why could not we have consulted them when, as I say, we may have consulted the United States?
The Government now find themselves in this difficulty. Having had virtually to eat their own words, and having had to promise that the surcharge will be removed within a very few months, I see a danger arising. Do not let hon. Members opposite say that this is a Tory plot. People who stockpiled in the summer thinking that the worst might happen—that Labour might get in, which, unfortunately, happened—will go on using their stocks and hold off making purchases.
People in that position have had a guarantee from the Government—for what such a guarantee is worth—that the surcharge will be withdrawn within a few months. They are, therefore, bound to hold off making purchases until it is withdrawn. I hear the hon. Member for Ebbw Vale muttering. He spoke for long enough while on his feet. I see no reason why he should continue his speech while in a sitting position.
As I was saying, any sensible person in business who stockpiled thinking that the worst might happen will go on drawing on his stocks and will not make new purchases until the surcharge has been removed. Business people will, naturally, put off the evil day as long as they can. I cannot fathom why the Government placed such a surcharge on goods and then gave notice that they intended to remove it, thus defeating the whole purpose of the surcharge.
It is not merely in generalities that we can criticise the Government's action, or in regard to their timing and the method they adopted in imposing the surcharge. The surcharge itself was a clumsy thing to apply. Consider the effect of the imposition on our exports and exporters. In my constituency is a firm with a first-class exporting record. It produces a highly technical form of machinery, two or three items in the manufacture of which must be imported. This firm is finding itself in the greatest possible difficulty.
I am endeavouring to point out, Sir Samuel, that the surcharge is having such a serious effect that it should be removed as quickly as possible. Since I appear to be out of order in raising this matter, I will abide by your Ruling and pursue the subject further on the Question, "That the Clause stand part of the Bill".
For the moment I will merely tell the hon. Member for Ebbw Vale—and it is interesting to note that no other hon. Members opposite are anxious to spring to the defence of the Government—that rather than indulge in the sort of tirade represented by his speech he should attempt to restore and not destroy confidence in us in our markets throughout the world, markets in countries governed by Governments of various political complexions.
The hon. Member for Ebbw Vale (Mr. Michael Foot) can always be relied on to give a good performance and, so long as it is realised that his contributions to our debates are performances, and are treated as such, it is all right. But he invariably accuses his opponents of saying something that they have not said and proceeds, with a multitude of words, to prove that what they did not say was not true.
I fear that that has happened on this occasion. Although he referred to the speech made by my right hon. Friend the Member for Barnet (Mr. Maudling) on 4th November, I thought that, since one should not always believe everything one hears, it would be wise if I looked up my right hon. Friend's speech. Having done that, I have found that what the hon. Member for Ebbw Vale said my right hon. Friend had said was by no means an accurate picture of what was stated.
To listen to the hon. Member for Ebbw Vale one would get the impression that my right hon. Friend was wholeheartedly in favour of the 15 per cent. surcharge, that he had no qualms about its introduction and that he was extremely anxious that it should be imposed. Nothing could be further from the truth. My right hon. Friend did not say anything of the kind. The hon. Member for Ebbw Vale gave a variation of my right hon. Friend's words, and if one reads my right hon. Friend's speech one sees that he did not accept the premises on which the Government decided to take action. My right hon. Friend in fact said:
… if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken "—
and he added
then they are right to act directly on the balance of payments and not by 'stop-go' or deflation."—(OFFICIAL REPORT, 4th November, 1964: Vol. 701, c. 239.]
I regret that the hon. Member for Ebbw Vale left some of that out. Perhaps he did not want us to know that as well as the surcharge we have also had stop-go and inflation.
I can understand hon. Members opposite not worrying too much about their treaty obligations. "They were entered into by previous Governments", they may say, "and since the Tories entered them we can ignore them". That might be their attitude. It would be wrong, but I would understand them taking it.
Having said that, I must make it clear that we are in clear breach—as hon. Members opposite must know—of the General Agreement on Tariffs and Trade. That was signed not by the wicked Tories but by a Socialist Government. The Socialists entered into that Agreement—a bit hurriedly because at the time they wanted to get the American loan. It is interesting to note that a signatory to that Agreement was the present Prime Minister, then President of the Board of Trade—though trade was fairly bad in those days. That is why he was the President.
In these circumstances, no one can pretend that we are not in breach of our international obligations. It is highly desirable, therefore, that we should take the steps recommended by my hon. Friends and get on better terms with our friends overseas—friends we will have once again, I hope—by bringing a speedy end to these breaches of our international obligations.
I will not comment on the remarks of my hon. Friend the Member for Southend, East (Sir S. McAdden), except to say that while the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot) no doubt made many people laugh, the assertions in it will not read so well amoung our friends in Europe, where there is a saying perfide Albion, or perfidious Albion, to people who do not keep treaties.
It is not very nice for me to receive letters from Norwegian friends of mine, people with whom I served during the war and with whom I have formed strong links of friendship, saying what a distressing effect the surcharge has had on their businesses and workpeople. In one case the owner of a Norwegian factory exporting 40 per cent. of its goods to this country—having spent the last 10 years building up a market here—has written saying that he is back to where he started 10 years ago and that 50 per cent. of his employees have had to be laid off. I am afraid that the speech of the hon. Member for Ebbw Vale is not likely to generate much amusement in that factory.
Can the hon. Member send to his hon. Friends in Norway a copy of the speech of his right hon. Friend the Member for Barnet (Mr. Maudling) on exactly this subject? I did not, as the hon. Member for Southend, East (Sir S. McAdden) indicated, misconstrue the words of the right hon. Member for Barnet in any degree whatever. The right hon. Gentleman dealt specifically with the question of international obligations and the imposition of the surcharge, and he argued in favour of its imposition.
It will not be necessary for me to do that. The people about whom I am speaking are listening to this debate and will have heard the hon. Member's remarks. They will, therefore, be able to take back to Norway their own views on it.
I do not wish to detain the Committee longer than is necessary, but I should like to quote what some friends in Portugal, another E.F.T.A. country, have said about the deep sense of hurt and injustice which this has created and what a Belgian friend has said. I was at a function the other day where an important member of the Belgian Chamber of Commerce in this country said to me, "If only we had been consulted. If you had come to us as partners and consulted us, we should have been able, perhaps, to go some way with you. But in doing this in defiance of treaty obligations and without any warning, your Government have done something which it will take months, if not years, to put right".
The lack of confidence in this country among countries abroad will have a bad effect on our exports. I speak as one who used to do this job many years ago. Before the war I used to go abroad, and an Englishman's word was his bond, especially in Eastern countries. A friend of mine who travels round the world says that he is amazed at the feeling against the British Government throughout the world. This is not a matter for joking or for amusing speeches. This is a matter which affects the prestige of this country abroad, and it should be looked on as such. It is for those reasons that I support the Amendment most wholeheartedly.
I rise to put the Liberal point of view on the surcharge. Of course, we dislike it. We dislike it historically. But we have leant over backwards to understand the Government's point of view. There is no doubt in our minds that they were left with an appallingly serious balance of payments position. Therefore, we have not voted against the surcharge, although we loathe and dislike it. We feel—in fact we know—that it is rather like the case of a drunkard trying to cure his disease by drinking a bottle of whisky all at once in the hope that afterwards he will be able to give up drink. The cause of the balance of payments crisis is primarily the fact that we cannot export cheaply enough to be profitable. There is no profit in exporting when the home market is so protected and so good. Therefore, the 15 per cent. surcharge must be regarded as a very temporary measure.
I understand that we are discussing the Liberal Party's Amendment No. 16, which suggests that the surcharge should cease to have effect in May, in six months' time. However, we hope that before then there will be, as a guarantee of good faith by the Government, a reduction in the duty which will enable hon. Members to judge whether it should be carried on and whether it was a temporary measure. We are prepared to give the Government a chance, although we dislike this surcharge. There is no doubt that there is a great deal in what hon. Members on this side of the Committee have been saying about its effect on the members of E.F.T.A. I understand, although I have only been a Member for a very short time, that if one proposes to attack someone notice should be given, and I feel that this might have been done in the case of the 15 per cent. surcharge.
Another reason why the surcharge should be removed as quickly as possible is that there is no doubt that manufacturers and farmers—indeed, everyone in the country who is in business—are mainly in business not for patriotic reasons but in order to make a living. If business people are able easily to dispose of their goods on the home market, they will not export for patriotic reasons. There is little doubt that the 1½ per cent. rebate will be quickly eaten up by increased costs in this country unless the surcharge is removed pretty rapidly.
Lastly, people abroad who sympathise with the Government's difficulties, and hon. Members on this side who are prepared to give them a chance to put the situation right, would be reassured if the Government gave a promise to come to the House of Commons in six months and to put their decision to us and give us a chance to discuss it. This would assist in reassuring a lot of people in this country and on the Continent that the Government mean what they say, that they are not basically protectionists. I have a sneaking feeling that some members of the Labour Party are protectionists. If the Government were to accept the Amendment in principle it would go a long way towards reassuring many people both here and abroad.
The hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) was quite right when he said that the surcharge would make the home market easier. That is its effect although it may not be its motive. But no one is interested very much in motives. What people are interested in is effects. The effect of this surcharge is to give protection to the home producer. Foreign or Commonwealth manufactured goods will be more expensive and thus a protective market will be given to the home producer. The surcharge is not put on for protectionist motives—we have been assured of that over and over again—but that is bound to be its effect. If it does not have that effect, the whole object of the exercise will have failed. The object surely is to make foreign and Commonwealth goods more expensive.
One Government spokesman, when the surcharge was first put on, cast doubt on that. In a pious speech, he expressed the hope that the prices of foreign and Commonwealth goods which came to this country would not be raised. This showed a degree of muddle-headedness which passed comprehension, because if the prices of foreign and Commonwealth goods are not raised the whole object of the exercise will be pointless. The object is to make people buy domestically produced goods, and they will be so persuaded only if the prices of foreign and Commonwealth goods are raised. This is symptomatic of the muddle into which right hon. and hon. Members opposite have got themselves.
Undoubtedly, every month that the surcharge continues there will be a sort of log jam. People who wish to buy foreign or Commonwealth produced goods will lay off buying because they have the word of several right hon. Members opposite that in a matter of months it will be taken off. Once that is said the surcharge loses its object to a large extent. People have only to hold off for a few months and to use up their stocks and not replenish them and they will be able o buy, as they have been doing semi-manufactured or completely manufactured goods from overseas.
So both in the speech made by a member of the Government when he said that he hoped that domestic prices would not be raised and in the remarks of several other right hon. Gentlemen when they said that the surcharge would be coming off in a matter of months, they have done their level best to ensure that the whole object of this surcharge is defeated. The only way to deal with it in that case is to take it off as soon as possible, certainly by May of next year, which is the six months' period mentioned by the hon. Member for Caithness and Sutherland.
I listened with very great interest to the right hon. Member for Bexley (Mr. Heath) this afternoon, because in a curious way and as opposed to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) I was myself strongly in support of the Common Market. I think that the time is long past when one need apologise for that sort of attitude, because things are different now and I do not think that the attitude of the Opposition has been particularly helpful.
The more I listened to the right hon. Gentleman's speech, the more I came to the conclusion that he was speaking very much with his tongue in his cheek. No one has had more experience than he has of the effort-taking, time-wasting, frustrating sort of negotiations that he had when he tried to negotiate our entry into the Common Market. Therefore, when he spoke about the possibility of our having consulted countries abroad about the proposed action, I suggest that he knows perfectly well that that would have been time-wasting, time-absorbing and, in the end, completely frustrating, because no one seems to have calculated, so far as I am aware, what would have been the position had such negotiations taken place.
Supposing that they had taken, as might well have been the case, three, four, or five weeks to produce any sort of agreement to disagree, with all the various consultations—I would have thought that a reasonable supposition—what would have been our imbalance of trade at the end of that period? I do not know whether one can delve into these highly speculative calculations as to run down in stock and the estimated improvement in the balance of trade that has been talked about, but is it too great a stretch of the imagination to say that if the imbalance of trade was between £700 million and £800 million six weeks ago by now would it be running at £1,000 million? I think that that is a reasonable calculation. There is a case for brutal action and again the right hon. Member for Bexley has been a victim of brutal action. Is it not about time that this country stopped being shoved around? [Laughter.] Hon. Members laugh, but we have been shoved around.
What trouble did the late Government take to demonstrate to the public the developing imbalance of trade between ourselves and other countries of the world? It was always taken as one cohesive figure. The right hon. Gentleman frowns as though he misunderstands what I am saying; let me explain further. I say that the late Government should have taken action to show the public just what countries were being greedy, to put it in simple terms, and the developing imbalance of trade between ourselves and other countries which should have been rectified by bilateral consultations.
Take the position which I see is now developing—perhaps I know a little more about this country than other countries—of Japan, the subject of a trade and navigation treaty less than two years ago. If we study the figures of British-Japanese trade at present, we see a very alarming situation developing with imports from Japan mounting steadily as compared with the increase of exports to Japan. That situation has been reproduced in many other countries over the last ten years. The situation was never brought home to our home manu- factures—the situation where there could have been remedial action taken to stimulate industry to make us relatively if not entirely independent in certain categories.
The right hon. Gentleman said in effect, that this is a protectionist Measure. Of course, as a side effect, it must be, but surely there is a case for saying that we ought to have a breathing space in order to bring home to those industries which are negligent and sluggish what they ought to do to help us in our present state. I must be frank and tell the Committee that the more I listened to speeches by hon. Members opposite this afternoon, the more I came to the conclusion that the Tories in opposition had turned themselves into some sort of importers' lobby.
I know that the hon. Gentleman is taking this very seriously. All the facts and figures about the trade balances of individual countries are published regularly by the Board of Trade in the Board of Trade Journal. Every industry knows exactly what is happening in this respect. He cited the case of Japan. The Treaty of Japan, negotiated by my predecessor, was a balanced treaty which gave us very great opportunities, as well as giving the Japanese opportunities here, but constantly we have emphasised that our exporters have not taken advantage of these opportunities.
If the hon. Member looks back on the Board of Trade figures during the month preceding the election, he will see that the comments which were issued with those figures on each occasion were reported in the Press, and, within the scope of not being rebuked for exhortation, I said that what was essential was aggressive export selling and that this problem could never be dealt with unless this was done.
I do not want to fall into the trap by carrying on too much about exports, which was a point on which I raised a point of order earlier. What the right hon. Gentleman has just said exemplifies exceptionally well the weakness of Government leadership during the last 10 to 13 years in the matter of our export and import trade. He said that the figures are published in the Board of Trade Journal. That is correct. One can read all sorts of balance of trade figures in the Trade and Navigation Returns. The fact is that individual companies have not the slightest idea of what goes on in the Board of Trade Journal.
The hon. Gentleman knows that I have a particular affection for Japan. I was addressing myself to replying to the right hon. Gentleman on his two points. First, I was saying that the average company, medium and large, does not really study what is said in the Board of Trade Journal. Something much more positive and direct for companies ought to be introduced.
Now I come to the question of Japan. I myself was extremely pleased about that treaty. Although I was pessimistic about the long-term trade with Japan there is at present and in the foreseeable future a reasonable chance of valuable exports.
I will immediately leave it at this, that trade being two-way, importations from a country like Japan are getting out of hand, and this goes for other countries as well. The right hon. Member for Flint, West (Mr. Birch) said that whatever Government had been in office he would have resisted the surcharge. The right hon. Gentleman has a rather murky past on the question of support of the Government, and I do not think that I would attach particular value to what he said on that score. The fact of the matter is that, somehow or other we have to stimulate domestic production.
One hon. Gentleman opposite talked about offending those countries which had stuck by us through thick and thin. What about Sweden, a country which was neutral during the war and which, as far as I am aware, is the only one which so far has taken any sort of retaliatory action? In my view, the Common Market countries and most of the other E.F.T.A. countries will not, in the main, take retaliatory action against us. Why? Because we are far too valuable a market. They may make loud noises—they have to—but they will not take retaliatory action. They know perfectly well that their economic health depends upon this country's economic health as well.
I wish that hon. Members opposite, who have given a very unfortunate impression today of advocating the interests of every country except their own, would realise that the facts are now relatively clear and accepted by their own Front Bench. We were faced with a situation which needed quick surgical remedial action. That action has been taken, and I for one think that the Government were absolutely right.
In reply to the hon. Member for Lichfield and Tamworth (Mr. Snow), I must say that, in spite of all temptations to belong to other nations, I remain an Englishman.
What has been surprising about the debate so far has been the lack of supporters to come to the aid of the Government. During the last hour, there have been only two hon. Members opposite who have done so. The hon. Member for Ebbw Vale (Mr. Michael Foot), apparently, is the protector of his Prime Minister, the new protectionist, the protector of a policy of protectionism as opposed to what most people now realise the country wants more than anything else, that is, more competition.
The hon. Member for Lichfield and Tamworth emphasised the need to watch our exports, and he instanced what was happening in our trade relations with Japan. My reply to the hon. Gentleman is that we must in our own shipyards face up to the competition we are having and recognise that our trade union structure is out of date compared with that in Japan. It may be going a little wide of the point of this debate, but I must say these things in urging the cause of my own Port of Harwich. In my constituency, people are most concerned with the future prosperity of the European Free Trade Association and are extremely anxious about the dishonour and bad will which has been brought by the Government into our relations with the countries of the E.F.T.A.
Harwich has benefited considerably from the capital which has been brought from Sweden to develop our new private enterprise port. A great deal of trade passes through the Ports of Harwich and Parkeston to the European Free Trade Association countries, and those of us who are interested in European trade are greatly disturbed by the measures introduced by the Government which will undoubtedly cause a contraction of trade and a contraction of the capital coming into Britain.
This is why I for one heartily support the Amendment introduced by my right hon. Friend the Member for Bexley (Mr. Heath). I know how urgent it is that the surcharges be removed as quickly as possible. The only cure for our country's economic ills is more competition, not protectionism of the type introduced by the new Government.
Listening to the speeches of the hon. Members for Ebbw Vale (Mr. Michael Foot) and for Lichfield and Tamworth (Mr. Snow), and studying the expression on the faces of those occupying the Government Front Bench, I was tempted to believe that they were now making a virtue out of the 15 per cent. surcharge. Apparently, this is something good for the country as an act of policy. The fact that, in the doing of it, they have destroyed confidence among our friends and broken goodness knows how many contracts seems to be a matter of complete indifference and unimportance to them.
If the hon. Member for Ebbw Vale, instead of commuting between the Tribune buildings and this place, would get out and about in the world and study industry in other countries, he would quickly find out, particularly in Europe, just what damage his Government have done to this country's industry.
The hon. Member for Lichfield and Tamworth talked about an imbalance in our trade of £600 to £800 million and he tried to justify the Government's action on that ground. There is no such thing as an imbalance in our trade of £600 million to £800 million. This figure is made up of all sorts of things. But the Government are very chary of telling us what they are. Yesterday, I put down a Question to the Chancellor of the
Exchequer in order to get the information. I asked the right hon. Gentleman whether
he will give the breakdown of the estimated balance of payments deficit 1964–65 on 16th October, 1964, as between capital overseas investment, debt repayment—capital and interest—overseas loans and grants, balancing items and current trading figures ".—[OFFICIAL REPORT, 30th November, 1964; Vol. 703, c. 23.]
The illuminating answer I received was, "No".
We are entitled to ask whether this is a hoax which the Government are perpetrating on the British people so that we may become a protectionist country once more. The hon. Member for Lichfield and Tamworth accused the Opposition of being what he called an importers' lobby. Has he not bothered to study the Amendments to Schedule 1 already put down by the Chancellor of the Exchequer which release a lot of items previously to be subject to the 15 per cent. surcharge? The materials we are talking about on this Bill, the things which we want to get, are basic raw materials out of which we make goods to export and earn our living. We want to be rid of the surcharge as quickly as possible.
On a point of order, Sir Samuel. I did not gather that the Amendment now before the Committee had anything to do with basic raw materials. I thought it was an Amendment about dates on which the import surcharge should terminate or about the conditions on which they should be renewed, none of them discriminating between raw materials and consumer goods. I submit, therefore, that what the hon. Gentleman is now saying about discrimination in favour of raw materials, although it might be a valuable point to make, is out of order on this Amendment.
I am more than happy to leave myself in your hands, Sir Samuel.
The longer this surcharge is kept on our goods, the more damage will be done not only to the good name of our country but to the industries within it upon which we depend for our prosperity. All the wonderful social services talked about by the hon. Member for Ebbw Vale have to be paid for, and they are paid for only out of the produce of British industry. If we lose our good name, as the present Government have made us lose it, our task in the outside world will be made the more difficult.
On a point of order, Sir Samuel. With great respect, I thought that it was the practice of the Chair to call speakers alternately from both sides of the Committee if speakers were available. I rose to my feet after the hon. Member for Ilford, South (Mr. Cooper) sat down.
On a point of order, Sir Samuel. With very great respect—[Interruption.] I fail to see why I should not express respect to the occupant of the Chair. Sir Samuel, with great respect, may I recall to your mind that you did not see me when I rose, and I am large enough to be seen.
I assure hon. Members opposite that I shall not detain the Committee for more than a few minutes. I was interested in the intervention by the hon. Member who spoke for the Liberal Party, the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie). He said that his party was prepared to give the Government the benefit of the doubt on the basic principle of the surcharge, but, nevertheless, supported the Opposition in their requirement that it should be removed very quickly, and he gave the reason that the Government had to impose the surcharge in view of the desperate difficulty which they faced.
I differ from the Liberal Party only in my assessment of the nature of the present trouble, which I attribute more to a lack of confidence in other parts of the world in the ability of the present Government than to any balance of payments difficulties which may have existed.
We listened to the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot) with great pleasure and amusement. In many ways, it was a meretricious performance, but it was a gifted one in terms of verbal gymnastics. The hon. Gentleman comes from a fine radical family, but I am certain that much of what he said tonight would have made old radicals cringe. In short, his argument was that most important and solemn treaty obligations freely entered into by this nation, whether under a Conservative Government in the case of the E.F.T.A. or under a Labour Government in the case of the G.A.T.T., were of such little importance and that we did not even need to consult the people with whom we had made the agreements before breaking them.
I said nothing of the kind. I quoted what was said by the right hon. Member for Barnet (Mr. Maudling) on the question of obligations. I certainly did not say that the question of how we abided by our obligations was a matter of no importance. What I said, and I stick by it, was a very different matter—that we could not impose this charge if we decided to do it after consultations.
That is where we differ. We on this side of the Committee believe that these agreements, entered into freely by this country are of some importance and the least that should have been done would be to consult and to have conversations with the other parties to the agreements. It is also incumbent upon us to say that the surcharges should last for as short a time as possible. I agree with my right hon. Friend the Member for Flint, West (Mr. Birch), who suggested that these restrictions were particularly objectionable in themselves, not only in the manner in which they were made, but that their intrinsic qualities are objectionable.
When the hon. Member talks about contractual obligations, the courtesies of international political life and the importance of consulting allies, I wonder whether he remembers what the Government of that day did in regard to the Suez operation?
The hon. Member is not going to lead me from the argument. [Interruption.] An hon. Member who has not been present at the debate all the time, but interrupts, will realise that it is completely outside the terms of this Amendment and that it would be out of order to discuss the Suez or any operation of that nature.
The nature of these surcharges is in itself objectionable. As my right hon. Friend the Member for Bexley (Mr. Heath) said, they will inevitably create a new area of protection in our economy when an extended area of protection in the economy is the last thing we require in Britain today and would be the most damaging thing in present circumstances. I object too because these surcharges are largely indiscriminate in their impact. They will affect the good and the bad. They will affect goods we produce as well as those we do not. They will affect commodities we require to sustain our export effort.
In my constituency there is a factory which has to obtain the raw material, silicon, to manufacture silica products. Their import will not be affected, but, the cost of the manufactured goods for export will be put up. In that sense the long maintenance of these surcharges may be positively injurious to the export effort we need to increase. I sincerely hope that we on this side of the Committee will press this Amendment to a very early Division—[HON. MEMBERS: "Hear, hear."]—that we shall press for a Division to show emphatically that we believe these restrictions should be swept away at the earliest possible moment and, moreover, that the memory of them should soon be—
I have not heard all the speeches on this Amendment, but I heard the opening speeches and I heard the last two speeches. There have been some in the middle which I have not heard, but I have taken a little care to inform myself as to what was said in those speeches. I make one exception in the case of the right hon. Member for Bexley (Mr. Heath), who opened the debate on this Amendment from the Front Bench opposite.
The hon. Gentleman made a very different kind of speech from all the speches that have been made subsequently by hon. Members behind him. His speech alone from his side of the Committee failed to attack the import duties in principle. He devoted himself strictly to the point he made about the timing of them, about the duration of them, about the Parliamentary procedure to be adopted if they are to be continued beyond a date when he thought they ought to come to an end. All this was perfectly reasonable and legitimate debating, but in my opinion that was the only speech in support of the Amendment which was legitimate.
All the other speeches in support of it have been attacks upon the principle of the import duties itself. They have been saying that it was wrong on a variety of grounds, that it was bad in principle because it was a protectionist tax and we were not a protectionist country. They said that it was bad in principle because it represented a breach of agreements into which we had solemnly entered and which had lasted for a long time. It was bad because, in addition, it was done without consulting any of the people to whom we were bound and without any apparent consideration for anything that they may have thought a contempiated breach of our obligations.
Hon. Members opposite are quite entitled to make these points, to say that the whole thing is wrong and to say it in connection with an Amendment which is related only to time to duration and to the mode of renewal because, if we think that a thing is bad we are entitled to limit its operation and make it as difficult to operate as we can. No reasonable criticism of the legitimacy of that kind of debating can fairly be made.
All the same, I say with forethought, and deliberately, that the speeches I have heard—and if the speeches I have not heard were, as I am told, of the same kind—were contemptible and deliberate hypocrisy, deliberate humbug, and deliberately insincere. Hon. Members opposite are not against the import duties as they pretend. If they had been against the import duties as they pretend, they had an opportunity of voting against them. Not a single man jack of them went into the Division Lobby against them. If they are as bad in principle as is being made out—illegal betrayals, wholly wrong, wholly insupportable—how does it come about that the right hon. Member had not a single word to say on those lines today and that no hon. or right hon. Member opposite at any time since they were introduced has availed himself of a single parliamentary opportunity of defeating them?
I know that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has dealt with this point already, but I want to add something to it. The right hon. Member for Barnet (Mr. Maudling), when my right hon. Friend the Chancellor of the Exchequer originally announced these proposals, said that they were right. He said from the Front Bench, speaking at the Opposition Dispatch Box, that the proposals were right.
I know that he did more; I am coming to that. He not only said that they were right, but that they were exactly what he would have done himself. If my hon. Friend the Member for Burnley (Mr. Dan Jones) will allow me to say so that is not all that the right hon. Gentleman said. He made the further point that these proposals were right, these proposals were exactly what he would have done himself if the country had been so unfortunate as to find itself in a position in which he was still Chancellor, but the third point was, "I would not have done it yet. I would have waited a few months. I would have done exactly the same things, but I would not have done them at once, I would have waited a few months".
I wonder how the right hon. Member for Bexley reconciles that with the Amendment he moved today. How many months would the right hon. Member for Barnet have waited before he introduced exactly the same proposals as my right hon. Friend the Chancellor of the Exchequer introduced?
No, I am not asking the hon. Member; he does not know.
I am pointing out that if the right hon. Member had waited a few months we may make some speculation about how many months. Supposing that he had waited for three months, he would then have introduced them in February. Would the right hon. Gentleman still have pressed that they should end in March? Suppose that he had waited for four months. Then they would have been introduced at the exact moment that the right hon. Member is now proposing to the Committee that they should stop.
The hon. Member plays many debating tricks. I have known him play many in his time. It is not much of a compliment to an old colleague in the House to expect me to fall for another of them. The hon. Member must be a little more subtle. I do not fall for tricks of that kind quite so readily and I should have thought that the hon. Member, with whom I have been a colleague in this House for a long time, would have known that perfectly well.
If the right hon. Member for Barnet said that he agreed that the proposals were exactly what he would have made himself—
The hon. Member keeps saying, "He did not say that" but I happen to hold the Floor at the moment and I say that he did say it. I do not know whether the hon. Member was in the House when the right hon. Member for Barnet made the speech to which I refer. From his interventions I can only assume either that he was not in the House, or that he was asleep when the right hon. Gentleman was speaking, because all the rest of us heard it. [HON. MEMBERS: "No."] When the Budget Resolutions to embody these proposals were introduced by the Chancellor of the Exchequer, the Chancellor of the Exchequer, in the hearing of the right hon. Member for Barnet, made the point which I have just made, and the right hon. Member for Barnet did not repudiate it.
The right hon. Member for Bexley must be careful. It is quite true that all right hon. and hon. Members opposite are at sixes and sevens about these proposals as they are about a great many other things and it is very difficult to make a concerted attack on the Government from a party which has mutually exclusive points of view. That puts them into great difficulties and I have every sympathy with them in their difficulties, but it does not help them to make a damaging attack such as they are trying to make. Let us see what they are asking if we are to take them seriously that the Committee ought to do or that the Chancellor of the Exchequer ought to have done in the first place.
Hon. Gentlemen argue that the import duties should not have been put on for all the reasons which we have been dishonestly given during the course of this debate. What, then, was the honourable thing which we ought to have done? We already owe something more than £700 million on this year's trading account.
The right hon. Member for Barnet admitted £400 million. In 1961, when the Conservative Government introduced a Budget intended to be restrictionist, in order to deal with what they called a most dangerous financial situation, the deficit was £260 million. The right hon. Member for Barnet admitted that he knew throughout the election that the deficit this year would be £400 million and my right hon. Friends say that when they came into office and had a look at the books they found it to be between £700 million and £800 million. Supposing that they are wrong and that it is only £400 million, only 40 per cent. more than it was in what hon. Gentlemen opposite described as the most dangerous year, 1961, what was the honourable thing, if we are to take them at their word, which hon. Members opposite wanted us to do?
I thought that I was directing my remarks to all the speeches made in support of the Amendment. Would that be out of order? If hon. Members opposite are saying that they are supporting the Amendment because the import duties are wrong, I am certain that if they are wrong it means that they ought not to have been applied and that hon. Members opposite are, therefore, right to make it as difficult as possible to apply them. I invite the Committee to look at the contrary proposition, to test whether the proposition which hon. Gentlemen opposite are now advancing is right or wrong. The contrary proposition would be that we do not have any of these import duties.
How honourable would it then have been to go on buying what we obviously could not pay for and to go on importing and importing and importing because we had made an agreement not to put on duties? Quite apart from the financial liability, what are hon. Members opposite inviting the Committee to believe about the honour of that? They have had much to say about the dishonour of breaking agreements, but how dishonourable it would have been to go on buying and buying and buying—
It is not a joke—knowing perfectly well that we could not pay for what we had bought already and that, if that situation remained unchecked, the time would come when we could not pay for anything. It is obvious that the right hon. Member for Barnet was right and his supporters wrong. Of course the import duties had to be put on.
It is then suggested that we should have consulted. What does "consultation" mean? Does it mean telling people that we intended to do it? This we did. If it means—
I am still dealing with the speeches which hon. Members opposite have contributed to the debate inviting the Committee to accept the Amendment. I am trying to show that these arguments led to a reductio ad absurdum. If I am out of order, I will certainly stop, but I cannot see that I am. All these arguments were put forward to induce the Committee to accept the Amendment. I am merely testing their validity by testing them against what the position would have been if hon. Members opposite were right, in order to show that what they are inviting the Committee to do is something which they cannot support by their arguments.
If it was decided that it was right to put a brake on imports, it would have been the most stupid thing in the world to adopt a line of consultation, which must have gone on for a long time and which might have resulted in no agreement, but in the meantime allow imports to continue coming in, knowing perfectly well that we had no means of paying for them and that the result would be complete bankruptcy.
I invite the Committee, if I may venture to do with respect—for I have known many hon. Members opposite in the House of Commons for a long time and they are not always so dishonest as they have been throughout the debate—to reconsider the question and to consider whether they are wise or right to continue an attack on the Government and to make these proposals as difficult as possible to implement when they know perfectly well that in the circumstances the Government did the only thing they could do and that they would have done it themselves if they had had the chance.
I have found the speeches of hon. Members from the Government Front Bench below the Gangway—I do not know whether there is anything significant in that—rather difficult to follow in many ways. I believe their remarks to be against the best interest of the Government which they were intended to help and also against the best interest of the country.
We are discussing the surcharges and the date on which they should be removed. The Government themselves have made it clear that they wish to remove the charges at the earliest possible moment. They do so because they accept that it is against the interests of the Government generally and of the country to continue them too long and they have admitted in any case that in order to introduce them they abrogated certain treaties.
I have found the speeches of hon. Members opposite extraordinary, particularly that by the hon. Member for Ebbw Vale (Mr. Michael Foot), whose speeches are always amusing but who did himself less than justice tonight when he did a great disservice to the country by implying—whatever he says now, the implication was clear—that the abrogation of these treaties did not matter. That was the implication which the hon. Gentleman gave to the whole Committee.
I hope that the hon. Gentleman reads HANSARD tomorrow a little more accurately than he read remarks which he attributed to my right hon. Friend the Member for Barnet (Mr. Maudling).
I was equally surprised when the hon. Member for Lichfield and Tamworth (Mr. Snow) said that it was about time that other countries realised that we would not be kicked around. It is the other countries who consider that they have been kicked around by Her Majesty's Government. The sooner hon. Members opposite appreciate that, the further they will go to putting the matter right and putting it right quickly.
Surely I was not so ambiguous and unfair as all that. Surely I made it quite clear that what I was getting at was that, for a long time past and under the feeble leadership of the party opposite, we had been kicked around economically.
Again the implication is that we are now kicking back. What an extraordinary way to kick back!
This action was not successful. The hon. Member for Ebbw Vale said that there was not time for consultation, that decisions had to be taken quickly and that the Government had to take this action because of the pressure of events. But it has not been successful and there has been a run on the £ and a crisis which left the Government apparently completely impotent. That good old Tory institution, the Bank of England, quickly consulted the credit world and put the matter right. There was plenty of time to consult then when the crisis was much graver than it was weeks before when the Government put on these charges without consultation with anybody. The Bank of England had co-operation by consultation.
I hope that the Amendment will be accepted. The worst feature of these charges is that hon. Members opposite, not having much knowledge of industry and trade, have treated overseas countries as if they were suppliers in a buyers' market, entirely forgetting that they are also our very important customers. That is where the grave danger of what has been done with the surcharges will be felt in future. How can we ever expect these overseas countries to want to enter into trade contracts with us if they believe that the contract can be thrown out of the window at the Government's will and that the action in throwing them out of the window will be supported by Labour Members?
I hope the Government also realise this, that this blow has gone far deeper than among the statesmen and politicians of the countries concerned; that it has struck at the industries and the economic well-being of the ordinary people of those countries. Resentment against the action of our Government has gone very, very deep. I hope again that they will consider taking the surcharge off as quickly as possible, because if they retain it its very retention will defeat their aims to give some stimulus to our exports by means of the export rebate.
I can speak from knowledge and experience and I know that people in Norway and in some of the other countries are demanding that the 2 per cent. rebate which will be given to exporters should be passed on to them in order to give them some rebate for what they have lost by the imposition of the surcharge. These are facts.
What the Government ought to have realised when considering this Amendment is that the sooner the surcharge goes off the less deep will be the hurt to the ordinary men and women in the streets and the homes and people going into the shops in those countries. If this surcharge goes on many of them will be thrown out of work. Do the Government really think that the people in countries affected are then going into their shops to buy our British consumer goods, when this country has helped to bring about their unemployment, their difficulties and their problems? That is how deep a thing this is.
I hope that the Foreign Secretary will respond to a question I wish to put, so that we can see how imperative it is that this surcharge be removed at the earliest possible moment. The question I put to him is this. I ask him to produce a transcript of all the speeches which were made at the last meeting of the E.F.T.A. countries. I think that that would show how deep is the wound and how strongly they feel about the summary abrogation of the treaties by our Government who are supported in breaking them by hon. Gentlemen opposite.
This debate has ranged extremely widely, far beyond the somewhat limited scope of the Amendments which we have been discussing. I suppose that that was inevitable in the circumstances, and I make no complaint about it, except that I do not propose to traverse the whole field of the debate which, in many respects, could be more appropriately dealt with on the Question, "That the Clause stand part of the Bill." I want, if I can, to bring the Committee to an understanding and appreciation of these Amendments and of the Government's attitude to the proposals before us.
The right hon. Member for Bexley (Mr. Heath), in moving the first of these Amendments, made considerable play, as, indeed, other hon. Members have, with what they say is the harm and damage which has been occasioned by the temporary import surcharge in many various respects to which they have alluded, and said that it is in order that that harm and damage may be limited and removed as quickly as may be that it is desirable to put a limit upon the term of the surcharge by the Amendments which have been proposed.
I only want to say, first of all, that in introducing this surcharge—and I want to make it abundantly clear—the Government had no illusions whatsoever but that it was bound to inflict some hurt, that it was bound to create concern, anxiety—if hon. Members like—in the manner of its application, some inevitable degree of misunderstanding or doubt, and soreness, even on the part of our friends, and particularly our friends in E.F.T.A. I want to say most emphatically that while, perhaps, all the soreness has not been removed and that there still remain, naturally enough, aspects of concern among our friends overseas, to describe the present situation as one in which confidence in this country has been completely shattered is a gross exaggeration.
What I would suggest the Government ought also to realise is that the impact of this surcharge has not yet come upon those countries, because there were forward orders covering the period since the surcharge was imposed, and it is only after those orders presently in the factories have dried up that the full effects will be felt in the countries upon which we have placed the surcharge.
The hon. Gentleman has only repeated what he said before, and I in my turn want to repeat that to suggest that the measure of concern which may well exist about this import surcharge can be correctly assessed as meaning that confidence in this country has been completely shattered is indeed a gross exaggeration.
It has been my privilege and opportunity in these last few weeks to meet not only Ministers of some overseas Governments who have been here to talk about this matter but the representatives of many industrialists, manufacturers and exporters from those countries, and while I do not pretend for a moment that they have not perfectly natural anxieties about the matter—anxieties which we fully appreciate—I have found that, on the whole, they are exceedingly understanding about the situation, that they are still well-disposed towards this country, and quite a number of them have been ready to admit, when the situation and the purpose of this has been explained to them, that they might well have found themselves in a comparable situation if they had faced the same facts. Indeed, the most impressive thing in the minds of most of us is something which I think we must all bear in mind, that whatever may be the transient hurt or the irksomeness of this measure, either to our own people or to our overseas friends, in the long run it would be a greater hurt if the situation which gave rise to this measure were not remedied and healed as quickly as may be.
I submit that the real source of harm and damage to our economy, and whatever harm or doubts there may be overseas, lies in the situation which was inherited by this Government, and not in the admittedly unpalatable medicine which has had to be applied, for when an ailment is ignored and neglected, and neglected for a long time, there is always the tendency for the development of an acute disease, and, in consequence, the application of the requisite medicine and surgery is often very unpleasant and very unpalatable.
The right hon. Gentleman clearly stated the effect of the Amendment. I am bound to say, however, that I was not persuaded by his solicitous desire to help the Government. I wish that I could believe that, but he does no service to the Government or, indeed, to the country by placing, as he and some of his hon. Friends did, such unwarranted emphasis on the protectionist character of this import surcharge. This can only be calculated to excite suspicion, where suspicion is now being allayed, that fundamentally this does lie at the root of this measure. It has been said time and again, and I repeat it now, that such is not the purpose of this measure, and that all the actions of the Government in the future in this regard will be directed to making it abundantly clear that that is not its purpose.
As I understand it, the Amendment seeks to put a term to the import charge—I hope that the right hon. Gentleman will accept this—to give a closer definition than he found in the Bill to the expression "temporary" which has so far been used in this connection. There is one very surprising thing about the whole of this debate. Not one hon. Member who has spoken has taken note of the fact that subsections (11) and (12) do not in themselves determine the duration of the charge. They merely determine the duration of the powers to impose the charge, and it is necessary, therefore, not merely to take account of the dates mentioned in those two subsections but to take account of subsection (9), too.
The right hon. Gentleman asked for some indication of the Government's intentions. I can only repeat—and this is a genuine expression of intention—that the Government will not keep this surcharge on for one moment longer than is necessary, for one moment beyond the period when the balance of payments position has so improved as to make it possible to remove or to abate the charge.
It is for that reason, therefore, that while the Bill provides the power to impose that charge—and that power will lapse in November, 1965, unless renewed by an Order in a year's time, subject to the approval of the House of Commons in draft—under subsection (9) there is a power to reduce the coverage of the scheme and/or the rate of the charge so that the incidence of the scheme can be lightened or the charge abolished by Order at any time.
What the hon. Member is saying is that the surcharge will be maintained as long as the Government consider it to be necessary. Does that mean that he does not support what the Foreign Secretary and the President of the Board of Trade said at Geneva, when they definitely referred to a "matter of months"? A matter of months is not a year.
What I am saying is that if it becomes possible to abate or remove this surcharge in a matter of months the power to do so exists already in subsection (9), by way of an Order, and there is no need for the Amendments. These Amendments refer to Clauses which put a duration upon the power but not upon the charge itself. In other words, the Amendments are quite unnecessary, in the sense that the maximum duration of the powers as provided by the Bill in no way prejudices the assurance that the Government have given that they will address themselves to a review of the surcharge within a matter of months.
I suggest that no one could possibly expect an absolutely close forecast of precisely when it will be possible to remove this surcharge. It would not be reasonable to expect that. The Bill provides that if the Government cannot see their way clear completely to abolish the surcharge within a limited time, the House, in the first instance, shall have an opportunity to debate the matter by way of the submission by a draft Order and, in the second place, if it goes beyond the final date it will be necessary to consider fresh legislation. But the provisions in the Bill are long-stop provisions—provisions which set a time limit of one year and two years respectively.
I am sorry to interrupt the hon. Gentleman. He did not interrupt me when I was speaking, and I am grateful to him for giving way, but whenever possible we must define matters clearly, and the Minister has referred to a period of two years. That is a terrifying proposition to go out from this House. I shall be glad if he will make it absolutely clear that it is not the Government's intention that a temporary provision shall at any time be in force for longer than merely a matter of months.
I made it perfectly clear that in the unhappy event of its not being possible to remove this surcharge by November, 1965, it could be extended only by way of a fresh debate, when the House will have an opportunity of considering the matter. This is not an indication either of hope or intention; it is a realistic proposal whereby, in the light of the circumstances, provisions can be made to retain this power but not necessarily to exercise it. The power clearly exists under subsection (9) to reduce or abolish the surcharge at any time, by Order, within the outside time limits of the Bill.
The alternative proposed by the Amendment would compel the House to debate this matter again in March, 1965. It might well be that the degree of progress and the improvement in the situation that could be seen by then would render it entirely unnecessary for the matter to be debated at all, because it would then be possible to invoke the powers under subsection (9). Within the ambit of their intentions, the Government will use that power.
Why does the right hon. Gentleman find it so objectionable that the House should debate it again in March, 1965? Why is that such a repugnant prospect—that there should be a debate so that the House should reconsider it?
I did not say that it was repugnant. I said that it was unnecessary, because if the circumstances exist whereby this charge can be abated or abolished, then the power exists in this Bill and it is the full intention of the Government to utilise that power. There is no advantage in the Amendments that are proposed. They give no advantage, because that power that is not already in the Bill.
For that reason I suggest to the Committee that the Amendments are unnecessary, and, quite obviously, hon. Members who have taken part in this debate just have not appreciated the significance of Clause 3(9). No hon. Member has made any reference to it at all in the whole course of the debate. Believing that, I ask the Committee to reject the Amendments before us.
We are all grateful to the right hon. Gentleman the Minister of State for his clear explanation of what it is possible to do under Clause 3(9). He will forgive me saying so, however, but his explanation was little clearer than the actual words of the subsection itself. What was quite obvious was that the Treasury may in various ways make orders reducing or revoking, in whole or in part, the surcharges now imposed, and that they shall be made under subsection (9, b) by statutory instrument, subject to annulment. But these statutory instruments will be in the narrowest possible terms. They could, for example, reduce the surcharge on imported timber from 15 per cent. to 12½ per cent. and that would be the sole matter that the House would be capable of discussing at that time.
This is why I support the Amendment. There are two Amendments before the Committee, and if the Government prefer the Amendment in the names of members of the Liberal Party, I dare say that they could be accommodated. But that would have the disadvantage of ensuring a debate after a Budget instead of before it. The advantage of the first Amendment is that at a time when these surcharges have been in operation for five months, a debate takes place in this House and the Government have to come before us and secure a renewal of their powers. As the Bill is drawn at present this matter need not come before the House again until some time just prior to the end of November, 1965. It is right that these matters should be reviewed before then, and I am surprised that hon. Gentlemen opposite did not welcome an opportunity to take part in a further debate on this subject.
The Government have been supported this afternoon by three speakers. The hon. Member for Lichfield and Tam-worth (Mr. Snow) made a most attractive speech on a basis which was, to paraphrase, "We can override the wishes of these people, our partners in E.F.T.A., because we are so valuable and important a market that they cannot do anything about it". The two other hon. Members who spoke—the hon. Member for Ebbw Vale (Mr. Michael Foot) and the hon. Member for Nelson and Colne (Mr. Sydney Silverman)—did not speak in any way like that. I listened carefully to both speeches and there was no suggestion at all, no word of regret, that we are breaking our pledged word to our partners in E.F.T.A. These hon. Gentlemen had a look over their shoulders. They looked for the ordinary rebels inside the party and said, "This is the place where loyal, faithful party men must stand up and support Government policy". We congratulate them on their loyalty to the party. The next time they appear before a disciplinary committee, may it be remembered in their favour.
We welcome the reply of the Minister of State. As he said, it has been a long debate covering a fairly wide field and I do not propose to go over it all. There are one or two main points which I should like to mention before I come to the remarks of the Minister.
The hon. Member for Lichfield and Tamworth (Mr. Snow) made an interesting speech. The logical conclusion of its general tenor was that we ought to abandon the multilateral trading system and try to create a bilateral trading system with those countries where we thought the advantage would be the greatest. The hon. Gentleman omitted to mention those countries where we have a favourable balance of trade, as is inevitable with a multilateral trading system. We have to decide whether to continue a multilateral trading system and ensure that the economy is competitive and efficient or try to proceed with a bilateral trading system and to strike equal bargains with other countries. All our experience since 1945 has pointed to the advantages of a multilateral trading system and I believe that we should continue in that way.
The hon. Member for Nelson and Colne (Mr. Sydney Silverman) asked about the policy which should be followed. If he looks at the speech made in Swansea by the Prime Minister on 25th January he will see that the right hon. Gentleman set out clearly the policy which in his view ought to be followed, and it was exactly the policy of my right hon. Friend the former Chancellor of the Exchequer. In case of balance of payment difficulties we should draw on all the international reserves available to us, and secondly, if necessary, we should use short-term interest rates. The right hon. Gentleman has found himself forced to do both.
Is the right hon. Gentleman really saying to the Committee that a policy which may have been right in January, 1964, ought not to have been affected in the last year by the catastrophic trend of events between January, 1964, and November, 1964?
It is the use of such words as "catastrophic" by the hon. Gentleman and his friends which has got them very largely into the mess in which they are now. The Prime Minister was at that time addressing himself precisely to the problems which he foresaw would arise during 1964. He answered at that time with a serious economic speech in which he stated the policy I described.
I may have used too dramatic a word and I concede that for the sake of the argument—though I do not myself think so. Whether it was "catastrophic" or whether some other pejorative adjective would have been more appropriate, is the right hon. Gentleman really saying that the position in November, 1964, was so similar to the position in January, 1964, that a policy announced in January, 1964, ought not to have been affected or modified by it?
I am saying that the Prime Minister specifically addressed himself to the problems which would arise during 1964, throughout the whole year. This policy had been set out by my right hon. Friend the Member for Barnet (Mr. Maudling) and it was a perfectly logical and sensible thing for the Prime Minister to discuss in his Swansea speech. He did it with great deliberation and great skill. It was later at Norwich that he started to turn it into political terms.
The hon. Member for Ebbw Vale (Mr. Michael Foot) spoke with his usual eloquence and I was flattered by the attention which he paid to me. The hon. Gentleman dealt with aspects of this matter which I think are to be regretted. The old tag used to be, "If you have no case, abuse the attorney". It has now become, "If you have no case, impugn the other fellow's patriotism". This is to be deplored. All hon. Members greatly value the good name of our country. The fact that one points out things that have caused harm to that good name is in no way to impugn the patriotism of anybody. I hope that in this House we shall abandon the impugning of the other fellow's patriotism.
The Minister of State produced an answer which was far from satisfactory. I assure him, with respect, that my hon. Friends and I had read Clause 3(9) most carefully. No hon. Member on either side of the Committee mentioned it simply because no one except the Minister thought that it was particularly relevant. With respect, the rest of the Committee is right. It is not relevant to the Amendment because we all recognise that the Government, if they so wish, can abolish the surcharge, reduce it or change it by order.
The Amendment is designed to take the Chancellor at his word, when he said that it would last for only a matter of months, and to ensure that the Government will bring the matter before Parliament for full consideration before the end of March. We believe that that is desirable and I regret that the Minister did not address himself to that point.
I asked him to tell us what information had been given to other countries about the surcharge. He did not give that information and he did not say whether any undertakings had been given about the period involved. My hon. Friends have pointed out the difficulty of getting information about the figures the Chancellor has already given. Having been in the House of Commons for 15 years I can honestly say that it has never been more difficult to get information out of a Government than it has been from this Government. [Interruption.] Everybody except the House of Commons seems to have this information.
I am afraid, therefore—since the Minister ignored this point, since the Chancellor said that it would last for only a matter of months and since we consider it desirable that the Government should bring the matter to the attention of Parliament before the end of March—that I must advise my hon. Friends
|Division No. 19.]||AYES||[9.2 p.m.|
|Abse, Leo||Gourlay, Harry||Monslow, Walter|
|Albu, Austen||Gregory, Arnold||Morris, Charles (Openshaw)|
|Allaun, Frank (Salford, E.)||Griffiths, David (Rother Valley)||Morris, John (Aberavon)|
|Alldritt, W. H.||Griffiths, Rt. Hn. James (Llanelly)||Murray, Albert|
|Allen, Scholefield (Crewe)||Hale, Leslie||Neal, Harold|
|Armstrong, Ernest||Hamilton, James (Bothwell)||Newens, Stan|
|Atkinson, Norman||Hamilton, William (West Fife)||Noel-Baker, Francis (Swindon)|
|Bagier, Gordon A. T.||Hamling, William (Woolwich, W.)||Noel-Baker,Rt.Hn.Philip(Derby,S.)|
|Barnett, Joel||Harper, Joseph||Norwood, Christopher|
|Baxter, William||Hayman, F. H.||Oakes, Gordon|
|Beaney, Alan||Hazell, Bert||Ogden, Eric|
|Bellenger, Rt. Hn. F. J.||Heffer, Eric S.||O'Malley, Brian|
|Bence, Cyril||Henderson, Rt. Hn. Arthur||Orme, Stanley|
|Benn, Rt. Hn. Anthony Wedgwood||Herbison, Rt. Hn. Margaret||Oswald, Thomas|
|Bennett, J. (Glasgow, Bridgeton)||Hobden, Dennis (Brighton, K'town)||Owen, Will|
|Bishop, E. S.||Holman, Percy||Page, Derek (King's Lynn)|
|Blackburn, F.||Horner, John||Palmer, Arthur|
|Blenkinsop, Arthur||Houghton, Rt. Hn. Douglas||Pannell, Rt. Hn. Charles|
|Boardman, H.||Howarth, Harry (Wellingborough)||Pargiter, G. A.|
|Bowden, Rt. Hn. H. W. (Leics S. W.)||Howarth, Robert L. (Bolton, E.)||Pavitt, Laurence|
|Boyden, James||Hoy, James||Pearson, Arthur (Pontypridd)|
|Braddock, Mrs. E. M.||Hughes, Cledwyn (Anglesey)||Pentland, Norman|
|Bradley, Tom||Hughes, Emrys (S. Ayrshire)||Popplewell, Ernest|
|Bray, Dr. Jeremy||Hughes, Hector (Aberdeen, N.)||Probert, Arthur|
|Broughton, Dr. A. D. D.||Hunter, Adam (Dunfermline)||Pursey, Cmdr. Harry|
|Brown, Hugh D. (Glasgow, Provan)||Hunter, A. E. (Feltham)||Rankin, John|
|Brown, R. W. (Shoreditch & Fbury)||Irving, Sydney (Dartford)||Redhead, Edward|
|Buchan, Norman (Renfrewshire, W.)||Jackson, Colin||Rhodes, Geoffrey|
|Buchanan, Richard||Janner, Sir Barnett||Richard, Ivor|
|Butler, Herbert (Hackney, C.)||Jeger, George (Goole)||Roberts, Albert (Normanton)|
|Carmichael, Neil||Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)||Roberts, Goronwy (Caernarvon)|
|Carter-Jones, Lewis||Jenkins, Rt. Hn. Roy (Stechford)||Robertson, John (Paisley)|
|Coleman, Donald||Jones, Dan (Burnley)||Rose, Paul B.|
|Crawshaw, Richard||Jones,Rt.Hn.SirElwyn(W.Ham,S.)||Ross, Rt. Hn. William|
|Cronin, John||Jones, J. Idwal (Wrexham)||Rowland, Christopher|
|Cullen, Mrs. Alice||Jones, T. W. (Merioneth)||Sheldon, Robert|
|Dalyell, Tam||Kelley, Richard||Shinwell, Rt. Hn. E.|
|Davies, G. Elfed (Rhondda, E.)||Kenyon, Clifford||Shore, Peter (Stepney)|
|Davies, Harold (Leek)||Kerr, Mrs. Anne (R'ter & Chatham)||Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)|
|Davies, Ifor (Gower)||Lawson, George||Short, Mrs. Renée (W'hampton, N. E.)|
|Davies, S. O. (Merthyr)||Leadbitter, Ted||Silkin, John (Deptford)|
|de Freitas, Sir Geoffrey||Ledger, Ron||Silkin, S. C. (Camberwell, Dulwich)|
|Delargy, Hugh||Lee, Rt. Hn. Fredrick, (Newton)||Silverman, Julius (Aston)|
|Dell, Edmund||Lever Harold (Cheetham)||Silverman, Sydney (Nelson)|
|Dempsey, James||Lever L. M. (Ardwick)||Slater, Mrs. Harriet (Stoke, N.)|
|Diamond, John||Lewis, Ron (Carlisle)||Slater, Joseph (Sedgefield)|
|Dodds, Norman||Lomas, Kenneth||Small, William|
|Doig, Peter||Loughlin, Charles||Smith, Ellis (Stoke, S.)|
|Driberg, Tom||Mabon, Dr, J. Dickson||Snow Julian|
|Dunn, James A.||McBride, Neil||Solomons, Henry|
|Dunnett, Jack||MacDermot, Niall||Spriggs, Leslie|
|Edwards, Rt. Hn. Ness (Caerphilly)||McGuire, Michael||Stonehouse, John|
|Edwards, Robert (Bilston)||McInnes, James||Stones, William|
|English, Michael||McKay, Mrs. Margaret||Summerskill, Dr. Shirley|
|Ennals, David||MacKenzie, Gregor (Rutherglen)||Swain, Thomas|
|Ensor, David||McLeavy, Frank||Swingler, Stephen|
|Fernyhough, E.||MacMillan, Malcolm||Symonds, J. B.|
|Finch, Harold (Bedwellty)||MacPherson, Malcolm||Taylor, Bernard (Mansfield)|
|Fitch, Alan (Wigan)||Mahon, Peter (Preston, S.)||Thomas, George (Cardiff, W.)|
|Fletcher, Sir Eric (Islington, E.)||Mahon, Simon (Bootle)||Thomas, Iorwerth (Rhondda, W.)|
|Fletcher, Ted (Darlington)||Mallalieu,J.P.W.(Huddersfield,E.)||Thomson, George (Dundee, E.)|
|Fletcher, Raymond (Ilkeston)||Manuel, Archie||Thornton, Ernest|
|Foley, Maurice||Mapp, Charles||Tinn, James|
|Foot, Michael (Ebbw Vale)||Mendelson, J. J.||Tuck, Raphael|
|Fraser, Rt. Hn. Tom (Hamilton)||Mikardo, Ian||Urwin, T. W.|
|Freeson, Reginald||Millan, Bruce||Varley, Eric G.|
|Galpern, Sir Myer||Miller, Dr. M. S.||Wainwright, Edwin|
|Garrow, A.||Milne, Edward (Blyth)||Walden, Brian (All Saints)|
|Ginsburg, David||Molloy, William||Walker, Harold (Doncaster)|
|Wallace, George||Willey, Rt. Hn. Frederick||Winterbottom, R. E.|
|Warbey, William||Williams, Alan (Swansea, W.)||Woodburn, Rt. Hn. A.|
|Watkins, Tudor||Williams, Mrs. Shirley (Hitchin)||Woof, Robert|
|White, Mrs. Eirene||Williams, W. T. (Warrington)|
|Whitlock, William||Willis, George (Edinburgh, E.)||TELLERS FOR THE AYES:|
|Wilkins, W. A.||Wilson, William (Coventry, S.)||Mr. McCann and Mr. Grey.|
|Agnew, Commander Sir Peter||Giles, Rear-Admiral Morgan||Miscampbell, Norman|
|Alison, Michael (Barkston Ash)||Gilmour, Sir John (East Fife)||Mitchell, David|
|Astor, John||Goodhew, Victor||Monro, Hector|
|Atkins, Humphrey||Gower, Raymond||More, Jasper|
|Awdry, Daniel||Grant, Anthony||Morgan, W. G.|
|Baker, W. H. K.||Griffiths, Peter (Smethwick)||Morrison, Charles (Devizes)|
|Barlow, Sir John||Grimond, Rt. Hn. J.||Mott-Radclyffe, Sir Charles|
|Bell, Ronald||Hall, John (Wycombe)||Murton, Oscar|
|Bennett, F. M. (Torquay)||Hall-Davis, A. G. F.||Nicholls, Sir Harmar|
|Berkeley, Humphry||Hamilton, Marquess of (Fermanagh)||Noble, Rt. Hn. Michael|
|Berry, Hn. Anthony||Harris, Reader (Heston)||Nugent, Rt. Hn. Sir Richard|
|Bessell, Peter||Harrison, Col. Sir Harwood (Eye)||Onslow, Cranley|
|Biffen, John||Hawkins, Paul||Osborn, John (Hallam)|
|Biggs-Davison, John||Hay, John||Osborne, Sir Cyril (Louth)|
|Bingham, R. M.||Heald, Rt. Hn. Sir Lionel||Page, John (Harrow, W.)|
|Birch, Rt. Hn. Nigel||Heath, Rt. Hn. Edward||Page, R. Graham (Crosby)|
|Black, Sir Cyril||Hendry, Forbes||Pearson, Frank (Clitheroe)|
|Blaker, Peter||Higgins, Terence L.||Percival, Ian|
|Bowen, Roderic (Cardigan)||Hiley, Joseph||Pickthorn, Sir Kenneth|
|Box, Donald||Hirst, Geoffrey||Pitt, Dame Edith|
|Boyd-Carpenter, Rt. Hn. J.||Hornby, Richard||Pounder, Rafton|
|Braine, Bernard||Hornsby-Smith, Rt. Hn. Dame P.||Powell, Rt. Hn. J. Enoch|
|Brewis, John||Howard, Hn. G. R. (St. Ives)||Prior J. M. L.|
|Brinton, Sir Tatton||Howe, Geoffrey (Bebington)||Pym, Francis|
|Bromley-Davenport.Lt.-Col.Sir Walter||Hunt, John (Bromley)||Ramsden, Rt. Hn. James|
|Brooke, Rt. Hn. Henry||Hutchison, Michael Clark||Rawlinson, Rt. Hn. Sir Peter|
|Brown, Sir Edward (Bath)||Irvine, Bryant Godman (Rye)||Redmayne, Rt. Hn. Martin|
|Buchanan-Smith, Alick||Jenkin, Patrick (Woodford)||Renton, Rt. Hn. David|
|Buck, Antony||Jennings, J. C.||Ridsdale, Julian|
|Bullus, Wing Commander Eric||Johnston, Russell (Inverness)||Roberts, Sir Peter (Heeley)|
|Burden, F. A.||Jones, Arthur (Northants, S.)||Rodgers, Sir John (Sevenoaks)|
|Butcher, Sir Herbert||Jopling, Michael||Roots, William|
|Campbell, Gordon||Kaberry, Sir Donald||Scott-Hopkins, James|
|Carlisle, Mark||Kerby, Capt. Henry||Sharples, Richard|
|Carr, Rt. Hn. Robert||Kerr, Sir Hamilton (Cambridge)||Shepherd, William|
|Cary, Sir Robert||Kershaw, Anthony||Sinclair, Sir George|
|Channon, H. P. G.||Kilfedder, James A.||Smyth, Rt. Hn. Brig. Sir John|
|Chataway, Christopher||Kimball, Marcus||Spearman, Sir Alexander|
|Chichester-Clark, R.||King, Evelyn (Dorset, S.)||Stainton, Keith|
|Clark, William (Nottingham, S.)||Kitson, Timothy||Stanley, Hn. Richard|
|Cooke, Robert||Lagden, Godfrey||Summers, Sir Spencer|
|Cooper-Key, Sir Neill||Lambton, Viscount||Talbot, John E.|
|Costain, A. P.||Lancaster, Col. C. G.||Taylor, Edward M.(G'gow,Cathcart)|
|Courtney, Cdr. Anthony||Langford-Holt, Sir John||Taylor, Frank (Moss Side)|
|Craddock, Sir Beresford (Spelthorne)||Legge-Bourke, Sir Harry||Thatcher, Mrs. Margaret|
|Crawley, Aldan||Lloyd,Rt.Hn.Geoffrey(Sut'nc'dfield)||Thomas, Sir Leslie (Canterbury)|
|Cunningham, Sir Knox||Lloyd, Rt. Hn. Selwyn (Wirral)||Thompson, Sir Richard (Croydon, S.)|
|Curran, Charles||Loveys, Walter H.||Thorneycroft, Rt. Hn. Peter|
|Currie, G. B. H.||Lubbock, Eric||Tilney, John (Wavertree)|
|Davies, Dr. Wyndham (Perry Barr)||Lucas, Sir Jocelyn||Turton, Rt. Hn. R. H.|
|Dean, Paul||Lucas-Tooth, Sir Hugh||Tweedsmuir, Lady|
|Deedes, Rt. Hn. W. F.||McAdden, Sir Stephen||van Straubenzee, W. R.|
|Digby, Simon Wingfield||Mackenzie, Alasdair (Ross&Crom'ty)||Walters, Dennis|
|Dodds-Parker, Douglas||Mackie, George Y. (C'ness & S'land)||Ward, Dame Irene|
|Donaldson, Cmdr. C. E. M.||McLaren, Martin||Weatherill, Bernard|
|du Cann, Edward||McMaster, Stanley||Whitelaw, William|
|Eden, Sir John||McNair-Wilson, Patrick||Williams, Sir Rolf Dudley (Exeter)|
|Emery, Peter||Maginnis, John E.||Wills, Sir Gerald (Bridgwater)|
|Fell, Anthony||Maitland, Sir John||Wilson, Geoffrey (Truro)|
|Fletcher-Cooke, Charles (Darwen)||Marlowe, Anthony||Wolrige-Gordon, Patrick|
|Forrest, George||Marten, Neil||Wood, Rt. Hn. Richard|
|Foster, Sir John||Mathew, Robert||Woodhouse, Hn. Christopher|
|Fraser,Rt.Hn.Hugh(St'fford & Stone)||Mawby, Ray||Woodnutt, Mark|
|Galbraith, T. G. D.||Maxwell-Hyslop, R. J.||Wylie, N. R.|
|Gammans, Lady||Maydon, Lt.-Cmdr. S. L. C.|
|Gardner, Edward||Meyer, Sir Anthony||TELLERS FOR THE NOES:|
|Gibson-Watt, David||Mills, Peter (Torrington)||Mr. Batsford and Mr. Ian Fraser.|
Order. The hon. Member for Hornchurch (Mr. Lagden) must wait until I have dealt with one point of order before I deal with another. The answer to the hon. Member for Exeter (Sir Rolf Dudley Williams) is that I do not propose to put the Question again. The Question has been put, and I said that the "Ayes" had it.
Further to that point of order. I was wondering, Dr. King, if, in the excitement and uproar which was caused over here, you heard a Member, namely, myself, who was in the Committee shout "No"?
May I assure the hon. Gentleman that I did hear the hon. Members who were in the Committee say "No". As a matter of fact, the Chairman often hears more than the hon. Gentleman thinks he hears.
Further to that point of order, Dr. King. Having regard to the tradition of the House of Commons in protecting the rights of minorities, even when a minority is a minority of two, do you not think that the hon. Gentlemen who wanted to shout "No" might be given the opportunity to do so and show up the rest of their colleagues who speak against measures but do not express their opinions by a vote?
I am not sure whether the hon. Gentleman's memory is at fault. The hon. Members who desired to say "No" were given the opportunity and did say "No" when I collected the voices.