Clause 3. — (Charge of Temporary Customs Duty.)

Part of Orders of the Day — Finance Bill – in the House of Commons at 12:00 am on 1st December 1964.

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Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale 12:00 am, 1st December 1964

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.

6.45 p.m.

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.