Invisible Exports

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 9th March 1965.

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Photo of Mr Peter Walker Mr Peter Walker , Worcester 12:00 am, 9th March 1965

asked the Chancellor of the Exchequer what action he has taken to improve invisible earnings.

Photo of Mr James Tinn Mr James Tinn , Cleveland

asked the Chancellor of the Exchequer what action he now proposes to encourage the growth of invisible exports.

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

So-called invisible earnings cover a wide range of activities, and form a valuable contribution to our balance of payments. Government policy is continually directed to securing the best possible return from them.

Photo of Mr Peter Walker Mr Peter Walker , Worcester

In view of the fact that 35 per cent. of these earnings come under this category, would the right hon. Gentleman consider other ways of giving tax incentives to the industries concerned, and will he see that they have representation on the various dollar-export councils?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Yes, Sir. I will look into this.

Export rebates are valuable in many fields, but there is a difficulty about extending them to service industries for reasons which I am sure are apparent to the hon. Gentleman. But invisibles provide an important part of our earnings and I will certainly do all I can. If the hon. Member has particular suggestions about particular services, I should be glad to consider them.

Photo of Mr James Tinn Mr James Tinn , Cleveland

Has my right hon. Friend noticed the contrast between the deficit on invisible earnings of £20 million in the privately-owned shipping industry and the contribution made by the largely publicly-owned civil aviation industry of a surplus of £25 million?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

Yes, Sir. It is noticeable that the earnings of shipping have gone down. To some extent this is due to the level of world trade. An improvement in world trade will bring an increase in the level of shipping earnings as soon as it starts to pick up.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

Will the right hon. Gentleman bear in mind the problems of the shipping industry, which are considerable, particularly with regard to capital? Will he do his best to restore the balance of £100 million a year which we used to have and which has now dwindled to nothing?

Photo of Mr James Callaghan Mr James Callaghan The Chancellor of the Exchequer, Member, Labour Party National Executive Committee

This is a problem which has afflicted many Governments for many years. The growth in nationalism in shipping is bound to militate against the earnings which we enjoyed from the shipping services before the First World War.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

asked the Chancellor of the Exchequer whether he will introduce a scheme to extend export rebates to invisible exports, including ship-repair work.

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

I have carefully considered the hon. Lady's suggestion which, as I think she knows, would require legislation; but there are great practical difficulties in the way of accepting it.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

Is not the hon. and learned Gentleman aware that ship-repairing for foreign owners has always been regarded as an export? When the ship repairers' representatives went to see the Treasury officials, they were given a friendly reception and were of the opinion that after an examination their invisible exports would be treated in the same way as the exports of people regarded as exporters. Can the hon. and learned Gentleman do better than appears from his Answer to be the case?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

We always try to give people a friendly reception at the Treasury. Ship-repairing could not be considered in isolation from other forms of invisible exports. As I have said, there are difficulties about applying the scheme to invisible exports and I think that we must wait to see how the scheme works out in practice for a period before we consider how we can extend it.

Photo of Mr Simon Digby Mr Simon Digby , West Dorset

Is the hon. and learned Gentleman aware of the worldwide reputation of this country for ship-repairing, and will he keep in touch with the Shipbuilding Conference to see whether something can be done about this matter?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Certainly. I shall be glad to consider any specific suggestions which may be made.

Photo of Mr James Tinn Mr James Tinn , Cleveland

Has my hon. and learned Friend noticed the improvement in shipbuilding which has already resulted from the steps taken by the President of the Board of Trade to improve credit facilities?

Photo of Mr Niall MacDermot Mr Niall MacDermot , Derby North

Yes. We try to help by many different ways, but we cannot find an answer to every problem by one means.