That is exactly what I was saying about alternative sources. I was pointing out that, as a result of this measure, we shall not automatically see anyone starting a plant for import substitution because of the difference of 2 per cent. If it was not competitive to manufacture these goods before, it is not likely to be competitive in the future. I accept—and this is where the whole thing breaks down—that, whilst we must put a brake on the import of goods, the way the Government propose to do it is the most dangerous and difficult they could have chosen. It will damage just the sort of firms we do not want to damage—the small or medium-sized active and growing units working to the limit of their capacity with very small borrowing powers. As a result of this measure, they will not be in a position to finance a great deal of their trade.
The measure will apply to a very wide range of goods. Certain firms trading to the limit of their resources are almost entirely importers. Unless the Bill contains more protection for them, such firms are likely to go out of business altogether. They are not like I.C.I., for example. Such big firms can get money from other sources even if the banks are in difficulty. Big powerful organisations will always succeed in obtaining finance. But many import merchants are able to trade because they give fairly long customer credit in this country. That credit is already out on previous sales and now they are suddenly presented with the fact that they must pay 50 per cent. deposit on succeeding imports. They will not have the capacity to solve the difficulty. Therefore, unless the Gov- ernment do something in the Bill to safeguard such people, many of our most active medium-sized firms will go out of business.
But if there is anything in the idea that the Bill will bring about import substitution, the Government have chosen a most extraordinary list of exemptions. The list contains an enormous number of articles which the ordinary, non-expert person considers we could very well do without. Yesterday, my right hon. Friend the Leader of the Opposition made a powerful plea for the alteration of our system of agricultural support. Nearly all the items that our farmers could grow or produce to give additional help towards import substitution are in the exempted list. Yet the Minister of Agriculture, last week, was talking about import saving over the next four years of£160 million. Under the system we propose, we reckon that we could save£250 million a year. But when, with this measure, the Government have an opportunity to do something, nearly every commodity which our farmers could produce more of is on the list. This is not a sensible way to bring about import substitution.
It is difficult to come down to individual cases. I can understand sugar being exempted. But surely, if our international position is as parlous as it is supposed to be, we could manage with a little less sugar confectionery. Perhaps we could eat Clarnico instead of Lindt, from Switzerland. I would not have thought that sugar confectionery was vital to the future of the nation. It is not machinery, upon which we depend for export production. It is not something essential to the well being of the people. Yet it is on the exemption list.
I note, also, that preparations of meat, fish and crustaceans are exempted. Perhaps the Prime Minister, who is so fond of luxurious feeding—one sees pictures of him with his sauce bottle—is desparately anxious to continue to import caviare. The only time I have even eaten caviare—and I paid for it myself—was when I travelled the Atlantic on the "Queen Mary". I do not think that the nation would collapse if, for a couple of years, we did not have so much caviare. All these things are to be exempted, yet the whole purpose, if there is any purpose, is import substitution.
The hon. Member for Bedford (Mr. Brian Parkyn) referred to chemicals which are vital to a particular process and which are not produced in this country. They are not exempt. My hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) pointed out that some chemicals which are essential to a certain production which goes for export on completion are not exempt. Machinery for use by plants producing goods for export is not essential. But the list of exemptions includes things which are not essential to the well being of the nation, not essential to our export effort and not even essential to keeping the Labour Party on the right side of the consumer.
Many of the exempted items are those which the man in the street would regard as unnecessary and whose import he would inhibit. By import substitution the man in the street does not mean having to work inferior machines when competing against the Germans, the French and the Americans in world markets. He does not mean not insisting on getting the latest machinery and having to buy an inferior British machine merely because there is a 50 per cent. deposit on the import of a superior foreign machine. Yet that is exactly what will happen under this half-baked Motion.
The Financial Secretary has told us that the Motion is so drafted that, although we may be able to add to the list of exemptions—and by the time we reach the Bill we shall have had many letters from our constituencies adding to the pressure to add more items to the list of exemptions. thus making the operation even less worth while—there will be no power to remove items. Any hon. Member who takes the trouble to read the list will find that it includes items which people would normally expect to be able to do without, or to replace by home produced products. I am surprised that the Financial Secretary's hon. Friends have not asked him to withdraw the Motion and to alter it so that we can both add to and subtract from the list of exemptions. The Motion has all been rushed. The Chancellor of the Exchequer himself was very woolly when, on Friday he announced his measures, and surely the list would be better balanced if hon. Members were able to add to and subtract from it.
I began by saying that in July I made a speech to say that imports were growing very fast and that exports were not growing as fast as we should like and that we were facing a financial crisis again. I regret to say that I have been proved right. I then said that some action should be taken to try to reduce the quantity of imports, particularly of nonessential items. I want to make it clear that I was then dealing, as I am now dealing, with the problems confronting the country.
The problem is that, as a result of the last four years, everybody overseas is as jittery as anything about the British currency and the way in which we manage our affairs, and we therefore have to be even stronger than we would need to be if there were confidence in our management at home. There is, therefore, a strong case for a temporary but firm reduction of imports while our exports grow to take a larger share of world markets.
I understand that the Opposition are to vote against the whole Bill, but in any case it ought to operate for a limited period. It should be only an expedient to do something towards solving a problem which, if the affairs of the nation are properly managed, ought to have disappeared inside 12 months. We want to make certain that we do not build into the economy a cumbersome, unjust and unworkable piece of machinery. The Bill should be passed for two years at the most and then be renewed only after full debate, because by that time it should no longer be necessary.
The Government have lost all the confidence of the nations and at home they have lost the confidence of the people. The difficulty is that we are discussing suggestions which would work in a climate of confidence, but which will not work in the present atmosphere. This is the Government's worry. Although I do not expect anybody to believe me, I say in a non-partisan spirit that the Government have now completely exhausted their credibility. When this happens, I do not believe that the nation can prosper with a continuation of the same management. I do not suggest that we should introduce a new system of "golden bowlers". I am glad to see the right hon. Member for Bermondsey (Mr. Mellish) in his place; he is one of the few in the present Administration to whom I would give a "golden bowler". But we shall not solve our problems by the new measures which the Chancellor announced on Friday. We shall begin to solve them only by a complete change of Administration and a new look for Britain all over the world.