I said earlier that it is possible under the Bill to terminate the scheme earlier or to modify the proportion. I am not making any promises whatever, but it is possible for this to be phased out, whereas, if we had not continued the scheme, automatically it would have been repaid within the next six months.
I come now to the third main argument, the direct effect of the scheme on the level of imports. Last year my right hon. Friend, my predecessor, was very careful to avoid a specific forecast, and so was I. We said, time after time in our debates, that the direct effects of the scheme would be marginal but useful, and, as it turns out, this would appear to have been the case. I cannot, however, give the House an exact figure now any more than I could last year. Such a figure is no easier to arrive at in retrospect than it was in anticipation.
Since the scheme was introduced, the level of imports has shown only a comparatively slight upward trend of about 4½ per cent., and this has been almost entirely attributable to higher import prices. Recently, imports have been flat, and the average for the last three months is little different from the average for the three months of May to July. I concede straight away that it would be quite wrong to ascribe all this improvement to the direct impact of the import deposits scheme. The other major measures taken to restrain consumption have clearly been the major factor, and, indeed, the slow growth of imports this year is as true of goods exempt from the scheme as it is of goods which are covered.
Probably, the best indicator which I can give to the House can be found from comparing the annual rate of increase, on the one hand, of goods subject to the scheme before and after its introduction with the comparable rates, on the other, over a similar period for exempt goods. Before giving the House the figures, I must re-emphasise the extreme difficulty of assessing what would have happened if the scheme had not been in existence and the difficulty of isolating the impact of the scheme from other measures.
Over the five-year period before the scheme, from 1964 to 1968, imports of goods now covered by it rose from an average of £135 million a month in 1964 to £225 million a month in 1968; a rise of 66 per cent. or an annual rate of just over 13 per cent. I have taken this rather longer period in order to excuse the distorting effects of the temporary import charge. In the same period, imports of exempted goods grew from £338 million a month in 1964 to £422 million a month in 1968; an increase of just under 25 per cent., or an annual rate of about 5 per cent. Non-exempt goods were, therefore, growing at a rate approaching three times that of exempted goods.
Since the scheme, imports of exempted goods have grown by about 3 per cent. and those of non-exempted goods have grown by about 6½ per cent. That is just over twice as fast. So the difference between the rate of increase in nonexempt and exempt goods has dropped from nearly three times to just over twice. These figures would, therefore, suggest that the scheme has had a valuable slowing down effect on the rate of increase and, therefore, a useful effect on the level of imports of goods subjected to the scheme, and one may reasonably expect the scheme to have a continuing useful and significant direct effect on imports in 1970—though, again, as in the past, one is not in a position to give any actual figures.
These are the main reasons for the continuance of the scheme. There is little need to say much about the actual terms of the Bill itself. Subsection 1(1) of Clause 1 contains the guts—the extension of the provisions of the Act for a further year, and the reduction of the rate of deposit from 50 per cent. to 40 per cent. Subsection 2(2) of that Clause looks a little complicated but is necessary to ensure the continued exemption from import deposits of goods imported for blind welfare purposes. As far as I know, no point arises under Clause 2.
I will sum up. The purpose of the Bill is to continue a measure of selective credit control operating on importers that has made a useful contribution in a number of ways to the success of our economic policies. It would be rash and it would be foolish to reverse these policies, or any part of them, just when they are paying off. I therefore ask the House to give the Bill its Second Reading so as to enable the scheme, in a modified form, to be continued for a further time.