I am in favour of this Bill, but I should declare my interest in a small importing company. I am in favour of the Bill because fundamentally we have no alternative. The scheme as devised was intended to bring a certain restriction of credit and if one accepts this policy no one can say that we are now in a position to say that success has fully been achieved.
Whether or not the scheme did bring about a reduction in imports—and my own figure all along of £50 million or £100 million was not far out—we are not in a position to allow imports to rise suddenly. The Chancellor has no alternative but to continue the scheme and to find a more suitable means of ending it in the diminishing manner to which my hon. Friend referred. I am not too sure about what level of credit restriction we should be engaging in, but one thing is fairly clear and it is that the policy of the Government permits no rapid increase in credit until the balance of payments situation continues along the present course for some time.
I have always felt that we have underestimated the enormous changes that came over this country in the last decade, and the kind of reactions which we should have undertaken long ago. In my latest Answer from the Board of Trade I find that exports to the Commonwealth are now only 22 per cent. of our total exports as compared with a level of 45 per cent. throughout the 1950s. A crucial change has come over our trade, a reorientation from the Commonwealth to other markets and it has brought in its train some necessary fundamental changes in the direction of our economic policy, to which we have always reacted far too late.
My own solution all along was to impose restrictions on imports, preferably by means of import quotas, but if not by this, then at any rate by getting some advantage from the use of import deposits. A better alternative would have been a floating rate for the £. I always felt that control over imports is really the kernel of the issue. However much incentive and encouragement the Government give at any time to exports these are something which depend upon the importing countries whereas we do have absolute control over imports, whether by means of import deposits, which can be varied or import quotas which can be rigid. This is a matter for argument, but there has always been the possibility of exercising control over imports, which we utterly funked for too long. We are not now in a position to introduce import quotas. We are now too far committed to our present strategy. I regret the opportunity to use quantitative restrictions of imports but it is now too late. We have had, first, the import surcharge and now the import deposits scheme, and there is no room for any further experimentation.
I come now to the question of legality. If the countries with which we trade, or countries with which we have financial or monetary agreements—and I include the I.M.F. here—feel that there is something wrong in taking unilateral action of this kind, then that view must be contested. I do not believe that they can hold a view as rigid as that. If we are not allowed to introduce import quotas because that would be contrary to the G.A.T.T., or to move to a floating rate because too many people have interests or theories against it, then we are faced with an impossible situation in which we are unable to manage our own economy in a way which any Government have a right to manage it.
No other country which has been in economic difficulties has accepted a situation in which it would be unable to exercise a degree of control over its economy. A country cannot be put in a position where it cannot advocate controls in the final resort. Whether it be by import quotas or deposits, by floating exchange rates or by other means open to them internationally, a Government must have control over the economy of the country in order to get the balance of payments right, and if this means a conflict with a certain number of international agreements, then that merely proves that those agreements are wrong. That is the only possible conclusion if countries are to be placed in a position where they cannot act to maintain a proper balance of payments situation. So I accept wholeheartedly the need to continue the scheme but I hope that it will be possible to phase it out in the manner suggested by my hon. and learned Friend.
The phasing out required can be left for decision later, both as to the percentage of deposit and the term of deposit. It may be done by one or other or both; it depends on the circumstances over the next 12 months. With the balance of payments situation as it is, we need to wait a few months longer.