I always think of the Member for South Angus (Mr. Bruce-Gardyne) as the other extreme to my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant). The hon. Gentleman always condemns domestic credit expansion out of hand, and my hon. Friend thinks it is the most wonderful thing in the world—at least at the moment. I find myself somewhere in the middle. I do not know what effect domestic credit restraint, in the way it is being used at the moment, will have on our economy. I really doubt whether either of the hon. Gentlemen really knows what effect, or how quickly, it will have.
I would like to say a few words about what the hon. Member for Worthing (Mr. Higgins) said in starting the debate for the Opposition this afternoon. He knows that I hold him in the greatest respect, but his speech today was extremely disappointing, to say the least. He said the reason for the Bill was that the Government were worried about the balance of payments because of the problem of prices and incomes and the way there was wage inflation as we have recently seen. He was concerned with what happens when the brakes come off, and he accused the Government of being irresponsible in their attitude to wage claims.
The hon. Gentleman is always very good at asking the most intelligent questions, but he is never quite so good in giving us the intelligent answers, because generally he keeps himself strictly to the questions, and he did so again today. When he accuses the Government of being irresponsible in their attitude to wage claims the assumption must be that he is implying that a Tory Government would be responsible about wage claims and that, though they would not be pursuing any legal, compulsory incomes policy, if they had control, none of these public sector wage claims would have been allowed.
I can only assume that that is what the hon. Gentleman meant and it would have been more honest if he had spelt it out. I think that is what he meant, but if my understanding of what he said is wrong I should be delighted to give way to him; but that is the clear implication of what he said. The obvious implication for the economy and the industrial sector of doing that, of preventing all public sector wage claims, is such as would not exactly help the balance of payments situation, I would have thought or, indeed, the economy generally.
What was perhaps the worst thing in the hon. Gentleman's speech was the way in which he spoke about the small importers. I myself have some contacts—considerable contacts, really—with small companies, small importers, and in last year's debate I declared an interest, in that I advise them. To suggest, as the hon. Gentleman did, that as he goes round the country and speaks to small importers he finds they are extremely concerned about their liquidity problems seems to indicate a less critical approach to the small companies giving him information than his normal, critical approach to the Government when they give information, because if he really expects any small company director to take a nice, optimistic attitude towards any Government proposals, then he really is rather more naive than I would have expected him to be.
My own experience is that pretty well every director of a small company will complain bitterly about all sorts of things, not least about Government action in all sorts of directions. To suggest that one should just accept their point of view without question is also to suggest that the hon. Gentleman is rather more naive in his approach to these matters than I would have expected.
However, at least the hon. Gentleman did not go quite as far as his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) did last year in trying to have it both ways, as some hon. Gentlemen have tried to have it. The right hon. Gentleman said last year that the whole scheme would be ineffective because the money would be found, and then he went on to say that it would be damaging because it would featherbed home producers. I really do not quite see how it featherbeds home producers at the same time as it is not working, but that is precisely what the right hon. Gentleman said last year and what we are constantly being told.
I myself, as I made clear in the debate last year, do not hold out very great hopes—I never did—about what the scheme will do. I never like quoting myself, and I shall certainly not do so today, but 12 months ago I forecast that the scheme would not come off after 12 months, and should not come off, and I forecast that the money would be available to importers, and that the scheme would have a marginal effect; and, of course, it has.
I will take up the view that this is having a selective pressure on liquidity. This is what the hon. Gentleman and others have said, that it is having a selective effect on the liquidity of importers. This measure does not have that effect directly at all, because any importer, small or large, can find funds without affecting his current cash flow, and the hon. Gentleman really must know that. I suggested in the debate last year that it would be a very simple matter for an importer to put an advertisement in The Financial Times, saying, "Wanting to borrow money. Security for that money will be cash—that is, money left with the Government in deposits." He need not do that any more because there were and there still are advertisements in The Financial Times and elsewhere offering money—admittedly, at 15 per cent. and upwards: but money is available.
So it becomes a problem of price. It is the size of the tax, as it were, which is the problem, not liquidity. It is not directly a liquidity problem on small importers.
Of course, what happens with the larger firms is that they very often will use moneys which they have available and which they had meant to use for manufacturing investment. That is a different thing, and I want to come to that in a moment, but to suggest, as the hon. Gentleman did, that the scheme is causing small importers such liquidity problems asto put them into bankruptcy and liquidation is a totally false argument.