The hon. Member for The Hartlepools (Mr. Leadbitter) has said that this is a very small Measure which has done no harm. Perhaps it has not. I shall address myself to that problem.
A year ago, when the then Financial Secretary took us into the labyrinth of these controls, he told us that it was his intention to bring the scheme to an end automatically after 12 months. That is why we on this side will vote against the Bill tonight. There was no great enthusiasm on either side of the House for last year's Bill.
Today I listened to the speech of the hon. Member for Heywood and Royton (Mr. Barnett) with great interest, as always. He made some constructive points, as he did in his speech a year ago when he said this of last year's Bill:
… I am not sure that it is worth the trouble of the distortion, administrative problems and anomalies that it creates.
We should keep this subject in perspective. We can work ourselves up into a colossal tizzy about the one-third of our imports to which we are applying some sort of restriction. The very fact that we applied these administrative controls has a depressing effect both ways in our trade. It has not only a depressing effect on the restriction of imports, as my hon. Friend the Member for Worthing (Mr. Higgins) described, but also a reciprocal depressing effect on exports because of the interference with the free flow that is necessary between our manufacturers who export and those who import.
The then Financial Secretary said some interesting things about what he thought was the intention of last year's Bill. I ask the House to listen to what he then said, very honestly—the right
hon. Gentleman is always very honest with the House—
I do not know exactly, or even within a wide range, what the effect will be "—
that was honest?
but I do know that the less effect on reducing imports the more is the effect on reducing extra bank liquidity … I am hoping that there will be a significant and marginal effect in terms of imports themselves. I shall be very surprised if there is not such a marginal effect, but the exact amount of it obviously no one can know."—[OFFICIAL REPORT, 28th November 1968; Vol. 773, c. 752–84.]
We were left in no doubt that it was a doubtful Bill—a small Bill and a marginal Bill.
I was present for the debates both on Second Reading and in Committee on last year's Bill. It was designed, as I thought, to reduce imports. I listened to those debates with an open mind, because I was concerned about the Government's overall aim to achieve a surplus on balance of payments—the surplus that the Chancellor was then looking forward to and which he now proudly says he can see being achieved.
What has been achieved during the last year? I was not very happy with the answer that we got from the present Financial Secretary today. How marginal has been the achievement, and how marginal or how large is to be the achievement if we continue with this scheme at 40 per cent.? We have heard that the scheme is designed, on the one hand, to apply a selective liquidity pressure, to take a little heat out of the economy. Have I heard the figure £650 million somewhere? How much heat has been taken out of the economy by this scheme?
By how much have imports been reduced? I thought that imports would be reduced. A year ago I was even prepared to consider supporting a Measure which might have had some dramatic advantage for the country in reducing the factor for imports in the sum that goes to make up the balance of payments at the end of each month and at the end of the year. As I understand it, imports have not been reduced. Only the rate of increase in imports has been reduced.
Therefore, after a year of this administrative interference and intervention by the Government, the heat has been taken out of the economy in reducing the liquidity pressure, on the one hand, and some heat has been taken out of the rate of increase in imports in the balance of payments sum by a factor which we have not been told in terms of hundreds of millions of £s or millions of £s.
When there are exchanges in this House and in the country about the balance of payments situation, it is really because we want to know where we stand. If, tonight, we are to give sanction to the Government to go ahead with this Measure, which they said they wanted for only 12 months and now they want to continue for another 12 months, we should be told exactly what we will get for it. Having listened to the debate this afternoon, I am still not clear what is the answer to the sum.
I believe that the Government's aim is to achieve a surplus on the balance of payments, to maintain the rate of achievement which we have seen. We know how the sum is made up on the balance of payments. We want to know what savings of imports will result from a continuation of the Bill. I should even be ready to consider supporting the Bill if I thought that it would make a valuable contribution to our economy, but I do not know its value. It do not know its value in reducing imports. I have been told that it may reduce the rate of increase, but that is not enough.
I know that this Measure interferes with our overseas trade. The hon. Member for Heywood and Royton said that it increases costs by about 2 per cent. to 3 per cent., and I can only accept the hon. Gentleman's word for that. I think that this Measure is yet another example of the Government's concern to interfere and control, and in this instance to do so to very little purpose and with very little real advantage. It illustrates the Government's incompetence—this is my fear—in the overall management of our economy.
We can see some light at the end of that tunnel. The amperage of that light is about £300 million. This flickering light is a long way off, and we want to do nothing to let that light of a surplus of £300 million go out, but we want the Government to take positive and real steps so that people in this House and outside can recognise them as competent steps in the management of the economy. The Bill does not seem to me to do that. It seems to me to be a continuation of the muddling, interfering, and administrative intention which produces very little.
There are much bigger things involved than those which the Bill will control. We are faced with a massive overseas debt of £3,000 million, which has been built up in five years. We are faced with the extra burden of taxation. Those are the factors which sit, not in the balance of payments, but in the balance which the Chancellor has to maintain on the economic tightrope which he has to walk and take us with him. We know that the measures taken by the Government have resulted in price increases of more than 22 per cent. in the last five years. I do not wish to range widely from the Bill, but we are debating this Measure as though it is of massive importance. I say that it is of minimal importance.
Having spoken about the economic tightrope across which the Chancellor has to walk, perhaps I might remind him ard his hon. Friends of some of the things that they have done while attempting to reduce imports which have made it more difficult for the Chancellor and the nation to keep their balance. The Government have attempted to reduce imports, but they have more than attempted to reduce demand at home. They have succeeded in drastically reducing demand at home by a succession of deflationary measures. They have successfully reduced and restricted our economic growth and industrial investment. They have reduced employment. They have reduced savings, and they have reduced the whole object of people wanting to save.