They may not say it in exactly the same way but I have splendid quotations of what has been said by E.F.T.A. Ministers, and if the hon. Gentleman goes around E.F.T.A. meetings and gets the impression that its members are not concerned about the scheme, he must be blind and deaf and unconscious at the same time. This is not the impression given by E.F.T.A. Ministers.
Whether or not there is this concern in E.F.T.A., we are taking action in breach of the spirit of both E.F.T.A. and the G.A.T.T. There is no doubt of that. Whether one is concerned with the small print of the agreements, this scheme is in conflict with their spirit. The Government should be concerned about it. Are they saying that we will take part in a trading organisation but will not pay too much attention to the rules and that, if the rules do not suit us, we will change them from time to time?
The Government are to start a grand exercise in which they hope to get Britain into the E.E.C., an organisation which imposes rigid rules and restrictions. If the Government regard the less onerous restrictions imposed by E.F.T.A. as being of no concern, and if they are prepared to shuffle them aside, they will find it difficult to persuade the countries of Europe to accept us into the Community.
Personally, I do not urge the Government to press ahead speedily to enter the Common Market. Like many hon. Members on both sides of the House, I have strong reservations about it. But the Government give the impression that they are anxious for Britain to enter the Common Market. I hope that they will consider seriously what the reaction will be in Europe if they break a solemn undertaking which was given to E.F.T.A. when these arrangements were intro- duced, when they said that they would be operated for only 12 months.
As has been rightly said, these arrangements cannot be applied selectively to help the economy. They cannot be operated so as to allow firms to buy machines and equipment to make themselves more efficient. On the other hand, as is well known to the hon. Member for West Ham, North (Mr. Arthur Lewis), who is one of the most active Members in this respect, they cannot be used to keep our things like gaming machines. At Question Time and on other occasions, the hon. Member has produced staggering figures of the amount of our resources take by imports of what many people regard as unnecessary luxuries. These restrictions do not differentiate between what would generally be regarded as in the interests of the efficiency of British industry and something not necessarily important to British industry.
If we are in serious imbalance, there is a restriction which we can use without breaking the E.F.T.A. or G.A.T.T. arrangements. That is the use of import quotas. They can be used selectively, according to the category of goods or materials, or the purpose for which they are to be used. I often wonder why import quotas are not used. They have much to commend them, It is suggested that to introduce them would invite retaliation, but there would be retaliation only if another country found itself in serious imbalance, too. have a sneaking suspicion that one of the reasons why quotas are not used is that, although they are acceptable under G.A.T.T., they are not acceptable under the Treaty of Rome, which is significant in view of the Government's campaign for British membership of the Common Market.
If we have to have a restriction of this sort, we should concentrate on making it a restriction which is in the interests of the country and of industry and which does not break solemn undertakings which we have concluded with other countries, or contradict words clearly stated by the Chancellor of the Exchequer and his advisers.
Unfortunately, like many others advanced by the Government, these restrictions have an undoubted inflationary effect. They have certainly put up prices and have increased the costs of industry. It is a sad fact that one of the things which has been most marked under the Labour Government, particularly in recent years, has been the staggering increase in prices. The hon. Member for Northfield suggests that that is not new, and of course inflation is not new; but if he were to talk to his constituents, not his friends in E.F.T.A., but the man in the street, many would tell him, particularly those on fixed incomes, that they were now more concerned about rising prices, because of the squandermania of Socialism, than they had ever been. When we have so many measures which have so clear an inflationary effect, the Government should avoid unnecessary action which has a further inflationary effect.
I am not normally a suspicious person. I like to find the best in people and to identify those factors in a policy which may have something to commend them, but I have a suspicion that the reason the Government are pressing ahead with import deposits is that in that way they can maintain a check on liquidity, a hold on money supply, and keep the economy decently in check until they can look forward to the next Budget, a pre-election Budget, and then let things rip.
If they were to remove import deposits now, the effect would be rather inflationary. It would improve the credit position and improve the money supply. The Government are holding things in the international economy while they wait for a grand slam Budget, a boom of about six months and then an election. Of course I am suspicious [Interruption.] If the hon. Member for Central Ayrshire (Mr. Manuel) had studied seriously and with any sense of conviction some of the disasters which have stemmed from the policies of his Government and the ill advice of their advisers who formulate the policies, he, too, would be suspicious. Coming from Scotland and representing a Scottish constituency, he more than anyone else should be suspicious. I am ashamed of him.