Orders of the Day — Customs (Import Deposits) Bill

Part of the debate – in the House of Commons at 12:00 am on 17th November 1969.

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Photo of Mr Michael Shaw Mr Michael Shaw , Scarborough and Whitby 12:00 am, 17th November 1969

With equal respect, I am perfectly on the beam, and it has to do with it in this respect, that if a squeeze is put on, and if additional credit is required, no matter where it comes from, it comes from within the economy, and it has an effect on the overall availability of credit. If people find they cannot go to the bank they go to some other financial institution. They have to get the money from somewhere, and it all has to come from somewhere within the economy, and pressure builds up, and finance becomes more and more difficult to get.

Look at the sale and lease bankarrangements which were very popular at the beginning of the year when this squeeze had really begun. Many of those arrangements were made, but those institutions which went into them quickly got sufficient of them, of that particular industrial type, and so they closed their books to that sort of deal, and that meant that that sort of credit was no longer available, and people went to seek other sources of credit. I shall not go into the details now, but I do assure the hon. Gentleman that we have to look at credit overall when we are studying a matter of this sort.

The availability of credit is a very important factor in dealing with development areas, and it is being under-estimated by this present Government. One has only to look at a constituency such as my own, for example. Before it ever became part of a development area the unemployment level was 4·4 per cent. at Scarborough and 5·5 per cent. at Whitby. Before this present Act came into being it was running at 5·3 per cent. and 9·9 per cent. respectively. Now, a year after the Act has been in operation, it is running at the highest level ever at this time of year, 5·6 per cent. at Scarborough and 10·4 per cent. at Whitby. It is because there is a general lack of confidence, and because there is this very severe credit squeeze which is being applied to small businesses. One has only to inquire whether it is having a serious effect on industry in my constituency to find that there is no doubt that it is.

We were initially asked to consider this legislation as temporary. If it were to be considered as a temporary measure that would be another reason why some form of import quota would not be applicable, because to set up the rigmarole of an import quota system would not be worth while if the control were regarded as purely temporary. By the new Bill, the original Act will run for a further year, and there are powers to withdraw its provisions at an earlier date. Quite honestly, I do not believe that there is much likelihood that the provisions which we have been discussing this afternoon will be withdrawn or altered in the next 12 months. To put it another way, I very much doubt whether they will be altered before the next General Election.