The Press SATURDAY, MAY 13, 1961. Extension Of Import Licensing Year

Press, Volume C, Issue 29513, 13 May 1961, Page 10

The Press SATURDAY, MAY 13, 1961. Extension Of Import Licensing Year

The announcement that the Government intends to extend the import licensing year for three or six months strikingly illustrates the confusion into which trade has been thrown by the Labour Government’s operation of the import control system. Last year, as overseas balances increased, the Labour Government liberalised its importing programme and introduced greater administrative flexibility. Persons wishing to import (not al] of them in established importing businesses) availed themselves freely of the opportunities offering. The situation encouraged importers not willing to risk being outdone by competitors—to file applications on a high scale. The result was that before 1960 had passed it was evident that if all the licences issued in that year for the next year were taken up, there would be an embarrassing volume of imports in 1961—far more than could be paid for from earnings unless export incomes should rise unexpectedly and sharply. Facing the likelihood of a heavy adverse trade balance, the present Government has sought to curb importing by suspending the “ R ” scheme and by a tighter control of discretionary licences. It now goes further and says that licences for the 1961 importing year must last until either April 1 or July 1 of 1962. It is calculated that extension for three months would save at least £6O million if applied to all private imports. Obviously it cannot be applied without exception. .To take one example, the construction industry would collapse for

want of steel. It will be necessary, therefore, to devise a form of supplementary licence for essential raw materials, and probably for certain lines of consumer goods. This is merely one of the additional complications that must now be worked into the control system. There is good reason to believe that many importers, fearing that 1961 may be used in future as a basis for import schedules, are importing goods, regardless of their needs, to the limit of their licences. With the object of relieving importers of such fears, th«* Government has become involved in a pretty problem: how to safeguard the interests of importers who help to conserve overseas funds by not using their' licences fully this year. Of course, the chief outstanding problem the Government must settle—and settle quickly—is whether the 1961 import year is to be extended for three months or six months Obviously, importers’ in tentions regarding unused or uncommitted licences will be ruled very largely by the length to which the importing year is to be stretched. While it is clear that orderly trading must incur additional penalties and increased frustrations from a licensing system that will become even more cumbersome, the new steps are probably as good as any the Government could take in present circumstances. The breathing space afforded by stretching the import year will be valuable if it is used to devise a simpler and more efficient means of equating imports "with the means that are available to pay for them.