Germany (Conditions)

Part of the debate – in the House of Commons at 12:00 am on 5th February 1947.

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Photo of Mr Nigel Birch Mr Nigel Birch , Flintshire 12:00 am, 5th February 1947

There are those who wish to go on with de-Nazification and whom I despise much more than I do Marxists. They are the people who are mean, unsuccessful, feeble, and so hopeless them- selves that they want to pull down anyone who has ever reached any position.

Further, as well as being morally wrong, this policy is economically disastrous, because we are faced with having to run the economy of German with third-class brains. It may be possible, although this has not been proved, to tolerate a number of Sir Ben Smiths, but you cannot run the whole show with Sir Ben Smiths, which is what we are trying to do today. The third main result of these two false assumptions is the industrial paralysis which is now affecting Germany. I believe that the scheduling and destruction of factories, although it has caused great dislocation, great hardship, and loss of moral, has been a relatively minor factor. Why we did it, I do not know, in view of the fact that the Americans have stopped doing it. We have to remember that we are a long way below the level of the Potsdam Agreement. That cannot be the major factor. I would give much more weight to local maladministration and over-control, because we have a number of officials who are ignorant of the language, history, and economy of Germany. Most of them have not been trained for the job. When you try detailed administration you will get the classic muddle like there was over the subject of peat. The food control maintained that it was for them, and the coal control maintained that it was for fuel, with the consequence that very little peat was cut. That is the type of thing that has been going on.

I am inclined to think that the main reason for the troubles is the Schachtian twilight into which German economy has fallen. We have started on the same course as Dr. Schacht started on many years ago. In Germany, this course has reached its logical conclusion. There, production is one-quarter of its prewar figure; the national debt is 10 times greater than prewar; the note circulation is seven times the prewar figure; black market prices are 10 to 15 times the controlled prices; in that country a man can sell his monthly cigarette ration for more than a month's wages. Nationalisation is imposed as a punishment instead of an economic device, and, on top of all this, there is the attempt to freeze the prices and wages at the 1939 level by withdrawing subsidies from industry. Therefore, money has lost its function. There is no incentive to the worker to work, and it is impossible for most employers, because they can only produce at an enormous loss. We have reached the padded cell stage of the Schacht economy.

I might say in passing that there are many parallels between their economy and ours. The Chancellor of the Exchequer, in his famous Gateshead speech last week, said that there would be no financial crisis here—we shall only be short of food, clothes and houses. There is no financial crisis in Germany, but the essential supplies are not there—food, boots, clothes and cooking utensils—and I am not the least reassured by the hon. Gentleman that there will be a 100 per cent. increase in all these things, because I think it will be many years before supplies are adequate. A surgical operation is undoubtedly necessary on German economy. This was recognised in the White Paper issued by the Foreign Secretary and Mr. Byrnes, but it is being held up month after month.

That is the sorry tale, but I do not want to end on a completely gloomy note. The Foreign Secretary said the other day, after he had signed that agreement, that we were at the end of our economic troubles. That is being perhaps a little too optimistic, but if we remember that it is no good trying to re-educate a dead man, and that the one thing we have to do is to get the wheels going round again, if we realise the need for speed, then, I think, we have a chance to succeed. The main doubt which was expressed by the hon. Member for West Ealing (Mr. J. Hudson) is whether that would be possible on a diet of 1,800 calories. If we cannot increase that, I think that more money may well go down the drain.

The hon. Member for West Coventry (Mr. Edelman) discussed, in particular, the joining up of the zones. That will not automatically solve our troubles. I am informed that the Russian zone—Eastern Germany less the parts cut off by Poland and Russia—is only capable of producing 3,000 calories per head of those now there. That should give a certain alleviation to us, because we are only producing 900 calories per head in our zone, although we hope to get it up to some 1,350 calories. That is not the long-term or final solution. I would quote the "Economist" of a fortnight ago, which said: The Russian zone is now a stripped and impoverished area, which would be a burden on the rest of Germany for many years to come. Therefore the unification of the zones is not an easy way out of our troubles. We may hope for agreement with the east, and for agreement with the west. We must not leave out our friends in western Europe, who are even more vitally interested in this matter than we are. When we are negotiating, I hope that we will hold to certain essentials: First, the time factor—that things cannot go on as they are much longer, that we cannot afford to wait while negotiations go on month after month; that further privations cannot be imposed on the German people in our zone; and that no action must be taken further to weaken our balance of payments.

We are on the edge now, and we must take no action that will make our position worse. The last point is important. If we enter into any agreement, we must have some reasonable assurance that that agreement will be carried out. A barbarous agreement is not less barbarous because one introduces into it the words "orderly and humane," as the frozen corpses on the trains coming from Poland might well remind us. If we compromise on these four points, we run the risk not only of ruining Western Europe, but of ruining ourselves. The difficulties and dangers ahead are very great. I often feel—certainly when in a more depressed mood I often feel—that the evil consequences of the war are only just becoming apparent. For a solution of the German problem we shall require all the courage, the firmness, the wisdom and the humanity of which we are capable, and I pray to God we shall show those qualities.