Orders of the Day — Import Programme

Part of the debate – in the House of Commons at 12:00 am on 8th July 1947.

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Photo of Mr Anthony Eden Mr Anthony Eden , Warwick and Leamington 12:00 am, 8th July 1947

I am coming to that also. It is perfectly impossible to reconcile that with our dollar expenditure in the last half of last year—5 per cent. on machinery, 7 per cent. on films, 32 per cent. on tobacco. That is not what this House had in mind when it voted for that loan. I accept the intervention of the hon. Gentleman. No one in the House thought that the dollars were going to be spent exclusively on machinery; of course we did not. We knew that great sums were intended for expenditure on raw materials, and also to keep our factories going, and also on foodstuffs to Maintain the health of our people. But expenditure on nonessentials has been excessive, as indeed the Government have themselves belatedly and half-heartedly realised. Our criticism, therefore, is that their policy has been one of piecemeal expedients, rather than comprehensive and realistic planning.

In the light of this, I want to look at the cuts the Chancellor announced last Monday. Let the House compare the new import programme with the old estimate for the year 1947. Then the House will find that the effect of the increased Tobacco Duty is calculated to mean a saving of about £10 million. The saving on film remittances has not been estimated yet, but I find that the total cost of these remittances calculated for 1947 was only £18 million, and clearly there is not very much scope for substantial savings there. So far we have not been given an estimate of the saving on petroleum products at all. I hope we may be given one.

As for newsprint and paper-making materials, which appears to be the one definite new Government decision, the total value of imports in these items for the first five months was only £1.2 million and £7.9 million respectively. According to the best calculations that I can make, the total saving in respect of newsprint, even if supplies to newspapers and periodicals are cut by a quarter, cannot amount to more than £1 million. I would like to know if I am wrong in that figure. If that is so, does the House not consider that at a time like this it is of the utmost importance that the nation should be given the fullest information about the urgent and vexatious economic problems that confront it? I must say that if the Government are going to make these reductions, they are going to make their task almost impossible. Even if the saving were important, I should hesitate about cutting newsprint severely at a time like this, but, when the saving is absolutely negligible in relation to our total deficit, I cannot see how on the grounds of public interest it can possibly be justified.

What effect can the cuts so far announced, have on our problems? So far as I can see, the sum total of what the Chancellor announced last week cannot amount to more than £25 million or £30 million over the year, when our total deficit is running at the rate of £600 million or £700 million, and our dollar deficit running substantially higher. This is merely tinkering with the problem, if I may borrow a much abused word.

May I turn to the new economic theory, which appears to underlie Government actions, as explained by the Lord President of the Council at his Press conference last week? It is apparently wrong for us to make substantial cuts in our imports, for this might betray a lack of confidence and help to promote a general reduction of world trade. Does that apply to the cuts which the Chancellor now proposes? If not, some of them, such as those in-films and tobacco, might have been made a long time ago. It is all very well for the right hon. Gentleman to talk about not giving a shake to international confidence, and not reducing world trade. I, personally, applaud the right hon. Gentleman's purpose, and think it a good purpose, but the only way we can serve his purpose is by increasing our own production, and balancing our payments in that way.

There was another statement attributed to the right hon. Gentleman at his Press conference last week which caused me a great deal more concern. He is reported to have said: If I am asked, Are these import cuts leading to others, still worse, or will they really see us through?' I must reply, 'It does not rest with us to answer that'. That is a very dangerous statement for one of His Majesty's Minister's to make. To argue that any further cuts would be a bad thing for world trade as a whole, and then to fling the reins on the horse's neck, and put the blame for any resulting breakdown on the rest of the world, is not government, it is the negation of government. Our job is to analyse the facts, and make our own contribution to their solution. The first unpleasant fact is this. In the long run, if not in the relatively near future, we shall have to consume very substantially less, unless we can produce very substantially more. I would like the Lord President, not to say that it does not lie with us, but to dwell upon the steps which we can ourselves positively take in respect of our balance of payments and to get as close as possible as we can to paying our way. I have one or two points I would like to make in that connection.

First and foremost, comes the question of coal. Shortage of coal is putting a break upon industrial activity in every sphere. The Government's programme of 200 million tons this year is quite inadequate for our needs. Everybody accepts that; the trade unions have said it, the employers have said it, everybody has said it. Yet, on present showing, would I be wrong in saying that there is no certainty even that that figure will be reached? Let the House consider, in contrast, what the position was even as recently as 1941. In that year the total production of deep-mined coal was 206 million tons. If we add to that another 9 million tons, which represents current opencast production—there was no opencast production in 1941—one finds a total for 1941, comparable to our present position, of 215 million tons. What a difference it would make to our economy if we were certain that we would have that amount of coal this year. Yet in 1941 there were fewer men in the industry and less machinery to produce it. Those are facts which we ought not to shirk, and from which we cannot escape.

Here is really the most urgent problem for the Government. They have inaugurated the experiment of the five-day week. After the first burst of enthusiasm, it appears from the figures and from Minister's speeches—which have been very rough to some of the miners—that production has fallen short of what is required to meet even the 200 million tons target. I say to the Government in all seriousness that the one thing which this country will never forgive will be a repe- tition next winter of the fuel crisis from which we suffered a few months ago. Therefore, I ask the Government what is now their estimate of the coal production in the coming months, and what action they propose to take, if any, to raise the level if that level continues below our minimum national needs? That is the most important question which I have to address to the Government today, because it is really fundamental to all our economy. The Government know it as well as I do.

In the economic Debate last March the Minister of Labour—I am sorry he is not here—repeated the statement of the Minister of Fuel and Power that the Government offered no objection in principle to the five-day week, provided that arrangements could be made to see that we secured the output of coal which was necessary to meet the country's needs. I have no quarrel at all with that statement, but that output is not. so far as I can understand it, forthcoming at the present moment, so that when the Minister of Fuel and Power is reported in "The Times" as saying, on Sunday, that the five-day week had come to stay, no matter what anyone said. Here are two completely conflicting statements. On the one hand, there is one which says that we want the five-day week, that we believe that it will result in increased production and that its continuance depends in a measure upon that increased production or sufficient production for the nation. On the other hand, we have the Minister of Fuel and Power saying the other day that it has come to stay no matter what anyone says. We must know which of these two statements represents the policy of the Government.

I have another point to put about our present position with reference to the nondiscrimination undertaking in Article 9 of the American Loan Agreement, which is repeated in spirit in the commercial policy proposals. I wish to recall to the House some of the words which my right hon. Friend the Leader of the Opposition used about this in the American loan Debate. I think the House will agree that there is no one who knows more about opinion in the United States than does my right hon. Friend. He said: This is really a proposal upon which earnestly trust the steady gaze of the just minded people of the United States will be attentively fixed."—[OFFICIAL REPORT, 13th December, 1945; Vol. 417, c. 714.] That was a very wise comment, for the significance of the non-discrimination undertaking has been completely altered by events. As I have said, the loan was originally intended to last until we had restored our trading position. In fact, as is only too obviously true, the dollars are running out much faster than was originally intended.

In present circumstances, the strict observance of this non-discrimination undertaking is leading to many anomalies and difficulties which could never have been foreseen at the time of the loan negotiations. I do not think that the right hon. Gentleman will dispute that. It applies particularly to a number of Empire products. There are even instances in which our inability to purchase certain commodities from America owing to our shortage of dollars has compelled us to reduce in similar proportion our purchase of these commodities from Empire countries. I am sure that that could never have been the intention of the negotiators of the loan. I am sure that if my right hon. Friend's advice had been followed, that is to say, if the "steady gaze of the just-minded people of the United States" was fastened upon those facts, they would see and understand our difficulties. I ask whoever is to reply for the Government to give the House some account of this matter, and to say what action, if any, has been taken.

I have made no mention of the Marshall offer. That is not because I wish to cast any doubt upon its validity or to detract from its importance. I know that the House will understand the significance of this historic offer, which may be the only means whereby economic catastrophe can be averted. I have made no reference to it for quite a different reason, because our concern at this moment should, above all, be with our own actions, our own responsibilities, what we can do to help ourselves. If the Marshall offer should become a pretext for continuing upon our present wholly artificial basis, for refusing to face the facts and for shirking the necessary hard decisions, then in the long run, I say to the right hon. Gentleman, the additional breathing space it gives us may prove to be more a loss than a blessing. We cannot become the permanent pensioners of the United States. We have a role of our own to play in the world, as the heart and centre of a great Empire. If we are to carry out this duty, we must, sooner or later, pay our own way, and to do this we must be able to sell British goods in adequate volume in a competitive world market, and it is our ability to do this which is the crux of the whole problem which now confronts us.

Are we doing everything in our power to produce the goods for export and to sell? I fear that we cannot pretend that we are As I have said before, an increasing number of our business men already report growing competition in price and quality in overseas markets. The problem of our level of costs, our level of prices, is of supreme importance. The index of wholesale prices in this country has been rising steadily since this Government took office. There can be no doubt that recent wage increases, which may well be justified in themselves—they may be, I do not deny that at all—[An HON. MEMBER: "Do you think that they are justified?"]—I ask the hon. Member to apply his mind to my argument. I am not saying that they may not be justified. I am asking the House to contemplate their consequence, which must be to give a further impulse to the present inflationary movement. In the economic Debate on 10th March, the President of the Board of Trade said: we cannot afford increases in wage levels or shorter hours unless they increase productivity per man year."—[OFFICIAL REPORT, 10th March, 1947; Vol. 434, c. 994.] Can this be said of all the recent agreements to increase wages and reduce hours? We should all like to see these increases, but are they correct policy at a time when we are living to an ever-increasing extent on borrowed money?

Let me sum up what I have to say. I say, first, that the cuts which the Chancellor announced the Government propose to make in our import programme are utterly inadequate to bridge the gap that at present exists in our balance of payments. Meanwhile, our dollar resources are being spent at an alarming rate. What do the Government propose? Alternative courses are open. I would even venture to tell them what, to the Opposition, they seem to be. They can propose further cuts to reduce the gap. If that is their policy they ought to declare it now. They ought to tell the nation what those cuts are and for how long they are to be endured. Alternatively, the Government can go on for a little while longer as we are now, living largely in excess of our income, in the hope that the success of the Marshall offer will save them from having to make further import cuts. If that is their policy, equally the House and the country ought to be told. The nation is entitled to know. The nation is perfectly prepared to examine any constructive plan to meet our problem, but the first condition is that the nation should be told of that plan. Up to the present I must tell the Government that that condition has not been fulfilled.

I want to conclude on a note which I fully understand will not be acceptable to Government supporters. I hope they will allow me to put this point of view because it is one which I most sincerely hold. The other day, the Paymaster-General, speaking in the country, said— I think quite accurately and I endorse his words: Economically we are in a jam. We must get through the next 18 months or smash. Speaking from these benches, I say to the Government that we are as concerned as anyone on the opposite side of the House for the future of our country. Nobody could watch recent developments of events unmoved. I believe that the Government would be wise and would be acting in the best interests of the nation if at this moment they decided to put aside for a while—perhaps for the period which the Paymaster-General regards as supremely critical—the pursuit of purely party legislation, and decided to try to unite the nation in a joint effort to rebuild our prosperity. I know that hon. Gentlemen opposite will not agree with that, but I must put it because I deeply believe in it. The present task is certainly sufficiently formidable for any Government. The right hon. Gentleman knows as well as I do how heavy is the pressure on the machine, how formidable are the tasks, how fully taken up is the time of his best civil servants. I must add that if the Government persist in pursuing party legislation now—I am not saying this as a threat: I am stating it as a fact—inevitably they are going to divide the nation into probably two almost equal halves. I conclude by saying that if they will show themselves to be something bigger than party men, they can do a service of lasting value to the State.