I think my hon. Friends must have made a considerable impression upon the hon. Lady the Member for Blackburn (Mrs. Castle). She complained of differences of opinion expressed on this side of the House, but if she reads HANSARD tomorrow she will find a good deal of difference between the constructive speech of the hon. Member for Chesterfield (Mr. Benson)—who made a considerable contribution towards showing that if we continue in the present direction we are facing disaster and starvation, to which the hon. Lady referred —and her speech, which seemed to me to be more noted for its loyalty to the Government Front Bench, in whose present infallibility she seemed to have complete confidence, in spite of her admission of their mistakes in the past.
I do not think hon. Members opposite will agree very much with what I want to say tonight, but I do not think there can be much disagreement on the first two points I wish to make. The first point is, that the cuts announced by the Chancellor, whether they are well planned or badly planned, are trivial compared with the ghastly gap in our trade balance. After listening to the Chancellor making that statement last week I thought he had the appearance of a man very alarmed at the prospect of being attacked by a tiger, and making every preparation to destroy a mouse. My second point, to use the words of the Paymaster-General, is: "We are in a jam." It is my fear—and I think the fear of all of us in this House, although perhaps not of the public as a whole—that at the present time about one-third of the vital imports we are getting are coming on tick, and that our available resources will be exhausted within about a year.
The disturbing thing about the jam we are in is that it has not been foreseen. I am referring not only to the exuberant optimism so often expressed by the Chancellor of the Exchequer—who, until the beginning of this year appeared to be full of easy enthusiasm—but I should like to quote the right hon. and learned Gentleman the President of the Board of Trade, with whom exuberance is not generally associated. Last February the right hon. and learned Gentleman said:
I certainly am an unrepentant optimist, subject to the one proviso that we frankly face our difficulties and take the necessary steps to overcome them.
Later on, he went on to say:
What we must guard against, and guard against at all costs, is a foreign indebtedness that we cannot discharge or an inability to import essential foodstuffs and commodities
from abroad, without which we can neither live nor work."—[OFFICIAL REPORT, 28th February, 1946; Vol. 419, c. 2213.]
It seems very clear to me that when the right hon. and learned Gentleman made that speech on 28th February, 1946, he foresaw what might come if steps were not taken, and he never anticipated the failure of his colleagues to take the necessary steps.
The Lord President of the Council complained of criticisms of Government incompetence which has brought us to the position in which we are today. I think we would get much further forward if we could make a correct diagnosis of why we are in this position, and it is for that reason that I feel that any of us who speak—although we have no resources of information other than those available to the public—serve a useful purpose if we try to suggest reasons why we are in this position today, because that may perhaps elicit from the Government, who have at their disposal all the available information, some authoritative confirmation or denial of our suggestions. I would not suggest that it is due entirely to the incompetence of the Government; but I do maintain that it is very largely due to their incompetence that we are in this position today. Quite obviously, a very substantial reason is the enormous rise in American prices. However, I have made an examination of the variation in prices between March, 1945, and March, 1947, of the major commodities which we import from America and Canada, and I suggest to the right hon. Gentleman who is to reply tonight that if we bought everything during the last year at 1945 prices, we should not have saved more than about £100 million. I put that forward as a suggestion. If that is so, then it is certainly an important contribution towards our present situation, but not a dominating one.
The second reason why we are in this position today, as I suggest, is because of our expenditure abroad. And for that the Government must take some responsibility. The Bank of International Settlements said in its last publication that the United Kingdom, since the end of the war until March, 1947, in postwar grants and credits, has spent £740 million. That is a colossal figure: about three-quarters of the whole of the American loan. I have no doubt at all but that they were most worthy causes to which the money was contributed. But has not the day arrived when we have to forget our rich past, when we were able to be a Lady Bountiful and dispose of our resources throughout the world? I think that at the present time that £740 million is an extravagantly large sum to have spent in that way. They have not included in that sum the very large amount spent in unrequited exports, the amount of exports we have sent abroad, for which we have only had a cancellation of debts. For example, in the first quarter of this year we have sent more exports to India, for which we received no return at all as far as I am aware, than we have to the United States and to Canada put together. The third expenditure abroad to which I want to refer briefly is that enormous expenditure in our administration of Germany. I believe that is due very largely to bad administration. I understand that this very week we are blowing up the great Krupp's works, which might otherwise have been used for constructive purposes. There are millions of semi-starving Germans doing nothing but spending their time in enforced idleness, who, given a better administration, could be employed in producing coal and steel, and other necessities, which would not only keep them, but would enable us to be relieved of an immense financial burden, and perhaps make some contribution towards the great cost which they have inflicted on the rest of the world.
The third and final point to which I wish to refer, and by far the most important, is the question of exports. The Lord President seemed to think it very unlikely that our exports could, in a measurable time, match our imports. I remind him of what the Chancellor of the Exchequer said, or was reported to have said, as lately as 27th September
We hope before very long to pay for all out imports from our earnings from exports.
Indeed, the Chancellor may turn out to be very right, but, not quite in the sense he wishes. If we have never done this before for 40 years, it looks to me as if we may have to do it in future, at the price of importing only a fraction of what we need. Why is it that our exports have disappointed the Chancellor of the Exchequer? I suggest for a variety of reasons. First—and in this I am very
largely in agreement with the hon. Member for Chesterfield—a wrong allocation of labour. I refer the House to the excellent table at the back of the Economic Survey, which shows the present allocation of the labour force of the country. The number of men employed in the export trade is 1,476,000. There is general agreement that we have got to raise that figure somehow or other, to about two million, if we are to get our exports up to the required level. The Services are not taking materially more people than before the war, and I do not think we can make any cuts there. Distribution has a smaller number compared with before the war, and textiles and clothing and other consumer services are in the same position. If we turn to the investment side, we find a huge increase of over half a million. These people are engaged in the investment industries, engineering, building. It is an admirable thing to rebuild our houses and re-equip ourselves, but I suggest we are living beyond our present resources. It seems quite clear that we cannot afford at the present time to have 3,600,000 people engaged in these occupations.
The main reason for the production failure, which was referred to by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden), is the lamentable shortage of coal. I suggest that there are many Members opposite who now consider that the fuel crisis which occurred last year was not inevitable, that if the recruiting campaign had been made earlier, and if proper allocation had been made we should not have had the crisis. There is general agreement throughout the country that the coal situation has been mishandled, and if that had not been so, we should have been very much better off today. Another major factor in the production failure is that we are trying to do more than we can afford. We have run down our stocks too much, and the result has been a series of bottle-necks, causing an enormous amount of concealed unemployment. We have tried to increase our exports by 75 per cent. raise consumption, and spend vast sums on capital equipment. All this adds up to more than our resources can manage, and nothing is more wasteful than to try to do more than we are capable of doing, because in that way we merely achieve less than we should.
Our national spendable income is vastly greater than the country can afford. That, I think, is the great responsibility of the Chancellor of the Exchequer. We would criticise any Government which did not maintain the purchasing power of the people up to the rate of the resources available, and, therefore, we must criticise this Government for allowing an excess of purchasing power over our available resoources. I would refer the Chancellor of the Exchequer to some very wise words of a former colleague of his in prewar days. In an interesting article in the "Sunday Times" this week, he stated:
The main instrument of control at our disposal, and the instrument which so far has been most surprisingly neglected. is the financial instrument. The Government has direct control over a vast field of capital investment. It has powerful indirect control over consumption expenditure via taxation and price policy.
It is a surprising thing that the first Socialist Chancellor of the Exchequer should so neglect taxation as an instrument of planning. He has asserted it in one respect, and that is in regard to tobacco.