Capital Investment (White Paper)

Part of Orders of the Day — Princess Elizabeth's and Duke of Edinburgh's Annuities Bill – in the House of Commons at 12:00 am on 18th December 1947.

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Photo of Mr Oliver Lyttelton Mr Oliver Lyttelton , Aldershot 12:00 am, 18th December 1947

I do not think the right hon. Gentleman could have heard what I said, that I derived that estimate from the figures relating to industrial coal used by the power stations, which figures are published. I also have other means of checking them. I am not claiming infallibility on this matter. If the right hon. Gentleman wishes to contradict the statement and to give other figures, I should be very glad to hear what he has to say. That is the source upon which I am relying.

The next thing to which the right hon. and learned Gentleman referred—I shall not go into the matter industry by industry, as he did; I have not the same access to the figures—was the increased tempo of production. As far as I can judge from my limited outlook, there is a better tendency in production. We ought to remember the great skill and flexibility shown by employers and managements as well as the efforts, skill and brain power of the men on the factory floor. I have the impression very strongly that the tempo of production is better—or, in other words, that practically all the dislocation caused by the fuel crisis has now been overcome.

The right hon. and learned Gentleman gave a number of figures. Perhaps the Minister of Health will refer to this matter when he winds up. I would like to know whether, in making his comparison, the right hon. and learned Gentleman adjusted the prices, or whether they are directly comparable as to volume. Again, while it is encouraging to see the increase in production, we have to remember that industry as a whole is working fewer hours than it was. The increase in the tempo of production has probably not done more than to increase the level of productivity to that which had been reached on the higher number of hours worked per week.

I have noticed during the past week or two a great deal of optimism being put out by the Government. I had the impression that the Lord President of the Council, at least judging by the screech which he issued last weekend, thought that the Government had lost the middle class. Perhaps the word went round: "A little more stuff about being all for the best would help our dispirited supporters to enjoy their Christmas more than they would do otherwise." I do not think that the Chancellor of the Exchequer has subscribed this afternoon to that sort of statement. He confined himself to those encouraging signs—as they are—but we must read those signs in the light of low coal targets and much worse quality, and in the light of the fact that, in production, we have still to make up what we have lost in shorter hours.

It is unnecessary for me to turn from this subject to the balance of payments, because the right hon. and learned Gentleman has dealt very fully with it. I would like to put the matter in a slightly different way. I do not think that the figures I propose to give are open to very much dispute. If I put one of them wrong I hope that the right hon. and learned Gentleman will interrupt. I have made it out that we shall have about £500 million of reserve gold and hard currency at the end of the year. If to that we add about £25 million as the balance of our International Monetary Fund quota, £75 million unexpended of the American credit, £79 million from Canada and about £80 million of the gold loan from South Africa it makes, according to my rather rudimentary arithmetic, about £760 million of reserves, in gold and in hard currency.

But they are not expendable reserves. We have it on the authority of the right hon. and learned Gentleman himself that the irreducible minimum of gold and hard currency with which we can operate the banking system of the sterling area is £275 million. That is the substance of what the right hon. and learned Gentleman said in October. From our total reserves we have, therefore, to deduct the irreducible minimum of £275 million, and that will give us something like £485 million of expendable reserves, and by expendable reserves I mean reserves which can be spent to augment the supply of food and raw materials above that which we can pay for with our exports. I thank the right hon. and learned Gentleman for having given us figures of the drain on these reserves. They are still a little obscure because the sales of gold have to be added to the actual dollar drain, but it will not be far out to say that the drain——