European Trade

Oral Answers to Questions — Trade and Commerce – in the House of Commons at 12:00 am on 7 July 1949.

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Photo of Mr Thomas Horabin Mr Thomas Horabin , Cornwall Northern 12:00, 7 July 1949

asked the President of the Board of Trade whether he will make a statement on the policy of His Majesty's Government in the matter of relaxing restrictions on intra-European trade.

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

Yes, Sir. I apologise for the length of this answer, but in view of the importance of the subject, I am sure the House would wish me to deal with it fairly fully.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

I apologise for interrupting, but there are 80 Questions on the Paper. As it is clear that this answer is a very long one, could not the right hon. Gentleman read it at the end of Questions instead of now, in order to safeguard the position of other hon. Members?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

If it were for the convenience of the House, and if you, Mr. Speaker, were so to authorise it, I should be prepared to read this answer at the end of Questions. I am sure, however, that the right hon. and gallant Gentleman would not in any sense wish to suggest that the statement which I am making is not a very important one with which the House would wish me to deal as fully as possible, but I will leave the matter in your hands, Mr. Speaker.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

It is just because it is so important that I thought it ought to be a special pronouncement.

Mr. H. D. Hughes:

Was not a protest made from the benches opposite yesterday because a Minister asked permission to read a statement at the end of Questions?

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire Eastern

Is it not a fact that in that case permission was asked to circulate the reply?

At the end of Questions

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

With your permission, Mr. Speaker, I will now answer Question No. 9.

As the House will have realised from the statement made by my right hon. and learned Friend the Chancellor of the Exchequer on Monday last, His Majesty's Government have, during recent months, been considering the possibility of a substantial step forward towards closer and more efficient economic integration in Western Europe and towards a removal of obstacles to European trade, through a concerted effort by O.E.E.C. countries to remove or relax import licensing restrictions on each others' goods. These restrictions were originally imposed by individual countries to safeguard their balance of payments, but in the new European trading situation many of them have begun to outlive their purpose and are tending to hinder the recovery of trade. Their progressive removal, by giving an added incentive to producers and traders to improve their efficiency and to lower their costs and prices, would be of direct benefit to consumers as well as to exporting industries in the United Kingdom and other countries.

His Majesty's Government believe that the time has come when it should be possible for both the United Kingdom and other countries to take steps to relax progressively their restrictions on imports from sources outside the hard currency area to the fullest extent consistent with safeguarding their balance of payments. Indeed, they consider that in present circumstances a progressive freeing of European trade on a competitive and multilateral basis is desirable. My right hon. and learned Friend the Chancellor of the Exchequer therefore submitted proposals for action by O.E.E.C. countries on these lines to the O.E.E.C., which has now recommended such action to all its members.

I should make it clear that such a policy of removal of trade restrictions would have to be considered in relation to the settlement of certain other matters: First, the relaxations cannot be applied to countries with which they would cause balance of payments difficulties; in particular, our payments arrangements with countries to which they apply must be such as to avoid any spending of gold and dollars by the United Kingdom. Second, while in present circumstances we clearly cannot contemplate extending these relaxations to countries with whom our balance of payments is such that gold or dollar payments would be involved, we should need to be in a position to apply the relaxations wherever and whenever this could be done without creating new balance of payments difficulties. This raises certain questions in respect of our obligations to countries outside O.E.E.C. Third, while we should be prepared to take a lead in removing restrictions, how far we can go must depend on the extent to which other countries feel able to follow our lead and relax restrictions on their imports from us within such limits as their balance of payments may set.

Further, in deciding upon the list of goods to be freed from import restrictions, we shall have to bear in mind the legitimate interests of our own industries. What I have in mind is the existence in certain cases of severe restrictions on the quantities of goods which certain of our industries are free to put on the home market. It would obviously be unfair to permit producers in other countries to sell without restriction in the United Kingdom market so long as United Kingdom producers are subject to severe limitations of this kind; in such cases we could relax import controls only as and when the restrictions on our own producers could be relaxed.

It is not possible at this stage to say precisely what action may result from our initiative or how far we may be able to go, but I thought the House would wish to be informed at this stage of the steps that we have already taken.

Photo of Captain Harry Crookshank Captain Harry Crookshank , Gainsborough

As I understood the right hon. Gentleman to say that, as a result of this move on the part of the Government, other countries had been recommended by the O.E.E.C. to try and take similar action, can he say whether anybody, except ourselves, has yet agreed to do so?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

Yes, Sir. The discussion at O.E.E.C. was participated in by all the member countries, and all undertook to take this action.

Photo of Mr Ronald Chamberlain Mr Ronald Chamberlain , Lambeth Norwood

As the Question on the Order Paper specifically relates to intra-European trade, but as the Minister appears to be talking merely about intra-Western European trade, is he bearing in mind the very important distinction, and is he doing something in regard to Eastern Europe as well?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

I think the House is fully informed of what is being done by Western European countries to increase the volume of intra-European trade as well, but such action requires corresponding action by other countries.

Photo of Sir James Henderson-Stewart Sir James Henderson-Stewart , Fife Eastern

Would it be true to say that the practical meaning of the right hon. Gentleman's statement is that we do not intend to make any relaxations at all upon imports, or, if we do, what relaxations does he intend?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

We hope to have a very wide system of relaxations of quota restrictions on our imports, but I have made it clear that that cannot extend to cases which involve the loss of gold or dollars by this country.

Photo of Captain Albert Blackburn Captain Albert Blackburn , Birmingham King's Norton

In view of the qualification in my right hon. Friend's statement about our own industry, which must, of course, include our relationship with the industry of the Commonwealth and Empire, may we take it that these proposals will be discussed with the Commonwealth Finance Ministers next week?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

Yes, Sir. Our friends in the Commonwealth and Empire have been kept fully informed, and I have no doubt that the Commonwealth Finance Ministers will wish to consider what we are doing in this matter.

Photo of Mr David Eccles Mr David Eccles , Chippenham

Could the right hon. Gentleman give us the names of one or two commodities which he thinks he might allow into this country in greater quantities? If he cannot even do that, perhaps he can give us the names of one or two countries with whom we have no difficulties?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

Perhaps the hon. Gentleman would like to put down that question. I should have thought he would have known at least one or two countries with whom we are not in balance-of-payment difficulties at this time. As far as individual commodities are concerned, so much depends, as I have already said, on the question of how far international obligations would stand in the way of a wide extension, that I should prefer not to make a statement about the commodities to be covered at this stage.

Photo of Mr Francis Noel-Baker Mr Francis Noel-Baker , Brentford and Chiswick

Apart from our new efforts in O.E.E.C., can my right hon. Friend say whether this country is continuing to be an active and effective member of the Economic Commission for Europe?

Photo of Mr Harold Wilson Mr Harold Wilson , Ormskirk

Yes, Sir, a fully active member, but if my hon. Friend wants to pursue the matter, I would point out that it is a separate question from the one we are now discussing.

Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , Dorset Southern

If greater freedom is now to apply to trade, can the right hon. Gentleman say whether it is going to apply to travel also, and will he make a statement about what countries it will be easier to visit?