Sterling Exchange Rate

Part of the debate – in the House of Commons at 12:00 am on 27 September 1949.

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Photo of Sir Austen Albu Sir Austen Albu , Edmonton 12:00, 27 September 1949

Those of us who had hoped to hear in the right hon. Gentleman's speech something which would give us some indication of the nature of the Amendment which the Opposition would be likely to move to the Government's Motion are bitterly disappointed. Nothing in what the right hon. Gentleman has said has indicated in what way the Conservative Party intends to give the country an idea of its alternative policy. His speech, which, if I might say so, seemed to me to be much below the level of the those generally given in this House by the right hon. Gentleman since I have been here, seemed to indicate a degree of disunity and doubt on the Opposition benches which will, I as sure, find its reflection in the Amendment when we finally receive it.

The right hon. Gentleman finished his speech by inviting the House and the country to compare the record of the Government since it has been in office, presumably with the record of the Conservative Party when it was in office before the war. That suits us on these benches very well indeed. No alternative has been put forward or suggested by the right hon. Gentleman or by any of their speakers or writers in the Opposition Press to the policy of devaluation which the Chancellor and the Government have now agreed to put in operation. I cannot myself see the point of the attacks which were made by the right hon. Gentleman on the Chancellor for having at a suitable moment changed his mind. So far as I know there are no doctrines in this matter. Nor, so far as I know, is there some definite stage at which to the whole world a change in policy of this nature becomes clear. It is presumably on the advice of the Chancellor's officials and in accordance with a general consideration by the Government of the situation as it is gradually changing that such a decision has to be made.

The Opposition have certainly no right to criticise the Government on the score of their handling of foreign trade since they have been in office. Have the Opposition forgotten that this Government have reversed the trade trends of more than half a century, trends in regard to which nothing whatever was being done when the Conservatives were in office? The situation with which we are now faced—certainly rendered far worse by the war and by the sale of our foreign investments—is the culmination of economic developments in the world which have been going on for many years, and right hon. Gentlemen opposite are as aware of that as are we on this side of the House, but when they were in power, and when it was within their power to do something about it they did nothing whatever.

So today, so far as one can see, there is no alternative policy which they are prepared to put forward unless it be that generally put forward in this House by the hon. Member for Chippenham (Mr. Eccles), the hon. Member for Scarborough and Whitby (Mr. Spearman), with the support, I presume, of the hon. Member for Orpington (Sir W. Smithers). Certainly the cheers which greeted the only recommendations made by the right hon. Gentleman, namely, that there should be considerable cuts in Government expenditure, and therefore presumably in the social services, which would naturally lead to deflation and presumably unemployment, indicate that to be the policy which has the most support on the Opposition Benches. But the hon. Member for Chippenham and his friends seem to me to reflect in this country the glow from the last flare-up of economic Liberalism which is taking place in Europe at the present time. I hope that the Chancellor and the Government will not allow themselves and their policy of economic planning and necessary controls to be nibbled away in any way by the growth—as I think, the temporary growth—of this development on the Continent.

I believe that the Washington Conference and the agreement made there, raises a hope that these economic Liberals, these last believers in laissez faire capitalism in Europe, are very shortly going to find themselves out on a limb. The advance in American thinking on these matters in the last few months, especially as indicated in the report of the Washington Conference, has been astonishing. It is not only that there is now in the United States a strong trade union movement of perhaps 10 million members who are understanding what we are doing in this country, and who are playing an extremely important role in support of the American Administration; it is not only, as the Chancellor has pointed out, that at last they really understand the role and responsibilities of a creditor nation, but even the manufacturers themselves—who might normally be expected to be somewhat behind advanced opinion—are changing their attitude towards these problems to an extraordinary extent. So much so that one may hope that in the future there may be less of the lobbying for high tariffs in the face of increased competition from outside the United States of America than there has been in the past.

I would quote in illustration of that the foreword by the Chairman, Mr. Curtis E. Calder, to a very interesting report on "The Foreign Trade Gap" published by the National Association of Manufacturers of the United States. Mr. Calder said: The battle for the trade gap is essentially that of reconciling our urge to export our surpluses with a reluctance to accept imports in payment for them. He went on: It is not too early to direct official attention to a careful and detailed analysis of those areas in our country which can, with the greatest benefit to the American public as a whole, accept an increased volume of imports. It is because of statements such as these, as well as the Government statements issued from Washington, that I think we can have confidence that we shall see permanent benefits, not only from the temporary change which has come about from the change in the ratio of sterling to dollars, but from the efforts we are making to balance our dollar and sterling trade throughout the world as a whole.

I believe that in the not so far distant future we may see a great development in economic planning in the United States itself. I am not sure that there is not a great deal more economic planning going on there at the present time than is understood by most people in this country, or the rest of Europe. It is a fact that they have a great deal more economic information than there is in this country; and they may have a great deal more technique for planning than exists in this country or in Europe. It is not at all unlikely, I think, that we shall see the American Administration in the near future planning for full employment; planning, in fact, for what may well be nearly an inflationary situation in order to ensure that there is a market in the United States for the goods which must be exported from non-dollar countries if they are to receive the food and raw materials which they need from the dollar area. I believe that this is what really lies beneath the agreement which has been reached at Washington.

If that is the case then there is some real hope. I think there is some justification for believing that that sort of opinion is growing in America because the quotation which I read from the Chairman of the National Association of Manufacturers in the United States does call on the American Government to direct attention to those areas in their country where imports can best be utilised. I suggest, therefore, that it is likely that we shall see a great expansion of United States economic activity, leading to a great expansion of United States imports.