Orders of the Day — Sterling Exchange Rate

Part of the debate – in the House of Commons at 12:00 am on 28th September 1949.

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Photo of Mr Winston Churchill Mr Winston Churchill , Woodford 12:00 am, 28th September 1949

I beg to move, in line 1, to leave out from "House," to the end of the Question, and to add welcomes the measures agreed upon in Washington but regrets that His Majesty's Government, as a result of four year's financial mismanagement, should now be brought to a drastic devaluation of the pound sterling, contrary to all the assurances given by the Chancellor of the Exchequer, and considers that a return to national prosperity, the maintenance of full employment and the safeguarding of the social services can never be assured under the present Administration, which, instead of proposing fundamental cures for our economic ills, resorts to one temporary expedient after another. We have reached a point in our postwar story and fortunes which is both serious and strange. We have before us this afternoon the financial measures which have to be taken as a result of four years government by the Socialist Party. It is our common interest and our first duty in the pass to which we have come, to decide what it is best to do and to help it to be done in the most effective manner.

There also lies before us a General Election, the date of which will be settled in accordance with what the party opposite consider to be in their tactical interest. All political thought and party machinery is affected by this. We are, I think, most of us agreed that it is high time for another Parliament and that all our difficulties will have a better chance of being solved in a new House of Commons. We are a Parliamentary democracy—[HON. MEMBERS: "Hear, hear."]—created before the Labour Party was born, or thought of. We are organised on a two-party basis—[An HON. MEMBER: "Two? "]—in the main, and an appeal to the nation is due and overdue. There can be no doubt that this Election overlays all our domestic affairs and also, I am sorry to say, it looks as if it will be fought out with more fundamental divergences at every grade and in every part of our society than have been known in our lifetime.

Finally, over all there looms and broods the atomic bomb which the Russian Soviet, for reasons not yet explained, have got before the British, though happily not before the Americans. If you take these three factors together, the financial crisis, the party conflict and the atom bomb, it will, I think, be generally agreed that the hour is grave.

The Socialist Government ask for a vote of confidence in their financial and economic policy during the last four years and in the measures they have adopted in the present crisis and they call upon the people for their full co-operation with the Government. This is a considerable demand, this vote of confidence, and it forces us to look back on the past conduct and record of the Socialist Party who, with almost absolute power, have ruled us during this difficult and harassing period. No one must under-rate the task which fell upon these Labour Ministers as the consequence of the Election of 1945. Britain and her Empire were in the war from the start and ran at full gallop, keeping nothing back, aiming only at victory till the finish. Britain had great claims on the respect of the world and on the good will of the United States. At the end there was an inevitable phase of national exhaustion, physical and psychical which required time to repair. There was also the tremendous transition from war to peace to be accomplished.

Under the unchallenged working of our Constitution a new Parliament was brought into being by the free choice of our people. Of course the circumstances were exceptional. There had not been a General Election for 10 years; three or four millions of our men were with our Armies abroad. The present Government were the result. They were the heirs not only of the problems of that grievous but triumphant hour, but also of all the slowly gathered treasures, customs, qualities and traditions of the ancient and famous British State.

How have they done? That is the question which by their Motion they ask us to consider this afternoon, and that is the question upon which the electors will have to pronounce at no distant date. I think it will be generally admitted that we are not in a very good position as a result of all we have done and put up with since the fighting stopped. In these last four lavish years the Socialist Government have exacted upwards of £16,000 million and spent them, over four times as much every year as was the cost of running the country in our richer days before the war. They have used up every national asset or reserve upon which they could lay their hands; they have taken 40 per cent. of the national income for the purposes of Governmental administration. Our taxation has been the highest in the world. It oppresses every effort and transaction of daily life.

Large incomes are virtually confiscated. The exertions and rewards of the most active class of wage-earners and craftsmen have been burdened in times of peace by the harsh direct taxation which in war, when we are fighting for life, may be a matter of pride to bear, but which in victory is at least a disappointment, and I believe has been a definite deterrent to production. Every capital reserve we had has been gobbled up. As has been well said, we ate the Argentine railways—£110 million—last year as a mere side dish. Our reserves of gold and hard currency which at the end of 1946 were £650 million have been draining away until we are brought together here and brought up against the fact that only £300 million at the old rate are left and that this would hardly last for a few months. It is because we are now brought to the verge of national and international bankruptcy after the dissipation of all this wealth that this emergency Session has been called.