Orders of the Day — Empire Settlement Bill

Part of the debate – in the House of Commons at 12:00 am on 21st April 1952.

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Photo of Mr Donald Chapman Mr Donald Chapman , Birmingham, Northfield 12:00 am, 21st April 1952

This is a subject which attracts a great deal of woolly thinking, woolly writing and woolly talking. I shall be bold enough to stir up controversy by saying that I have heard a lot of woolly talking in the Chamber on this subject this afternoon.

Apart from the question of the strategic dispersal of the Commonwealth, the problem involved in the Bill and in the Amendment is an economic one. At every turn this afternoon speakers ran up to the economic problem and then ran right away from it. It happened in the speech of my hon. Friend the Member for Lincoln (Mr. de Freitas), and it happened even more in the speech of the hon. Member for the Isle of Thanet (Mr. Carson). The economic problem is fundamental to the entire discussion; and it is the question of the economic future of the sterling area of which the Commonwealth is the greater part. So it is ridiculous to be talking all the sentiment we have had this afternoon without looking at the economic problem which is more basic.

Let me give two examples of things we have heard said in the House today. I am sorry the hon. Member for the Isle of Thanet is not here now. He said that if we did not get on with the development of the Commonwealth, we should find American capital going in there. He spoke of that with horror. Yet one of the problems facing the Commonwealth today is that of attracting American capital, not freezing it out. Then my hon. Friend the Member for Lincoln read, with obvious approval, a telegram suggesting that our textile industries should be taken out to Australia. Whatever good would that do? It would mean dislocation, the impossibility of housing them when they got there, and having to wait five years before seeing any results. Even then, what good would it do?

Let us look at the Australian position at the moment. My hon. Friend obviously had in mind the fact that the Australian Government have had to cut imports of goods from this country, and therefore he thought it would solve the problem if we sent the industries to that country. Nothing is further from the truth. Why is Australia cutting its imports from Great Britain? Mainly because the balance of payments position at present shows that it is not exporting enough to this country and to other members of the Commonwealth to have goods from us in return. If my hon. Friend would look up the facts, he would find that one big reason is the falling agricultural production in Australia.

A few days ago "The Times" had an article on Australian food supplies which said: Food production has remained almost at pre-war levels and vital industries such as wheat, meat, and butter production have all been heading for lower output, particularly at a time when the seasons were, for the most part, favourable … It goes even further and says: The Government must play its part. Some things it can do are essential. More men must be placed on farms. No significant increase in production can be secure unless more labour is available. In other words, the problem affecting Australia and Britain in this context is that if Australia could export more agricultural production, we would be only too happy to send the textiles. But whatever good would it do to send the textile industry to Australia? It would not solve the problem in any way. It was a pure piece of sentiment. It would not help Australia to feed any more people; it can hardly feed its own population now. What Australia is needing is not a textile industry but people to develop its basic resources, such as food and raw materials. It does no good at all to speak in such sentimental terms.

I want to come to what I believe is the fundamental economic problem that we have to solve, partly through migration. We have to judge where it is best to have our population and to be producing goods. The usual idea about emigration to the Dominions is that if we could spread our population, and perhaps our industries, we should then have Britain not so vulnerable to movements in world trade.

It is said, for example, that because we have 50 million people here and are highly specialised, when there is a movement in world trade that affects other countries' imports of our goods, a highly concentrated population like ours will very easily suffer. This is not a problem just of Great Britain alone. It is a problem that faces the whole sterling area of which we are a part, and we must look at it in that context.

The main problem that will face us is not merely something on which we cannot put our finger; it is the movements in the United States economy. What we shall be facing in the next five, 10 or 20 years is the impact of the United States on the sterling area and the Commonwealth. As I said last November, if there is a slight movement in the American economy, we quite easily have a very deep recession, with a balance of payments crisis, in this country; we lose gold and are subject to the present kind of import cuts.

This is the question, therefore, I want to pose. What kind of migration do we need to help the sterling area to preserve its immunity from the movements in world trade, of which the United States will be the main source? That is the problem, and that is the only real reason for altering the present balance of population inside the Commonwealth. We need to know whether our policy will help us to meet our trading problems with the rest of the world. When that is analysed, it comes down to the problem of the American impact on the rest of the world and how we can adjust ourselves to it.

Let me give a few background facts before I say what effect this has upon our migration policy. The size of the United States can be judged by comparing its gross national product—its national income—with that of other countries. In 1938, for example, in comparison with the whole of Western Europe plus Canada—I do not have the figures for the sterling area—the size of the United States was about double. By 1951, it is three times as great. The gross national income of the United States is now 330 billion dollars, and that of Western Europe 104 billion dollars. By compound interest and at the present rates of expansion, the United States will soon have advanced to four time the size of Western Europe and Canada, and in the 1960s to five times, and even six times as great.

We have seen by our own unfortunate experiences the impact that the United States movements can have on the whole of the rest of the world. Take an American recession like the one which occurred in 1931. The result of that recession was that American imports from the sterling area dropped to 20 per cent. of their former level. The result of the 1938 recession in the United States was a fall to something like 50 per cent. of their imports from the sterling area. Even a minor recession like that of 1949, when there was a falling off in purchasing by the United States, meant a drop of 20 per cent. in purchases from the sterling area. That is the kind of impact that American movements can have upon us.

In 1950 and 1951, exactly the same thing happened. In 1950 we had a boom in the sterling area. Our products were selling at high prices as the result of post-Korean re-armament. We were reaping the advantages of devaluation and we cut our dollar imports. It was a boom year for sterling's trading position. But in 1951 the reverse happened. The situation was reversed with the cessation of American stockpiling and the consequent slump in prices of sterling raw materials; then in addition we had a carry-over from 1950—a hangover, it might be called—of too high a volume of purchasing by the Australian Government, and by ourselves also, from the rest of the world. But the same lesson is present: that if there is a movement mainly in the American economy, we suffer very greatly indeed. In 1951, we lost £600 million worth of gold and we had to make the panic cuts in our imports.

In these circumstances, what is the temptation that faces us? Is it to say that what we have to do through migration policy in the British Commonwealth is to make it into a self-sufficient bloc in the rest of the world in order to isolate ourselves, to immunise ourselves, from American recession; that the whole essence of our migration policy should be to get ourselves into a full employment bloc as the sterling area, as the British Commonwealth, so that we are then quite immunised from these movements in the American economy. That would be the only justification we can see for the kind of migration that is talked about sentimentally on both sides of the House.

When hon. Members say that a high population in this country is too precarious, what is meant is that, at bottom, the problem facing us is to get ourselves in protection against movements in world trade that inflict themselves on this country from time to time with disastrous consequences. To take the argument to its next stage, I repeat that it means that we then have to envisage trying to make the sterling area immune from these movements.

That temptation is very strong indeed. It might mean that we have to start depopulating this country in such a way that we develop in the Commonwealth resources which will help to feed this country and to supply it with raw materials now bought outside the Commonwealth. On the other hand, we should be de-populating the country of industries which are mainly dependent on sales to the dollar area and areas where the fluctuations in trade would start.

What the sentimentalists are trying to tell us is that in effect we ought to cut the numbers of textile workers here and send them to grow food in Australia, which would be the way of immunising the sterling area from movements in world trade; or that we should send highly productive workers of various kinds to Australia, Canada and New Zealand to produce basic raw materials—primary products—which we need and which the sterling area needs to develop for itself so that its economy can be complementary and less reliant upon outside countries.

To break down the problem in this way exposes how shallow are some of the thoughts which we hear expressed, because we really cannot envisage the kind of movements in population that are involved. It does not help to take a whole industry to Australia. It would only help us in our trading relationships in the world if we develop the kind of things which would make us independent of the dollar area.

In view of this, can we in fact, apart from the difficulties even of transferring the right sort of labour to do the right sort of production, try to make the British Commonwealth into a self-sufficient area, and is that a good thing to do? I do not think it is. I think that what we need at this stage of history is not what has been suggested this evening, an Empire conference on the problem, or an Empire economic conference which would embrace also the problem of migration and the best dispersal of population, but a Western conference on the whole subject. I am not enamoured of conferences generally; and perhaps the time is not yet ripe for such a particular conference.

The essential problem is to get American investors, privately or through their Government, sufficiently interested in coming into the sterling area so that we can develop the whole area together. Then it will be in the interests of American capital and the American nation as a whole to prevent slump situations hitting the sterling area at every stage. If we could have integration between the sterling area and the dollar area the United States would be keen to prevent the kind of recession which in 1949—a very minor one—hit us to the extent of a fall of 20 per cent. in purchases by the United States from the overseas sterling area.

I am sure that is the right way of going about it. If we can get the sort of economic study which will show how the Commonwealth is to be developed with American capital and partly with British capital, we can get an interest in the totality of the problem involved and match the effort to that kind of development. But to talk sentimentally in the meantime will not do any good at all. I do not think it would be any good to try to make the sterling area into a full employment bloc cutting off its trading relationship with the rest of the world, because that inevitably will involve us in cutting highly productive labour in industry in this country and sending it to produce, at a lower productive level, raw materials and food in order to make the whole area self-sufficient. In a sense, it would be suicidal and not helping our standard of living to increase at the rate at which it would increase if we could keep the benefits of specialisation we have built up in the British Isles.

I think this is all the more possible at this stage of history because of the political development of the Commonwealth which has been going on since 1945. None of this idea of a co-ordinated development of the Commonwealth and getting American interest in it could have been possible in, say, 1945, 1946, or 1947 for two reasons. The first reason is that at that time we did not even know whether the Commonwealth and the sterling area were likely to survive at all.

At the end of the war we were in a position in which it looked very likely that India and the Asiatic members of the Commonwealth would disappear. We had not had an Imperial conference for many years, and it was not until the historic occasion in May, 1946, that the present Leader of the Opposition called a meeting of Commonwealth Prime Ministers that we began to get this new form of British Commonwealth which is now more closely knit and more unified than ever we thought would emerge from the difficulties of the war.

Finally, of course, it was helped to survive by those very great statesmanlike decisions of freedom within the Commonwealth for India and Ceylon, and the freedom to leave the Commonwealth—but to remain associated—as in the case of Burma. We have assured the political survival of the Commonwealth which was in great doubt at the end of the war. Now we are at a stage when we can begin to look at the problem of developing it further, and we have the political foundations to enable us to do so.

Secondly, we have come to the stage where the American Government and the American nation as a whole have over the past five years developed an extraordinary interest in making their resources available to the rest of the world for development. Nobody dreamed in 1945—and here I do not want to be guilty of exaggeration, because we want the American nation to go much further in its programmes, such as under Point Four—that we would have five years of extraordinary progress in American realisation of her obligations as the biggest nation in the world.

If we can now clinch the double advantage we have reached of a good political foundation of the Commonwealth and American interest in world development and treat the whole question in terms of economic development of the Commonwealth with American help, we can begin to get a migration pattern which suits economic facts and not just the sentiment that has been so glibly expressed in the House this afternoon.

If we do it that way we will be solving the main problem which I tried to pose at the beginning of my speech. My hon. Friend the Member for Lincoln (Mr. de Freitas), the hon. Member for the Isle of Thanet (Mr. Carson) and the hon. Member for Shrewsbury (Mr. Langford-Holt) were employing the old argument, that automatic dispersal means automatic freedom from the risks of world trade. It does not mean anything of the sort if we are not solving the whole sterling area problem of the impact on it of the dollar area.

If we get American capital interested in this development and a Western diplomatic conference in which America is committed to help in the whole process of development, we shall be getting the dollar area anxious to be a stable factor in world economic affairs, and to that extent we shall be taking away the necessity for thinking of the sterling area as a full employment, isolated, immune bloc from the rest of the world.

I believe that is the underlying economic problem which is being skirted throughout the whole debate, interesting although it has been. We have to face the really basic problem of what in the end will be the good or bad economic results of our policy, or to look at it the other way round, we have to decide what economic policy we are trying to achieve and then fit our migration policy to it.

In the meantime, I hope we can stop sentimental talk in this House and in the whole country and get down to economic discussions. The best job the British Government could do at this juncture is to have an economic study of the problem in its basic essentials and, at a later date—when we can get the dollar interest in the problem—have a Western economic conference so that we can see what is to be the future of the whole sterling area. Then, please, let us have a thoroughly good migration policy if—but only if—it fits the economic facts of the situation.