I would certainly have disagreed with the document, but I would not necessarily for that reason think it was as turgid and ill-argued as this document. I should like to ask the President of the Board of Trade whether, when he winds up, he can give us an assurance that this document, reeking with deflation and giving priority to a tight credit policy, above almost anything else, does not represent the policy of Her Majesty's Government.
I should like to turn to the position as we face it now and the prospects for the future. I think the first task—I agree it is more easily mentioned than solved—is to try to get the short-term capital position better with confidence in sterling greater than at the present time. It is very worrying when we get the position running in our direction for only two or three months, and then we have the position moving against us again. It is probably moving a bit against us at the present time.
I hope the Government will look very carefully at the exchange control mechanism and try to make it more effective. I hope the President of the Board of Trade will deal with this point when he replies, a point mentioned by the Chancellor of the Exchequer, whereby, in effect, we are going to give hire purchase to the foreigner to make our exports more attractive. That, I take it, is what is meant by extending export credits in a certain way. That may be good from a long-term point of view, but I should like the right hon. Gentleman to tell us whether the disadvantageous effect of such a policy from the short-term point of view has been taken into account, and to reassure us, if he can, on that point.
The first thing, therefore, is to try to get the short-term capital position a little better by looking carefully at our exchange control mechanism. Then I agree with a number of hon. and right hon. Members who have said that we must look at this situation, not as a short- term crisis, but as a long, difficult struggle which is not desperate, but which is certainly likely to be difficult for a long time to come. That being so, it would help a great deal if the Government could turn their backs on this will o' the wisp of convertibility in the near future. I am sure that it does nothing but harm to chase that kind of objective, which there is really no chance in the world of our attaining for a couple of decades. I should like the Government also to look at the E.P.U. position and to try and tell the House what they conceive to be the future of E.P.U.
My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) said in his speech that the Labour Government always thought of E.P.U. as a club in which all members, debtors and creditors, must make an effort to be in balance for as much of the time as possible. Is that the Government's view? The Chancellor of the Exchequer was very touchy about any criticism of Belgium. But Belgium obviously is not pursuing that policy.
But I was worried, too, about what the Chancellor went on to say about his hope that when we had turned the position we might begin to win back gold from E.P.U. That policy has certain attractions, but it is really hoping to put other people in the position in which we now are if one is hoping that, as soon as one gets out of a position of having to pay gold to E.P.U., one can begin to get it back. Is it the policy of the Government that all members of E.P.U. should pursue a course of keeping themselves in balance as far as that is possible?
Now we have the prospect of another Commonwealth conference. Certainly we are all hoping very much that the Government will approach that conference in the spirit of expanding our exports. There can be no doubt at all that the rather disappointing results of the last Commonwealth conference which dealt with this matter have had a lot to do with the fall in our exports that has taken place recently.
I thought my right hon. Friend the Member for Huyton (Mr. H. Wilson) did not give enough weight to this in his speech. He did not give enough account of the extent to which our exports, even of metal goods, were falling off, not only because of competing demands on the industries which could produce these goods, but also because the policy of this Government had closed markets to them. One sees from the figures that engineering exports to non-sterling countries have been going extremely well. It is only to the sterling area countries that the falloff has occurred.
Another point is that we must try to reverse this extremely disturbing production trend. Here again, it would be a pity to exaggerate the extent to which this is now a question of shortage of materials rather than a shortage of demand. I really do not see that the Government can hope to reverse this trend by a policy of tighter and tighter credit. I have never heard any reputable economist urge that higher interest rates, whatever else they might do, would be a factor leading to increased production. I ask the Chancellor to think very carefully about his policy of tightening credit when he is worried, as he is bound to be, that for the first time for six years we are in an extremely difficult position from the point of view of increasing production.
The last point is the re-deployment of industry. Obviously we are in a position in which we greatly need to expand certain parts of British industry and British agriculture. That is a difficult thing. If one had to look back and make a criticism of the planning policy of the late Government, I would say that they were extremely good at corrective planning and less good at purposive planning. I do not share all the criticisms of the Treasury planners which are sometimes made. I think they were good at steering a course between unemployment and inflation and at correcting things which were going wrong. What the Government were perhaps less good at was at saying, "If we are to overcome these difficulties we want a substantially different shape to the British economy in 10 or 15 or 20 years' time." I think we should make a new approach from that point of view.
I am bound to say two things in that connection. I agree that we must look at the defence programme in view of new circumstances, but it would be a pity if any of my hon. Friends fell into what I think would be the error of saying that, if we cut back the defence programme as far as anyone has suggested, we should have solved our balance of payments position. I think there is a danger of not looking sufficiently at the long-term measures which have to be taken if one believes one can solve it completely by any one measure at this time. I point to that as being a danger.
Secondly, I cannot see how we are to bring about these big changes in the shape of the British economy which are absolutely essential if we are not to go on from crisis to crisis unless the Government maintain a great deal of control over that economy and a great deal of power to shape it in the way it needs to be shaped.
Finally, I turn to a point which I mentioned earlier. This is no moment for the Government to be arrogant or particularly proud of their work. The measures which are associated with this new Conservative Government—monetary policy and the rest of it—are as yet completely unproved. They may help a bit, they may not. Certainly nothing has happened so far to indicate that these measures will bring about any degree of success. On the contrary, it may be the case that, by provoking a difficult wage situation, they may do great harm to the country. Therefore, one certainly cannot feel any confidence that the past record of the Government indicates it is within their power to cope with the situation in the future.