Debate on the Address

Part of Orders of the Day — Queen's Speech – in the House of Commons at 12:00 am on 3rd November 1958.

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Photo of Viscount  Hinchingbrooke Viscount Hinchingbrooke , South Dorset 12:00 am, 3rd November 1958

I realise that. I have looked up the volume figures; I have them with me and they are much the same. If it is the prices that have fallen, that is an indicator of what might go wrong to the economy if there were an explosion in the world, a sudden vast buying demand by the United States or any other country, and prices were to rise. The same applies to shipping debits.

On the export side, as the Chancellor of the Exchequer said, the situation is not very satisfactory. For the same periods that I have given, exports and invisible exports together totalled £2.486 million, £2,481 million and, in the last six months to June, £2,458 million. Exports and invisible exports have hardly contributed to stabilising the situation in the country. Indeed, they have shown this decline. In parenthesis, I am wondering whether the Government have been wise to abolish hire-purchase restrictions on so many articles, notably motor cars, that we need to stimulate our export trade. I hope that before the end of the debate we can have some justification, in strict economic terms, for the relaxation of controls on articles which are suitable for export.

There is another special factor in the situation, of which I do not want to make a great deal, but on which I should like some information. What is the expected gold payment to the European Payments Union in the last six months of this year? It was very substantial last year and in previous years. It was £70 million in 1955, £88 million in 1956 and £119 million in 1957. So far this year we have received from the E.P.U. gold amounting to £27 million. That has artificially helped to make these figures appear good. I should like to know how much we are at risk there.

I come to the indicators of internal inflation which influence these moguls overseas from time to time. The floating debt at the time of near crisis in August, 1957, was £5,022 million. Many people at the time thought that the very size of that figure indicated inflationary activities. It was £5,290 million in October of this year. The note issue, which some people think is an indicator of excessive internal purchasing power, was £2,055 million in August, 1957, before the autumn crisis, and it is now not quite so much, but relatively high at £2,008 million.

But it was Government expenditure, or rather the apparent and rather startling rise in Government expenditure, which was the reason why my right hon. Friend left the Government. Government expenditure between April and August of 1957 was £1,519 million, and this year it is £1,574 million. We may say that a matter of £75 million is not very important in the national economy, but we have quite clearly broken through the barrier, and Civil Estimates expenditure is way beyond what it was when my right hon. Friend resigned.

Finally, the most disquieting one of all is the level of bank advances, which, in August, 1957, just before the autumn crisis, were £2,054 million. As a result of the measures taken in the crisis, they rapidly went down in November, 1957, to £1,931 million, and since then have steadily risen. In February, £1,940 million in May, £2,031 million and in August of this year, £2,092 million, which is more than they were in the month before the economic crisis. There are many other considerations which must arise which weigh the other way, but the basic statistics of the country today give some cause for anxiety, and certainly do not give us an opportunity for playing fast and loose with public and private expenditure. I am very glad that the Government are not doing that, and I was very glad to hear from my right hon. Friend the Chancellor today that he does not intend to do so.

The view put over by the Radical Press is that the Government are hell-bent to bribe their way towards victory by loosening every factor on the economic front, by playing a fast and loose political game. I believe that that is what the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) virtually said in his speech. Therefore, a sudden international scare —and who knows that we have finished with crises in the Middle East and elsewhere?—might well shoot some of these international indices skywards and send us hurtling into another cost inflation at home. We are hovering on the edge of risk today, and a massive release of purchasing power, for any reason whatever, might well set up a new cycle of inflation. Therefore, when the Chancellor says that there is to be no opening of the flood gates, I was very pleased to hear him say that.

There is a short point on the public investment programme. I rather agree with the hon. Member for Bolton, West (Mr. Holt), as I have agreed with him in the past, that the Capital Issues Committee is no longer fulfilling a useful purpose. If it is to be abolished, or even if it is not to be abolished, why on earth cannot we have annually, by means of a White Paper, a published statement of the investment programme which we can discuss and consider?

My right hon. Friend the Chancellor has elevated the figures by £150 million, but we have not the slightest idea year by year how it is divided up between the railways, the roads, schools, hospitals and all the rest. We do not see it until we get one of these massive Blue Books at the end of the year, and then we have to wade through it page by page to discover what the facts are. I hope that the Government will at least agree to get over the extraordinary reluctance of the Treasury to publish the capital investment programme, and that they will do so by means of a White Paper.

On another short point on the convertibility of sterling—and I know that right hon. and hon. Gentlemen opposite do not like convertibility, because it releases the one and final control over the economy of the nation—I believe that we cannot successfully survive in the international capitalist order without working the international capitalist game, and that the sooner we release sterling and let it float, and the sooner we have convertibility, both for foreign sterling and resident sterling, the better. That is my view and a great many of my hon. Friends agree. I tell the Government that because some inquiries have been made about this.

I hope that the Chancellor, who seemed, at Delhi, to be riding very high towards this aim, will pursue his policy to the end now that the international figures justify our taking the risk.