Orders of the Day — Economic Affairs

Part of the debate – in the House of Commons at 12:00 am on 4th November 1964.

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Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby 12:00 am, 4th November 1964

The hon. Member is restless from being out of office. He must contain his soul in rather greater patience.

So much for consultation. The next serious criticism that has been made, and this is strictly correct, is that the decision to use a charge on imports was a breach of E.F.T.A. and of G.A.T.T. Here, we must distinguish between two things. I think that the notion that one restricts imports when one is in difficulties is totally accepted by E.F.T.A., G.A.T.T., the I.M.F. and every single international organisation. Therefore, we are not in breach of any of these bodies by deciding to restrict imports. Where we are in breach is by deciding to do it by a charge on imports instead of by quantitative restrictions. The primary reason for this was the simple and basic one of practicality. I think that the former Chancellor of the Exchequer will be again sympathetic, and this is certainly true of ex-Ministers of the Board of Trade.

We had at one time in this country a very elaborate system of physical controls over imports. That system has been completely dismantled now, and had we tried to re-establish it and restore the whole thing to do what we wanted by quotas and quantitative restrictions this would have taken a matter of months, and a matter of months is precisely what we could not have afforded. Once again we would have run into the same difficulties of growing speculation and of forestalling imports. Therefore, this issue of practicality was a decisive and determining issue.

I would make the point made by the Prime Minister yesterday that it is a curiosity that in 1964 of these two methods, quantitative restrictions and a charge on imports, the one that is most liberal, the one that is least arbitrary, the one that is least rigid and the one that allows the most consumer choice is the one ruled out by E.F.T.A. and G.A.T.T., and the other is the one permitted. There is something wrong with the rules of these bodies. There is no consistency with the trading philosophy of today in allowing quantitative restrictions and not allowing a charge on imports. There is a strong case for the revision of the rules of these bodies to take this into account.

The next and more general criticism is that this method on the part of the British Government represents somehow a return to the inward-looking insularity of protectionism. [HON. MEMBERS: "Hear, hear."] It is no good saying "Hear, hear" to that, because any method which hon. and right hon. Members opposite would have chosen to close this £800 million gap would have laid them open to precisely the same charge. One cannot close the gap by any method which does not make one vulnerable to those sorts of suggestion. The Government have made clear that this is not in any sense a revival of or beginning of a protectionist philosophy. These charges are intended to be temporary. They will be temporary and they will be taken off without any regard whatsoever to protectionist feelings or any demand for protection on the part of British industry.

There is a further point about our decision which shows that we attach great importance to the spirit of our international obligations, and that is that the charges are non-discriminatory. As hon. Members can imagine, we were under very heavy pressure to discriminate in favour of someone or other—in favour of the Commonwealth, or simply the Colonies, or E.F.T.A. All these things, for obvious political reasons, were attractive notions, but, despite that, we decided firmly, although we knew that we would attract additional protest from various countries, that these charges would be non-discriminatory between one area of the world and another.

It has been suggested that some of these charges would mean that we would go back on the Kennedy Round, or would prejudice the success of the Kennedy Round. In the case of some countries in Europe, perhaps not their Governments but certainly their Press comments, there is an element of hypocrisy about this. If we were to ask ourselves what are the biggest obstacles in the way of the Kennedy Round being successful at the moment we would not put a British charge on imports in the list of the top five obstacles. I get strongly the impression from reading some of the comments from some European countries that they are positively looking for a scapegoat, looking, as it were, for another country to take the blame for failures which more fundamentally are their own.

We can see no reason why these measures should jeopardise the Kennedy Round. The timetables are quite different. As I say, these measures are intended to be temporary. The Kennedy Round negotiations have not yet begun. They certainly cannot be concluded, with the best will in the world, till the end of next year, and, even when they are concluded, most of the major countries involved will then reduce their tariffs bit by bit over a period of four years thereafter. It is, therefore, highly unlikely that these charges on imports will have any effect on the Kennedy Round whatever.

Furthermore, as regards the Kennedy Round, it has always been and is our intention to table our industrial exceptions list on 16th November, which is the date earlier fixed in the G.A.T.T., provided that the other main participants are ready to do so, and this, we hope, will be the beginning of effective negotiations. We are, therefore, very glad to learn that the United States Government yesterday announced that they were prepared, together with other industrial countries, to table their industrial exceptions list from that date. We shall now go ahead and do the same.

I have tried to deal with a number of the points which were made on the balance of payments measures. I now turn to certain more particular points mentioned during the debate. The hon. Member for Ilford, South, in a very strong partisan speech—he, at least, is getting himself rapidly into training for the role of opposition—mentioned the question of a number of chemical raw materials. They will come up in the course of discussions on the Finance Bill, and I do not think that they need be dealt with now. The hon. Gentleman in company with the noble Lord the Member for Edinburgh, North, also made some very odd remarks about our proposal for office building, claiming a great deal of credit for what the Conservative Government had done and suggesting that our main desire was to insist on office workers continuing to work, in the hon. Member's phrase, in Dickensian conditions. When we remember how many years of opposition it took us to force the Conservative Government to do anything about working conditions in office buildings, the idea that they can now claim credit for it is, to say the least, peculiar.

The object of our measures regarding office building—it hardly needs to be said—is not in the slightest degree to make permanent bad working conditions for office workers. The object, which, I am sure, most hon. Members would approve, is to try to spread office building more evenly over the country. We want to do this partly because we want to bring more employment of all kinds to the areas which are currently the more depressed areas and partly because, if one is to talk about Dickensian con- ditions, we want to try to reduce the sub-Dickensian horror of commuter travel in London.

The inescapable fact is that the concentration of office building which has occurred in London and the South-East during the past 13 years or so has produced the most damaging and deplorable social effects not only in London and the South-East, but in the areas of reduced employment. This is the basic reason for what I regard as one of the most essential parts of our programme in proposing to do something to restrict office building in the overcrowded areas.

Several other points were made generally on regional problems. We had speeches from Scotland, Wales and Northern Ireland. I do not feel competent to comment in detail on the problems of any of those regions. Certainly, my hon. Friends who spoke from those parts warmly welcomed the various measures which we have taken.

Inevitably, in my speech and, to some extent, in the debate we have been discussing the short-term emergency measures which the Government had to take, but I wish to conclude by making absolutely clear that these are emergency measures only and do not constitute the more important part of our programme. The more important part of our programme by far consists of the longer-term measures announced by my right hon. Friend the Secretary of State for Economic Affairs this afternoon.

The crux of the matter was totally ignored in many of the speeches opposite. When hon. Members say that there is no crisis, they forget that, after 13 years of Conservative rule, we find two things at the same time, stagnant production and a £800 million deficit. Some British Government at some time must clear up the mess. We cannot go on year alter year having a rate of growth slower than that of any comparable country. We have had a rate of growth year by year of about 2½ per cent. while the principal European countries have had 4, 5, or 6 per cent. This is what has been happening, and we simply cannot at the same time live with a balance of payments situation so vulnerable as ours still turns out to be.

Every time we achieve anything like full employment we run into a balance of payments crisis. This is, and will continue to be until we solve it, the basic limiting factor on our doing what we want to do in this country. When hon. Members opposite take great credit for those years of Conservative rule and say, as several did this afternoon, that they left the economy strong and prosperous, the fact is that they have done nothing of the sort. They have left the economy basically weak; they have left us an economy in which whenever we have had full employment we have had a flood of manufactured imports coming in, and our exports increasing less than those of other countries. Whenever we have full employment, we have this large and gaping deficit in our balance of payments.

That is the crucial thing which they have been trying to solve for 13 years and to which we now have to address ourselves. It is no good, while they are in opposition, pretending that they ever found a remedy for this problem, because they did not. No advice from them at the moment, I regret to say, is of any use to us whatsoever.

It is for that reason that my right hon. Friend the Secretary of State for Economic Affairs this afternoon announced a number of extremely important policies which the last Government had not, in fact, introduced. These policies will gradually develop. Obviously, there is no time to go into them now, although they will be mentioned in the course of the debate. They were dealt with very fully in a speech lasting about an hour by my right hon. Friend, and will be dealt with again.

But the crux of the matter is the difference between talk and action. Hon. Members opposite had a very long time indeed in which to talk of expansion and of modernisation and in which to express their constant hopes of achieving rapid growth. The fact is that for all their talk they never did it. We propose now, with this Government, to have rather less talk and rather more action.