Orders of the Day — 5. Tax Rebates for Exports

Part of the debate – in the House of Commons at 12:00 am on 11th November 1964.

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Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North 12:00 am, 11th November 1964

It has a lot to do with the Budget. I am about to remind the hon. Member for Nottingham, South and other hon. Members of why we could not have an election last October. I shall explain how the balance of payments problem has been directly attributable to the actions of the last Government, particularly the former Prime Minister. After the right hon. Gentleman was appointed, manoeuvred or jockeyed into leadership of his party, however it happened, he said: From this moment on, the fact that there is a General Election ahead of us must never be out of our minds. Every act that we take, every attitude that we strike, every speech that we make in Parliament or elsewhere, must have that fact in mind. I quote from the centre pages of today's Daily Mirror. I advise hon. Members opposite to read it. I ask hon. Members on both sides of the Committee to read it. If I could afford to pay for it, I would circulate it to the public generally.

I come now to a quotation from the former Chancellor of the Exchequer, the right hon. Member for Barnet (Mr. Maudling). It is true that, before the election, he said that there might be balance of payments problems, but he did not say it during the election campaign. This is one of the quotations from the right hon. Gentleman's words: I think our economic prospects in the short-term are certainly good … I think that the use of the word 'crisis' is quite wrong. Just before the election, the former Prime Minister said: Everyone seems to be agreed that short-term measures are not now necessary". That was from a speech on 3rd October last.

I am not arguing about it, he may or may not have been right, but I am reminding the Committee that we have had the former Chancellor here saying that he believes that there is a need for short-term measures.

The hon. Member for Nottingham, South cannot make up his mind whether the deficit is £700 million, £800 million, £300 million or £400 million. Apparently, he believes that it may be nearer £300 million or £400 million.

But we cannot get the agreement of the Opposition on whether there is or is not a balance of payments crisis. I rather accept the word of the former Chancellor who, now that the General Election is over, admits that there is a balance of payments crisis. I only wish he had said it during the election campaign. I wish the former Prime Minister had said it on 3rd October. I wish he had said on 3rd October that there might be a need for short-term measures, that his right hon. Friend the former Chancellor had some ideas and proposals pigeonholed and that when they got back to office, if they got back, they would have an autumn Budget. But he did not.

My accusation against the former Government is that either they knew and did nothing about it or did not know but ought to have known. They cannot have it both ways. Either they knew that the situation was getting crucial or they did not. I do not know which way it was, but I believe that they knew, and I believe that for electoral purposes they kept mum and hoped against hope that, as on previous occasions, they could get back to power and then start introducing their retrogressive legislation.. I believe that they would have done that if they had got back to power. Just as they started to dismember the National Health Service, so they could have continued. Just as they imposed taxation on kiddies' sweets and on ice cream, they could have done the same thing.

What has happened? We have heard about it this evening. It is amazing. The Tories had 13 consecutive years in power. Over the last 50 years, with the exception of two short periods, they have had undisputed control over the affairs of the country. Yet they suddenly decided when they heard the Budget and realised that my right hon. Friend was to increase the pensions for the old people, widows and so on, that if they had got back they also would have done it. If I may use some non-Parliamentary language, why the heck did they not do it? The Labour Party would not have opposed them. In fact, time after time we asked that this should be done, but it was the votes of the Conservative Party which stopped it.

A little earlier an hon. Member opposite said how terrible it was that the young people had to contribute towards the old-age pensioners. The hon. Gentleman does not know working-class men and women. They are only too pleased to look after Mum and Dad, and "Mum and Dad" are every old-age pensioner and retired person. All the working men and women in my constituency have said they are disgusted at the way the old people have been treated and neglected by the Tory Government over the last 13 years. I am not a bit worried about telling my constituents that they must pay a few bob a week to help give £1 a week to the old-age pensioners. Indeed, they are very pleased to do it. They know that the old people will get not only that but further advances which will come. Our ultimate policy is half pay on retirement.

I want to be a bit critical about the payment of the increases. With all respect to my right hon. Friend the Chancellor of the Exchequer, I do not accept the advice given him by the Treasury, the Post Office or the Ministry of Pensions and National Insurance that the increase cannot be paid until March. That is wrong.

I will tell the Government how the increase could be paid tomorrow. Every pensioner in receipt of a State pension collects it from the Post Office. A receipt is torn out from his book when he gets the money. All that is needed is to issue the Post Office with rubber stamps which would stamp the increased amount on each slip. The money would be paid by the Post Office and debited to the Treasury. I think that it takes about 24 hours to have a rubber stamp made.

I urge the Government not to listen to the arguments about this that we heard during the 13 years of the Conservative Government. We were always told that the increase could not be paid so quickly. But when the judges wanted their increase, they got it overnight, and, with all respect to Ministers, when the necessary Bill passes the House they will also get their increases overnight, although they are not in so serious a need as are pensioners.

Do not let this increase be delayed until March. Let us show that we can find a way. Even on the basis of using an I.O.U. from the Treasury to the Post Office, I would still prefer to show our determination to get the money paid as soon as possible—and as soon as possible is certainly not next March.

I agree that it is silly to have a general impost because there are new machines, new inventions in plant and equipment, which either we have not made ourselves or which we should see in order to study the possibility of making them here. It might well be that some machines from abroad are necessary to improve our exports. It should be possible to issue exemption certificates for the importation of proved plant and equipment necessary for the export trade. This also could be done simply. It is only a question of the Board of Trade issuing the necessary certificates.

My right hon. Friend the Minister of Public Building and Works wants a machine that will make more bricks. If I could find such a machine abroad, surely that would be a case for exemption from the new impost. The Board of Trade and its experts could examine it, and if it could be proved that the machine was able to do the job, it should be allowed in without the impost. Equally, if a machine could help us get a big export order, then it, too, should be exempted.

The impost is a short-term measure. We must get down to the job of directly encouraging exports. Far too many industrialists and workers are very happy to make a lot of stuff neither useful nor necessary because they are able to sell it quickly and cheaply on the home market, making a big profit. They are not interested in exports. Why should they be? Under the profit motive so much admired by hon. Members opposite their job is to make the biggest profit as quickly as possible, and if they can do that by making stuff only for the home market, why blame them?

A simple way of giving that incentive would be to allow everyone, not only manufacturers but British people going abroad on holidays, a cash discount in sterling on any foreign currency which they paid into the Bank of England. The discount could be altered according to whether the currency concerned became harder or softer. There are many people who, when about to return to this country from a holiday or a business trip, finding that they have a few francs or lira left, spend the money on some cheap souvenir which they do not really want rather than take the trouble to exchanging it here. If they knew that they could get a tax-free return on their money, I am sure that they would take the opportunity. [Laughter.] The hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) laughs, but I assure him that there are plenty of business people who would take advantage of a subsidy like that. Australia has such a system and is operating it with great success. The hon. Member for Worcester (Mr. Walker) has just returned from Australia and he would be able to confirm that.

If the Government introduce an incomes policy, as is their desire, if they want the support and active co-operation of the trade unions, as they do, I hope that they will quickly tackle those problems which confront ordinary people, and I refer especially to rents and the Rent Act. I am very pleased that my right hon. Frined the Minister of Housing and Local Government has already laid a Bill in that connection today. I hope that he gets on with the job quickly. These are the things which prevent an incomes policy. If a chap finds that his rent is going up by 25s. or 30s. a week, or if, as is the case in my constituency, two unfurnished rooms having no toilet or bathroom are advertised at a rent of five guineas a week, how can the ordinary man be expected to carry on without asking for a wage increase?

Let the Government deal with these problems and with the social services, the health charges and so on, and, as a trade unionist, I believe that if trade unionists see that the Government really intend to tackle the rackets which have been going on for so long under the party opposite, they will give their support to a fair incomes policy.