Oral Answers to Questions — Balance of Payments

– in the House of Commons at 12:00 am on 27th July 1965.

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Mr. Gresham Cooke:

asked the Prime Minister, in view of possible balance of payment difficulties arising during the Recess, what arrangements he is making for dealing with such difficulties; and if he will give an assurance that he will seek to recall Parliament if such a situation develops.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

The balance of payments is much better than it was a year ago, and my right hon. Friend the Chancellor of the Exchequer hopes to make a Statement reinforcing previous Government measures later this afternoon. As for the second part of his Question, I would refer the hon. Member to the provisions of Standing Order No. 117.

Mr. Gresham Cooke:

Is the Prime Minister aware that many well-informed people think that the balance of payments crisis may develop more severely in September and that further measures may be necessary beyond those to be announced this afternoon? Will he give an assurance that Parliament would be recalled in such circumstances?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I am not sure that the hon. Member is aware of the text of the statement to be made by the Chancellor of the Exchequer this afternoon. As for the views of certain well-informed people, I am anxious to know who is informing these well-informed people because, as I stated in the original Answer, compared with a balance-of-payments deficit of £800 million last year, all the signs are that the balance-of-payments deficit this year will be considerably less than half that figure, which is quite a good interim report.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Easington

Would not my right hon. Friend agree that the time has come when hon. Members of all parties, irrespective of their political views, should divest themselves of political prejudice and stop indulging in gloom and despondency? Does he recall that during the past years we have frequently had balance-of-payments problems but that on no occasion has the House been recalled to deal with them?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I particularly remember that in the very grave balance of payments crisis which followed Suez, when we were fully opposed to the Suez operation but when it was a question of strengthening sterling, we from the Opposition Box expressed our full support for any measures to save sterling, despite the fact that we were completely opposed to the policy which had led to the crisis in the case of Suez.

Photo of Sir Edward Boyle Sir Edward Boyle , Birmingham Handsworth

The right hon. Gentleman has said that three times in this Session. Will he take it from me that it is quite incorrect and that in fact the Finance Bill and the policy of imposing temporary increases in taxation were opposed through all their stages by the Labour Party.

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

In fact the right hon. Gentleman is a year out. The Finance Bill was in the previous year. Perhaps he is referring to the Autumn Budget, and the following Finance Bill. If the right hon. Gentleman is saying that if an Opposition opposes a Finance Bill it is acting against sterling, I will take his point, whatever the motives for the protracted debate on the Finance Bill. But in that case we supported the then Chancellor of the Exchequer, Mr. Macmillan, in his demand that action be taken to save sterling. But we reserved our right to oppose, for example, petrol rationing and the increased supplementary taxation on petrol, which was not done in the Finance Bill but on a Ways and Means Resolution—and the right hon. Gentleman himself said that it was not a Budget.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

Is my right hon. Friend aware that all the well-informed views of which we have been told were not so well informed about the outcome of the first ballot for the Tory leadership?

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

I do not think that that arises out of this Question in any way at all. All I would say is that if, with a balance-of-payments deficit of £800 million last year, there was a feeling that that was a tolerable figure to be accepted—which we were told repeatedly by right hon. Gentlemen opposite, although we did not agree with it—then I think that, with a balance-of-payments deficit this year of much less than half that figure, there is no possible justification for any financial crisis when the economic position is improving rapidly and when we require more time to get it completely right.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

I am not going to ask the right hon. Gentleman about the degree of support which he gave to the measures which I took to defend sterling in 1961. However, are the measures which the Chancellor of the Exchequer will announce today well thought out, because we have not yet received a copy of the statement which the right hon. Gentleman is to make? [HON. MEMBERS: "Oh."]

Photo of Mr Harold Wilson Mr Harold Wilson , Huyton

On the question of my right hon. Friend's statement, the right hon. Member for Wirral (Mr. Selwyn Lloyd) did not convey a copy of his statement to me on 26th July, 1961, because it was regarded as having budgetary significance; and it is not usual to transfer any statement from the Chancellor of the Exchequer dealing with policies of that kind. So the right hon. Gentleman did not give me a copy of his statement. I hope that he is not trying to suggest that at any time I or any of my hon. Friends supported his policy on Suez. But I now know a great deal more about what he was doing at Villacoublay and Sèvres on that occasion, and I hope that one day he will come clean with the House because of the effect he then had on sterling.