I "That a sum, not exceeding £2,668,876, be granted to His Majesty, to complete the charges for the following Departments connected with the Department of Overseas Trade and with Export Trade for the year ending on the 3rst day of March, 5944, namely:
|Class VI., Department of Overseas Trade||£183,254|
|Class VI., Export Credits||£191,978|
|Class VI., Board of Trade||£1,293,644|
§ [For details of remaining Resolutions, see OFFICIAL REPORT, 23rd July, 1943; cols. 1333–1341, Vol. 391.]
§ First Resolution Read a Second time.
§ Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
§ Mr. Harcourt Johnstone (Secretary, Overseas Trade Department)
As the three Votes put down to-day indicate, in order 1420 to give a general picture of our export policy as it stands and to follow that up by some statement of what is being planned in the post-war period involves touching upon the work of the overseas side of the Board of Trade, for which, under my right hon. Friend, I am responsible, and then upon the work of the Department of Overseas Trade and of the Export Credits Guarantee Department, for whose Votes I am responsible to Parliament. Up to the outbreak of war, our export policy, though not always easy, was obvious. Our object was to sell abroad as much as possible in order to pay for the food and raw materials which we require from overseas, and, on the whole, we were successful in doing so and in earning a surplus as well, for investment in foreign countries or in the Dominions or Colonies. It is true that in the decade before the war we were not always successful in balancing our payments with the very large sum of our investments abroad, to enable us to meet such deficits as occurred without too much inconvenience and to look forward to a time when the deficits would turn once more into annual surpluses.
Then came the war, and the brief period during which our export policy was not fully determined. Very soon, however, at a time when my right hon. and gallant Friend the present Colonial Secretary was President of the Board of Trade, we entered into the period of the war known as the export drive. It was carried to its height under the guidance of my right hon. Friend the present Minister of Supply. Those were the days of "cash and carry," when our relations with neutral countries were not yet clearly defined and when nearly every form of foreign exchange which we could possibly earn was of value in the prosecution of the war. The export drive was remarkably effective. With the co-operation of manufacturers and merchants and of the newly formed export groups, exports were raised by the late spring of 1940 to a very remarkable figure indeed. It regrets me that those figures cannot be mentioned, because I think they would impress the Committee. It is an unfortunate fact that, for security reasons, figures of exports cannot be given publicity, which must tend to rob the discussion to-day of a certain amount of reality. The export drive may be said to have continued until the end of the 1421 year 1940, but already, by the early autumn, this aspect was noticeably changing, and the era of the so-called selective exports had set in.
Although this change seemed somewhat to threaten our capacity for buying abroad, yet it was in itself a sign of good things at home. It meant that war production was increasing on a really big scale and that exports in future would have to be strictly regulated in order to preserve labour, raw materials and factory space for the essential purposes of war production. The export drive had done great things. It had demonstrated to the world the remarkable flexibility and tenacity of British manufacture, and it had earned for us many, many millions of essential foreign exchange. Henceforth, however, the policy of selectivity was to work with increasing rigour. Our ability to pursue this policy was immensely assisted by the adoption on the part of the United States of the generous policy of Lend-Lease. That was in the early months of 194.t. Then, finally, with the entry of the United States into the war, there began the new policy of joint planning, as we now call it, which is now being applied to the export trade of both countries to an increasing extent.
These changes of policy have, of course, inevitably caused some temporary maladjustments in our export industries, though, on the whole, the gradual changeover to a full war economy has gone with remarkable smoothness. I think it is universally recognised that the purpose of our export trade is not now primarily to balance our import needs but to contribute directly rather than indirectly to winning the war. The export trade is dependent upon factory space, manpower, machinery and shipping. All those factors have to be harnessed primarily to the war effort, and so it follows that the export trade is now in the nature of a supply service, attuned to our total war effort, rather than the export trade as it existed before the war and later, during the export drive. The nonmilitary supplies which we export now are playing their full part in the war effort of the British Empire as well as of the United Nations as a whole, for the maintenance of the internal economy of our Dominions and Colonies and the Colonial markets of our Allies. We must also remember the neutral States from whom 1422 we obtained the supplies of food and raw materials which are almost as essential as the provision of munitions.
Let me give an illustration of what has happened by reference to a particular type of export. Before the war our pottery industry, beside supplying the home market with its essential requirements and with its luxury or semi-luxury ware, conducted a flourishing export trade. It was based almost entirely upon home-produced raw materials, and for that reason its export trade was of special value. Foreign currency against pottery exports did not have to be discounted, as others had to some extent, by an appreciable expenditure upon raw materials from: abroad. In the earlier stages of the war, therefore, during the period of the export drive especially, when currency was of such enormous importance to us, by arrangements made between the Ministry of Labour and the Department of Overseas Trade labour in the pottery industry was afforded special reservation in order that our exports, particularly to hard currency countries, might be increased and earn for us currencies of which we stood in really desperate need in the days of "cash and carry." The pottery industry, needless to say, responded really nobly to this task. Then, as time went on, and the need of man-power became more insistent, the pottery industry was called upon to undergo concentration like so many other industries. Supplies of pottery coming on to the home market were limited increasingly to essential needs, and the global export quota was reduced.
Meantime, the volume of essential domestic requirements was growing, owing to the increase in the Fighting Services, the auxiliary Services, and factory and national canteens and so on To render possible the increased output with the reduced man-power, the decoration of pottery for the home market was prohibited, and types of production were reduced and standardised. We even began to see cups without handles. So far as export is concerned, the volume has been reduced to a limited proportion of the exports in 1941, and arrangements have been made to ensure that many markets which were largely if not wholly dependent upon us in the past, will obtain their full share of exports which are still permitted.
1423 In other words, the exigencies of war and the need to put first things first have compelled His Majesty's Government to regulate and restrict exports to an increasing extent. The primary object is, of course, to win the war, and the available resources of labour, factory capacity, raw materials and shipping must be devoted to that purpose. This has necessarily involved transfer on a major scale of resources of all kinds from their normal peace-time purpose. The volume of production of ordinary goods, whether for home use or for export, has had to be curtailed correspondingly. In the very important field of capital goods, such as machinery and plant, any exports not justified by war-time needs have had to be severely checked, and exports of repairing parts and for maintenance have had to be kept to the lowest level compatible with war-time needs and the maintenance of overseas economies upon a level appropriate to the circumstances of totalitarian war. In the field of ordinary consumer goods, rationing, direction and limitation of supplies have everywhere had to be introduced and to an increasing extent, if the war effort were not to suffer. It is indeed an essential accompaniment to the sort of war that we are fighting, that civil consumption of all kinds should have to be reduced everywhere to a minimum compatible with efficiency and the winning of the war, and that our exports of all kinds to all markets have had increasingly to comply with this condition.
Our main responsibility is towards the Empire and the countries actively associated with us in the war. They are largely dependent upon us for their supplies for their essential needs. Colonial territories of the world, under our flag or associated with us, are of great importance as primary producers of all kinds. If the labour and the production drives of those territories are to be maintained, consumer goods in appropriate amounts must be made available. Concentrated as they are on primary production, local resources in most cases are inadequate to the double task of maintaining an ample flow of primary products and of meeting their own consumer demands. Exports to the Dominions and Colonies are therefore essential to us, either directly or indirectly, in the field of war production, and exports to the Empire and the Colonial territories de- 1424 pendent on us must take a first place in our export programme, even at the sacrifice, the inevitable sacrifice, of some of our traditional markets.
In this country there has had to be strict rationing and, as we all know, strict limitation of consumption. Our people have cheerfully, quite cheerfully, although perhaps with an occasional grumble, sacrificed their peace-time comforts and adapted themselves to a more Spartan standard. It would be a real betrayal of their sacrifice if export policy were allowed to be dominated by the normal commercial considerations appropriate to the happier times of peace, and it would jeopardise the speedy winning of the war if resources that could demonstrably be better employed for the war should be used for the production of goods for export that do not contribute to this end. A prime test in the export field to-day is whether goods are really essential to the importing countries, due regard, of course, being had to their own resources, to other sources of supply and to their appropriate level of war-time economy and war-time consumption. In short, the optimum use of the resources of the United Nations must be the dominant factor. Our main duty within the limits of the resources we can spare for the purpose is to supply only those goods that are essential and for which this country is the most appropriate source.
Under present circumstances the needs of the importing country are the prime factor to be considered. Our export trade has had to adapt itself to this condition. Where the customary kind of exports have been of a less essential sort or even in some cases reflected the happier days of peace when luxury was not a crime, our manufacturers and merchants have had to turn away from it and adapt themselves to the production of more essential and more utilitarian kinds of goods. The export trade has had to make a sacrifice of some of its higher quality products in adapting itself to the more austere conditions now prevailing. Many specialities appropriate to the days of peace have had to give way to more standardised and more economic production. Channels of trade too have been disturbed through the overriding consideration I have mentioned. Importing countries, of course, as the supplies grow shorter, are more and more concerned with the equitable distribution of the limited supplies available 1425 within their own borders. They themselves have had to adopt various methods of control, ranging from import licences to bulk ordering.
Wherever possible, subject always to the overriding condition of efficiency, we have sought to keep trade in its normal channels, for these normal channels of peacetime trade are in fact often more efficient and adaptable than a system of full Governmental regulation. Indeed, I have been amazed at their resilience and the continued contribution they have made and are still making to the reasonable satisfaction of overseas demands. For our own part we have tried, in the various schemes regulating exports, to maintain the greatest possible measure of equity among all trades and sections of trades. The export groups and other representative bodies in the trade have been called into frequent consultation in deciding the mechanism of any scheme and the system of allocation to be followed. In the main we distribute out trade in proportion to past performances, and in this way we hope to keep alive all our export interests for the great task ahead of them of rebuilding our export trade after the war.
Let me give the House a description of how one of our most important export trades is now run. Before the war the value of our exports of woollen manufactures was about £30,000,000 to 35,000,000 a year. Woollen manufactures normally accounted therefore for about one-twelfth of our total exports. Woollen and worsted piece goods are the most important part of the trade. They were first brought under control in November, 1941, and the full scheme at present working was started in February, 1942. Owing to the existence when the scheme started of considerable export stocks built up during the period of the export drive, total exports in 1942 remained at a pretty high level, but with the disappearance of stocks and the reduction of total production due to labour withdrawals, the total available for export is now much reduced and is barely sufficient to meet essential Empire needs. It has thus been found necessary not to allow new production for Latin America or for the United States. This decision has provoked a strong protest from the trade, but I am afraid that no change is possible so long as the production position remains as it is.
§ Sir Patrick Hannon (Birmingham, Moseley)
Did consultations take place with the trade or the interests concerned in the woollen trade before this very important decision was arrived at?
§ Mr. Johnstone
Yes, the fullest consultation of all kinds. The position has been fully explained to the trade, and there has been a full exchange of letters between my right hon. Friend the President of the Board of Trade and the Chairman of the Wool Export Group. The Board of Trade decides the amount of the exports to be allocated to different countries in accordance with need. The main markets now for woollen goods are Canada, South Africa and New Zealand. Australia is relatively unimportant, and not much is required by the Colonies or by the Middle East. The export control scheme is run by a branch situated in Bradford of the Export Licensing Department. It is found very convenient for the trade, and licences are granted to exporters in proportion to their trade in the separate markets in the year ended in November, 1941. This base period and other arrangements were agreed with the trade. It has been found possible in general to maintain this principle, which has been accepted by the trade as equitable. In the case of some markets it has been found necessary to restrict the types of cloth that can be exported. For example, special arrangements have been made with the Canadian Government, in consultation and agreement with the trade, as to types of cloth required for Canada. The arrangements include certain price limits also agreed by the trade. Special arrangements, though more limited in their scope, have also been made with Australia. Otherwise, trade has been left to normal channels and arrangements within the quota.
In the case of the Middle East there has been some difficulty in marrying up our export allocation system with the import recommendations from the Middle East. It is hoped however that arrangements at present in course of discussion would prove satisfactory both in meeting the needs of the Middle East and the interests of our own merchants. The Wool Advisory Committee, containing representatives of all sections of the trade, was set up early in 1942 to advise us on the working of the scheme. This, I believe, has been much appreciated by 1427 the trade, and it has certainly been very helpful to us The wool scheme indeed has run smoothly, and there has been no complaint of substance as to the mechanism of this scheme. Recent complaints such as there have been have related not to the mechanism of control nor to the need for restriction which is fully accepted, but to our inability to allow any further new production for the present for exports to Latin America and the United States.
Exports of wool yarn are also under control. The Board, in consultation with the Wool Control, settled the total to be exported. We decide the distribution between countries, but the distribution of the export quota among exporters is done by the Wool Control. Exports of knitted woollen goods have been under strict control for a long time owing to the shortage on the home market. Apart from some Colonial requirements, very little export of knitted goods is permitted. An exception, however, is made in the case of the rarer fibres like cashmere and alpaca and so on, which are not in such demand for the home market and where a small pocket of production still exists.
I have given examples of how our present war export policy is being applied to two of our most interesting export trades, pottery and wool, which are two examples of a British characteristic on which we shall have to count much in the future. I mean superiority of quality. In both cases quality has had largely to be sacrificed, and it is possible that quality may have to some extent to be sacrificed during the period immediately after the war, when the relief of devastated Europe and Asia will be of such immediate importance. But we must return as soon as possible to the manufacture of high quality goods if we are to regain and expand our export trade. The nation, I fully believe, accepts the thesis that for a period after the war many of the present war controls will have to be maintained if the world is to return to peace conditions in an orderly manner, but just as the present joint arrangements for civil supplies contain no implication whatever that we shall not be free when peace is fully restored to trade with any market in the world, so equally, when that time comes, shall we return to the manufacture for export of goods of the highest possible quality. It 1428 is not likely, however, that we shall too quickly reach a stage after the war where the normal interplay of economic forces can be left free.
In the transition period through which we have to pass from the present highly abnormal conditions to the normal conditions we hope to establish there will be a difficult intervening period when control of various kinds must be maintained. A new task will face us immediately our Armies have liberated countries now under the enemy yoke. The relief of the distressed countries must be and is being kept in mind. It is inevitable that if we want to have the equitable distribution of the means of living, both in consumer goods and in reconstruction generally, the demands will outrun materially the available supply in the post-war period. We shall have to share what we have with our less fortunate neighbours on the Continent of Europe. Some measure of restriction of our home consumption and some measure of direction of our exports will continue, therefore, to be necessary in the early days of peace. This must remain the guiding principle in the policy of the Government.
We are fully aware that this has meant, still means, and may continue to mean sacrifices and temporary loss or markets by many branches of our export trade. It has been repeatedly emphasised that the Government regard an increasing and healthy export trade after the war as an essential if we are to maintain our own standards of living and to play our part in contributing to the achievement of an expanding world economy, with full employment, which is one of the main objectives of the Atlantic Charter and the Mutual Aid Agreement. The Government fully realise their responsibilities in this field and already are giving much time and attention to discovering the best means of attaining all the objectives of the Atlantic Charter by agreed action-for it can be achieved only by agreed action with other like-minded nations. But it will depend inevitably on the enterprise of our trade and industry, the skill of our workpeople, the willingness of all to work for the better things that we all, without exception, desire to achieve. The Government have every confidence in the resilience of industry and in its ability to develop export trade once again when the time comes.
§ Mr. Shinwell (Seaham)
My right hon. Friend spoke about agreed action with other nations, but he did not explain what was meant. What does he mean by agreed action?
§ Mr. Johnstone
I will give my hon. Friend an example. We have lately seen the Keynes and White Plans, as they are known, which are being discussed by the Governments of all the United Nations. It is clearly highly desirable that an agreed scheme Should be reached. That is an example of the sort of agreed action which I have in mind.
§ Mr. Gallacher (Fife, West)
Are you going back to the old smash-and-grab which operated before the war?
§ Mr. Johnstone
That is not the intention of the two schemes I have mentioned; indeed, their intention is precisely the opposite of that. For the time being, however, industries must be asked to accept the present situation and the loss, or the drastic curtailment, of traditional branches of trade and traditional markets, in the knowledge that, vital as export trade will be to this country in the postwar world, it is even more vital to concentrate now on winning the war.
I should like to turn to the work of the Export Credits Guarantee Department. This Department came into being some years after the last war, in order to assist the exporters of United Kingdom goods by giving them cover in suitable cases, at an appropriate premium, against the risk of non-payment by the overseas purchaser of their goods. Great care was taken to make the exporter a participator with the Department in the risk involved. The Department made it a point of policy not to insure the whole cost of the goods, since if the exporter ran no risk of loss he might fail to take reasonable precautions to ensure that the purchaser was of reasonable credit. Another risk against which the exporters became increasingly interested in covering themselves in the inter-war period was the risk of having to wait a long time for the transfer of exchange even though the purchaser had made payment at due date in the local currency for the goods exported. In the early days of the war new risks arose—risks arising from enemy action, over which the exporter could exercise no possible control, risks of so serious a character that they might well prevent the 1430 exporter from engaging in trade at all. The most important of these risks against which the Department agreed to give cover was what was called calamity risks, the risk of non-payment by the purchaser owing to occupation of his country by the enemy before he was able to make payment. This risk occurred more especially in the early days of the war, when export trade was still of importance from the point of view of earning foreign currency and when Germany had overrun certain countries and still had it in her power to subject others to the same fate. That day, fortunately, has passed, never, we hope, to return. Another risk against which the Department arranged cover was frustration of voyage risk, which took the form of additional transport or insurance charge to the exporter against the risk of diversion to another port of the ship carrying his goods.
The possibility of securing cover at reasonable rates against very serious risks was welcomed by exporters, as has been proved by the considerable volume of insurance effected by the Department. The demand for these guarantees increased rapidly, and during the three years ending 31st March, 1943, the aggregate value of the policies issued by the Department exceeded £267,000,000. It was not expected when this system was started that these war-time guarantees would be on a commercial basis, but the cost has so far been less than was anticipated. The war emergency scheme, covering all guarantees given since the outbreak of war, has resulted to date in a deficit of rather more than £1,000,000, but this will eventually be substantially reduced by recoveries. The ultimate deficit on these schemes—and there may be none—will represent but a tiny proportion of the total exports which have been facilitated by these schemes. That the Department must play an important part in the post-war period I have no doubt at all, since, especially in Europe, during the period of reconstruction unusual difficulties will occur. Institutions and firms that were credit-worthy in all respects before the war may have undergone such changes in capital and in structure—and, indeed, may have gone completely bankrupt—that the risk involved in trading with them may be very considerable.
The Department possesses an Advisory Council consisting of business men, to 1431 whom we are deeply indebted for the time and trouble so generously devoted to assisting the Department. I have asked the Council to make recommendations for assisting the post-war usefulness of the Department, and their recommendations have been made and are now being carefully considered. I feel sure that after the war it may well be desirable that Parliament should be asked to increase the statutory limits upon the potential volume of liability at any one time accepted by the Department.
§ Sir P. Hannon
Will my right hon. Friend have a list of these liabilities made and presented to Parliament, so that it may be available to Members of this House?
§ Mr. Johnstone
If, for example, the Government were to approve some extension of the total liability to be undertaken by the Department at any one time, I think that that alteration would have to be incorporated in a Bill introduced in this House.
§ Mr. Speaker
The right hon. Gentleman cannot continue on that subject, because it is not in Order to discuss legislation on Supply.
§ Mr. Johnstone
The Council's advice has been tendered to me through the Committee over which my right hon. and learned Friend the Minister without Portfolio presides, and the details of the alterations which are recommended by the Council are now being considered by the appropriate Departments. I really do not think that an exception should be made for this particular series of recommendations, since the whole of the recommendations made to the Minister without Portfolio are in fact kept confidential, for the moment at any rate.
§ Mr. Wootton-Davies (Heywood and Radcliffe)
Are we to understand that the Minister without Portfolio is to deal with overseas trade?
§ Mr. Johnstone
No, Sir. That is not exactly what I said. Overseas trade, like 1432 every other form of human activity, has some connection with the Government; and where it has some connection with the Government it is not only with one Department, but, of course, with a number of Departments. In that respect it is no exception to other Governmental activities. My right hon. and learned Friend the Minister without Portfolio is responsible for co-ordinating the views of Government Departments and presenting the Government's views on a number of subjects.
§ Mr. Johnstone
Including overseas trade, or anything you like; but only from an inter-departmental point of view. These particular recommendations about which I have been speaking have been through my right hon. and learned Friend's Committee, and have now got to the final departmental stage.
§ Sir Granville Gibson (Pudsey and Otley)
My right hon. Friend referred to £267,000,000 up to March this year in respect of insurance covered by the Export Credits Department. He knows, of course, that the U.K.C.C. are operating over the whole of the Middle East. Is it necessary for them to take advantage of cover by the Department?
§ Sir P. Hannon
Is it a fact that the U.K.C.C. have a scheme financed entirely by their own administration, while at the same time the Department have their own guarantee system?
§ Mr. Johnstone
I am not financially responsible for the U.K.C.C., but they find the cover for what they call their customers.
§ Mr. Shinwell
Is their normal expenditure provided by the Government? We 1433 were informed that even lunches that they provide for potential customers are paid for out of Government funds.
§ Mr. Kirkwood (Dumbarton Burghs)
Before they get any grant or consideration, have they to go through a means test the same as the working classes, or is it that thousands of pounds are given to them automatically?
§ Mr. Johnstone
The test applied is that it is supposed to be a good thing for the country that the Government should provide the necessary money for any particular operation the U.K.C.C. undertakes which is an ordinary operation of policy.
§ Mr. Evelyn Walkden (Doncaster)
Are we likely at any stage to-day to have any general statement by the right hon. Gentleman or by his right hon. Friend as to the ramifications and the various operations of the U.K.C.C., so that we can have the searchlight put on the whole thing, which appears to be very necessary?
§ Mr. Johnstone
My right hon. Friend says he is prepared to say something about the U.K.C.C. when he replies on the Debate, but my hon. Friend must bear in mind that the responsibility for the U.K.C.C. is not that of my right hon. Friend. The U.K.C.C. does work at his request.
§ Mr. Molson
In view of the part that the Minister without Portfo[...] is playing in co-ordinating the activities or the Board of Trade and the Treasury and any other Department which may be concerned with export trade, there seems to be so much co-ordination that it would be useful if we were told what he is doing to co-ordinate the Board of Trade officials.
§ Mr. Johnstone
That is not a difficult question to answer. I come to that later on in what I am going to say.
§ Mr. Johnstone
A report of that kind is submitted to a Committee which con- 1434 tains a number of Cabinet members, and there is a discussion on the apportionment of work between all kinds of Departments. I now come to another Department for which I am responsible to Parliament—the Department of Overseas Trade. This Department was established about the end of the last war for the purpose of furthering the export of United Kingdom goods. The Department maintains in foreign countries, as members of the British Mission, commercial diplomatic officers who, in addition to making their own inquiries, call upon British Consuls, who for commercial purposes are subordinate to them in that respect, to provide them with commercial information relating to their Consular areas. Within the Empire our Trade Commissioners, who hold independent appointments, work in close touch with the United Kingdom High Commissioner in the Dominion in which such an officer has been appointed. It is the duty of these officers, apart from advising the heads of Missions or High Commissioners as the case may be, to assist United Kingdom business men who are visiting their area, to keep headquarters informed in a general way of commercial developments, Government contracts and other trade openings, and to furnish ad hocinformation in response to any specific inquiries made from them. It is the duty of the Department at headquarters to keep in touch with industry, to furnish export industries with information of every kind in regard to foreign markets, to assist in finding suitable agents overseas for exports from this country, and generally to assist export trade to the best of its ability. Another of its activities before the war but suspended during the war was that of staging the London section of the British Industries Fair and taking responsibility for participation on behalf of the Government in Imperial or international fairs or exhibitions.
During the war the work of this Department has been considerably reduced. It still receives reports and makes a number of inquiries from its officers overseas, though a number of these officers are devoting a greater or smaller proportion of their time to war-time duties at their posts abroad. At the time of the export drive, the Department worked at very great pressure, and the staff, of which a large number were loaned to other Government Departments at the outbreak of war, had 1435 temporarily to be increased. But, even so, it fell below its pre-war complement. With the diminution of export trade, the complement of the Department has been progressively reduced, until at the present time its authorised complement stands at rather less than one-quarter of its pre-war figure. (An HON. MEMBER: "What was that?") About 101. The Department still receives a large volume of inquiries from business exporters and from its officers overseas at a rate of some 2,000 every month. It is the Department's duty to assist exporters with advice on the very many complexities with which they are faced under war conditions. Other of their current activities are to advise the appropriate Departments in regard to the issue of exit permits for business men desirous of travelling abroad, the granting of foreign currency in connection with such visits and the activities of branch houses or representatives overseas of British firms.
At the present time the main activity of part of the staff is to consider postwar problems. While it might not have been a certainty that this war would break out, it is an absolute certainty that it will finish, and though we do not know how, immediately after the end of the war, export trade will be resumed under more normal conditions, when that day comes our exporters, many of whom have lost contact with their former markets, will be anxious to have and should be in a position to obtain, reports upon wartime changes in markets overseas. Arrangements are now in train for the production of reports of two kinds, (1) geographical, upon individual markets, and (2) industrial, to indicate the particular export industries and the conditions they are likely to find in all the more important markets. The preliminary reports from overseas officers upon which our final judgment must be founded have been received from every post. These will be continuously revised, both abroad and at home, so that the final product may be as up-to-date as possible. Naturally, it will not be possible to provide fully informative reports upon occupied countries, which information of a surprising amount is in fact available, and it should be possible within a short time after the armistice to bring this information abroad well up-to-date. The intention is that these reports should be available for issue 1436 to chambers of commerce, trading organisations, export groups, and individual export firms. When export trade as we knew it before can be resumed, I hope that this will prove to be of assistance to our manufacturers and merchants and make some contribution towards the re-absorption of labour into our industries when they turn over from war to peace.
I have appointed a committee within the Department to consider the various forms of service and assistance which the Department rendered before the war to our exporters, and it is my intention when that committee has made its recommendations to confer with representative business men in order to ascertain whether the activities recommended for the post-war period are those which would really help them and in what way improved service could be rendered by the Department. It may be found—I do not say that it is certain to be found—that there are certain services that have to some extent outlived their usefulness and that others could with advantage take their places. I intend to discover, not only from what I call high-up business men, but from export manufacturers and others who are engaged in the day-to-day work of export just what use our services are to them. It is no good keeping some elaborate service going which may look very nice but is in fact nothing but a piece of eyewash.
§ Mr. Hammersley (Willesden, East)
I understand my right hon. Friend to say that he is going to ask his Department to make recommendations and is subsequently to confer with business men. I wonder whether it would not be better to confer with business men a little earlier before recommendations are put forward.
§ Mr. Johnstone
I think not. It is not an elaborate inquiry with recommendations, and we have in the Department a great volume of experience available of how business men have reacted to these various services and how they are regarded by our officers abroad and so on. I propose to get a summary of the views inside the Department on these services, as corrected by anything which is available from foreign or Imperial posts, and then to submit them to the eye of experienced business men. They will, in no sense, be finalised before that process is gone through. There will simply be a 1437 summary of what has gone on and what the Department thinks of the information available to-day. During the past year I presided over a committee, the meetings of which representatives of a large number of Departments as well as my own, and all the business members of the Industrial and Export Council regularly attend. This committee was set up by my right hon. Friend the Minister of Supply shortly before he left the Board of Trade to take his present position. The subject of the Committee's deliberation has been the promotion of export trade after the war. The Committee recently made its first report to the President of the Board of Trade, and the report has been referred to the Minister without Portfolio.
§ Mr. Shinwell
I am sorry. I thought we were discussing the possibility of developing our export trade after the war. Unless we are advised of the Government's policy arising from recommendations that are made by one Department to another Department, how are we to determine whether the Government have a policy for reviving our export trade?
§ Mr. Johnstone
It is not my responsibility nor even the responsibility of my right hon. Friend here. It is the general responsibility of the Government, and I understand that my right hon. and learned Friend the Minister without Portfolio will no doubt answer, if he is asked, why the departmental report to his Committee is in fact not for publication. If my hon. Friend puts that question at some other date, I have no doubt he will get a full reply. I am not responsible for it either one way or the other.
§ Mr. Shinwell
I have been listening very carefully to what the right hon. Gentleman has had to say in order to gather what was in his and his Department's mind as to the possibility of developing our export trade and whether we had a policy. At long last I have gathered that reports have been received from overseas markets summarising the possibility of services to exporters and that there has been set up a Committee which has made recommendations to the Minister without Portfolio. As I am anxious to catch Mr. 1438 Speaker's eye later in order to offer a few observations on the subject, I wondered whether there was anything else.
§ Sir G. Gibson
Does the Industrial and Export Council meet regularly? My information is that it has not met for years.
§ Mr. Johnstone
I was talking about a committee of business members of the Industrial and Export Council, not the Council itself. There are still a number of questions which have to be considered by that committee, although preliminary reports have gone to the Minister without Portfolio. For instance, tourism is being exhaustively considered by the Travel and Industrial Association, the grant-in-aid for which is borne on the Vote for my Department, although I am not responsible for its administration. A report will be rendered in due course by the Export Trade Committee. As hon. Members may be aware, the Ministry of Labour is also taking a great interest in this question of tourism and is hoping to take a big part in improving hotel accommodation in this country.
§ Mr. Johnstone
No, but it is the same kind of thing.
The question of refugee industries is also under consideration. [Laughter.] Hon. Members may laugh, but refugee industries have played, are playing and, I hope, will play a very important part in our economy. My right hon. Friend the President of the Board of Trade has taken a great interest in this question, and so have I. I have seen these refugee industries at work, and I know something of them, how they have been carried on and the very difficult time they have had during the war, when the whole structure of industry has been altered at a moment's notice. These industries, not yet on a very firm foundation, have suffered perhaps disproportionately, but I do not intend to go into this question to-day, although I think it is a very interesting question and one which should be very profitable to this country.
1439 In the meantime two sub-committees of this Committee have been appointed to consider the whole question of participation in exhibitions and fairs abroad, a subject about which I have often met with very wide divergencies of opinion. Still another sub-committee has been asked to report on design in industry, on what steps can be taken to improve the design of goods which the United Kingdom makes for export. There can be little or no doubt that design, whether functional or aesthetic, or both, will play an important part in creating a market for goods of a very wide range. The Departments are also holding a series of discussions with representatives of our leading export industries, in order to obtain an understanding of their problems and to learn their views on post-war plans and prospects. Renewed discussions will obviously be necessary when decisions of international policy in the spheres of finance and commerce have been reached. We must face the fact quite squarely that unless the United Nations can reach an agreement upon the economic future for the liberated world that is in full accord with the principles of the Atlantic Charter and Article 7 of the Lend-Lease Agreement, our hopes of a free and expanding economy may be in vain. We may be driven back upon the desperate defence of the inter-war years. His Majesty's Government hope and believe that this will not happen, and it is in that hope that they are looking forward to the reconstruction after the war of our export trade.
§ Mr. Burgin (Luton)
The House has listened to a humdrum report on an immensely important topic, and the Minister will not mind my saying that much of what he told us was rather self-evident and that a good deal of it was an understatement. For instance, to say that the Government are firmly of the opinion that a healthy export trade is essential is, of course, putting it very mildly indeed. Nor was I aware, as I listened to the Minister unfolding his account of the various Departments and their activities, that any of the real difficulties confronting the country were being tackled at all, and in a few minutes I want to make one or two observations on some of these matters. How typically British it is, and how typical a British characteristic of our democratic institutions, 1440 that we should listen at one moment to a speech by the Prime Minister on one of the most momentous happenings in the war and that we should then, in the following hour, as if it were a matter of normal routine, discuss export trade after the war. That is one of the all-sided features of the British democratic institution that we know as our Parliament and which must be an amazement to onlookers but which is a very great comfort to ourselves.
I am an optimist as to the fortunes and chances of export trade after the war. I believe that we have almost unrivalled manufacturing possibilities in this country. We have immense opportunities; we have a trained personnel in almost every industry, craft and branch that is second to none in their expert handling of material and machines; we have very considerable raw material and possibilities of acquiring raw material by our own coal and all its products and by our agriculture, shipping, ports and railways. We have a climate that comes to our aid, a people trained in industry "as the sparks fly upward," the possibility of the provision of the raw material of which we are in need and an almost undiminished manufacturing capacity in terms of plant, machinery and up-to-date equipment. I believe that the heroes of the post-war period will be all those who, by their own industry, initiative, design, invention, skill, management, or hard work, contribute one additional unit to our export total, for it is by the export trade of this country that our whole standard of well-being will be determined.
§ Mr. Shinwellindicated dissent.
§ Mr. Burgin
The hon. Member for Seaham (Mr. Shinwell) is entitled to his own view, but my own credo, after a very extensive study of these economic topics both during the war and what is likely to happen afterwards, leads me to believe that our internal trade by itself cannot maintain this country at the standard of comfort or at the level of wage and enjoyment to which we are accustomed, and that it is precisely the element of the export trade, added to our own internal trade, which will determine That measure of comfort. I believe that to be incapable of serious challenge, but no doubt that point will be dealt with later in the Debate. That, again, is one of the 1441 great advantages of a democratic Assembly.
We were gratified to hear from the Minister assurances that the Government were alive to the necessity of maintaining the organs of export trade possibilities. Many Members of the House will remember, as I do, the present Minister of Production speaking to us at the time of the first idea of the concentration of industry. It sounded all so simple to have five units, all making the same thing, concentrated into one or two nucleus firms, and the remainder, shot of their factory plant and labour, being surplus to requirements for that particular commodity. Some of us said, "What is to happen to the sales organisations of the industries that are telescoped?" and I remember the pleasure with which we obtained the assurance from the right hon. Gentleman who was then the President of the Board of Trade and who is now the Minister of Production, that a minimum sales organisation was to be maintained in being even of those firms that were concentrated into other firms. That gave some of us the idea that attention would be constantly paid by the Government to the importance of not tearing up by the roots the sources of supply for the export trade or the sales organisations for selling proprietary or other brands. But we did not find that. I ask the House to bear with me while we examine several instances in which the very well-being of the entire export trade is being grubbed up by the roots, riot merely being cut back, is being restricted and reduced because of the necessity for concentration on total war—a necessity winch we all admit—and is being threatened with complete destruction. I wish to ask the House to think of such matters as Lend-Lease, the actions of the Treasury, the Ministry of Labour and the Custodian of Enemy Property, passing very lightly in review each one, but endeavouring to show the effect of these different operations of State policy and State administration upon the possibilities of export trade.
No one, of course, questions the immense wisdom and advantage to this country of the whole Lend-Lease programme, but I hope the Government are giving some thought to the question of how long allocation to world markets under any such policy is to continue. Alarming things are happening in the steel 1442 pen industry at the present moment. There has been allocated from Washington to that industry a quota less for the entire world, divisible among all its separate units, than has been the custom for one of the units themselves to make for their own customers in a normal period. I do not question the immense value to the country of Lend-Lease as a conception of Lend-Lease both ways during war and immediately following the war, but what amount of thought is being given to the division of markets? Our exporters and those who have accredited branches, customers and outlets in certain countries are under a decision imposed upon them by a committee sitting in Washington. I mention it merely because it is one of those factors which go to the root of what we are discussing, because it takes a portion of the total export trade and renders it, while that policy lasts, wholly beyond our capacity to fulfil or supply in any way.
I mentioned the Treasury. What I have in mind is an immense Republic like Brazil. It may be that the finances and the Government of Brazil have not always been wisely conducted, and that, in consequence, the City of London feels that Brazil is one of those countries to which facilities cannot be extended on the same level as others. But I would ask the Minister to consider whether a great market like Brazil, which is already in difficulty because it is a Latin-American country and pre-eminently under the American sphere of influence under the Lend-Lease idea, is really to be excluded from its proper share of our export trade because of financial differences between its Government and the City of London in a past year. I ask that that attitude, which is causing great concern in London to my knowledge, which is time after time used as an argument for the refusal of an export licence for machinery or goods manufactured in this country, may be reviewed and some explanation given to the trading community as to the position of the Government with regard to Brazil as a country to which we have been accustomed to look as a market for large quantities of our goods.
§ Mr. Johnstone
Do I understand that my right hon. Friend means that export licences are being refused for United Kingdom goods to go to Brazil on the ground 1443 that Brazil has not in the past punctually fulfilled her obligations? Will he let me have specific cases?
§ Mr. Burgin
I shall be only too happy. That is precisely the impression I desired to leave on the Minister and the House, that the reason for looking askance at exports to Brazil is Brazil's financial record in a period when she was under another administration, at an entirely different part of our world history and long before she was an Ally of this country. Many of us hoped that, immediately Brazil joined the Allied Nations, all those errors and transgressions of the past might at least have been conveniently put on one side for the time being and that she might have enjoyed most-favoured-nation treatment for the first time.
§ Major Petherick (Penryn and Falmouth)
The right hon. Gentleman will nor maintain the thesis that a debt contracted by the Government of any country would necessarily be repudiated by a following Government?
§ Mr. Burgin
I am asking that a United Kingdom exporter should not have difficulties placed in the way of a sale that he is wishing voluntarily to make to a Brazil customer because of an alleged default by the customer's Government in the past.
There is another contributory factor to the reduction of British export trade. I would ask the Minister to take into account the action of the Department of the Custodian of Enemy Property and the Trading with the Enemy Department. What I have in mind is this. I am not quite sure that hon. Members are familiar with what is happening. Any trading company in which there is an enemy element will, broadly speaking, pass under the control of the Trading with the Enemy Department and the Custodian of Enemy Property. The duty of the Custodian is to preserve, and the word "preserve" provides a great break on commercial activity. You may have in a trading company an enemy shareholding element passing under the control of the Custodian, and a British accountant, or a British lawyer, or a British trader nominated as the Custodian's representative on the board of that company. It may have very substantial assets. They may be liquid assets. Those liquid assets are at once 1444 treated as something which, in order to be preserved, should be invested in Government funds. They are, therefore, withdrawn from the company's trading activities and are frozen by being placed at the disposal of the State. So far no one minds. Then assume that the trading company either just makes both ends meet by its normal trading or shows a tendency to make a trading loss. Its invested capital is not taken into account, but the Custodian's present attitude, acting, I have no doubt, upon Government instructions, is that wherever a company tends to show a probability of not being able to make sufficient to carry on, its capital is not regarded, but it is to be put on a care and maintenance basis and its activities brought to an end. Many of these are companies with export links, export facilities and an export reputation, and I am pointing out that, by the operation of the present policy of the Treasury and the Board of Trade in its impact upon the Trading with the Enemy Department and the Custodian, export houses are being closed down because of the Custodian's rigid interpretation of his duty to conserve, meaning that he has no power to engage in the risks of commerce. That difficulty is heightened by the fact that every loose penny of working capital is, under present directions, invested and is put beyond the availability of the company as working capital. I am calling attention to some practical day-to-day matters with which those of us who are connected with trade and industry find ourselves frequently confronted.
Another agency of that kind to which I wish to call attention in passing is the action of the Minister of Labour and National Service in regard to the personnel of firms engaged in the export trade. If it was right at the start of the concentration of industry to say that those firms that were telescoped should be allowed to maintain a minimum of a sales personnel, so, surely, export firms ought to be allowed to keep at their disposal in connection with export markets those men and women in whom are wrapped up the secrets of the export trade in the particular commodity in which they deal. There is an undoubted feature about the export trade. Some people have a flair for it and others have not. Some manage to know exactly how the customer overseas can be contented, and some fail by 1445 yards to get near giving contentment. Every practical industrial unit knows that it has certain key people upon whom the possibilities of an export order being well carried out wholly depends. This type of consideration is apparently not present to the mind of the Minister of Labour and his staff. Industry after industry is finding subtracted from its personnel those key people who alone have an expert knowledge of oversea markets. If the man-power position was so desperate, if the need of the Forces was so desperate that every able-bodied person, whatever his special knowledge, ought to go straight into the Forces, no one would raise the matter, but it is because notoriously the position is very different and a large number of people are allowed to extend their activities in all kinds of ways that I beg the Minister, as one who has shown by his speech to-day that he is a believer in and is desirous of supporting export trade, to watch the agencies to which I have called attention, which sap the very roots of the trade which he is so desirous of supporting. I am calling attention to the matter in the interest which he has at heart in making the speech that he has done.
There is only one other thing which I wish to mention, and that is to rebuke a heresy. In many quarters to-day it is taken for granted that the word "luxury" is something to avoid—that it is something wrong in itself. I want simply to state in an assembly of well-informed men and women that a luxury export trade is none the less a good trade to this country because the articles in which it deals are in some people's opinion luxuries. It is very necessary to say so, because there is a great campaign against the resuscitation of any trade which is called a luxury trade. Human beings are made like that. Some like it penny plain, others like it twopence coloured. There will always be an ordinary model and a de luxe model. There will always be some people whose fancy, upbringing, preference or choice goes to pay incredibly more for an article which is no better because they happen to like it more. Why, in Heaven's name, should not some of our people be employed in making those things if there is a world market for them? A 17th century poet said exactly what I want to say in much better language than I could: 1446Hard was their lodging,Lonely was their food,For all their luxuryWas doing goodThat expresses exactly what I want to say, and I beg the Minister, who has cultural qualities which we all admire, to cast a fatherly eye on the resuscitation of the luxury export trade, as well as all other branches.
§ Colonel Harold Mitchell (Brentford and Chiswick)
We have all listened with interest to the detailed survey which the Secretary to the Department of Overseas Trade has given us. I think everyone in the country accepts the principle that, in time of war, export trade has to be very severely curtailed, but I, for one, had hoped that we might hear rather more specific proposals as to the intentions of his Department in regard to the very difficult and vital post-war period. He told us that a number of very important committees are sitting, and no doubt they are doing excellent work, but we shall need a great deal more than tourist trade or refugee industries to get trade back after the war. I do not of course wish to speak in any disparaging terms of those industries, which may play their part among others.
I intervene in this Debate because I want to put a number of questions to the Secretary to the Department, not in any way to embarrass him but because people in industry want to be reassured that plans are ready the moment the war comes to an end to go right ahead with trying, once more, to re-establish export trade on a proper world basis. Obviously, the conditions at that time will be greatly changed. The world is going through a period of revolutionary change, and industry and commerce have to adapt them-selves to meet the condition of peace whenever it may come. The war has been going on for four years and we are entitled to expect that plans are being made ready. At all costs we must not take a short-sighted view. In the days before the war, the task of achieving a balanced Budget and of paying for our imports of food and raw materials was assisted very greatly by the revenue from our foreign investments. To-day that assistance has almost wholly gone and we have now to face a very different situation. It has been estimated that the loss in revenue from our foreign investments by the end 1447 of the war will amount to something like £150,000,000 a year. These are big figures, and if we add the deficit on our international trade of about £50,000,000 immediately before the war, it means that we have to find something like £200,000,000 per annum in additional export trade if we are to make up the deficit.
The first question I would put to my right hon. Friend is whether the Overseas Trade Department has any idea how that amount of trade is to be recovered and from where? My right hon. Friend the Member for Luton (Mr. Burgin), who made an interesting and forceful speech, referred to one or two possible markets such as South America. Wherever they may be, markets have to be considered. The task will be a hard one. It may well be that export trade after the war will not be very popular with a public which has been severely rationed for a period of years. People may not look kindly on the idea of sending abroad many things, which they would be glad to see in the shops. But there is no alternative, as has already been said by my right hon. Friend. A time will come when war-time arrangements like Lease-Lend, however valuable they are, will come to an end, and we must be prepared for that period. The difficulties of some of the firms in the export trade have been touched on but there are other problems than those of concentration. Many firms have lost their premises in the blitz. Some of these are very important in the export market. Are any plans being made by the Overseas Trade Department to see that these firms get some measure of priority as regards alternative accommodation, so that they may have, in, say, shadow factories, or in other premises which are under the control of the Government, some opportunity of getting going quickly and building up their export trade after the war? That is a question to which the Department should give consideration. Last February the President of the Board of Trade announced that a committee was at work examining production for the export trade and that it had approached 52 industries concerned with the export business. That approach was made in the first instance by a broad-based questionnaire on which discussions were to be held. Can the Minister tell the House anything about the result of 1448 those inquiries and the subsequent discussions?
To bridge the huge gap between imports and exports there are two alternatives. We have either to reduce imports or, somehow, to increase exports. Obviously the only possible cure is to increase our exports unless we are prepared to accept a permanently diminished standard of living. It will not be an easy task. In 1912 the cotton trade of this country accounted for one-third of the whole of British exports and represented something like 70 per cent. of the world total of export trade. At that period, coal and steel exports represented one-fifth of our total and we provided 80 per cent. of the world coal exports. By 1937 cotton and coal together accounted for a diminution in exports of no less than £70,000,000 a year, about one-seventh of our total British exports, in spite of a considerable rise in prices. It is clear from these figures that the old staple exports cannot any longer provide a solution. Moreover, many other industries will by that time have been supplanted by the enormous war-time expansion in the Dominions and elsewhere. I have had some opportunity during the war of seeing something of that expansion in Africa and other places. It will not be without its effect on the industries of this country. Military developments in the war have had an interesting effect in this regard. Thousands of Africans have been trained in the Services as tradesmen, and it may well be that a proportion of them when they go back to their civilian life will provide man-power for some of the new industries which have been established.
I am not one of those who are appalled or dismayed by that prospect. It would, in my opinion, be a mistake if any attempt were made by us—and I know it will not be made—to squeeze out these new industries. Let us encourage them because they will in the long run provide the most valuable market for capital goods and work for our heavy industries, which, incidentally, may be the very first of our trades to feel the draught after the war has come to an end. My right hon. Friend stressed the importance of Empire markets and showed that he was alive to the increasingly important part that many of us believe these markets will have to play after the war, particularly the Colonial markets. The higher standard 1449 of living which we hope will arise from the growth of new industries in some of the Colonies will, in the long run, create a demand for additional goods from this country. The achievements of our heavy industries since 1939 have won us undoubtedly an enhanced reputation for engineering products of all kinds. Our inventors and technologists have proved in the war that they have been able to keep more than just ahead of their competitors, and I am convinced that their skill can equally well be transferred from war to the problems of peace. I am one of those who, like my right hon. Friend the Member for Luton, believes that we must concentrate upon quality products—and I would not exclude luxuries—in which skill and experience enter to a high degree. That and the tightening up of sales methods—market research, salesmanship and the like—will be industry's contribution to the post-war export trade, but my right hon. Friend and the Government must make their contributions, too. This must be conceived on broad lines and must not by any means be a niggling policy.
My next question then is, what progress has been made with the recently announced plan for reorganising the consular services which ought to be of considerable importance in the development of the export trade? Under pre-war conditions a manufacturer who wished to discover new openings for his goods had to send out his own personal representative from the country concerned. That was a difficult task, for not only had the individual to be an expert in his trade, but if he was to be effective, he had to know a great deal about the country to which he was sent. That is to say, he had to be endowed with a number of qualities which are rarely found in one individual. Now we are hoping that in the reformed Foreign. Service we may find room for the development of a trade branch with a status at least equal to that of the diplomatic branch.
It is essential that diplomatic duties and services of a general character should, as far as possible, be separated from commercial and trade duties. The types of men required to perform these jobs are quite different. Why, for example, should a man who has been trained in an engineering works or something like that be concerned with such duties as marrying and giving in marriage of a couple who 1450 have taken into their heads to be married in some foreign city? Or, vice versa, why should a consul charged with other duties be expected to distribute catalogues or do work for some firm at home? There must be a separation of functions. Our trade, however, cannot wait until the day when the reformed Foreign Service has been put into effect. Many of us watched with pleasure the success of the Willing-don trade mission to South America in the early days of the war. They did a valuable job for export trade.
What are we doing to prepare commerce for the transition period? It would be useful for the Department to follow the example of the Fighting Services and to split up intelligence and operations. A world-wide trade intelligence system can only be supplied economically by the Government. It would be unnecessarily expensive for each industry to attempt to do so, and except with big firms it would be impossible. A system on the scale at least of war trade reporting officers, which was instituted for the purposes of our blockade of the enemy, is needed in peace time to keep industry in touch with business opportunities. As regards overseas trade plans, there is a function for both industry and Government co-operating in export councils for each industry. The Government's representative could keep industry informed of Government policies and also assist trade in the difficult period immediately after the war. The operation of overseas trade, if intelligence and operations were organised on that basis, could be left to normal trade channels without any further need of further Government concern. The cost demanded from the Government for such a set up would involve a considerable amount of finance.
I had the privilege for four years of acting as Parliamentary Private Secretary to a former Secretary to the Overseas Trade Department, the right hon. and gallant Gentleman who then represented Midlothian, and I had the opportunity of seeing some of the problems. There was a time when people even went so far as to say that the Department should be abolished. It is almost incredible that any one should suggest at any time that such an important function as overseas trade should not receive every possible support from the Government. I greatly hope that in the years after the war, theme will be a complete reversal of policy. 1451 Every one recognises that for reasons of man-power the Department has had to be reduced, but I hope that plans are ready to expand it quickly after the war because, if we are to build up our export trade, we will need all the help we can get from the Government and everybody else. I sometimes wonder whether some of the methods adopted before the war were really the most effective and I was glad to hear from my right hon. Friend that they were considering the reorganisation of some of the services which they formerly supplied. I have the feeling, and I speak with some knowledge of industry, that far too much effort was devoted to producing long and admirable reports upon different countries, which appeared perhaps once a year, or in some cases once every other year, instead of giving much more frequent and up-to-date information. A great deal in those reports was merely academic in character, and I doubt whether many people read them. We want something much more up-to-date, and I should like to have some assurance that this is being considered.
Again, it is very important that these industries should be informed as early as possible after the war when the utility lines can be suspended and when it will be possible to branch out in new directions to try to regain some of the markets which have been lost. After the war there will be a stage when America and ourselves may have to play the principal part in assisting in the reconstruction of Europe. The Minister referred to sharing with our neighbours, and I am sure that all hon. Members recognise our obligations to the unfortunate nations who are at present overrun. I hope the closest consultation is taking place between ourselves and the many Allied Governments in London, so that when the time comes we shall be in a position to help them, at any rate with the necessities of life, as quickly as possible. I wonder whether it may not be possible—it may be in process for all I know—to do something in the way of building up at any rate small stocks of the most necessary manufactured goods to relieve the destitution which undoubtedly we shall find in some of these countries when we go in. Big changes are taking place in industry, a change over from the defensive to the offensive, and that means in many cases 1452 alterations in our plants. It may well be that a certain amount of labour, at any rate for a temporary period, may be displaced, and I hope that if there should be any labour available this particular project of accumulating stocks for the conquered countries may not be overlooked.
Finally, we face a situation in which we have a Department which is undoubtedly experiencing a difficult period in that it has to try to run with a very much reduced staff. All of us recognise that what we must concentrate on after the war are high quality goods, but let us never forget that the basis of our postwar structure will be overseas trade. It will be quite impossible for us to introduce those many reforms and social services about which we have heard so much unless we have a strong and flourishing overseas trade. For that reason all will wish the Overseas Trade Department every success in the investigations upon which they are engaged in regard to future problems. We say to them "Press on with your investigations and let us know as soon as possible what are the concrete proposals of the Government for the post-war period."
§ Sir Edward Campbell (Bromley)
I am sure that we have all thoroughly enjoyed the speech of my hon. and gallant Friend the Member for Brentford and Chiswick (Colonel Mitchell). I look upon this Debate as one of the most important we have had for a long time, and I listened to the Minister with a great deal of pleasure, because I realise that more is perhaps being done than we hear of. For many years I was a merchant and also a British vice-consul, and therefore I think I know something about the subject and the necessity for the Overseas Trade Department to-day. Mr. Joseph Chamberlain's tenure of office as Colonial Secretary is generally regarded as a turning point in the history of the relations between the British Colonies and the mother country. I wonder whether the President of the Board of Trade appreciates that his name, too, can go down to history, as the future prosperity of this country, and in fact of the world, depends almost entirely upon our ability to regain and increase our export trade directly the war ceases, and the present President of the Board of Trade can do a great deal to bring this about provided 1453 he tackles the problem now with real determination and energy and a due appreciation of its importance in our post-war schemes.
We are spending to-day, let us call it about £400,000,000 per annum on our social services. Our ability to maintain that standard, let alone the large amount visualised in the Beveridge proposals, depends upon our ability to maintain national prosperity at the highest possible level. That is, it depends on practically everyone being in full employment. Unless we can get our export trade going again our hopes of that are slender. There are two reasons. The first is a matter of history and fact. British industry has been built up on the basis of the ability of the export market to absorb an important part of what we can produce. If we were to lose that export market the workers who had been producing goods for it would be out of a job. You may say that we would have to find other jobs for them. So we should.
That brings me to my second point. It was not just an accident which caused our industry to develop the supply of export goods. Our small island, with its dense population, has for many years past been unable to feed itself from the produce of its own soil, nor is it very richly endowed with raw materials. Our very life, therefore, depends upon our being able to import goods and raw materials from the four corners of the world; but we cannot bring them in unless we can pay for them, and the principal means of payment is in our export trade. The more, therefore, we have to find home trade jobs for people who have lost their employment in the export trades the smaller will be the range and volume of imports we can afford. At this moment we are sampling what happens when the range and volume of imports has to be reduced. We may have money in our pockets but we cannot spend it on what we want at the prices we want to pay. We all look forward to a world in which the earnings of full employment and the benefits paid out under our social services will once again command the things we want to have on our tables and in our homes.
Lei us never forget that the realisation of that hope depends on the re-establishment of a vigorous export trade, not merely the trade we did before the war, 1454 because we shall need a much bigger trade than that to replace the income which came to us in pre-war days from overseas investments which we no longer possess. We have readily poured out those investments during the war in the common cause, and in the same cause we have handed over to our friends and competitors a great part of our traditional trade. The replacement of those overseas earnings which we have given up as part of our war effort must be an objective set in the very forefront of our peace effort. International trade was passing through many changes prior to the war; it was becoming more scientific and complex, and the old methods will be of little use after the war. Export firms must find out now, therefore, the probable world requirements. Many markets to which they exported in past years have been lost to them. They must therefore find new markets.
Export firms must start now to find out the methods of finance, currency, system of weights and measures, shipping facilities, etc., of any country to which they wish to export. Catalogues should be printed in the languages of those countries, not in English, as they used to be. That is a point I should like to emphasise particularly, because I know from personal experience that a man who knows languages when he goes abroad can be more useful than anybody else—even if it is only Scotch that he knows. A commercial traveller or an agent who is to represent British firms abroad must learn sufficient of the language of the country to which he is going to be able to read the local papers, read local catalogues, carry on a reasonable correspondence with the local people and engage in conversation.
When the appropriate time comes a director or manager of the home firm ought to make the initial exploitation on the spot, for one can gather more fundamental and practical knowledge of a country, of its people, requirements, markets and business methods by a personal visit than by years of correspondence or reading the reports of travellers or agents about a country we do not ourselves know. The men sent out must be the best obtainable—well educated, capable of getting on with foreigners, in other words "good mixers." I ought to say that a good mixer is a fellow who can get along with people, and if he has a 1455 funny story to tell he ought not to tell it in the club when he is drunk and to the wrong people. I should like to tell a few funny stories, but I am afraid I should be ruled out of Order. If you are sending a man abroad send one who is capable of getting on with the local people. There are many clever people who are no use at all when they go abroad, because they are too British, or too Scotch, or too English, or too Welsh. I think it is very important that the people we send out should be able to get on with the people in the countries to which they are sent, and that they should have the regard of the firms who send them abroad, so that when their reports come home they will receive in any case reasonable consideration.
Although I have been closely attached to Government Departments for a great number of years I am, and always have been, a staunch believer in private enterprise, which, despite its critics, results in personal initiative and keenness and engenders a spirit of healthy competition. In saying this it must be understood that I only support private enterprise provided that it is efficient, up-to-date and progressive, and hon. Members should not forget that private enterprise pays for its own extravagance, experiments and mistakes, whilst the taxpayer pays for those of the State, though they are generally so wrapped up that the taxpayers never knew there was a mistake at all. Governments can, of course, assist private enterprise considerably. They can get information through the Overseas Trade Department and through the local consuls which private firms cannot get, and therefore a combination of private enterprise with Government assistance is the ideal goal to aim at, and friendly and practical cooperation between the two will result in great benefit to all concerned, the State as well as the individual.
In conclusion, I would say once again that the future prosperity of this country and our ability to afford the social services in which we all believe, depend upon a successful export trade, which will give remunerative work to millions of our people. There are many markets open now, and when we look around the world and realise the enormous difficulties facing our Allies and our enemies, we appreciate that the possibilities of the future are extraordinary, and we appreciate also 1456 that we must be ready as soon as the war is ended. Somebody asked me the other day,—"How about this Lease-Lend, the Atlantic Charter and so on, will there not be a period of suspense?" There is never a period of suspense in business. One has to carry on and be ready and be up and doing. The man who gets in first, will get the business. Why should not we get the business? When the Government, or anyone else comes along with a plan for co-operation between the State and individuals, then we are right to take it and to work together. In the meantime the President of the Board of Trade and his colleagues are carrying on. I am glad to see that his colleague who made such an admirable speech is now in his place again. If he only knew it, he has one of the most important jobs in the Government. I sincerely hope that the President of the Board of Trade will realise that a lot of private traders are willing to work in collaboration with the Department, which is in possession of facts not available to private individuals. Let all work together for the good of the country.
§ Mr. Shinwell (Seaham)
Unlike the hon. Member who has just resumed his seat, I am unable to offer congratulations to the hon. Gentleman who opened the Debate with what I believe was his maiden effort at that Box. As the right hon. Member for Luton (Mr. Burgin) properly said, his speech was humdrum. It certainly was uninspiring. It was monotonous. It displayed a firm grasp of the obvious.
§ Mr. Shinwell
It was completely lacking in the presentation of a constructive policy. We are well aware of what happened in pre-war days in a declining export situation. The facts are to be found in the Libraries of this House. We are equally well aware of the patient, and I will agree the constructive, efforts of successive Presidents of the Board of Trade during the war in the curtailment of civilian consumption and in the concentration of industry, while at the same time they kept an eye, so far as it was possible so to do, on the possibilities inherent in export trade. These facts are well known. They are not the primary consideration, which is, What is to be the future of our export trade?
1457 On the assumption that my right hon. Friend opposite had that question firmly in his mind, he presented certain considerations to the House. I shall, for the convenience of hon. Members, enumerate them. They are the post-war plans of the Government in relation to export trade. First of all, there will be statistical reports on the export market position—very desirable and very orthodox. That is clearly no departure from existing policy. There are to be provided services, undefined, to exporters—no doubt very necessary. A committee has been set up. It has presented its initial report to the Minister without Portfolio, but the recommendations in it cannot be disclosed. I presume that if we questioned the Minister without Portfolio he would give the same reply, that no firm constructive reply could be adumbrated on this or on any other topic until every Government Department has been consulted as well as interests outside this House, and the Government had co-ordinated a policy and were in a position to come to the House and state their views. The war may well be over before that position emerges, and it may be too late to devise plans for the rehabilitation of our export trade in a remarkably complicated situation.
It is that theme that I propose to develop, to begin with. There will be no serious export problem immediately following the war. Why should there be? The markets will be there in Europe; who can doubt that? There will be unsatisfied consumer demands—yes, and in the United States, because of the absence of effective controls there. They have not imposed controls that we have adopted in this country, particularly for the curtailment of civilian consumption, and there will be an immediate demand which cannot be satisfied wholly from United States of America resources. They will be glad to buy goods from this country. After all, we must not forget that half the purchasing power of the world resides in the United States of America. That is a fact which it is not convenient to ignore.
So, immediately the war comes to its end, we shall have an export market. Our problem will not be to find markets but to find labour and raw material and to turn them into finished products to export abroad. That will be the immediate post-war position, but it will not last. There may—indeed, I am certain there 1458 will—be a boom in the United States and probably in the Dominions and elsewhere. Certainly there will be a boom in European countries in the demand for goods. It is not certain that that boom will continue. Indeed, the greater the boom, the sooner it will be exhausted. It is then that we shall be faced with a serious position in regaining our export trade. If the United States developed an extensive and expansive social policy, for example in the creation of public works, absorbing the savings of the people of the United States, the demand would continue, and we should find something of a market, but if one is to judge by recent events, for example the dismissal of Mr. Henry Wallace, and the changing of what might be described as the ideological position of the United States, it is not at all certain that that nation will adopt an internal, social, public works policy, based upon high wages and a high demand for consumer goods, which would enable them to absorb much of the export from this country and the Dominions.
What then is to be the position? It is estimated that the income of the United States of America after the war will be in the region of £30,000,000,000. It is also estimated that the savings of the people of that nation out of that huge income will be in the region of £8,000,000,000. If this sum can be used either for the purpose of the internal market, purchasing goods from abroad, or used for the purpose of developing an investment policy, as it will be, and of sending the surplus of goods produced in the United States into all the markets of the world, there will be the competitive factor with which this country has to deal. When that critical moment arrives and in that export trade situation, America, whether we like it or not, will be the dominating factor. It is regrettable, but it is true and we have to consider the nature of the policy that ought to be adopted in the light of that situation.
That brings me to the question of the principle underlying our export trade. I join issue with hon. Members opposite who have spoken on this subject. We have been told that unless we develop a great export trade and regain our old-time position—it is not clear whether by that is meant the position when we exported £1,000,000,000 worth or only £400,000,000 worth of goods—we could not support a decent standard of life in 1459 this country. The two hon. Members who preceded me actually declared that we could not provide for our social services, much less for the Beveridge proposals, unless we built up a great export trade. For sheer poppycock that statement takes the biscuit.
§ Sir P. Hannon
The speeches of my hon. Friends do not lend themselves to the interpretation put upon them by the hon. Member. They did mention, I think rightly, that the development of an expansive and expanding export trade was vital to the interests of this country.
§ Mr. Shinwell
They emphatically stated that we could not sustain our social services and the high standard of living unless we did so on the basis of an export trade. I have got confirmation of what I have just said. I will join issue with the critics. If we take the average years preceding the war, we find that the total volume of our export trade in many fields amounted annually to about £400,000,000, that is, about 8 per cent. of our annual income. There are some industries that do not export at all; some, as in the case of the coal industry, export round about 19 or 20 per cent. of their production. But what were the profits? On the whole volume of our export trade—
§ Mr. Hammersley
Is the hon. Member trying to develop the argument that the relationship between the export trade and the total amount of trade has nothing to do with the necessity of whether we have to maintain and develop our export trade?
§ Mr. Shinwell
In due course my hon. Friend will see what I am about. I am dealing with the arguments adduced on the other side. I think it is about time that such fallacies were removed. Certainly they are likely to be disproved. I was dealing with the question of profits when the hon. Member interrupted. The fact is that on the basis of 10 per cent. the profits were only about £40,000,000. Will anyone suggest that out of the proceeds of our export trade, which by the way have got to find their way into the coffers of the Imperial Exchequer before they can be used for social purposes, we can sustain our social services? It is not out of our export trade that we sustain our social services; it is out of our internal 1460 resources. We have always done so, and in fact we always will. If we are to have a repetition of the old argument that was used by members of the Conservative Party before the war, that unless you build up your export trade and that will be at the expense of a low standard of life in certain export industries—for example, the coal industry—you cannot build up social services. We had better have it out now and be done with it, because it is a very serious issue.
It is alleged that we export for the purpose of providing employment. We do nothing of the sort. If you want to provide employment, you need not export. For example, instead of exporting machinery you might produce houses and thus provide as much employment in the country in an internal direction; instead of exporting whisky to the United States of America, you might perhaps make clothing in this country. That is the way to provide employment. Employment does not depend on export. [An HON. MEMBER: "The general well-being of the country does."] We will come to that. Let us take an industry very much affected by export in relation to employment and the standard of life. In the coal export industry, the greatest exporting industry in the country, to the extent, as I have said, of 19 to 20 per cent. in an average year before the war, the wage standards in the mining industry, particularly in the export section, were far from satisfactory. No one would regard them as providing an adequate standard of life. In fact, we have repeatedly had Debates in this House in the course of which certain hon. Members have declared—we have all heard them—that if we were to build up our export trade in a competitive market, it was necessary for the workers in this country to recognise the fact and accept lower standards. We have been told that over and over again. Thus we have the old arguments about the sheltered and unsheltered industries; we are all familiar with them.
I apologise to the House for raising this issue, but I do it with a purpose. One thing we must do in order to deal adequately with this question of trade, internal and external—at the moment we are concerned with the external aspect—is to get away from the old shibboleths, the old devices, the orthodox methods, 1461 which are outworn and should be discarded. We have had nothing but that from the right hon. Member opposite today, committees here and there, foreign attachés to deal with commercial matters abroad. It is the old stuff. The only wonder is that he did not say anything about the future fiscal policy. But then he is in a special difficulty. He is a representative of the Liberal Party—of one of the Liberal Parties. It will be very interesting to know what are his views about our future fiscal policy, whether in fact he thinks we ought to abandon the Import Duties Act. I know that involves legislation, so I will leave it at that. That is all we have had to-day—orthodoxy—and we have had it from Members on the opposite benches.
Orthodoxy was all right in the old days but not in relation to the future. We have this American competitive position, and what is more a competitive position that arises from the facts which the war has thrown up. One of them is that as a result of the war—it was developing before the war—secondary industries have developed in the Dominions. Take Canada, which is producing more merchant ships than we do. Is it suggested that Canada is going to abandon her ship building industry after the war? It may be very costly, as I said in the shipping Debate recently, which is a bull point for us. We may be able to produce more cheaply, but it is unlikely that Canada will abandon her secondary industries. Australia has been developing her secondary industries, and I have had an opportunity of discussing the matter with people associated with finance and industry from Australia. They all agree that it will be difficult for Australia to abandon her secondary industries. Therefore, we are faced with very difficult problems. One of them is that as a result of the development of secondary industries in the Dominions they cannot take in future all our manufactured goods. We on the other hand, for many reasons which I need not advance, because they are known to all hon. Members, cannot take all the primary produce of the Dominions. Indeed, that was the reason why it was necessary for Australia to enter into an agreement with Japan on the wool question—we could not buy the whole of the wool clip. These are new facts that have emerged, and we have to face up to them.
1462 In spite of what I have said about the export position, I believe it is necessary to have an export trade. Of course it is necessary. [Interruption.] Perhaps I had better tell hon. Members why. Because we have to pay for imports. It never seems to have occurred to some Members that that is the reason why you must have export trade. If you could afford, as a result of rationing, seriously to curtail your civilian consumption, particularly in those commodities which we get from abroad, we should not need to bother about export trade at all, because we would not have to pay for imports. We have to export in order to pay for imports. What is the sole advantage, the exclusive advantage, of imports? It is when you get goods coming into the country that cost less than it would cost to produce them at home; otherwise what is the advantage? The only advantage that is derived is in the increasing of national income. If as a result of your trading process you fail to increase your national income, you have gained nothing. If you buy goods from abroad that cost more than they would cost to produce in this country what do you gain? Nothing at all. You must always buy them at a rate cheaper than that at which they could be produced in this country.
That is the reason for our export trade. It has nothing to do with employment or social services. It is just a business arrangement, with this qualification, that the arrangement has been effected on wrong lines. It has been hampered first of all by the fetish of Free Trade, and, secondly, by the shibboleth of Tariff Reform, when in fact what we want, and indeed what we must have, is what we are having during the war, namely, controlled trade. Why do I say controlled trade? Because we have to determine the nature of our export. It must not be left to what is called the enterprise of the individual entrepreneur to determine, because he may say, "I shall import wine into this country," when we do not want wine but timber. What is more, it affects shipping space, which may be a vital consideration after the war for some considerable time. We also must not only determine what is to come into the country but also what is to leave the country. In other words, we ought not to allow in a critical trading situation luxury imports to come in and luxury goods to go out.
1463 In short, the direction of our trade, to put it in a sentence, must be controlled by the State itself. That does not mean State ownership. I am not advocating that at present. Unless that is done, I am afraid it will go hard with us. Take the question of capital. The hon. Gentleman said not a word about it to-day—the most fundamental issue of all. Are we to revert to the position when it was possible for anybody to export capital? That would be suicide. We cannot allow that at all. That means State direction, and capital is the focal point in relation to your trading power. Something more we must do is to promote bilateral agreements. What do I mean by that? I do not mean that we should promote bilateral agreements which are exclusive in character and which disregard the rest of the world, but bilateral agreements which are based on this principle, "We buy from you if you buy from us." That is fair enough, no tariffs about it, no import duties about it except maybe as mechanical devices. That is the method. In fact, I am now a little orthodox myself, because we were developing that system before the war and with great success. I took part in Debates in this House on that subject, as did the hon. Member for East Birkenhead (Mr. Graham White), who is an authority on this subject, and the hon. Member for East Willesden (Mr. Hammersley), and we encouraged the Government of the day to promote those trade agreements. That ought to be developed.
Having gone so far, I want to present what I regard as a constructive view. The House may not agree with me, but one must speak as one feels. The first thing is that we must plan. The second is that we cannot plan for Britain alone. It is too small a unit. For example, we cannot grow all our wheat here, nor can we produce all the commodities we want to. Therefore, we have to consider our relationship with other parts of the world. Can we plan our foreign trade, not exclusively but in very large measure, within the Commonwealth structure? I must preface what I am about to say by this observation. I beg my hon. Friends behind me not to imagine that I am developing into a quasi-Imperialist. I know that the Liberal Party—or what remains of it—is still in the mid-Victorian era. 1464 We must not pay too much attention to them. There are difficulties about this Commonwealth trading structure. The Dominions cannot take all our manufactured goods, because they are fast developing secondary industries and they have to buy from the United States and other countries, and we cannot take all their food products. There are some remarkable facts about our trading position. We hear a great deal about Anglo-American co-operation. I am all for Anglo-American co-operation, I am all for international co-operation, for world cooperation; but first things first. Let us consider the facts underlying this possible co-operation. It is a remarkable fact—I hope there are not too many Ulster Members present—that Eire is actually as good a customer to us as the United States. It always has been. I am not speaking about the present position; there is a diminution in the trade now. The United States purchased from us, on an average, 30-odd million pounds worth of goods a year, and we purchased from them about £120,000,000 worth. There was always an adverse balance, made up, of course, by invisible exports, but they have disappeared. I would say in parenthesis—although it is very important—that if we want to regain our export trade on the basis of present prices, which may continue for some time, and in view of the fact that we have not our foreign investments available to us, it would be necessary for us to have an export trade of 1,000,000,000 annually. How you are going to get that trade, I do not know.
§ Sir P. Hannon
With regard to trade with Ireland, the hon. Member knows that Ireland is a non-industrial country and required an immense amount of manufactured goods from us, while we bought from Ireland a large amount of agricultural products. It is a case of two corresponding markets one rural and the other urban.
§ Mr. Shinwell
Of course; but that does not dispose of the fact. With the exception of South Africa, Eire was the only country with which we had no adverse balance of trade whatever. You may regard Eire as an exception. At the moment we are not favourably disposed to her; and for very good reasons. What are the facts about our Dominion trade? Of our export trade, of, roughly, £400,000,000 per year in the years pre- 1465 ceding the war—you must not take 1939, when we had a huge foreign trade, largely because we were rearming—the Dominions and Colonies took about half. They were very good customers. This is not a question of sentiment there is no question of cousinly ties and affection and the like. It is a question of business. If you are running a business concern and you have a number of commercial travellers, you do not tell them to go out and seek business in a highly competitive market, where there are difficulties; you send them to a district which is favourable and where there is good will. I hope my hon. Friends will acquit me of any sentiment on this question. I have none at all. Moreover, there are huge possibilities latent in the position of Australia; a possibility of migration, which ought to be linked up with the possibility of expansion and the development of her resources. That is an essential prerequisite of peace after the war. New Zealand is not a large country, but there are possibilities there. With regard to South Africa, I understand that General Smuts delivered himself of the statement recently that South Africa supports a white population of 2,000,000 now and could support a population of 20,000,000. I think that is highly exaggerated, but certainly she could support a much large population than she has. And South Africa is one of the two countries with which we have a favourable balance of trade. The question is whether you can build up a Commonwealth commercial entity, not exclusive in character, but ready to collaborate with the rest of the world, a commercial entity based on business considerations in addition to good will. We should seek to achieve that, and all the more so because of the American competitive position, which will face us after the war.
§ Sir P. Hannon
Does the hon. Member suggest that we should have an economic unity within the British Empire? What about countries outside?
§ Mr. Shinwell
There is no time to develop this subject in detail. The ideas are percolating in one's mind, and I wanted to depart from the orthodox ideas which have been debated so far. I think that we ought to go to Australia, New Zealand, South Africa and Canada, and say, "We want to trade with you, will you trade with us? We want to assist you in an expansion policy and in the 1466 development of your resources, and you will be able to assist us." I want to do more than that; I want to consider what is the role of Great Britain in the future Europe. That is very important. So far, as a result of developments in recent years, the German economic method has dominated Europe. That will be generally agreed. I will not discuss their special technique: a very clever technique, a very subtle technique, and a very successful technique; much more successful than we like to think. What are the possibilities in Europe when the war ends? We have the utmost good will towards Soviet Russia, but Soviet Russia will be preoccupied with her internal affairs—I am speaking in an economic sense—perhaps for a long time.
Who is to assume the rôle of leader, in an economic sense, not with a view to domination, but with a view to leading them out of the pit into which the Nazis have driven them and reorganising their economy, not in a condescending fashion: with no stigma of charity about it? I think that that rôle must be taken by Great Britain. There are great possibilities. Such a scheme must not be exclusive in character. There will be Denmark, Sweden, Norway, a revived Finland—a democratic Finland, on good terms with her neighbour Russia—the Dutch, with their huge Empire—let us not forget that—and the great French Empire; to say nothing of the Empire which we have acquired in North Africa ourselves, and which offers possibilities, unless we propose—it has not been made quite clear—to put those territories under international mandate, or hand them back to the natives. At any rate, there is a possibility of social and economic development in those territories, and they provide possibilities for our export trade. When we have created a European federation, closely allied to the Commonwealth, for economic purposes, we are in a strong position to talk; but a country with 45,000,000 souls cannot talk on terms of equality with a country of 130,000,000, particularly in view of the resources of the latter country. There is a lot more to be said on this head, but I am occupying a lot of time, and I must come to a conclusion soon. I want to negotiate with those countries on terms of equality.
Now I will end as I began. Prosperity, in my judgment, does not depend so 1467 much on external as on internal trade. It is on the development of your own internal resources that you build up wealth for the development of your own people, and we have much internal wealth in this country.
§ Mr. Shinwell
I want to develop our raw material resources. This is not the occasion to develop the subject, for example, of hydrogenation relating to the coal industry, or the question of plastics, with which my hon. Friend is familiar. There are great developments pending in connection with the new synthetic industries, and it may be that much of the raw material we have had from other countries will not be necessary. The world is changing, in an economic as well as a political sense, and we have to be in the van of progress, and not talk in terms of shibboleths, particularly such as were used by the hon. Member for Bromley (Sir E. Campbell), with his introduction of funny stories.
§ Mr. Shinwell
What does his experience of business matter? We are told by the hon. Member that what we want are people who can tell funny stories. Who is going to pay attention to that kind of pabulum? If we are going to develop the standard of life of our people, it must be in the main by our internal industries. Lastly, I want to say that there must be no question of subsidies for private industry nor any question of subsidies given at the expense of the internal section of the industry in order to gain export trade. That is ruinous. Moreover, it is done at the expense of the worker at home. If there are to be subsidies—and I can conceive that there may have to be—it must be based on State direction and a large measure of State control.
§ Mr. Shinwell
There may be no need for subsidies at all. There was a subsidy on the coal industry borne on wage ascertainments. It is the same in all industries. 1468 You are not going to build your trade on that basis. I have perhaps spoken strongly and feelingly but I believe it is necessary. Again, I repeat that it is essential to discard out-worn orthodox methods. They have served their turn. We must have new devices and, unless we proceed in that direction, all this talk about the revival of export trade will count for nothing.
§ Sir Granville Gibson (Pudsey and Otley)
Before I get on to the general tenor of the export trade, I would like to refer to the interruption I made during the speech of the Minister in regard to the activities of the U.K.C.C. I feel that the U.K.C.C. have not advertised themselves sufficiently in this country. Their activities have been enormous during the war period, and they are doing a great service, and I hope that the President of the Board of Trade, in his reply, will make reference to that matter. I remember distinctly how on 2nd February, 1943, the Chancellor of the Exchequer made what I considered to be a very fine speech in this House, when he referred to a matter which had been addressed to him by the hon. Member for Seaham (Mr. Shinwell). He said that we must rely in the main on a considerable expansion of exports. They were our life. Upon them would largely depend our status of life after the war, and our future hopes and plans for the betterment of this country greatly rested upon them, and unless we could have a great move forward in our export trade we should fail. With that view, no doubt, the hon. Member for Seaham entirely disagrees. He said the reason we buy imported goods is because in the main we can buy them cheaper. It is nothing of the kind.
§ Mr. Shinwell
I did not say that. I said that the only advantage we gained' was that we could buy them cheaper than it costs to produce them at home.
§ Sir G. Gibson
Still the hon. Member is not quite right. Such a large percentage of our imports are primaries which we are compelled to import, as we cannot produce them. At the beginning of the war £850,000,000 of these primaries were imported. But I must congratulate the hon. Member for Seaham on his very bold and courageous speech, in which he has blossomed out as a full-blooded protectionist.
§ Sir G. Gibson
The hon. Member said, "We will not take your imports unless you take our exports." Therefore, why does he not come over to our Benches? I did not hear a cheer from his colleagues to-day.
§ Sir G. Gibson
It is the protection of our own people. Very few people in this country realise the extreme seriousness of post-war export trade and its prospects. They do not seem to take the slightest interest in the export trade. The industrialists of this country have a feeling that nobody troubles or cares about exports, past, present or future. Those of us who are connected with industry, and particularly with the export trade, as I have been for many years, cannot wonder at that. It does not touch the general run of people in their daily lives, and they do not realise it, but it is very serious. If we cannot fill the gap between our exports and imports, it will affect the lives of every man and woman in this country, and we cannot help it. Only two years ago, when I was in New York, I could, if I had had the dollars available, buy sterling at 2.50 dollars to the £. I remember being in New York the day before the outbreak of war, and I could not change a £5 Bank of England note, and I was in New York just after the last war, during the slump of 1921–22, when the exchange rate went down to 3.60 to the £. Whatever the hon. Member for Seaham says—and he is very sincere in what he says in this House, and I pay great attention to what he says and listen carefully—he is entirely up the wrong street with regard to disregarding the vital importance of the maintenance of the balance between our exports and imports. Those of us who have to buy in sterling and make our purchases in foreign markets know that, if there is more sterling sold than bought, sterling weakens, and every farthing's worth of materials, either primary or foodstuffs, costs more, and the cost of living goes up, and our social services must inevitably suffer. Speaking personally, it is not because I would rather have export trade than home trade, but because I and many hon. Members realise that it is vitally important that our exports should be kept up to balance with our imports in order that the £ sterling may maintain steadiness and purchases may be made 1470 month after month and year after year. It all helps in making purchases and buying forward.
§ Sir G. Gibson
I agree with the hon. Member for Seaham. I feel that in the few years following the close of the war there will probably be an enormous demand in industry in this country as there was after the last war. We may then drift—I hope we shall not—into a slump, but European countries which have been over-run and denuded of commodities and clothing will need to be clothed and fed. There are very few champions of export trade in this country. For the past twenty years the Department of Overseas Trade has done a remarkably good job in this country for the export trade. It has been very helpful, but in the past two or three years it seems to have become obscure, impotent, somnolent, dormant or whatever you will, and I blame the Department for dilatoriness in granting licences for export trade.
§ Sir G. Gibson
It does not grant licences but at any rate it influences the granting of them. I feel that the export trade has been influenced to a great extent by the opinions of the controllers of various industries. In the main these controllers have done a splendid job of work in their own industries. Speaking of my own industry, we have a controller who is a first-class man. But these controllers have to look after the Services and civilian needs and have not the slightest interest in the export trade. He would be a bold Minister who would advise the export trade in face of these controllers who have not the slightest interest in the export trade. I know of cases, where the export trade has been cut down because of the recommendations of these controllers.
The Board of Trade seems to a great extent to be interested ot the present time in the home market. I wonder sometimes whether we have not sold our birthright for a mess of pottage. An outstanding example of the wilful and light-hearted way in which exports are being repeatedly destroyed is the recent proposal of the 1471 Board of Trade to prohibit the exportation of all footwear to Canada, the United States and, in fact, to the whole of the Western hemisphere. The boot manufacturers—I am not one of them, although I am in an allied industry—have built up a very valuable, though not very large in volume, specialised, high-class trade in boots and shoes. The exports in 1941 came to 250,000 pairs, compared with the production of this country of 140,000,000 pairs and 500,000,000 pairs in the United States. The exportation of 250,000 pairs is not a great amount of export, but it has been built up slowly over a considerable number of years. There are no shipping difficulties in the way. Ships are going Westwards with plenty of empty space. There is reason to believe that this proposal emanated entirely from officials in this country, and no request was received from any Government in the countries concerned that these exports should be prohibited.
From 1941 to 1943 the Board of Trade seems to have lost all interest in the export trade. It now appears to be waking up once more to the vital importance of the maintenance of those contacts which have been built up over a number of years and which are not easily picked up once they are lost. It is well known that our exports, compared with the beginning of the war, have fallen to 25 per cent. of what they were—from £400,000,000 to £100,000,000, only a quarter of the volume of 1938. Markets have been closed to our exports all over the world except in the Dominions but for the granting of export licences. The way of the exporter is very hard indeed. We were, until the outbreak of war, the greatest exporting country in the world. We are the greatest importing country in the world. We have the best social services and a standard of living as high as that of any other country. Investments were accumulated abroad and stood us in good stead in the last war and to a lesser extent in this war, and all this has been done by private enterprise, a system which is more or less condemned by hon. Members above the Gangway on this side of the House. The situation today is too serious to be played about with any longer. The economic life of the nation will be at stake, and the very existence of the people demands urgent consideration of this important matter without any further delay.
1472 Any extension and development are impossible in these days unless profits are ploughed hack into industry during the war period. As industrialists we cannot possibly do that. Despite the assurance of the Chancellor of the Exchequer with regard to the 20 per cent. reserved from E.P.T. for use after the war, we still look on it as the pot of gold at the foot of the rainbow which will never be reached. When application is made for repayment to help us in our export trade, to buy new machinery and reorganise our works, there are so many difficulties and conditions put in the way that most industrialists do not for a moment dream that they will ever touch any of it. The Prime Minister, in his wonderful broadcast on the four years plan, pointed out the unprecedented and sterilising level of taxation to-day and that while we are willing to bear these taxes now in the national interest, they must be taken away after the war at the earliest possible moment. How can firms with low profit standards face the future with confidence if they have no profits to plough back into their industry to enable them to re-equip?
§ Mr. Montague (Islington, West)
Has the hon. Member read the statement by Mr. Henry Ford in his book, "My Life," that industry ought to be fructified at the core and not at the periphery?
§ Sir G. Gibson
That is the point I was trying to put before the House. The profits made at the core of the business should be left in the business and not be taken away by the Chancellor of the Exchequer. Industries which have been playing their part and which will have to have finance to carry on their trade after the war have suffered. The export trade bears upon one vitally important point, namely, the necessary finance to carry on increased business. We shall be faced with other difficulties, such as providing extended credit to countries which have been denuded of goods. I want to know whether it is likely that banking facilities will be available at a low rate of interest for extended periods in order to help industry to carry forward export trade in as great a bulk as possible. There must be a long period of steadiness of prices of primary commodities. I agree with the hon. Member for Seaham that there should be control of certain primary commodities for some time after the war in order to keep prices steady. Nothing 1473 more adversely affects the working classes of this country than unsteady prices of primary commodities. You cannot have confidence when you are wondering whether prices are going up or down, and the result is that it is difficult to maintain a steady flow of business. All this requires a stabilised currency, and I was pleased to hear the Chancellor of the Exchequer say recently that he welcomed the International Clearing Union as a step in the right direction.
To gain export trade, we must have efficient production not only by the employee but by the employer. We must have a high rate of production by the employee in order to maintain high wages. Inefficiency and a low rate of production must produce a low standard of living. I feel, with the Minister, that after the war we must specialise in medium and higher grade goods. Let the 1½d. an hour countries make the cheap shoddy stuff in the future. Let Japan, China and India do it. But let us use the Too years' accumulated skill of our people to produce goods of quality. If we do, we shall be on the right lines. I would like to ask whether it is intended to alter the Ottawa Agreements in order to grant us the same facilities of freedom in their markets for manufactured goods as we grant to other countries in ours? Better organisation of export goods is required, because such organisation would be of enormous help, not only to the large firms, but to the small firms. Some people have the idea that the City of Birmingham is a city of 1,000,000 people in which there are nothing but huge firms such as Austins and the like which employ thousands of people. But a little while ago the average number of employees in Birmingham per firm was only 48. There are small firms which have never taken any part in export trade but which will be interested in taking part in the future. Export groups can play an important part in assisting them.
Many of our troops now abroad will be possessed of the wanderlust when they return. Only the other day the father of F. young man in North Africa told me that his son had written to him saying that he did not wish to come back to a stockbroker's office but wished to see something of the world. Our young fighting men are learning languages while they are 1474 away—Spanish, German, French and Italian—and these will be the fellows to send out to various parts of the world in the future in the search for more export trade. If 44 nations could go to Hot Springs, Virginia, and agree to a great extent about food supplies after the war, I do not see why the Government should not consider the question of international trade in the same way. It will have to be considered internationally. The world will no longer be our open market. Countries which were our happy hunting grounds will be our keenest competitors.
To-day Argentina is forging ahead in South Africa. Exports have been organised under the name. of "Camara de Exportadores," which aims at presenting a united front in concert with world economy, co-operating to solve material shortages and at intensifying Argentinian trade abroad. The United States of America are carrying on very extensive advertising propaganda in India. They have stated that the new contacts which have been established in time of war with India will be maintained and extended in peace-time. Entirely distinct from Lend-Lease shipments, exports from America to India more than doubled in 1942 as compared with 1939. These are very significant figures, and I hope the Minister will bear them in mind. It must be part of the policy of our Government to ensure that the countries from whom we buy our primaries must take a reasonably corresponding value of our exports. This country was built up by men who have risked their all by private enterprise. It was a great spirit of business enterprise to every corner of the earth and a concentration of manufactured goods which the world wanted which sent our fellow countrymen to live and work in distant lands. After this war will such men be again available? I am sufficiently optimistic to believe that they will and that they will realise that without exports we cannot live.
§ Mr. Graham White (Birkenhead, East)
If, as the hon. Member for Pudsey and Otley (Sir G. Gibson) says, the Department of Overseas Trade has been so dormant and somnambulent, I have been wondering what adjective one could apply to a House of Commons which has waited until the last few days before the Summer Recess before raising a discussion on a matter which is of the greatest import- 1475 ance whether from our point of view at home or from that of the peaceful development of the world. There may be a reason for it, but it is a remarkable and unfortunate thing that we should have left the subject of overseas trade so long undebated. We have listened to many practical suggestions and schemes with regard to exchange. My hon. Friend the Member for Pudsey and Otley mentioned a number, but I think this Debate has very largely missed putting the question in the right perspective because the whole future of our overseas trade depends, as the Minister said in a sentence towards the end of his speech, upon whether the United Nations agree and remain agreed on carrying out a universal policy of expansion. Upon that depends the whole practicability of making anything of the postwar world.
We are to-day facing a desperate war for survival because the world would not face up the problems presented by a condition of economic plenty. It adopted the cowardly policy of restriction both at home and abroad. The atmosphere has changed with regard to that, but unless we are prepared to turn our backs on old shibboleths and adopt an entirely new attitude we shall find ourselves back again in the squalid era of bitter retaliation and bickerings—which the Prime Minister denounced so rightly—when the whole object of one country was to put some into employment at the cost of putting others out of work somewhere else. In so far as this Debate helps to clear our minds on that matter and concentrate our attention and purpose on a policy of expansion in the interests of full employment everywhere, it will serve a vastly important purpose. We have spoken of the difficulties which will occur when peace comes upon us. We are working up to the major crisis of this war and we have no doubt as to how it will end, although it may be at a cost which we do not yet realise. But when we have passed from the crisis of the war we shall come to the crisis of the peace. Whether we shall overcome the crisis of the peace depends upon whether the comradeship, common interest and self-sacrifice which we have won and strengthened during the war between the United Nations will be strong enough to overcome the inherited prejudices, traditional animosities, shibboleths and destructive machinery of the 1476 past. That is the question. If we cannot win the crisis of the peace we are wasting our time in discussing the practical statements which hon. Members have put before the House to-day.
My hon. Friend the Member for Seaham (Mr. Shinwell) made, as he always does, an important, able, and interesting speech. On this occasion I would like to add the further adjective "intriguing." I could not help thinking that he must have formed an alliance with right hon. and gallant Friend the Member for Kelvingrove (Lieut.-Colonel Elliot)—whose continued absence from the House we greatly regret—who, in a recent article in "The Times," said that owing to the great advance of science and the great increase in sources and means of production it would be no longer necessary for any country to have any export trade at all and that in a short space of time we would be entirely self-contained. I thought the hon. Member had some idea of that kind, but that was a fleeting impression which passed away as his speech developed. I am bound to say that with the greater part of it I was in a great measure of agreement. There was a point at which there seemed to be a difference between him and my hon. Friend the Member for Pudsey and Otley who, if I understood him aright, suggested that there must be complete freedom of the movement of capital on the coming of peace. The hon. Member for Seaham, I gathered, was in favour of restriction of the movement of capital.
§ Mr. White
Then I misunderstood my hon. Friend. Of course, in regard to the movement of capital, as in many other respects, we have to put up as best we can with the position. It will be essential to have over all direction for a considerable time in the immediate future after the war, and even greater strengthening and stringency than there has been in the immediate past, especially in regard to the supplying of food stuffs and what one might call the materials for rescue. There will be in the situation which will appear at the end of the war all the elements for complete chaos. It is net open to question that there is in Europe to-day, for the first time in the history of the world as far as I know, a complete system of trade control, a Continental 1477 system. It is conducted on the basis that the people who have to carry it out will do what they are told and will be shot if they do not. It is working for the benefit of the Nazi party. That system is going to be dissolved. There will be the greatest possible difficulty in any other way.
It has been pointed out that our present position does not allow of any orthodoxy. Orthodoxy is a thing we have heard the last of, I hope, for a long time. Our difficulties, and perhaps some of our successes, may be due to the fact that, whereas before the war we were a creditor country, to-day to the extent of nearly £1,000,000,000, we are indebted to other countries who previously owed us money. That situation, properly handled, may help our export trade. But there it is. The whole question depends on whether or not we are prepared to make the necessary sacrifices to co-operate in the world expansion of trade with all other countries of goodwill. The hon. Member for Sea-ham appeared as the apostle of a new Imperialism. I will yield to no one in my belief in the mission of the British Empire and the work which it has still to do, and which I believe it will carry out. But I am also convinced that, whatever we may do to determine in advance the course of trade after the war by means of concrete proposals, of which so many useful ones are being made—the Hot Springs Conference and the entirely new order of economic affairs which has been indicated by Lease-Lend, the Atlantic Charter and Canadian help—these things are signs of a new order of things. We should play up to it and see that these things are maintained and encouraged, and should not hark back to the shibboleths and orthodoxies of the past. We have an opportunity to make a new world if we wish to do so.
The hon. Member for Seaham seemed to range himself alongside Lord Bennett, who took occasion on Friday to review the trade of the world, and of the Empire in particular. He deprecated talk about a new world. A new world may or may not be possible, but the first step towards a new world is a belief that it is possible. The belief in a new world, in the economic and every other sense, is one of the most potent forces in maintaining the morale of our fighting men. It is because they believe that they are not coming back 1478 to the old pattern of things that they are making the sacrifices they are making to-day. Lord Bennett indicated that it meant a change in human nature It is an odd thing that human nature is always called in aid when people wish to excuse themselves from doing something which is right, or for some special act of human failing or depravity. Whatever may be the position with regard to the immutability of human nature, there is one thing which can and does change, and that is man's conduct. It has changed for the worse during the war. It has reached depths of depravity which a few years ago we should have thought incredible, but the merciful fact remains that the exercise of barbarity and brutality in the course of this war has created and roused in opposition the greatest qualities of which man is capable—courage, self sacrifice and the will to work for common aims.
I am glad to say that in the economic field, as in every other, there is evidence of a new order in the world. Let those who doubt it read the final act of the Food Conference at Hot Springs and they will see running through it a common purpose. Again, if they turn to the postwar plans of the United States, they will find the same co-operative anti-isolationist spirit and purpose prevailing there—a very different proposition from that advocated by Lord Bennett and the hon. Member for Seaham when they envisage after the war the United States of The Empire ranged against the rest of the world. We can influence the course of events by the way we discuss our problems and by the character of our approach to their solution. The worst possible way to influence the future course of events is to talk in this defeatist way, imagining that the end of it is to see the British Empire ranged against the rest of the world. The noble Viscount's speech was mischievous talk of the worst description and I hope there will be no more of it.
§ Sir P. Hannon
On a point of Order. Is the hon. Gentleman in order in so describing the speech of a Noble Lord outside?
§ Mr. White
I hope the hon. Gentleman will believe that I should be the last to be guilty of discourtesy. The phrase I used was "mischievous talk," an expres- 1479 sion in common parlance. It is a tremendously difficult task for the United Nations to build up a state of economy upon which a sound political basis can rest, but there is no need for despair. As far as our resources are concerned, there is ground for very considerable optimism. Let us, in the industrial community, put away the inferiority complex which was developing so strongly before the war. Let us rest in the future on our achievements during the war. We have shown, and learnt, that British workmen, when properly led, organised and equipped, can turn out in a day as much goods of a fine quality as any other country in the world. That must be the basis of the service.
§ Sir Patrick Hannon (Birmingham, Moseley)
I will not follow the hon. Gentleman in the line he has taken but I am certain that the Noble Viscount to whom he referred deserves the thanks of the Commonwealth for the services he has rendered. I am glad to have been here and to have had an opportunity of hearing the speech of the Secretary to the Overseas Trade Department. I think some of us felt that the House would like to see him again. We have not seen him for a long time and we were wondering what contribution he was making to the preparation for post-war policy. We have had to-day an outline of the course that he intends to pursue. His Department, as he said, has been charged with very important functions and, as far as one knows, the work that has been accomplished by the various expert committees attached to the Department has been well done, but there has, somehow or other, been a want of leadership in the direction of the policy of the Department since the war broke out. I am bound to say that, after repeated appeals to my right hon. Friend, manufacturers who became embarrassed in the process of their export trade did not receive any substantial help from his Department. On the other hand, the President of the Board of Trade has been most kind and most helpful and has received deputations and given substantial help. We felt all along that there was some difficulty in the precise work that the Department was doing.
§ Sir P. Hannon
The expert committees, and some distinguished officers of the Department, were doing valuable work in relation to the export trade but, of the Department itself as such, we heard very little in the House and we did not get much stimulating advice. I say that with a good deal of reluctance because I always like to praise Ministers when they are worthy of it. I hope that after the criticisms that have been made the Department of Overseas Trade will arouse itself from its slumbers and start on the work with which it was originally entrusted. We had a remarkable speech from my hon. Friend the Member for Seaham (Mr. Shinwell). I agree with my hon. Friend the Member for East Birkenhead (Mr. White) that the hon. Member for Seaham is developing tendencies towards Imperialism which we on this side of the House gladly welcome. The suggestions made in the course of his speech were, I thought, derived from that wisdom which grows with further experience in tackling the economic and social problems with which he has to contend from time to time.
I would like to put to my right hon. Friend the President of the Board of Trade and the Secretary to the Overseas Trade Department one or two questions. The first is, what is being done to create a real understanding with industrial organisations in the United States vís-à-vís the problems of the future? In February last 4,000 American manufacturers—people may criticise big business in this country, but big business in the United States is a much more formidable proposition—went to New York to spend a week junketing, and they passed a series of resolutions making it quite clear that the whole influence of their organisation, political and economic, would be exercised for the removal of controls at the earliest possible moment after the war and for making them perfectly free to compete in the world markets. That is a matter to which the President of the Board of Trade and, indeed, His Majesty's Government as a whole ought to give careful consideration. As I see it, looking to the future and with some experience of industrial problems in this country, unless we can come to a workable understanding with the United States after the war, I cannot see very much hope for the maintenance of the competitive power of this country in the markets of the world. The allocation 1481 of trade between the two great communities, upon whatever system may be organised, remains to be seen, but unless we can have between the United States and ourselves some understanding based upon economic considerations, I fear that the productive enterprise of this country will suffer a very severe blow.
I cannot agree with my hon. Friend the Member for Seaham as to the part he says our export trade plays in political and economic life. It is of profound consequence to masses of workpeople in this country. Its restoration is the only means by which employment can be restored in a great many branches of industry. The hon. Member mentioned the city of Birmingham and its great variety of trades. How can we hope to restore employment in Birmingham after the conflict if we have not the opportunity to expand our export trade? My hon. Friend the Member for West Birmingham (Mr. Higgs) will correct me if I am wrong when I say that we have 1,100 different trades in Birmingham, and I should say that 80 per cent. of them depend on the export trade. Birmingham is known over the world as a centre of industrial vitality. That vitality cannot be maintained after the war unless the policy of the Government is such as to give us a fair and reasonable opportunity of getting our share of whatever world markets may be available.
The President of the Board of Trade knows the difficulties which the export trade of this country has experienced in relation to the loss of our South American trade. I am President of the British and Latin-American Chamber of Commerce, and I know that we have suffered gravely in this country because of the restrictions which the Government have quite rightly had to place upon our export trade to South America. The South American Republics themselves have been only too anxious, within such limits as were available, to encourage any export trade that might possibly be carried on during the war. I want my right hon. Friend to think very carefully of how we are to restore the South American trade after the war. Investors in this country have developed in large measure the economic growth of the South American Republic. Railways, tramways, harbours, and all sorts of public utility services have been financed from this country and the in- 1482 visible exports consequent upon that finance have been of great value to us. They have now disappeared, and it would be a serious matter for many great manufacturing industries in this country if we could not, at least to some extent, have a restoration of the trade that previously existed. I realise, as my hon. Friend the Member for Seaham pointed out, that an industrial civilisation exists in South America as it does in the Overseas Dominions and the Colonial Empire, and that this means a modification of the policy we previously pursued in our export trade with those countries. I attach great importance to the point made by my hon. Friend that we should buy from those who buy from us, and that should always be an abiding principle of the economic system of this country.
The Secretary to the Overseas Trade Department mentioned a remarkable fact when he spoke of the credits guaranteed by the Department during several years and the comparatively small loss that was sustained It is one of those facts which redound to the credit of the commercial community of this country, that when a Department of State guarantees the discharge of obligations amounting to £267,000,000, the loss is less than £1,000,000. Nothing could contribute more than that fact to the credit of British trading operations and to the credit of the people who carry on our trade. I should like to suggest to the President of the Board of Trade, who has been extremely kind about it, that he should do still more to get his Department into contact with various voluntary organisations which are working in this country for the development and expansion of our export trade. We have a whole series of them which are doing useful and helpful work. I am associated with most of them. An example was given in the speech of my hon. Friend the Member for Pudsey and Otley (Sir G. Gibson), who represents the Association of British Chambers of Commerce. Other hon. Members represent various organisations on the commercial and productive sides. I am sure that my right hon. Friend the President of the Board of Trade will take into his counsel as much as he can, such wisdom and experience as may be available in these various bodies.
The problems before the country related to our export trade are vast, various and 1483 necessarily very obscure. I believe that no Minister has a more difficult task to face than the President of the Board of Trade in relation to the re-establishment of the commercial supremacy and quality of this country after the war, and the country looks to him as the Minister—generous, kindly and helpful as he is in every respect—to give that impetus to the consideration of the questions involved which is so essential if we are to develop any decent post-war policy in our export trade. What is asked all over the country now is, What is to be done after the war, particularly to restore the contacts we made in building up trade with the countries overseas? What kind of arrangements will be made between the newly industrialised communities and our industrial people here? All these serious problems are, no doubt, in the mind of my right hon. Friend and will be dealt with constructively and helpfully by his Department, but yet there is a feeling in the country that during the past few years sufficient thought has not been given to the post-war situation of our export trade. It is not to be treated by any means, as my right hon. Friend will be the first to admit, as a negligible consideration. It is something to which great masses of people look forward for the maintenance of their standards of living and their prospects of employment, and for keeping British products with their unrivalled quality and competitive character before the world for all future time. I am confident that in the difficult work before my right hon. Friend, he will have the full support of every branch of enterprise in this country, so long as enterprise is satisfied that his policy is calculated to make a brighter outlook for the economic life of the country.
§ Mr. Summers (Northampton)
Had more time been available I should have liked to have referred to some of the remarks of the hon. Member for Seaham (Mr. Shinwell), but in the short time available I will do nothing to divert attention from the question of whether the Government are doing all that we can reasonably expect them to do to prepare for the expansion of exports after the war. I hoped that this Debate would indicate the extent to which the Government attach importance to this subject compared with other post-war problems, and indicate, too, the way in which they propose to discharge 1484 their responsibilities. So far as the first object is concerned, I hope that the speech from the Minister is not to be taken as a criterion of the importance which the Government attach to this question. For the first 50 minutes of his speech the right hon. Gentleman dealt with the activities of his Department in the past. I should imagine that most Members, and certainly the country, are far more concerned with the activities of the Department as it affects the future. We learned that a number of committees have been appointed to discuss this, that and the other, and far from hoping that at an early date we should be given the benefit of their findings, he said that they were to be put at the disposal of the Minister without Portfolio. I hope it will not be long before we are allowed to learn the use to which it is proposed to put the recommendations of those committees.
Of the several contributions which can be made to this question of exports I regard that from the Government as unquestionably the most important. I shall take it for granted that, despite the mental gymnastics of the hon. Member for Sea-ham (Mr. Shinwell), there are good reasons for expanding British exports beyond what they were before the war, and if we are agreed upon the need for that expansion surely it is of less importance relatively, and therefore can be ignored for the moment, which are the good reasons each person wishes to adduce. The contributions from the Government must come partly from the Treasury and partly from the particular instrument, namely, the Board of Trade. We are indebted to the hon. Member for Walsall (Sir G. Schuster) for two extremely interesting and illuminating articles in "The Times" recently on the re-equipment of our industries to play their part in the development of exports after the war. This is not the occasion on which to develop the question of the use to which the weapon of taxation can be put to enable industrial plant to be modernised for that purpose. The occasion for that was taken not long ago on the Finance Bill, and I welcome the response which the Chancellor of the Exchequer then made to the point of view expressed, and I hope that he is pressing on with ways and means of assisting industry to equip itself to produce cheap and modern goods for the development of that trade. Again, there are the possibilities of an international clearing union. That can 1485 play an important part in developing trade.
Turning to the particular instrument concerned primarily with this subject, the Board of Trade, it is difficult for one who has not been closely associated with the Department to avoid making from superficial knowledge a criticism which more knowledge might not make so well-founded. I venture to suggest that the setup is, to say the least of it, somewhat illogical. There is a Department which I understand is known as the Commercial Relations Department, primarily charged with the duty, in normal times, of course, of dealing with treaties between one country and another and the tariffs and modifications of tariffs which negotiations between countries might require. No doubt they are in close touch with the Department of Overseas Trade as such, but I cannot see the advantage of the segregation of those two Departments, on the ground that the Department concerned with day-to-day problems put to them by manufacturers should surely be the Department primarily concerned with negotiating treaties with other countries. By the same token, that section which is primarily concerned with treaties should be closely interlocked with the one dealing with the results of those treaties in practice.
We had a discussion in this House not long ago on the reform of the Civil Service. I venture to suggest that there is as much scope for refreshment, shall I say, in the personnel of the Department of Overseas Trade as in any other Department in which our civil servants operate. That is not intended as a reflection upon the status or integrity of civil servants. I have had much too close association with them to be led astray by ill-founded criticism of that kind, but I think there is scope for improving the services which they render to our manufacturers by bringing them in closer touch with people of business experience. It should be possible to interchange, possibly only for short periods, personnel in the Consular Service or in the offices of trade commissioners with people at home engaged in industry, and, by the same token, to exchange civil servants abroad with their opposite numbers at home. I do not know to what extent those at headquarters dealing with overseas trade have in fact spent any material part of their time abroad, but I should 1486 have thought they would be able to bring a much better qualified point of view to their task if they had spent some years, at any rate, abroad.
This question will, it seems to me, be of no less importance after the war than the question during the war of maximum production for war purposes. That problem has been tackled in a variety of ways. It has been tackled through technical assistance, by building up joint production committees, and by interesting the worker in the use to which the products of his labour are put. Imagination has been shown, and very remarkable results have been achieved. I hope that in dealing with the post-war problem no less imagination will be shown. I have been particularly impressed with the effects of showing the worker to what use the products which he makes are put. Excellent results have followed visits from Service speakers. That particular system may not be possible everywhere in war-time, but I should have thought there was great scope for a Department such as the Overseas Trade Department, by the imaginative use of films, to interest the worker in what he is doing by showing him the use to which his goods are put abroad, and also in interesting foreign customers in the way the goods are made. In that way a complementary interest would be built up.
Next I would refer to the part which manufacturers and distributors can play, for things cannot be left solely to the Government if we are to get satisfactory results. I have a friend who, for some years, was in a merchant's office in Calcutta. He was telling me that for reasons which have not been vouchsafed to us the Indian chicken is smaller than the British chicken and lays a smaller egg, but for many years it was apparently quite impossible for those engaged in trade with India to impress upon British manufacturers that egg cups which were suitable for British eggs would not do for the eggs from Indian chickens, and that they would have to be adapted in order to make them fit. That is an illustration of a case where the manufacturer and the country ought not to be suffering through a lack of knowledge of what the consumer wants.
That brings me to one other point in connection with the Department. The reports sent home have been of interest. They have shown tonnages and other 1487 statistics which manufacturers need, but the viewpoint has primarily been that of one taking a bird's-eye view of the country, noting trends and possible exchange rates which would be useful to anyone writing a general essay on the future of the country; but what they have not as yet been able to show is an approach to the problem of the consumer's mind. I hope there will be an increase in consumer-mindedness on the part of the staff of the Overseas Department, so that the intelligence service they provide will be that which is most required by the trading community who are anxious to make use of their services.
§ The President of the Board of Trade (Mr. Dalton)
I think the Debate, which was initiated by my right hon. Friend, has been of very considerable value, and I will undertake, in conjunction with him, that all the points which have been made and all the various suggestions which have been put forward by hon. Members shall be carefully considered. There have been stimulus and suggestion, sometimes a little contradictory, from different sections of the House, but I give an undertaking that the suggestions made shall all be carefully looked into, and we will seek to profit by them. There are three phases regarding export trade which it is convenient to remember. They are well known to the Committee. There was the phase of the export drive under my right hon. Friend, who is now the Minister of Supply, when he was President of the Board of Trade. That was before Lend-Lease, when it was necessary to export to the maximum in order to pay for the imports needful to carry on the war and to sustain our population. That phase closed shortly before I was appointed to the Board of Trade. When I became the President we were already in the second phase, the phase of Lend-Lease and of the restriction of exports made possible by Lend-Lease. Restriction of exports is a just and admitted policy, in order to strengthen to the utmost our short-term war effort over the next few years, while furnishing essential minimum supplies, and no more, for the home market and for those Empire markets particularly dependent upon us and for the requirements of our Allies, for example, Russia and the Middle East. In this phase we still stay. It is still necessary to restrict 1488 exports very severely with these objects in view. I say that frankly to the Committee, and I do not think any hon. Member would differ from me. As my right hon. Friend sagely observed, this war might not necessarily have begun, but once begun it must some day end, and we are preparing—and it would be very wrong and we should be subject to criticism and rebuke if we were not—for the third phase when, after victory, we shall again expand our export trade with energy and vigour with the aid of the many organisations, which have special knowledge of these matters.
I do not need to debate at length whether we need to export. We all agree that for one reason or another we must do so. I am content to put it on the ground that my hon. Friend the Member for Seaham (Mr. Shinwell) particularly emphasised. We must export, not merely as a national spoilt or as a luxury; we must export as a necessary operation, in order to procure in exchange very large quantities of food, which we either cannot produce here, or produce in sufficient quantities for our needs and to procure materials which are indispensable for the development of our various industries. Unless we export on a large scale—larger than before the war—we shall not get those necessary imports. Nor can I and other hon. Members, who represented depressed constituencies before the war, forget that, bad though unemployment was in the inter-war years, it was worse and most chronic in those areas which were dependent—unduly dependent—upon languishing export trades. Evidently, if we are to achieve full employment, it is necessary to have regard to stimulation of the economic life of those areas which were particularly dependent before the war upon exports and which cannot be suddenly switched round to cater only for the home market.
Therefore, I say at once, in response to an invitation from one of my hon. Friends, with precise deliberation, that the Government do attach very great importance indeed to preparing for the resumption of export in the third phase, when it opens. It has not opened yet, but, when it does, we are determined, with the help of the House of Commons and of industrial organisations, representing employers and labour, and with any other assistance that we can get, to 1489 have our preparations ready and to give all the help that the Government can give. Our hope and our aim are to join with other nations and Governments in creating after the war what is commonly called an expansive world economy. We are pledged to that, and we mean it. It will be a very different thing from the economy we had between the wars, when every form of perverted ingenuity was used in order to produce a restrictive national and world economy. All over the world, masses of men were unemployed, and great quantities of plant were insufficiently used. Standards of life fell, and increasing paralysis spread over the scene.
§ Sir P. Hannon
Would not my right hon. Friend admit that it was a desperate time, when we were able by a restrictive economy to put a large number of people back into employment?
§ Mr. Dalton
I do not think that my hon. Friend and I really differ on this matter. That was not really my point. There were ups and clowns between the wars, and all sorts of desperate expedients were adopted. I do not want to get back into the old dreary Tariff Reform and Free Trade argument, and I am sure the House will agree. We are all agreed that between the wars things were pretty badly done throughout the civilised world. There were unemployment and lack of trade, channels were clogged instead of being open, and there was paralysis instead of life and vigour. At this stage, I am particularly anxious not to blame any person or group or policy. I am sure we all agree that that situation, with its miserable inter-war expedients, must not be repeated again, and we must lend all our efforts, good will and power of international co-operation to prevent it. What my hon. Friend the Member for Pudsey and Otley (Sir Granville Gibson) said was quite right, when he pointed out that this is a matter for international consideration. I give the House an assurance that we are determined that the matter shall be considered internationally, not only with our Dominions, with whom we keep constantly in touch—I am myself frequently in touch with the Dominion representatives—and not only with the United States of America, but with all the representatives of the countries, our Allies, soon to be free, whose Governments are for the moment in exile here; and last, but by 1490 no means least, with the Union of Soviet Socialist Republics.
It is to our national interest that there should be this expansive economy and to the interest of the world as a whole. We are pledged to it by our signature to the Atlantic Charter and to the Mutual Aid Agreement with the United States. I believe that in an expansive world economy, if we can create it, there will be room for all. I believe that there will be room for trade conducted in some cases under a considerable degree of State direction, in other cases without much State direction, and in yet other cases quite free of State direction, particularly after we have passed through the immediate phase; and there will be room for all, if we make our arrangements aright for a world-wide prosperity, which will exploit the hitherto undreamed-of possibilities both in production and in consumption, in backward lands as well as in more civilised countries. I want to pass from generalities—
Lieut.-Colonel Sir Ian Fraser
I did not want to interrupt the right hon. Gentleman, as I know his time is limited, but, in a sentence, will he define the meaning of "an expansive world economy"?
§ Mr. Dalton
An expansive economy is one in which standards of life expand instead of contracting, people get better off instead of worse off, in which there is regular employment and people get better wages as production expands. That is what we should all like to see, irrespective of other differences that may exist in this House.
I would like to touch upon one or two matters that have been raised in the course of the Debate, and also to say a word about Latin America. Several hon. Members have asked for assurances and undertakings with regard to the future of our exports to Latin America. I am prepared to say that we have good reason for being assured that the United States Administration, equally with our own Administration—
§ Mr. Dalton
There is a great deal to be said about the Most-Favoured-Nation Clause both pro and con. In the light of 1491 the new situation it is evidently one of the topics that will have to come up in international discussions between our Dominion friends, the United States and European countries. I will not pursue that point further at the moment, because the time is not ripe for any declaration upon it. It has to be examined in relation to several other problems.
I wish to give an assurance that we do not intend to disinterest ourselves in Latin America and that nobody has suggested that we should. The United States of America in particular, equally with His Majesty's Government in this country, are determined that for the moment our resources and activities should be concentrated upon the primary task of winning the war and not in manoeuvring for some post-war advantage. For the moment, we and the United States Government are engaged on a joint adventure, in which combined planning of economic resources is developing, with a view to bringing victory as soon as we possibly can. My right hon. Friend the Minister of Production is engaged deeply in these matters. That is our immediate aim; but in the post-war period—and I have every reason to believe that the United States Government share our view—the United Kingdom must participate in the expansion of trade in Latin America as elsewhere.
In Latin America there are enormous possibilities of expansion. In reply further to my hon. and gallant Friend the Member for Lonsdale (Sir I. Fraser) I would say that there are great possibilities of an expansive economy there. You have States with enormous natural resources and relatively small populations and with relatively undeveloped transport systems. Therefore it is surely possible to look forward to a tremendous expansion of the production of primary products and some industrialisation, which will undoubtedly be in terms of the less highly-priced goods. We hope still to be able, in the new conditions which will follow the industrialisation of, for example, Brazil, to have a very substantial trade in which we supply the high quality goods and she gives us her goods.
§ Mr. Dalton
Yes, such as coffee, but I hope, in the interests of Brazil herself, it 1492 would not be exclusively coffee. This point illustrates one of the arguments of the hon. Gentleman as to the purpose of our export trade. We must have coffee from other countries, because coffee grown in this country would, I expect, have an evil taste and cost too much. I expect it would have to be grown under glass. If there is any doubt in the mind of any section of the Latin-American community, or of British traders, as to the continued interest of His Majesty's Government in the Latin-American markets as a legitimate and proper post-war field, I hope I have been able, by these words, to remove it. I do not believe that any Government in any part of the Americas, or any part of the world, would deny that we have a proper and legitimate right to trade in Latin America after the war, and to take part with others in the expansion we hope for in that great trading area. We are bound to Latin America by many friendly ties and mutual interests, and these, I hope, will be strengthened in the future.
May I now turn to the U.K.C.C.? Several Members have mentioned it, and I would like to take the opportunity of saying a word or two about it and in praise of it. The U.K.C.C. was formed in April, 1940, just before the change of Government which took place at Whitsun, 1940. I may illustrate its formation personally, because I was concerned with it when I was Minister of Economic Warfare. One of the first things I had to do when I became Minister of Economic Warfare was to go to the present Chancellor of the Exchequer and ask him for a substantial sum of money to put the U.K.C.C. on its feet, and I succeeded in persuading him. We were chiefly desirous at that time, and I went as Minister of Economic Warfare, of pre-empting quantities of goods in Turkey and the Balkans, in order to keep them out of the hands of the enemy—certain metals in particular, chrome and so forth, which were of high importance both to strengthening our war effort and weakening the enemy's.
In those first stages the U.K.C.C. was principally what we call a pre-emptive purchasing organisation. It was brought into existence with that primary object in view, and it did that very well in the period before the armies of the enemy overran the countries of South-Eastern Europe. Gradually it developed its functions, and it was found necessary, in 1493 order to make pre-emptive purchasing successful, that we should not only buy from these people but be prepared to sell to them things they wanted; otherwise they were reluctant to let us rather than the enemy have the goods. Therefore, the U.K.C.C. developed a two-way traffic. It organised sales from this country as well as purchases to this country, and these have grown. The U.K.C.C. has been very active in Spain and Portugal, and it has been still more active, in the aggregate of its operations, in the Middle East. The Middle East Supply Centre, as it is called, is very dependent on the U.K.C.C. for its operations in all the countries of the Middle East. We have also used the U.K.C.C. as the medium for all the British non-military supplies to Russia, whether by the Northern route or by the Persian route.
The U.K.C.C. is entirely financed by public money. There are no private shareholders; no rent, profit or interest derive from its operation. It is financed by the Treasury—[interruption.] I hope that will riot turn any hon. Members against this most valuable instrument in the war effort. In all, the Treasury has put, and I think rightly and properly, several million pounds into the work of the U.K.C.C. The U.K.C.C. has not got, as has sometimes been suggested, a monopoly of trade. This has been particularly suggested as being the case within the field of operation of the Middle East Supply Centre. It has not got a monopoly of trade. It does not determine what shall be shipped, but acts on the recommendation of the various authorities—the civil and the military authorities in these areas. It acts on their recommendations as to what is urgently required in those countries to sustain the civil and economic life of the populations, and it canalises trade in a manner which the authorities in those countries find exceedingly convenient in war-time, and does it extremely efficiently. I repeat that in regard to the despatch of supplies to Russia of material over the Persian route, which is now able to be used continuously throughout the year, and on an increasing scale, it has been performing most valuable work. What will come after the war cannot be exactly foretold. I have already said, in reply to a Question in the House, that I certainly would give no undertaking at all that the U.K.C.C. should close down. It has been 1494 extremely valuable during the war. I can well believe that in certain directions it may be extremely valuable after the peace. It will be for the Government, and Parliament, as supervising the Government, to decide in the light of circumstances then prevailing whether it should expand after the war or should in some respects be restricted in its functions. I desire to pay my tribute to those responsible for the conduct of the U.K.C.C. It has been an exceedingly well-run show, and we could not have carried forward our war effort so successfully without it.
Now, taking points rather out of order so that I shall not miss matters raised by hon. Members, may I reply to another point raised by the hon. Baronet the Member for Moseley (Sir P. Hannon)? It was very kind of him to speak of me in the way he did. Anyone who helps me by coming with suggestions or information to the Board of Trade I shall always be grateful to and will endeavour to co-operate fully with. He asked me about Anglo-United States contacts and understanding. There is a very great deal of contact, as he will appreciate, on the governmental and official levels. I need not develop that. We are all looking forward very much to the visit of Mr. Eric Johnston, the President of the United States Chamber of Commerce, who is arriving here next week. We welcome that very much. His Majesty's Government are very glad that he is coming. I am sure it will be valuable for him to hear what we are thinking over here and for us to hear what they over there are thinking. That is typical of the sort of interchange visit which I think is very helpful. It is by no means the only one.
The hon. Member for Northampton (Mr. Summers) made some observations about what he calls the set-up of the Board of Trade, and it may indeed, like a lot of British arrangements, look a bit illogical. None the less it may not be too bad as compared with more logical plans. There is a Commercial Relations and Treaties Department at the Board of Trade, concerned primarily with all external economic relationships, which we at the Board of Trade have to consider. Several officials there—I mention this to show that I agree with the hon. Member—have moved about since I became President of the Board of Trade. Some have arrived and some have gone elsewhere. 1495 and so on. I entirely agree that one does want a fairly frequent degree of movement, though not so frequent as to be disorganising. I have attempted, while I have been President of the Board of Trade, to see that there is a reasonable mobility of people back and forwards. That applies both as between different jobs in this country and tasks in this country and tasks overseas. At the moment, with so many countries overrun, it is not easy to provide the overseas experience which could have been arranged in peace-time. Particularly in connection with reform of the Foreign Service, which was debated in the House some time ago, I hope there will be scope there for a great improvement in the Consular and Commercial Diplomatic Services. This has all been very much in the mind of the Government, and I have discussed it at some length with my right hon. Friend, who is sitting beside me and who is naturally deeply concerned in it, and with my right hon. Friend the Foreign Secretary and others. My right hon. Friend the Secretary to the Department of Overseas Trade has, of course, a relationship to both the Board of Trade and the Foreign Office, which, I think, is generally appreciated in the House. His name figures on both the Foreign Office list and the list of the Board of Trade. That is not logical: it is a compromise arising out of a quarrel long ago between predecessors of my right hon. Friend the Foreign Secretary and myself as to which should control overseas trade. The President of the Board of Trade said that, because it was trade, it should be under the Board of Trade, and the Foreign Secretary said that, because it was overseas, it should be under his Department. My right hon. Friend here is the compromise, and that compromise does not work too badly.
A number of other questions were put; perhaps I ought to be excused from answering those of hon. Members who are no longer present. My hon. Friend the Member for Seaham spoke of the collection of the reports, to which my right hon. Friend has referred, as being orthodox. I am sure that he will agree that we must have as many facts and particulars as we can. It is no good planning, for example, to export an enormous number of bicycles to Ruritania without ascertaining in advance that the 1496 Ruritanians are likely to want them and that the country is not so mountainous that the bicycles will have to be wheeled more often than ridden.
§ Mr. Dalton
It might be, and it might not. I am giving an illustration. We must know what the people want. The use of films has been referred to in reinforcement of other methods. That is the purpose of the study which is being carried on under my right hon. Friend into the prospects we have in markets all over the world in the immediate post-war period. I agree that there is no immediate risk after the war of a slump in trade. The problem will be to control the boom, and to prevent it getting out of hand. That can be done easily by keeping on the present controls. My right hon. Friend the Chancellor of the Exchequer has explained this to the House, and I have endeavoured to do so in a previous Debate. We shall, after the war, have to stimulate and direct our export trade to a considerable extent, having regard to the economic situation at the time. We shall have three great sources of demand for our goods. There will be a tremendous demand in the home market with all the pent-up purchasing power, including War Savings, Service gratuities and post-war credits. That pent-up purchasing power cannot be allowed to break loose in an inflationary flood. We must direct abroad certain products, which might otherwise be absorbed by the home market, In doing so, we must distinguish between the ordinary commercial exports and the relief exports, which, at any rate for a time, this country will wish to make, and be under an obligation to make, possibly on a Lend-Lease basis, in order to relieve the misery caused by the German barbarians and the Japanese barbarians in the overrun territories. We have to balance the claims of the home market, the commercial exports and the relief exports against each other. We cannot give priority for any one; we must go as far as we can to meet them all, within the framework of our commercial control. I have great confidence, based on talks I have had at the Board of Trade with representatives of the employers and of the trade unions, that we 1497 can surmount the difficulties. I thank the House for the stimulus it has imparted to us in dealing with the problems of overseas trade, and I can assure hon. Members that my right hon. Friend and I will not be backward in taking advantage of all helpful suggestions.
Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.
§ It being the hour appointed under Paragraph (7) of Standing Order No. 14, Mr. SPEAKER proceeded, pursuant to that Standing Order, to put forthwith the Questions, "That this House doth agree with the Committee in the outstanding Resolutions reported in respect of Classes I to X of the Civil Estimates, the Revenue Departments Estimates, the Civil Excess Vote, 1941, the Navy Estimates, the Army Estimates and the Air Estimates."