HC Deb 30 November 1944 vol 406 cc69-74
The Prime Minister

I ask the House to allow me to read a statement upon the future workings of Lend-Lease. This statement has been carefully agreed with our United States colleagues and friends, and I will now read it to the House.

I thought it proper to take this first opportunity of telling the House the outcome of the discussions which have been taking place in the last few weeks in Washington, between a British Mission headed by Lord Keynes and the American administration. The Mission has been occupied in examining the manner in which the continuation of the war, after the defeat of Germany, is likely to affect the best use of our joint resources, and in particular the changes in the programme of supplies which the American Administration feel that it is proper and right for us to have in accordance with the terms of the Lend-Lease Act, an Act which, we must remember, is for the defence of the United States, and is strictly limited to what is necessary for the most effective prosecution of the war by the United States and its Allies.

The end of the war with Germany will make possible large reductions of some of our requirements. We expect that our needs will be met by a programme at a rate not much more than half of what we have been receiving in 1944. All of those supplies and services will be exclusively for the joint war effort against the common enemy. The prolongation of the war, in what will be, for us, the sixth or seventh year, means that certain improvements are esesntial, if our national economy is to be as fully effective as possible for the prosecution of the war. Fatigue and abstinence carried too far, and endured too long, can impede the effectiveness of a people at war, at least as much as more sensational forms of privation. After the defeat of Germany, some release of man-power to increase the supplies available for essential civilian consumption must follow in due course, some improvement in standards and variety of national diet, some devotion of current resources to the provision of emergency housing and a serious effort to rebuild the export trade, which we deliberately gave up in the extremity of our emergency but without which we cannot live in future. Those are forms of sacrifice which it is both possible and right to make for a limited period, but become self-defeating if they are continued too long.

All these matters, both military and economic, have been jointly examined, supported with a wealth of detail, by our representatives in Washington with the heads of the American Departments concerned. We have put at their disposal every particular, and every relevant fact in our possession. One part of the relevant material which can safely be published has, moreover, been made available to the public here and in the United States, in the White Paper published a few days ago. During the recent brief Recess, our representatives in Washington have been in a position to make a full report to us. I take this opportunity to express our very great appreciation of the practical sympathy with which the realities of the position have been examined, and of the results which have been achieved.

Let me remind the House that it is no part of the Lend-Lease Act to provide general relief, or to prepare for post-war reconstruction, or to aid our export trade. That great Act has stood us and our Allies in good stead, and in recent conversations we have neither asked nor expected any assistance which is not strictly within its terms and provisions. Nevertheless, as the war proceeds, the nature of the aid which forwards its prosecution most effectively, though unchanged in major matters, gradually changes in detail. Accordingly, so that we can play our full part in continuing the struggle, a programme of Lend-Lease aid against Japan, after the defeat of Germany, has now been planned with the American Administration, to maintain our fighting power against Japan. Without any reduction in our proportional effort, we shall be able, along with the United States, to release some of our man-power to produce somewhat more for civilian consumption. Some improvement in the variety of the civilian diet will be made possible. We shall be able to do more to build temporary and emergency houses. We must, necessarily, for the most part, depend on our own efforts in this field, but, in addition to those efforts resulting from the planned and proportional programme, we anticipate aid from American sources, not only in materials but also in complete houses, to meet some of our needs for temporary and emergency houses for war workers in war areas.

These items are being closely examined, with the help of experts sent out by the Ministry of Works during the tenure of Lord Portal. It is too soon to say on what scale the possibilities of physical production and of shipping will allow this most generous assistance to be released in practice, but it is not too soon to say that the principle is recognised that the provision of emergency shelter for bombed-out war workers is an essential condition of a fully effective contribution to final victory, and, therefore, a war need eligible for Lend-Lease assistance.

Finally, we have been able to reduce the Lend-Lease programme, so that there will be no obstacle to the efforts which we ourselves must begin at once, and intensify after the defeat of Germany, to increase the export trade which will be absolutely vital to us when, at the termination of the war, the present system of Lend-Lease necessarily and properly comes to an end. This is a matter on which, I am well aware, hon. Members are anxious to hear, in some detail, what the position will now be. As I said, the defeat of Germany will make possible reductions in the Lend-Lease programme. In certain fields we have been able to anticipate those changes and to work on the basis of the new programme from the beginning of 1945. Thus, from that date, we shall no longer receive shipments to this country under Lend-Lease of any manufactured articles for civilian use which enter into export trade, nor of many raw and semi-fabricated materials, such as iron and steel and some non-ferrous metals. Consequently, in accordance with the White Paper of September, 1941, we shall then be free to export a wide range of goods made from those materials.

Naturally, we have not used in export, and do not propose to use, any critically scarce materials, except where the export is essential to the effective prosecution of the war, but till the German war is at an end, however, there can, of course, be no significant release of resources. The defeat of Japan must still continue to have the first call on our resources after that; but after the defeat of Germany, it will be both possible and necessary to turn over an increasing part of our resources to civilian production, including the export trade. As a result of the recent discussions with the United States Administration about our Lend-Lease programme, following the defeat of Germany exporters will then be subject only to those inevitable limitations dictated by the needs of the war against Japan.

There is not of course—and never has been—any question of our re-exporting in commerce any articles which we have received under Lend-Lease. Nor, in general, shall we receive in this country under Lend-Lease, finished articles identical with those which we shall export. Such articles will be paid for by us. Where we continue to receive any raw materials, the quantities supplied under Lend-Lease are limited to our domestic consumption, for the manufacture of munitions and the maintenance of our essential wartime economy. We shall pay cash for any additional supplies which we might wish to take from the United States for export purposes. Thus, one uncertainty about future conditions has now been removed. It should be possible for exporters, henceforward, to make plans with the assurance that they will be able to give effect to those plans with the least possible time-lag, when the defeat of Germany releases man-power, capacity and materials.

I should like to add one word. The White Paper on reciprocal aid lately published, and the President's last Lend-Lease report, provide vivid evidence of the extent to which the community and inter-dependence of effort between the two great Atlantic communities has now proceeded. Never, I think, has there been a more thorough understanding of the facts of the economic position, and the problems of Great Britain and the United States of America on both sides than we have now been able to reach. If men of good will start out from the same premises of agreed fact, they do not necessarily find it impossible to reach the same conclusion.

Mr. Shinwell

Whilst appreciating the great vale of this statement, may I ask my right hon. Friend to elucidate one point? He says that at the beginning of 1945, the usual Lend-Lease arrangements will not operate as regards the import of manufactured goods or semi-manufactured goods and raw materials which may be made available for export purposes from this country, and that a cash arrangement will come into operation. What exactly does he mean by that? Are we to pay for the goods and raw materials imported from the United States, by our foreign assets still available, or will the United States take, in return, goods exported from this country?

The Prime Minister

Everything in this statement, as I said, was agreed, almost sentence by sentence, with our American colleagues. I would be grateful if my hon. Friend would put that question, which is a perfectly valid question, to me after reading the statement, either to-morrow or the next day, because I would not like to give an answer offhand which might not correspond with the exact wording which was decided upon. I must add that I consider the statement I have made is one of a highly satisfactory nature, and gives real hope far the future and the smooth development of economic affairs between the two countries in the future.

Mr. Gallacher

I do not know whether the statement is to be discussed at any time, but there is one point in it, on which I should like to put a question. The Prime Minister said that early steps are to be taken to encourage and increase the export trade. I would ask him whether this is not starting off in the wrong way, as happened after the last war; and whether any development of export trade should not arise from, and be based on, a sound policy of social security for the mass of the people in this country?

The Prime Minister

That raises topics outside the limited character of the statement I have just made, and for raising which the hon. Gentleman may possibly have an opportunity during the course of the Debate on the Address.