HC Deb 09 December 1946 vol 431 cc888-913

This Act shall continue in force so long as the Supplies and Services (Transitional Powers) Act, 1945, continues in force.—[Mr. Eccles.]

Brought up, and read the First time.

10.0 p.m.

Mr. Eccles

I beg to move, "That the Clause be read a Second time."

The Government desire that this Bill shall be part of the permanent law of the land. The Chancellor of the Exchequer actually said that he wanted these powers for eternity. This Clause sets a definite time-limit to the length of the Bill, and there is, therefore, a fundamental conflict here between the two sides of the Committee. We recognise that, in the immediate future, tight control is necessary over the conversion of sterling into other currencies; indeed, I think that we are probably more cautious than the Government about the nearby prospects of balancing overseas accounts. But this caution in no way alters our belief that, with prudent management of our domestic economy, the bulk of these controls could be withdrawn within a few years. We are bound to fix the date when this Bill should be reviewed by Parliament, and we have chosen the date when the Supplies and Services (Transitional Powers) Act expires which, I think, is four years from tomorrow. That seems to us a convenient time to review all the extraordinary powers which the Government so hastily took to themselves last autumn.

The Committee will realise that if the Chancellor pursues the present policy of spending more than the taxpayer can pay, and, at the same time, pursues cheap money and schemes of indigestible nationalisation, the value of the £ will not be re-established by 1951. I admit that if in asking for these powers to be of unknown duration, the Chancellor cites his taxation and monetary policies in his own defence, there is no answer from this side of the Committee. My hon. Friends will agree that a man who is never sober, has a permanent claim to a lamp-post to conceal his instability. The second argument for limiting the life of this Bill is that restrictions of this kind, over all the contacts between citizens of this country and citizens of countries outside the sterling area, which involve payments, should not be subject to Treasury control because that, in itself, is a definite obstacle to international understanding and world peace. These comprehensive controls put back the clock of civilisation. The Committee will recall that between the wars, the totalitarian dictators habitually justified their actions by an appeal to efficiency, and it may very well be that tonight the Chancellor will justify asking for these powers by saying that he cannot control any leakage of capital, unless he can control all foreign payments. He will make an appeal to efficiency and, in doing so, he will repeat the age-old argument of the dictator, that unless he can control everything, he cannot control anything. If this argument is advanced, the Committee will have no difficulty in recogniseing its totalitarian parent.

The two points I have cited were made on the Second Reading, but surely our discussions in Committee have multiplied the objections to making these powers permanent. Monstrosity after monstrosity has come to light, as the various Clauses have been turned over in Debate, and I will only cite—as I do not wish to keep the Committee long—Clauses 21 to 23, which deal with imports and exports. We found, there, that the Treasury have the right to interfere with every contract of sale of goods abroad, either to set a limit to the time in which the foreign buyer must pay, or to criticise the payment which the foreign buyer has to make to the British exporter.

I do not think that the Committee knew, before we came to look at those Clauses, how far-reaching are the powers under Clause 23. We also find that the Chancellor of the Exchequer is determined, I think, under Clause 22, to list any of the articles, other than money in its various forms, which a traveller may not take abroad. The result is that the Treasury can and will make criminals of all of us. Unless we happen to catch the favour of some good-humoured Customs official, who is prepared to wink at my gold pencil or my wife's marriage ring every time we go abroad, we are in fact criminals. That is not the kind of law which the British Parliament ought to pass, namely, that it is by favour of an official of the executive that we escape the courts.

The Chancellor of the Exchequer, the Financial Secretary and the Solicitor-General are defending the permanency of these powers, each in his own peculiar way. The Committee will recall that the Solicitor-General advanced the argument that because most of these powers were useful and had been well-administered during the war, we ought not to quarrel with them in time of peace. That is an extraordinary argument for the Government Front Bench to bring forward. They might as well argue that because the black-out was useful and well administered, in time of war, it would be a good thing to have in time of peace. Many of my friends regard some of these controls as very much the equivalent of black-out in the commercial world. The genial Financial Secretary, who is always so agreeable, used the disarming but hollow argument, that these powers would not be needed. If powers of this kind are not to be used, they ought never to be taken at all, much less asked for permanently.

I come now to the Chancellor of the Exchequer who, as usual, trampled upon the arguments of his colleagues and told us in his heavy and direct way that he needed these powers to catch crooks. He smacked his lips at the thought of the victims to come. Catching crooks is a worthy pursuit, but it is not a whole-time job for the Treasury. Their main business is to manage the finances of the country, so that trade and industry can expand to the fullest extent. If witch-hunting becomes their chief occupation and delight, as indicated under this Bill, those very efforts will weaken and not strengthen the value of the pound sterling. The Govern- ment ought to strike a saner balance between, on the one hand, allowing the ordinary trader to get on with his business without all this spying and form filling and, on the other hand, catching the unsocial and crooked financier who desires to fly from sterling. I am convinced that under this Bill 99 out of 100 traders will be harassed and restricted in order to try to catch the one guilty man. That will not be in the general interest of our export trade. So much for the Government Front Bench. I cannot refrain from saying a word about the Government supporters on the back benches. This is a long, complicated and important Bill on which they have put down not one Amendment, and with the exception of the hon. Member for Oldham (Mr. Hale) this afternoon, they have not asked one question about a single Clause.

10.15 p.m.

Mr. Edward Evans (Lowestoft)

That shows what a good Bill it is.

Mr. Eccles

It is a record in Parliamentary inertia.

The Deputy-Chairman

I must point out to the hon. Member that he is going very wide of the new Clause, which deals purely with the duration.

Mr. Eccles

My final reason for desiring to limit the life of the Bill is that the Committee stage has revealed in all its importance the connection between these controls in the United Kingdom and their operation in the countries which are now called scheduled territories. The success of the whole effort of defending the value of the pound, as the hon. Member for Chesterfield (Mr. Benson) said last week, depends upon the strength of the weakest link in the chain which is thrown round the sterling area. Our Treasury officials are the wiliest and most experienced men at their job in the world, but I wonder whether they have considered the strain which they are putting on their opposite numbers in the scheduled territories by asking them to adopt the most complicated system of exchange control ever thought of. It may be that crook catching and witch hunting is not so popular a pastime—

The Deputy-Chairman

The hon. Member must keep to the new Clause

Mr. Eccles

I submit, Mr. Beaumont, that this is very germane to the argument. I am saying that the question of putting the controls on here and getting them to operate in the Dominions is very much a matter of whether His Majesty's Government have to say to the Dominions, "These are permanent," or "These are temporary," and I was saying that crook catching, which is the purpose of these controls here, may not be so popular a sport in Egypt or India as it is in Socialist Whitehall Surely, it would have been wiser to have said to the Governments of the Dominions, "We are in a crisis now, we need exceptional powers for a few years; will you help us to operate them, and we will undertake within a short period to review the whole system and invite you here to a conference, at which we can get together, and see where and how the whole of this rigid"—and, as I think uncivilised, though, for the time being, necessary—"system of exchange control can be modified for the benefit of ordinary citizens." I consider this to be almost the most important reason for not making this Bill permanent—that to make it permanent is to put a strain upon our Imperial relations which is quite unnecessary

Mr. Benson (Chesterfield)

I think hon. Members opposite are under the impression that they have been using serious arguments in this Debate. I assure them they have not. With regard to the present Clause, everybody knows that it has always been the custom of the House to pass permanent Acts when dealing with permanent conditions. [An HON. MEMBER: ''What about the Army Act?"] I am afraid I should be out of Order, if I tried to show why the Army Act is passed annually. When hon. Gentlemen opposite were in power they passed the Children and Young Persons Act. They did not limit it. [Interruption.] When we passed the National Insurance Act last year hon. Gentlemen did not suggest that there should be a limit to its duration. Both those Acts are permanent; why should not the present Measure also be permanent? The hon. Member for Chippenham (Mr. Eccles) said that he realised it was necessary stringently to control sterling for the next two years. Does he really suggest stringent control is necessary only for the next few years? He suggested that, by prudent argument, we should in a few years make sterling cap- able of standing on its own legs without protection. Does he really believe that? We shall be lucky if we succeed in the next few years in making our balance of payments—

Mr. Eccles

Under the present Government, I agree.

Mr. Benson

Under any Government If we do succeed in a few years in making our balance of payments equal, it does not mean that sterling is capable of standing without control. Sterling will not be capable of standing without control without assistance, until we have sufficient sterling reserves to meet any strain that may occur in any financial crisis or trade depression. In 1932 when we had far less liquid assets than there are now there were something like £5,000 million bank deposits and £4,000 million Treasury bonds. Never has this country had so much internal liquid assets as it has now. In 1932 with far less and when we had vast foreign assets and no sterling balances, we had to establish an Exchange Equalisation Fund with £500 million sterling fluid cash, to deal with currency fluctuation. In order to deal efficiently with currency fluctuations in sterling we should require control over foreign currencies, not of £500 million but of £5,000 million and therefore it is just nonsense to talk about this Bill being temporary. The hon. Member for Chippenham said he hoped the Chancellor would not use the argument used by all dictators, that he could not control anything unless he controlled everything Does this Bill control everything? Look at the First Schedule, which rules out a large area of the' globe. The Chancellor is not attempting to control everything. All he is attempting to do is to take powers that might be necessary and as the Solicitor-General has said, those powers will not be used just because they are there. Because they exist they will not necessarily have to be used.

If I may draw an analogy from the Surtax legislation in the last 25 years, I would say that there was scarcely a Finance Bill that had not pages of Clauses, dealing with Surtax, tending to prevent avoidance of payment. Once a particular loophole was stopped, the powers involved practically lapsed for the simple reason that no one tried to use that loophole again. We have stopped practically every bolthole and we are now stopping the final ones to prevent people from sending their assets abroad. The hon. Gentleman referred to the wiliness of Treasury officials. Certainly, I agree that they are wily, and they are a good deal wilier than Treasury officials in some of the scheduled areas, and we may have trouble. But under this Bill we can always eliminate from the scheduled areas any country which proves to be a loophole. What did astonish me was that the hon. Gentleman gave as one of his reasons why this Bill should be temporary the fact that our Dominions and Colonies would not like it, and that we ought to have passed a temporary Bill so that in future years those Dominions and Colonies would not be interfered with and controlled by the present Measure. In fact they are not really interfered with or controlled by it, but if we removed the powers of this Bill in three of four years' time who would be the greatest sufferers? The Dominions and Colonies who have vast sums here as sterling assets. This Bill is essential to prevent sterling depreciating. It is designed as much for the protection of the Empire, as for the protection of this country.

Sir A. Salter

The hon. Gentleman said, quite rightly, that Bills introduced to deal with permanent conditions are usually permanent in form, like the present Measure. He went on to argue that the conditions intended to be dealt with by this Bill are in their nature permanent or at least of such long duration as to be considered permanent. But his argument was really addressed not to showing that any of the conditions dealt with in this Bill are permanent but that some form of control is likely to be necessary for an indefinite length of time. I agree with that, although in doing so I may be differing from some hon. Members who support this new Clause. I have for many years believed that some form of control of movements of capital should be a part of the permanent structure of the economy of this country. I wrote a book 40 years ago largely devoted to that argument and demonstrating the evils which result from uncoordinated and uncontrolled external speculation and investment. But I draw the greatest distinction between the control of capital movements, and the limitation and restriction of ordinary current expenditure. In my argument tonight, I shall refer not to current business transactions, but to current personal expenditure such as that on foreign travel.

10.30 p.m.

There is the greatest possible difference between two periods. The first is the one in which we are at this moment, when it is clearly necessary, in addition to controlling capital movements, also not merely to supervise, but actually to limit and reduce personal expenditure in foreign currency. The second period—which we may reasonably expect to reach as early as the date contemplated in this new Clause—is one in which, though it is still necessary to control capital movements, any supervision of current payments will be for the purpose, and only for the purpose, of seeing that they are not used as a medium for covert and illegitimate capital movements. The hon. Member's argument seemed to imply that there was no vital distinction between these two periods.

Mr. Benson

The Treasury has power to remove any of the regulations under this Bill, and one must assume that a Government, in dealing with matters like this, acts reasonably, whether it is Conservative or Labour, and with both its eyes and all its attention on the fostering of foreign trade.

Sir A. Salter

But we are a legislative Assembly, and it is our duty not to make any such assumption, and not to grant unnecessarily wide powers, without limitation of time, which can be grossly abused either by this or any succeeding executive. Otherwise we are consenting to an abdication of the legislative functions of this House, which ought not to be tolerated.

There are two reasons why I greatly regret the passage of this Bill without any provision for its termination. The first is that it is a Measure which is likely to result in the continuance of an irksome form of control of personal conduct far beyond the time that is either necessary or desirable. The second is that it adds one more precedent to the numerous cases we have had recently of Bills being presented to this House in a form that in fact involves an abdication by Parliament of its true legislative function. Take the first reason. If an Administration, acting under the powers of a permanent Act, decides, and for a time necessarily and rightly, whether it is extravagant for an individual to spend his money in a foreign country, it will begin to think that this is a part of an Administration's duties in normal times; we are in danger of being under a drastic control for all time of our expenditure of such of our income as is left after the payment of Income Tax. I am confirmed in this fear by the argument of the Chanceller of the Exchequer. He compared invisible imports such as foreign travel with visible imports, which are of course subject to duties or official regulation in normal times. Yes, but normally visible imports are taxed or restricted for the purposes of either securing revenue or of protecting a home industry. It is only in periods of emergency that countries have restricted visible imports, not for either of these purposes, but in order to support the balance of payments. We all know occasions when this has been done, but we know that the times were then abnormal—they were times of financial crisis.

I trust that we are not accepting the position that, after the emergency of the next few years, it shall be a permanent part of our normal system to control the expenditure of private individuals on foreign travel in order to support the balance of payments. We are in danger of Whitehall considering it to be a part of its permanent duties in normal times to judge whether it is reasonable for a private person to spend more than a specified sum abroad. What kind of bureaucrat's prison are we now setting up for ourselves—prison from which we can only hope for occasional release on bail at the gaolers' caprice? There is a play in London now entitled "Is Your Honeymoon Really Necessary?" It has had a long run, but I hope it will not go on for eternity. Still more do I hope that Whitehall will not for eternity consider it a part of its duty to decide where a man may go, and what he may spend. I ask this Committee to treat this control of personal expenditure as a necessity of the next four or five years, not a permanent part of our system. I trust, too, that, when we speak of foreign travel, we shall not think of it in terms of mere holidays or joy rides. Foreign travel has been a vital element in the development of our own and the world's civilisatian, and civilisation will be impoverished if it is for all time to be allowed only so far as Whitehall thinks it desirable or necessary.

We may all admire the beauties of Scotland or Wales, but is Whitehall for all time to tell us whether we are to prefer these to the attractions of some other country? A few days ago the Foreign Secretary said he looked forward to the time when the citizen—

The Deputy-Chairman

I am sorry to interrupt the right hon. Gentleman, but we cannot discuss that question on this proposed new Clause.

Sir A. Salter

With great respect, Mr. Beaumont, I think it is a very serious argument for the limitation in time of this Bill. We are, as it stands, accepting a system under which, not for a short period but in perpetuity, our travel will be at the mercy of Whitehall and of the Treasury. Concluding this point, may I say that the Foreign Secretary gave us an alluring picture of the private citizen desiring to go abroad only having to go to Victoria and buy a ticket. The picture would have been sadly spoiled if he had said "a private citizen desiring to go to a scheduled territory."

Mr. Dalton

What is wrong with the Empire?

Sir A. Salter

Nothing, except that we shall find our affection for it diminished if, instead of choosing freely to travel in it, we are forced to go there by the Treasury.

I now come to my second reason, which I will give briefly, for regretting that this Measure is to be permanent. This is one more case, and perhaps the most extreme case, of a Bill being brought before us in the form of what is almost a blank cheque. We are asked to accept such Bills because the Chancellor of the Exchequer or other Minister concerned states the policy to which he intends to give support under the wide powers he asks. We may accept that policy as reasonable and believe in the sincerity of the Minister. But that is not legislation. An Act once passed continues in force till it is abrogated. It continues to provide power to succeeding Ministers who are not bound by their predecessor's statement of policy. I should for this reason have argued against the form in which the present Bill is drafted but for the fact that I realise that, in the particular circumstances of the moment and in order to deal with a problem such as that of Exchange Control, special and abnormal powers are required. I do not contest the validity of the argument that the Treasury must be able to act with great rapidity. But while I do not, for this reason, contest the general form of the Bill for this present emergency period, I think it the more necessary to limit a Bill in this form to the emergency. If, as Parliament, we are not to continue the process of losing our true legislative functions, we must have a definite date after which these wide emergency powers are terminated, and at which the Government of the day will have to direct their minds to the problem that remains at that moment, to consider the controls and the powers that are then needed. They can, and should, at that time introduce a Bill comprising the powers which are then needed, and only those powers, for the different needs of that time.

Mr. Birch

I wish to say a few words in support of the arguments which have been advanced by the senior Burgess for Oxford University (Sir A. Salter) and the hon. Member for Chippenham (Mr. Eccles). But I cannot say that I am in agreement with the remark of the hon. Member for Chesterfield (Mr. Benson) in regard to the Children and Young Persons Act. He seemed to argue that because we have always children with us we must always have exchange control. His argument was a non sequitur. I do, however, agree with him that the short term situation is extremely serious and we on this side of the Committee agree more with the President of the Board of Trade than with the Chancellor, at any rate in his expansive mood at Bournemouth. True, he put up the Financial Secretary on the Third Reading of the Finance Bill to say that it was owing to the Bournemouth air—lemonade, he said, had flowed like water and so forth—but the fact remains that the Chancellor on that occasion did make a number of loose statements, which are not true. If the present monetary policy is pursued in perpetuity, this Bill will be needed in perpetuity. But it is a long way ahead to 1951, and we do not know what the situation will be then. I would like to emphasise one point made by my hon. Friends, and it is this. The Bill creates a number of new crimes. The mark of a civilised State is respect for law. If there is to be respect for law, it has to be based on moral grounds or on habit, usage or prejudice. On the moral grounds, it is going to be very difficult to persuade people that it is wrong to travel abroad, and as my hon. Friend the Member for Chippenham pointed out, it is going to be difficult to persuade anybody that it is wrong to forgive a debtor, because he happens to live abroad. We are enjoined by our religion to do so.

Mr. Benson

This Bill deals with hard currencies.

Mr. Birch

This Bill forbids the forgiving of debts to all debtors abroad, except in the scheduled areas. There is great difficulty in building support for this Bill as far as usage and custom are concerned, because it is a complex Measure, largely dependent on administrative action to put it into force. One day £75 may be the sum which it is correct to spend abroad, another day it may be £150. So one cannot get any moral, or customary, ground to back up the argument that it is only right to spend £75. As pointed out by the right hon. Gentleman the senior Burgess for Oxford University the Government are continually passing these wide Measures and creating these new crimes. If one is a road haulier, for instance, it is going to be a worthy action to deliver goods 24 miles from one's garage, but if one travels 27 miles it will be a crime. That sort of thing is going to pull down our country. After all, in America, Prohibition, "the experiment noble of purpose," had to be given up because it caused disrespect for law. The experiment which hon. Gentlemen opposite are now making, the experiment ignoble in purpose, will have the same effect, and therefore the shorter the term put to it the better.

10.45 p.m.

Mr. J. Foster

I want to add my plea to those of my hon. and right hon. Friends who have preceded me. One of the main objections to the Bill's being made perpetual is that it is a crisis Bill, and exactly the same considerations apply to it as applied to the Supplies and Services (Transitional Powers) Act, which has- a time limit of five years. The Chancellor of the Exchequer, the learned Solicitor-General, and the Financial Secretary to the Treasury, all admitted that these were exceptional measures, and when measures are exceptional they cannot be, or should not be, continued in a Bill which proposes to make them perpetual. What makes it much worse in the case of this Bill is, that owing to the nature of the subject, the Bill is so flexible that it can alter its shape in five years without Parliament having any check on the change. At the end of five years, the Treasury and the Government may have altered all the Clauses of this Bill so that they will become unrecognisable, and we may continue under quite a different system. If it is crisis legislation, then at the end of five years the machinery should be overhauled to find out why there is a crisis and whether the right way of dealing with it has been followed in that period.

The hon. Member for Chesterfield (Mr. Benson) said the Bill did not allow the Chancellor of the Exchequer to do everything, because it excepted the scheduled areas. If he looks at the Bill, he will see that the Treasury can change the scheduled areas tomorrow. It can add to, or subtract from, them. Therefore the Bill does allow the Chancellor of the Exchequer to do everything with regard to the scheduled areas as well. A Bill which does that should, at the end of five years, be given back to Parliament to check whether the crisis legislation has been properly operated, and if it has not, then Parliament should be given an opportunity to change it, to alter the system and try some new development. Exactly the same arguments applied to the Supplies and Services (Transitional Powers) Act. It will be within the recollection of the Committee that the hon. Member for Chesterfield did mention children in seeking to draw an analogy from other legislation like that dealing with insurance and children. He said that that was not limited to five years. But that is what I might call beneficial legislation. That is legislation to improve the lot of children. It is not intended that at the end of five years we shall be free to be cruel to children. It is not intended that at the end of five years we shall be free to stop the insurance of insured persons. That is quite a different consideration. Therefore, I ask the Chancellor of the Exchequer whether some method could be found of giving Parliament some check other than that of having Orders which are liable to be laid before Parliament, but in regard to which we may find considerable exceptions under the Sixth Schedule. I would ask the Chancellor whether some means should not be found whereby Parliament can control the way in which this Measure is administered at intervals. It is not legislation for the general good of the country in normal circumstances, although I admit it is a Bill for the general good of the country, in peculiar and crisis circumstances.

Mr. Ronald Mackay (Hull, North-West)

I want to deal with some of the points raised by the senior Burgess for Oxford University (Sir A. Salter). The hon. Member for Northwich (Mr. J. Foster) suggested that this was "crisis legislation", and made the point that we should not make it permanent. That seems to be a new phrase. "Crisis legislation" was the legislation of the Defence Regulations of 1940. That was the argument used by the hon. Member for Chippenham (Mr. Eccles) in regard to the blackout. Such arguments do not apply, unless the basic conditions apply, and obviously the blackout is not necessary now. But provisions in regard to exchange control which obtained in 1940 are equally necessary now. Hon. Members opposite will not face the fact that the international aspect of the matter has changed and that because it has changed, legislation of this kind is necessary.

The senior Burgess for Oxford University referred to a book which he wrote, and which I read many years ago—and not only read but learned and inwardly digested. I was staggered when I heard him say that this Bill should not be given permanent form. His argument rested on two points, first that we were giving the Government a blank cheque, and secondly, in regard to the effect on overseas trade. The question of giving the Government a blank cheque turns on the legislation being enacted. We are trying to control a number of matters concerning movement of capital. The senior Burgess for Oxford University agrees that that is something which should be done, and he argued it in his book some years ago. Apart from movements of capital, there is the question of control of external trade. The fact is that the position has been changed in a way which is going to be permanent for quite a long time. [Laughter.] Well, is going to last for a very long time. It is essential that we should maintain secure machinery, adequate to deal with any changes which occur.

Resulting from external trade, is the balance of payments, Hon. Members on both sides of the Committee must acknowledge how serious the position is in regard to sterling balances. Arrangements have been made to refund them and in five years time, when hon. Members opposite want to end this Measure, we shall be faced with the ending of the American Loan. Remember, this is the first time this country has been put into a position of having to repay them. [HON. MEMBERS: "NO."] We shall soon be starting to repay the Loan. This makes the whole position entirely different, and makes it necessary to create machinery to handle the whole of the overseas trade position. The senior Burgess for Oxford University went on to say that the problem of overseas travel was so important, that we must at least make that free and that we should limit the operations of this Measure for that reason. I find it difficult to follow that argument. I have had my fair share of foreign travel and in the last 15 years, I have been round the world many times. I would join in any endeavour to see that facilities are provided to encourage foreign travel. But that is a very negligible percentage of the amount of control to be operated. I find it difficult to follow the argument that, because 10 per cent. of what the Bill is going to do is something we cannot limit in time, therefore, we should limit the whole purpose of the Bill. The hon. Member for Chesterfield (Mr. Benson) answered that argument perfectly, when he pointed out that this Bill is laying down the framework for exchange control, with which the senior Burgess for Oxford University agrees.

Sir A. Salter

Is the hon. Member arguing that the pound should not be convertible into hard currencies for current business transactions for a longer period?

Mr. Mackay

I am arguing that this is a question of fact: that it is not within our contemplation that it is going to be so convertible, and that without adequate machinery for control it could never become convertible.

Sir A. Salter

The hon. Member has forgotten for the moment the provisions that have been made with regard to the convertibility of sterling in the very near future.

Mr. Mackay

With the exceptions to which I referred earlier. I did argue about the balance of payments. That is one factor which makes the whole problem of our balance of payments all the more difficult at the present time. The senior Burgess for Oxford University will remember that I said the Government had said nothing about this at the moment. But with the position as acute as it is, not only as a result of the last war or of the one before that, but, probably, as a result of the changed economic conditions since the end of the nineteenth century, if becomes a more fundamental problem than many people are willing to recognise. With this changed position, I find it difficult to follow the argument that, because of the desire—great as it is, and though I sympathise with it—for currency to be available for foreign travel, the machinery of the Bill should not be made permanent.

The hon. Member for Chippenham raised the whole question of the currency position. He said we were making our position more difficult with the other members of the Empire within the scheduled territories. I wonder. I cannot speak for Canada. At least, I can, but Canada is outside the scheduled territories. Canada is the only Dominion which matters in the external trade and currency world. [HON. MEMBERS: "What?"] It is the only one that really matters. Australia and New Zealand have firmer exchange restrictions than are contained in this Bill. Of South Africa I cannot speak. But Australia and New Zealand have stricter, or just as strict, restrictions. To suggest, as has been suggested, that because the magnitude of their trade is a small percentage of the trade of this country, and that because of our relationship with those two countries, this should not be a permanent Measure, seems to me, again, to be entirely nonsensical.

The problem we have to face—and hon. Gentlemen are not facing it—is that we have to create, as a permanent part of our external economic machinery, some form of exchange control. The statement the Chancellor of the Exchequer made today on Clause 31 was complete evidence of the extent to which machinery was being left to the Treasury, to implement the general lines laid down in the Bill If one takes the view that the conditions of this country in 1946 are changed, that those changed conditions are going to continue because our economic position in the world has changed from what it was in 1914, then, as part of the normal machinery of the country, exchange control is necessary; and that being so, the general lines of it should be made permanent.

11.0 p.m.

Mr. H. Roberts

It is doubtful whether the Chancellor will be grateful for the speeches made in support of his case. Without doubt, arguments put forward by the Chancellor have been arguments, in general, of a crisis character, related to the present serious state of affairs, and very rightly so related. I think that all his arguments on foreign travel, and the amount of currency to be allowed, were crisis arguments; he was hoping that they would be relaxed later. It may well be that some parts of this Bill will have to be permanent, but it is wise that it should be reviewed by Parliament at the end of four years. Why? Because it is not at all a good thing for restrictions of this acute character to become embedded in our legal system and habits. That, to me, is quite sufficient argument, but I must at once say that—I have to make two points only—I take great exception to the suggestion that on this side of the Committee we do not realise our overseas position. In the course of my election campaign in the summer of 1945, and at every meeting I addressed, I told the people that this was not the time to look forward to a life of ease, and that the problem before the people of this country was how to keep alive for the next five years from then. I wonder whether hon. Members opposite gave as much prominence to the difficulties as I did. And, I would like to ask in conclusion, was it put forward by the Socialists as a great inducement to the electorate that, after the right hon. Gentleman and his colleagues had managed the affairs of this country for about 18 months, we should be told that the present state of restrictions was in future to be permanent, that that was to be our reward, and the reward of the country, for having entrusted our affairs to them? I know very well what promises were made, but if we on this side of the House did not make our protest for the ultimate decision in favour of liberty, we should be in the position of allowing indefensible permanent powers to be given up without a vote, and that is a responsibility I cannot take.

Mr. Dalton

Earlier in these discussions the view was expressed on the other side of the Committee that this ought not to be a permanent Measure, and a number of my hon. Friends, and I myself among others, asked the Opposition to say when they thought the Measure should terminate. We were unsuccessful in eliciting their view at that time; the right hon. Gentleman the Member for the City of London (Mr. Assheton), to whom the question was addressed, said, "You must wait until we put down our new Clause on the paper"—in other words, they had not then made up their minds. Since then consultations have taken place—not exactly through the usual channels, but in the usual pond—and I presume that out of their consultations has arisen this proposal. This proposal, which is what we are going to vote upon—we are not really voting upon an abstract question of eternal versus temporary arrangements, we are voting upon a positive and detailed proposal put forward by the Opposition—is that this Bill should continue in force for the same period as the Supplies and Services (Transitional Powers) Act, 1945—that is, for five years from 1945.

The proposal before the Committee is therefore that this Bill should terminate in 1950. The exact month of the year I cannot recall without checking, but I think it would be September or December, or some month in the latter part of 1950. I asked whether any particular date could be named, because it seemed to me that in regard to any particular date a differing answer would be made. The particular answer which has to be made in this case, has already been made by my hon. Friend the Member for North-West Hull (Mr. Mackay), who pointed out that it was just the time when we should have to be prepared to make the first payments on the United States and Canadian Loans. That is an eventuality for which we shall have to be prepared in due course, and I cannot think of any more ill-chosen moment for pulling down the national financial defences, which this Bill provides, than a time when our foreign exchange will be strained; I will not say strained to endurance, but subject to a heavy and long-to-be continued strain. Year by year, we shall have to put over unrequited payments to those in North America who have let us have dollars now. I am sure that whatever date might have been suggested, no time could be less easy to defend, in relation to these circumstances, than the date here proposed. Therefore, I say that this date is one which the Committee ought not in any circumstances to approve, even if, on other grounds, it was thought that there was a case for limiting the Measure to a temporary period.

As I have argued before, there is, in the view of the Government, an overwhelmingly strong case for not setting any limit in time for this Bill. Prevention is much better than cure, and we do not want to have to cure a serious financial crisis, which might arise in the future, if we financially disarmed ourselves in this fashion We shall need these defences, so far as we can see, for a long time ahead. We may hope that we shall need them with less urgency as the years go on, and that, as we recover our balance of trade and our economic life, we shall be able to diminish and undertake a certain measure of financial disarmament, and in due time we shall no doubt be able to lift the permitted totals for foreign travel, and in other ways greatly ease up. But this total financial disarmament which the Conservative Party are preaching in the realm of finance cannot be accomplished by realistic persons in any reasonable period of time.

I was reading the "Economist" the other day. I was chided on Second Reading for not quoting, among others who approved the Bill, the Editor of the "Economist." Of course, the "Economist" is not one of the stoutest supporters of the Government. It wobbles a bit, and it wobbles a bit in support of things which I do. It has not been a supporter of what is called the "budgetary and monetary" policy of the Government For that reason, it is no doubt regarded by some hon. Members opposite as being right in general. I try to view it objectively, from week to week, sometimes agreeing, and sometimes disagreeing with its comments on affairs. I notice, in last Saturday's issue, in dealing with this Bill, observations which are cogent and which put the case well—and it can put a case well, whether it is good or bad; and in this case it has put a good case well. It stated: In this particular sphere, since it is impossible to say when Britain's external position will be so strong that capital could be allowed to move as freely as it pleased—and since, even then control of capital under a Bretton Woods structure would be needed to protect the economy of others—it would be wholly unreasonable to put the Government of the day in the position of having to seek renewed powers at a denned date. For similar reasons there was never a possibility of writing into the Bill itself the actual system of exchange control. In this sphere, more clearly perhaps than any other, essential flexibility cannot be secured except by delegation of power to the authorities. That is regrettable, but it is also inevitable, as wartime experience has proved. The only available safeguard against bureaucratic abuses is the right of Parliament to discuss, and possibly to reject, the Orders laid before it; and this right is preserved in the Bill. I think that is an extremely good and clear statement of the case by an impartial organ, which has never been so complimentary to anything for which I was responsible since I assumed my present office.[...] events move on in our public affairs what makes the difference between the practical working of a permanent Measure, such as we are now proposing to put on the Statute Book, and a Measure limited in time, terminating in 1950 or 1951? In what political situation could we—I am not, for the moment, assuming a change in Government; I will consider that in a moment—be sure that when we get to 1950 or 1951, and we had to start afresh, all those who still have some constitutional powers would instantly respond to the need which we might think to be very urgent? Could we be sure of getting back the powers which would be lapsing? Of course we could not. We could not trust all the elements which would, in some degree, be influential in this matter.

On the other hand, if there has been a change of Government at that time, and if the party opposite have been installed in a majority, they can repeal this permanent Measure or, alternatively, introduce an amending Measure by which they could strip away this or that essential feature For the sake of continuity through a period of great difficulty—I will not say "danger," because that is perhaps an exaggerated word—when we shall need to have all our defences effectively organised for the protection of sterling, we should tonight say that this should be a permanent Measure. The Opposition will desire to vote against this Bill, as is their right and natural reaction following the expressions of opinion we have heard from the benches opposite. I offer them this consolation: if only they could win a General Election, if only they could get into training, if only they could win a by-election, if only they could save all their deposits, then the prospect would open out that this Measure, although permanent in form, might be temporary if they had the power to change it. That is the only consolation which I feel it proper to offer tonight. It is a prospective consolation, but I hope that although they will vote tonight, and be defeated, they will not abandon all hope of being able to reverse all those Measures of ours which they sincerely believe to be ill-advised.

11.15 p.m.

Mr. Stanley

As I wish, at this stage of the discussion, to save time, the right hon. Gentleman will not expect me to follow him in the more irrelevant parts of his speech. The question whether or not Dr. Joad shall or shall not contribute £150 to the Exchequer is not really one for discussion now. This is, of course, an important matter, and I think the right hon. Gentleman does realise that it is one on which two views can be held. In the first place, we all agree that there is need today, in the circumstances of the time, for exchange control of some character or another. We on this side may differ, and have differed, over some of the provisions in the Bill. But none of us would deny the need for a Bill which can substantially meet the situation facing us today. I should also be prepared to claim that while we all agree that there should be a Bill, none of us on this side is quite happy about this Bill. No one who has really followed the discussion can fail to realise the kind of situation which might be inevitable. But this is a situation in which a legislative Chamber lays down a series of propositions under which some customs or excise officer or some Treasury official will in fact exercise control over the consequences of any action that may be taken. None of us really likes a position of that kind, although from what I heard from the learned Solicitor-General during the course of the Debate he apparently translates salus populi as the convenience of a Treasury official. I think, however, we all agree on these two propositions—we have to have a Bill, and that this Bill may be inevitable now, but that none of us like all its provisions.

Now we come to the point on which we differ, the question whether the conditions which make a Bill of this character necessary today are such that we must regard it as a permanent act of legislation. The right hon. Gentleman has given his view, and he is well aware of the views expressed on this side. But he may not be so happy as to what has been said by hon. Members behind him, who have all spoken in tones of unrelieved pessimism. They are convinced that the Chancellor will not be able to do anything within the next few years to relieve the situation in which we are placed today, and that we must look forward for ever, not to a situation where we might have in reserve some major power to prevent big movements of capital, but to the operation of a Measure of this character which includes; power for the Treasury to inquire into every trifling transaction by everybody in this country. Perhaps it is not flattering to the Chancellor to know that that is the esteem in which his prospects are held by his own supporters.

In order to restore his sell-confidence, which may temporarily—but only temporarily—have left him, I will assure him that we take a more optimistic view. We believe that it is not impossible that within the next five years conditions may improve to such an extent that, not only will it be possible to sweep away all measures of exchange control, but a considerable amount of the detailed, petty control which is most of this Bill. If, in fact, there are prospects of some, and, perhaps, some considerable, amelioration in the next few years, we think it is right that it should be laid down that at a particular period Government and Parliament should look at this Measure again. I heard the hon. Member for Chesterfield (Mr. Benson) express almost childlike confidence in Government Departments. He said any Government Department, as soon as a power is no longer needed, will get rid of it. That has not been my experience. Government Departments once they are given powers always find it more convenient to continue with them. I should be prepared to assert that, unless something of this kind is put into this Bill, however great the improvement in the exchange position may be, we shall find that it will be for the convenience of the Treasury and of the Minister, and above all, for the convenience of the Chief Whip, that Parliamentary time should not be occupied by any abdication by the Treasury of powers that have become unnecessary. If hon. Members really believe there is a chance in the next few years that conditions will so improve, and not necessarily all controls could be abandoned, but a substantial relaxation could be made, the only way of ensuring that the Government and the House have an opportunity of reconsidering the matter, is to put this in the Bill now.

The right hon. Gentleman the Chancellor of the Exchequer has made great play about the date. He says the date we have selected comes at the time of the repayment of the first instalment of the American Loan. It does not really matter when it comes. It does not matter whether it is on this date, or the next year, or indeed on the date of the second instalment. That is a permanent trend we have to face, and one of the things which have to be taken into account when any review of the situation is made. It appears to me this point has not much validity. We selected this date because we regarded it as a period when the immediate effects of the war are most likely to have passed away and provisions which are purely transitional could therefore be abandoned. The right hon. Gentleman did call one very powerful ally to his aid. That was the "Economist." We hope that this is a habit which will now stiffen, and that he will be prepared on future occasions, as he has been prepared to do now, to listen to the advice of the "Economist." If he does, it will only strengthen the case for this new Clause, because it will create such a radical improvement in the Chancellor's financial outlook that our prospects will become brighter. I remember also reading a leader on the subject in "The Times"—which supports the right hon. Gentleman so long as he is a Member of the Government. "The Times"—I have not the copy with me and cannot quote the exact words—on the day on which this Bill was introduced, had a leader approving it and in general admitting its necessity. But it said exactly what we are saying now, and that is that the real proof of its success will be the rapidity with which the Government are able to dispense with many of the provisions in this Bill. It is because we want to see that test—because we want Parliament to see whether, in fact, many of these provisions are necessary after an interval—that we shall vote on this new Clause, believing that at the end of the period, the Government of the day should have to justify to the House of Commons of the day, the continuance of the very drastice powers taken in this emergency.

Division No. 33. AYES 11.37 p.m.
Agnew, Cmdr. P. G. Foster, J. G. (Northwich) Noble, Comdr. A. H. P
Amory, D. Heathcoat Fraser, Sir I. (Lonsdale) Peto, Brig C. H. M.
Assheton, Rt. Hon. R. Fyfe, Rt. Hon. Sir D. P. M. Pitman, I. J.
Astor, Hon M. Gage, C. Poole, O. B. S. (Oswestry)
Baldwin, A. E. Gates, Maj E. E. Prescott, Stanley
Barlow, Sir J. Gomme-Duncan. Col A. G. Price-White, Lt. Col. D.
Beamish, Maj T V. H. Grant, Lady Prior-Palmer, Brig. O.
Beechman, N. A. Gridley, Sir A. Ramsay, Maj. S.
Birch, Nigel Hare, Hon. J H. (Woodbridge) Rayner, Brig. R.
Boles, Lt.-Col. D C. (Wells) Harvey, Air Comdre. A. V. Reid, Rt. Hon J. S. C. (Hillhead)
Bossom, A. C. Holmes, Sir J. Stanley (Harwich) Renton, D.
Bowen, R. Hope, Lord J. Roberts, H. (Handsworth)
Bower, N. Hudson, Rt. Hon. R. S. (Southport) Robinson, Wing-Comdr. Roland
Boyd Carpenter, J. A. Hulbert, Wing-Cdr. N. J. Sailer, Rt. Hon. Sir J. A.
Braithwaite, Lt. Comdr. J. G. Hurd, A. Sanderson, Sir F.
Bromley-Davenport, Lt.-Col. W. Joynson-Hicks, Lt.-Cdr Hon L. W. Shepherd, W. S. (Bucklow)
Buchan-Hepburn, P. G. T. Keeling, E. H. Stanley, Rt. Hon. O
Carson, E. Lambert, Hon. G. Stoddart-Scott, Col. M.
Clarke, Col. R S. Lancaster, Col. C. G. Strauss, H. G. (English Universities)
Clifton Brown, Lt.-Col G. Legge-Bourke, Maj E. A. H. Taylor, C. S. (Eastbourne)
Cooper-Key, E. M. Lindsay M. (Solihull) Teeling, William
Corbett, Lieut.-Col. U. (Ludlow) Lucas, Major Sir J. Thomas. J. P. L. (Hereford)
Crookshank, Capt Rt. Hon. H. F. C. Lucas-Tooth, Sir H. Touche, G. C.
Crosthwaite Eyre, Col. O. E. Mackason, Brig. H. R. Turton, R. H.
Cuthbert, W. N. Maclean. Brig F. H. R. (Lancaster) Watt, Sir G S Harvie
Davidson, Viscountess Macmillan, Rt. Hon. Harold (Bromley) Wheatley, Colonel M. J.
De la Bère, R. Maitland, Comdr. J. W. White, J. B. (Canterbury)
Digby, S. W. Manningham-Butler, R. E. Willoughby de Eresby, Lord
Dodds-Parker, A. D. Marlowe, A. A. H. York, C.
Dower, Lt.-Col A. V. G. (Penrith) Marshall, D. (Bodmin)
Drewe, C. Mellor, Sir J. TELLERS FOR THE AYES:
Eccles, D. M. Mott Radclyffe, Maj C. E. Sir Arthur Young and
Erroll, F. J. Neven-Spence, Sir B. Major Conant.
Fletcher, W. (Bury) Nield, B. (Chester)
Adams, Richard (Balham) Clitherow, Dr. R Field, Captain W. J.
Adams. W. T. (Hammersmith, South) Cobb, F. A. Fletcher, E. G. M. (Islington, E.)
Allen, A. C. (Bosworth) Cocks, F. S. Follick, M.
Allen, Scholefield (Crewe) Coldrick, W. Foot, M. M.
Anderson, F. (Whilehaven) Collick, P. Fraser, T. (Hamilton)
Attewell H. C. Collindridse, F. Gaitskell, H. T. N.
Awbery, S. S. Collins, V. J. Gibson, C. W.
Ayrton Gould, Mrs B. Colman, Miss G. M. Gilzean, A.
Bacon, Miss A. Comyns, Dr. L. Glanville, J. E. (Consett)
Baird, J. Corbet, Mrs. F. K. (Carnb'well, N.W) Gooch, E. G.
Balfour, A. Corlett, Dr. J. Goodrich, H. E.
Barstow P. G. Cove, W. G. Gordon-Walker, P. C.
Barton, C Crawley, A. Greenwood, A. W. J. (Heywood)
Battley, J. R. Crossman, R. H. S. Grenfell, D. R.
Bechervaise, A. E. Dasgar, G. Grey, C. F.
Belcher, J. W. Daines, P. Grierson E.
Benson, G. Dalton, Rt. Hon. H. Griffiths, D. (Rother Valley)
Bing. G. H. C. Davies, Edward (Burslem) Gunter, R. J.
Blackburn, A. R. Davies Ernest (Enfield) Guy, W. H.
Blenkinsop, A. Davies, Harold (Leek) Haire, John E. (Wycombe)
Blyton, W. R. Davies, Hadyn (St. Pancras, S.W.) Hale, Leslie
Boardman, H. Davies, S. O. (Merthyr) Hall, W. G.
Bowden, Flg.-Offr. H. W. Deer, G. Hamilton, Lieut.-Col. R.
Bowles, F. G. (Nuneaton) Diamond, J. Hannan, W. (Maryhill)
Braddock, Mrs. E. M. (L'pl, Exch'ge) Dobbie, W. Hardy, E. A.
Braddock, T. (Mitcham) Dodds, N. N. Hastings, Dr. Somerville
Bramall, Major E. A. Donovan, T. Haworth, J.
Brook, D. (Halifax) Dribsrg, T. E. N. Henderson, Joseph (Ardwick)
Brooks, T. J. (Rothwell) Dye, S. Hewitson, Capt. M.
Brown, T. J. (Ince) Ede, Rt. Hon. J. C. Hobson, C. R.
Bruce, Maj. D. W. T. Edwards, N. (Caerphilly) Holman, P.
Burden, T. W. Edwards, W J. (Whitechapel) Holmes, H. E. (Hemsworth)
Burke, W. A. Evans, E. (Lowestoft) House, G.
Butler, H. W (Hackney, S.) Evans, John (Ogmore) Hoy, J.
Callaghan, James Evans, S. N. (Wednesbury) Hudson, J. H. (Eating, W.)
Chamberlain, R. A. Ewart, R. Hughes, Hector (Aberdeen, N.)
Champion, A. J. Farthing, W. J. Hughes, H. D. (W'lverh'pton, W.)

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 97; Noes, 233.

Hutchinton, H. L. (Rusholme) Nicholls, H. R. (Stratford) Stokes, R. R.
Hynd, H. (Hackney, C.) Noel-Baker, Capt. F. E. (Brentford) Strauss, G. R. (Lambeth, N.)
Jay, D. P. T. Noel-Buxton, Lady Stubbs, A. E
Jeger, G. (Winchester) O'Brien, T. Symonds, A. L.
Jeger, Dr. S. W (St. Pancras S. E.) Oldfield, W. H. Taylor, H. B. (Mansfield)
Jones, D. T. (Hartlepools) Oliver, G. H. Taylor, R. J. (Morpeth)
Keenan, W. Orbach, M. Thomas, I. O. (Wrekin)
Kenyon, C. Paget, R. T. Thomas, John R. (Dover)
Key, C. W. Palmer, A. M. F. Thomas, George (Cardiff)
Kinghorn, Sqn.-Ldr. E Parker, J. Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)
Kinley, J. Parkin, B. T. Thorneycroft, Harry (Clayton)
Kirby, B. V. Pearson, A. Tiffany, S.
Lang, G. Peart, Capt. T. F. Tolley, L.
Lavers, S. Perrins, W. Tomlinson, Rt. Hon. G.
Levy, B. W. Piratin, P. Ungoed-Thomas, L.
Lindgren, G. S. Plaits-Mills, J. F. F. Usborne, Henry
Lipson, D. L. Poole, Major Cecil (Liksfield) Viant, S. P.
Longden, F. Porter, E. (Warrington) Wadsworth, G.
Lyne, A. W. Pritt, D. N. Walkden, E.
McAllister, G. Randall, H. E. Wallace, H. W. (Walthamstow, E.)
McEntee, V. La. T. Ranger, J. Webb, M. (Bradford, C.)
McGhee, H G Robens, A. Wells, W. T. (Walsall)
Mack, J. D. Roberts, Goronwy (Caernarvonshire) West, D. G.
Mackay, R. W G. (Hull, N.W.) Robertson, J. J (Berwick) White, C. F. (Derbyshire, W.)
McLeavy, F. Royle, C. Whiteley, Rt. Hon. W.
MacMillan, M. K. (Western Isles) Sargood, R. Wilkes, L.
Macpherson, T. (Romford) Scollan, T. Wilkins, W. A.
Mainwaring, W. H. Scott-Elliot, W. Willey, O. G. (Cleveland)
Mallalieu, J. P. W. Sharp, Granville Williams, D. J. (Neath)
Manning, Mrs L. (Epping) Shurmer, P. Williams, J. L. (Kelvingrove)
Marquand, H. A. Silverman, J (Erdington) Williams, W. R. (Heston)
Mathers, G. Simmons, C. J. Wills, E.
Medland, H. M. Skeffington, A. M. Wills, Mrs. E. A
Mellish, R. J. Skeffington-Lodge, T. C. Wilmot, Rt. Hon. J.
Middlleton, Mrs L. Smith, C. (Colchester) Wise, Major F. J
Mitchison, Maj. G. R. Smith, H. N (Nottingham, S.) Woods, G. S.
Moody, A. S. Smith, S. H. (Hull, S.W.) Yates, V. F.
Morgan, Dr. H. B. Snow, Capt. J. W. Zilliacus, K.
Morris, P. (Swansea, W.) Solley, L. J.
Mort, D. L. Soskice, Maj. Sir F. TELLERS FOR ME NOES
Moyle, A. Sparks, J. A. Mr. Michael Stewart and
Murray, J. D. Steele, T. Mr. Popplewell.