§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Daines.]
§ 3.34 P.m.
§ Mr. Osborne (Louth)
I apologise to the House for bringing up the wide question of Anglo-American trade so late in the afternoon, and I am grateful to hon. Members for staying here at this hour. This question is one that would have deserved a really full House, because, of the many problems we have to face, I think this ranks as the most pressing.
Last week we had a Debate on the country's import programme, from which three important facts emerged. The Chancellor of the Exchequer agreed that our dollar credits were being spent at the present time at the rate of £800 million per annum. Between January and July this year, we had already spent £400 million worth of dollars, which means, as regards our trade, that we are buying from the dollar countries at the rate of £800 million per annum more than we are selling to them. My second point is that at this rate of spending, the dollar loan will be used up completely in about six months' time. That statement was made by the right hon. Member for Warwick and Leamington (Mr. Eden) and, as it was not contradicted by the Chancellor, I take it to be approximately true. The third point which arose from that Debate affecting this was that of our total imports no less than 42 per cent. came from the dollar countries—from America—and only 14 per cent. of our exports go there.
Therefore, unless something is done in the next six months and done with great speed—something very drastic—we shall be faced by Christmas with three things. First, we may be faced with mass unemployment owing to the shortage of raw materials. Secondly we may—I think we shall—be faced with a serious cut in our food rations. I am delighted to see the Paymaster-General on the Front Bench to answer this Debate. I would congratulate him on having had the courage, a fortnight ago, to warn the country that unless the production drive succeeded and the export drive also succeeded, there was a danger that our food would have to be cut by something like half. That is a statement that required great courage, and I wish more hon. Members on the Front 810 Bench opposite had the courage to make similar awkward, ugly, straight statements.
The third thing which we have to face is the danger that unless we can stop this huge gap of £800 million per annum the pound will come down to about 2s. 6d. value on the 1938 basis. Already, as the hon. Gentleman will know, dollars are being exchanged at three to the pound in New York, and the rate would be worse if it were not to some extent pegged by the American bankers. On these three grounds, I think that we are facing a real crisis, the urgency of which the average person in the street has no idea. I want the Government to do something not only to meet this, but also to make it quite clear to the average man and woman in the street that we face this great crisis. That is the gloomy side. May I for a moment give to hon. Members what I consider to be the better side of the picture?
What do the Americans feel about this. because there are always two sides to every bargain? When I was in America for eight weeks in April and May, I covered some 6,000 miles from Tennessee in the South to Chicago in the North, and I tried to see all classes of Americans—Congress men, business men, leaders of the A.F. of L. and C.I.O., ordinary people in the factories and streets—and one impression above all others with which I came back was that the Americans have a great feeling of sympathy for us in our difficult position. I think that they would do anything they could to help us, but what they say, wherever one goes is, "Are you doing all you can to help yourselves?" I think that that is a reasonable question for them to ask. The newspapers throughout America are almost unfailingly friendly towards us, and even the "Chicago Tribune," which has been anti-British for 40 years, is now being kind to us. If our position is made clear to America that some adjustments are necessary, they will be made. I find there is an appalling ignorance in America of our position here, nearly as great as the ignorance over here of what the American situation is. That is saying a great deal.
The attitude of the Americans as I found them was summed up by one of the leaders in Congress when he said, "What is it that we Americans can do to help you British to put yourselves permanently on your feet?" There are two controlling 811 ideas there—that we do it ourselves and that we do it permanently. Yesterday in "The Times" there was this statement:Talks have begun in Washington on the terms of the Anglo-American loan agreement and their effect on import of food and other supplies from British colonial territories.The British Government are in particular seeking to reach agreement on an interpretation of Article IX of the loan agreement which would place no obstacle in the way of their plan for increasing production in the colonies.Why is it that we have to gat important information like that from the American correspondent of "The Times"? Why was not some statement made in this House when these important negotiations started? First, I should like to ask, are they true; and secondly, if they are, when are we likely to have a statement on them? The correspondent goes on to say:The State Department has admitted that it is worried by the rapid consumption of British dollars and has disclosed that it is trying to find methods of slowing down the pace.That is one of the things which I want this Government to make clear to the British people. Our people at home ought to be worried but they are not, which is because they do not know.
"The Times" Washington correspondent further comments:It is considered certain that agreement will be reached to allow Britain and the non-self-governing colonies to be considered as one under the loan agreement. It is unlikely that the United States would take the next step and exempt the entire Commonwealth at this moment.Has the Minister any comment to make on those two important statements? Surely something could have been said in the House instead of compelling us to pick our information even from such a respectable newspaper as "The Times."
What I fear is that Article IX is being used as a smoke-screen or an excuse to hide our own difficulties. I do not think that that Article is a cause of our relative poverty vis-à-vis the Americans. On that I want to ask the Paymaster-General two important questions. The first is, what quantity of goods are now on offer in the Empire that we could buy that Article IX has prevented us from buying; and, secondly, what percentage of our total imports ape being affected in that way? If Article IX were entirely suspended, what statistical effect would it have upon our 812 position? I feel that before we ask the Americans to suspend Article IX we ought to put evidence before them and before this House as to what its effect really is. We ought to know the facts.
From my own limited observations in America I can say that if we were to state to the Americans that we wanted them to suspend Article IX for 12 months, the suggestion would have a good reception there. It is the American business man who will insist on Article IX being observed. and in the next 12 months he will have a sellers' market in the world, so he has nothing to fear. If we put our cards on the table I do not think we have anything to fear in regard to Article IX but we must know the facts. Both sides of the House will agree, I am sure, that if it is proved that Article IX really interferes with Empire trade, then, somehow or other, that Article will have to go.
The second point I should like to raise under that heading is this. Discussion is also taking place about sterling convertibility, and the excuse is likely to be made that this sterling convertibility will hinder us in making the recovery that we could otherwise make. I ask the Paymaster-General what it would cost if sterling convertibility were not interfered with at all. It has been suggested to me that in the first six months it would cost something like 600 million dollars, which is about one-third of what remains of our Loan. Could the Paymaster-General say something about those figures? Again, I believe that convertibility of sterling would not be a difficult problem for us if our facts were placed before the American people, and I should like to ask the hon. Gentleman whether the American Government have, in fact, been approached on these two subjects. If so, when are we likely to obtain some results and, secondly, are the Cabinet satisfied that the Central Office of Information in this country and the British Information Services in New York have done their part both here and over there to make the position known? If they have not, obviously something ought to be done.
Some hon. Members may say, "Do not get excited and worried about what appears to be a crisis. We shall be all right because we have the Marshall plan and that will save us." I think it would he a tragedy for us to take that view. First of all, we have not got the Marshall plan; 813 the American public may say "No." The Marshall plan is a magnificent gesture. When Lend-Lease was first introduced, my right hon. Friend the Member for Woodford (Mr. Churchill) said that it was the most unsordid act in human history. Surely the Marshall plan is doubly so? I am not casting any doubts upon the fact that it may come, but it is not certain, and what I feel about it is that we are much more likely to obtain the Marshall plan help if the Americans are convinced that we are helping ourselves l00 per cent. An ounce of self-help is worth a ton of help from outside and, therefore, it is vitally important that as far as possible we should stand on our own feet and should increase our export trade.
May I ask the Paymaster-General another question? It is often said that from this side we talk a lot of nonsense but do not ask questions, and I am now trying to disprove that. Are the Government satisfied with the drive, energy and productivity of those engaged in the export trade? If they are, I am not, and I do not think that any American who reads this publication—the Monthly Digest of Statistics for June—could be expected to be so satisfied. In this June issue, which is the latest available, it is stated that the total volume of exports for the first quarter of this year from January to March was 100.5 per cent. compared with 1938—just a tiny bit more than we exported in that year. But according to the Government's own figures the numbers employed in getting that work done are these: in 1938, 930,000 people were employed in the export trade and in March of this year no fewer than 1,440,000. This means that 55 per cent. more English people were engaged in the export trade to produce the same amount of goods as were produced by 930,000 people under what hon. Gentlemen opposite like to describe as the inefficient Tory administration.
I can see one Minister on the Front Bench opposite giving advice to another, and I can almost hear him saying, "Of course, it was bad weather. We could not export." Let us take the previous quarter, where there is no such excuse. In the last quarter of 1946, when the weather was good and was no hindrance to exports, the volume of exports from 814 this country was 110.8 per cent. of those of 1938. The number of people engaged in the trade in that quarter averaged 1,440,000 as against 930,000 prewar. Even in that quarter there were 50 per cent, more people engaged in the export trade and they produced only 10 per cent. more in the volume of goods. It is fair to say that that is not a satisfactory state of affairs. Are the Government satisfied with their own figures? Have they looked into them, or do they think that we are entitled to go to America and say, "Please give us the Marshall Plan, please give us another loan, but we shall want three men in England to do the work two used to do in 1938"? The one thing these figures show above everything else is that the restricted 40 hour-week has failed and that the sooner we get away from it the better.
The Government have men who write and speak and apologise for them. In the "Daily Herald" this week, on this very question, I read an article by the hon. Member for Devonport (Mr. Foot). First of all he quoted this:The Washington correspondent of the 'Observer' reports that Britain would get more sympathy if to Americans she seemed to be showing more determination to help herself.The hon. Member objects to that. I can see no reason for objecting to it. Surely the Americans are entitled to say, "You must help yourself first before we are prepared to come and help you still more." Later on he threw a gibe at my right hon. Friend the Member for West Bristol (Mr. Stanley). He said this:…or perhaps the Americans have been listening to such spokesmen as Mr. Oliver Stanley. He, after all, is perhaps the most intelligent Tory on the Opposition Front Bench.What does. he say? This is the quotation:'I am not sure,' he said in a speech at the week-end, that America will be prepared to work six days a week in order that the people of this country should work five days or four days a week.'The hon. Member for Devonport objected to that. Is there an hon. Member opposite who expects the Americans to work six days a week in order that we may produce the footling, disgraceful figures which the Government have produced? I hope not. It is a good old rule, even in the Labour Party, that God helps those who help themselves. At least, it seems so by the 815 new people who come on to the Front Bench. I therefore make the plea that we should show to the Americans in our export drive that we are doing everything in our power to help ourselves. Those who object to this attitude should at least remember what has been said by three of their spokesmen in the last 10 days. The Minister of Fuel and Power has been saying that certain of his miners are not doing what he considers to be a fair week's work and he has gone so far as to threaten them with imprisonment. Mr. Deakin, who is the boss—the gauleiter—of one of the biggest trade unions, has gone so far as to threaten conscription. All this is showing—
§ Mr. Blackburn (Birmingham, King's Norton)
I agree with a great deal of what the hon. Member for Louth (Mr. Osborne) says, but I must appeal to him to abandon this phraseology and not to refer to Mr. Deakin as a gauleiter. We know Mr. Deakin and we know that he is a fine democrat and a person with whom we are proud to be associated.
§ Mr. Osborne
On that ground, Sir, with your permission I withdraw the remark. I do not wish to attract any of your scowls of disapproval, Sir, so may I finish by saying that I feel that by Christmas this country will be facing such a crisis that very few people in this country can imagine what will possibly happen, and our only hope is somehow to close that gap of 800 million sterling, for the 42 per cent, imports that we are now getting from America. I do not know where else we can get them from—
Mr. Richard Adams (Balham and Tooting)
May I interrupt the hon. Member? In view of the fact that he stated quite clearly the necessity for closing that gap—and I have listened carefully to what he said—why did he vote against the proposition of the Government last night to make a start on closing that gap by reducing our imports of newsprint?
§ Mr. Osborne
That is an interesting question. The answer is, because it was footling and piffling. It is typical of what the hon. Gentleman's party are doing. They are playing with a serious and tragic position. They are wanting to save £2 million out of 800 million. They are fooling the people. That is why I voted against them. I would not 816 vote against them if they would do something they ought to do, something really drastic—
I take it, then, that the hon. Member believes that to make a start on saving £800 million by saving £2 million is foolish. I cannot follow that logic, but where does he propose to make the cuts?
§ Mr. Osborne
To start with a cut of £2 million when you have to save £800 million is just playing with the thing.
§ Mr. Adams rose—
Will the hon. Member forgive me for just one moment? It has been made perfectly plain by the Chancellor of the Exchequer, the President of the Board of Trade and other Ministers, that this cut in newsprint was only the beginning of other kinds of cuts that will have to be made later on. It has been made perfectly clear on a number of occasions.
§ Mr. Osborne
If the other cuts are to be made, why in the name of goodness, were they not all made together? What vested Socialist interest is the Cabinet afraid of?
§ Mr. Beverley Baxter (Wood Green)
I wonder if my hon. Friend will allow me to interrupt? I am not quite certain, Mr. Deputy-Speaker, whether the procedure allows me to assist my hon. Friend in answering the interjection. May I point out to the hon. Gentleman on behalf of my hon. Friend that, by cancelling at the present time the Canadian contracts to supply us with newsprint, we shall shortly have to pay far more for our newsprint that we did before, and this cut of £2 million means a financial loss of the biggest description.
§ Mr. Osborne
That is getting away from my point. [Laughter.] I do not regard this as a laughing matter. I feel we are faced with a crisis, and if this Adjournment Debate does nothing else than draw attention to that crisis, the time will not be wasted.
I want to ask the Paymaster-General whether all Government Departments are doing all they can to attract American industrial capital on long-term investment 817 into this country, because I think that is one of the greatest ways in which that gap will be closed? In the 19th century we sent our exportable surplus over to America and developed it there; now, Americans have to do the same thing over here. When I was in New York I tried to induce one great textile combine to bring over here their machinery, their technical knowledge, their raw materials, their working capital. That would have found work for our people, it would have given us exports, it would have helped us. I was asked these two questions which I present to the Paymaster-General: will this Government guarantee to such American industrialists, if they come here, that they will be permitted to take their profits in the way of dividends back to America when they have earned them? That is, will the Treasury allow them to take over the fruits of their earnings? Second, I was asked this: could it be guaranteed that the Socialist Government would not confiscate their assets once they had been well-established over here? Unless the Government give a "Yes" to both of those questions, American industrialists will not come here and establish their businesses. I would like the Paymaster-General to give a complete and unequivocal answer to that. Finally, I would urge upon the Board of Trade, in so far as they can, to encourage all business men in this country who can export to America to go over there to investigate the markets for themselves, to make as many goods as possible, and to see that "Made in.Britain" remains the mark of the finest and the best article. If they will do that, it will help in a small measure to fill that gap. If we do not fill that gap, I think it is, God help this country.
§ 3.55 p.m.
Mr. Richard Adams (Balham and Tooting)
I had no intention of intervening in the Debate, but I came along out of interest to hear what the hon. Member for Louth (Mr. Osborne) had to say. I must say his observations today were perhaps more economically sound than some of his previous utterances in the Chamber. There are a number of points he made which I would like to take up, and which might perhaps assist the hon. Member to understand some of the difficulties of the situation at the present time. He said, in the first instance, that he was surprised to find 818 that 42 per cent. of our imports came from America, and that we were only exporting 14 per cent. I think if he looked up any commercial geography of the days before the war, he would find those figures were approximately correct in those days—
—that that was so, and said that those figures should be altered in some way. It is most unlikely that those figures could be drastically altered in a normal economy, for the simple reason. as the hon. Member should know, that they were the kind of figures which operated before the war. We imported our food and raw materials from America, and distributed finished goods to the rest of the world, for which we got the money with which to pay for our imports from America. That is one of the reasons why it is necessary to get world trade moving again. Until we get world trade moving again, there is no way out for this country. That is why the President of the Board of Trade has been emphasising time and time again the need for getting trade going again, in order to restore the balance.
§ Sir Wavell Wakefield (St. Marylebone)
Surely one of the reasons for the difficulty which this country and the world experienced in the years between the two wars was the fact that the United States of America put up high tariffs, and would not receive back into the country the finished goods this country could send to America, if America had not put up high tariffs. If those high tariffs were only allowed to come down, we could send more finished goods there, and purchase more goods from there more easily.
I think the chance of this country competing successfully in America on a wide range of manufactured goods is pretty remote.
§ Sir W. Wakefield
There is a very large market indeed for specialised goods. I agree we cannot compete on certain mass-produced goods, but we can compete in specialised goods, and there is a big market for them.
I said in a wide range of manufactured articles, and naturally I had in mind the mass-produced articles on which America compares—to put it mildy—very favourably with ourselves. I do not deny that there is a market for specialised articles, textiles, whisky, and so forth, but the whole range of articles they would be prepared to accept in a perfectly free market, would not be sufficient to balance our imports of 42 per cent. We would have to make up the difference between what we take from America and what we give America by the balance of trade with the rest of the world. Our only hope is by freeing the whole world trade. While we are talking about American tariffs, I think we must be thankful that the Americans altered their attitude on that subject during the war. The whole conception of Bretton Woods, the International Bank and the International Fund is to get international trade moving on a satisfactory basis. Until that is done there is no hope of altering the present situation satisfactorily. It can only be done by cutting down our imports, which nobody desires.
I listened to what the hon. Member had to say about the fear of mass unemployment and about the drastic cuts which would have to take place before the end of the year. I interrupted to ask him how he voted last night. I cannot see how any Members of this House can vote against a very small reduction in the imports of newsprint into this country when they themselves say the following day that they know that there must be drastic cuts in the import of raw materials and food. I hope that in due course they will go to the country on that issue, that they would rather continue to bring newsprint into this country and cut down imports of essential raw materials and food.
§ It being Four o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Hannan.]820
§ Mr. Baxter
Before the hon. Member leaves the point about the vote last night, I wonder if he would answer this point, which the Minister of Health refused to answer, that is, that by going back upon our signed word with the Canadian pulp manufacturers and newsprint suppliers we are destroying the security of that market, and this £1 million saving will result in a vast increase of dollar expenditure in the future and be a cause of insecurity for our newspaper suppliers? Will the hon. Member answer that or will he continue with this parrot repetition about last night's vote? Will he explain his own vote, in view of that?
While I am gratified that I should be asked to answer something which the Minister of Health is stated to have been unable to answer, I should be ruled out of Order if I went into the technicalities of the basis on which that contract was made and of the basis on which the curtailment is being arranged. Perhaps on some other occasion we might discuss that.
Again, I would say I am greatly flattered by the suggestion that the next regime will be found on this side of the House. It shows that the hon. Member has no hope that it will be found from his own side.
If I may return to the matter under discussion, the hon. Member for Louth was worried about the rate of consumption of dollars, a matter about which we are all concerned. He did not go on to explain why that rate of consumption had been increased. The obvious reason is that American prices have risen considerably since the loan was made, and if we want to buy anything like the quantity of goods we had in mind when the loan was made it is obvious that the rate of drawing from the loan has to be increased.
§ Mr. Osborne
It is not with what has happened in the past but with what we are to do in the future that we are concerned. Speak about the job in front of us.
The hon. Member said he is worried about the rate of consumption of dollars. I should think it is important, since he implied many times during his speech that the Government were responsible for the present situation, that we should understand that the rate of consumption of dollars has increased, first, as I think is accepted by everybody, because of the higher internal level of prices in America since the loan; and second, because of the slower rate of recovery in Europe compared with what was expected a year or two ago. One of the reasons why we cannot restore our trade position is this vacuum which still exists in Europe and the rest of the world. That is the reason for the Marshall plan being put forward. It is to fill that vacuum. The Americans realise as well as we do ourselves that the whole conception of Bretton Woods and the International Bank cannot operate in the world conditions of today. We must get international trade working freely, and that is quite impossible with the quagmire which we have in Europe at present. Until that quagmire is filled with the help of American dollars, through the Marshall plan, we cannot hope to get back to a reasonable state of world trade.
The same thing applies to sterling convertibility about which the hon. Member was worried. The arrangements regarding the convertibility of sterling were made on the assumption that by July of this year world trade would have been well under way again. In fact, events have not turned out that way. Therefore, there must be fresh discussions on sterling convertibility. Since the hon. Member was so concerned about the present situation and implied—
I have said, time and again, during my brief remarks that we are all concerned. But there is a difference between being concerned about the situation with a genuine concern to get the country on its feet again, and, by implication, suggesting that the Government are not handling it properly. I am sorry to see the hon. Member for King's Norton (Mr. Blackburn) taking the view that he 822 does on this matter. I would remind the hon. Member for Louth that the present situation is caused chiefly by the ending of Lend-Lease after the war. Since he raised the question of this present crisis, I would remind him that it largely arises because of the failure to have proper termination clauses in the Lend-Lease Agreement. At the time of the Agreement it was visualised that, when the end of the war came, this country would need some time in which to recover. Lend-Lease was not a one-sided arrangement. It was not a gift from America to ourselves. Under the financial arrangements we ran our industries down quite voluntarily. We wound down our export industries on the assumption that after the war, we would have a proper opportunity to set ourselves on our feet again.
There are many other points which I could raise in connection with the hon. Member's speech, but I know that other hon. Members want to take part in the Debate. Whilst I recognise his anxiety about the present situation, an anxiety which we all share, I ask the hon. Member instead of talking so much about this country helping itself and the fact that we must not be dependent on American help, to realise what this country went through during the war years and to remember the contribution we made towards winning the war. We have a right to expect help from outside, not out of kindness but as a proper contribution to the winding-up of the war arrangements.
§ 4.9 p.m.
§ Mr. Turton (Thirsk and Mahon)
I think we have had an unfortunate apology from the hon. Member for Balham and Tooting (Mr. R. Adams), because he said.that this country has not got scope for quality production. I believe that to be entirely wrong. I believe that there is a great export market for quality production. Secondly, he tried to wriggle out of the breach of faith and the breach of contract involved in the newsprint cut. I do not propose to go into that question.
§ Mr. Turton
Because the Minister must have plenty of time in which to reply. I want to deal with one point in connection with the balance of trade with America. I refer to the position of dried eggs and maize. I am strongly of the opinion that 823 we can no longer afford to spend £5 million in five months or, I believe, more than £12 million a year on dried eggs. Equally, I believe that we could produce the eggs for the housewives by getting maize from America. America has a surplus this year of six million tons of maize compared with last year. This House has never been told why the Government have not gone to America and said, "We cannot afford to spend these large sums on dried eggs, but we must buy maize so that we can produce the eggs at home in the form of real eggs." I hope that the Minister will explain the position.
The other point I wish to, raise is on the question of Article IX. It is quite clear that the whole of our trade is being hampered by Article IX of the American Loan Agreement; not only our trade with our Colonies, but our trade with our Dominions, and also our trade with those countries in South America that are anxious to trade with us. They have not got sterling balances, and equally they have not got dollar balances. This report that has come out in the papers today that the Government are merely trying to have Article IX revised in so far as it deals with our trading with our Colonies, is doing a great deal of harm. Of course, we want to revise it in respect of trading with our Colonies. It is most important that we should encourage that trading by revising Article IX, but it does not carry us sufficiently far. We want to have that Article IX—the non-discrimination article—applied generally over the whole scope of trading with our Dominions and with the South American countries.
How far have the Government worked out their plans for seeing whether we can get bilateral agreements in order to encourage trading? I know they are in difficulties over that, in view of the proposals for world trade at the Geneva Conference. But unless we look at this realistically, to see whether some countries are being prevented from trading with us because we cannot trade with them owing to Article IX—unless we tackle that question—I do not believe we shall get out of our economic difficulties as quickly as we otherwise would. I will put it like that. Whether under this Government or another, I am sure this country is determined to get out of this crisis, if only whoever are the Govern- 824 ment will give us the lead. We are not receiving that lead today.
§ 4.12 p.m.
§ The Paymaster-General (Mr. Marquand)
I think that the large number of hon. Members who wish to speak proves the intense interest which this House has in this subject. Despite the fact that we have debated it quite recently, there is a number of Members who wish to speak. I do not wish to intervene to prevent them from doing so, but at the same time I feel that if I do not get up now, perhaps, the hon. Member for Louth (Mr. Osborne) who raised the topic may feel that I shall not have sufficient time to deal with some of the points he raised I must say that we did have, a comparatively few days ago, a long Debate on the world balance of payments in general, and on the United Kingdom balance of payments in particular.
It was a Debate caused by the announcement by the Chancellor of the Exchequer of cuts in imports. Both he and the Lord President of the Council dealt very fully at that time with all sorts of wide, general questions affecting our balance of payments, and they pointed out that this is a world crisis. It would be an extraordinary thing if this afternoon, so shortly after that Debate, speaking late on a Friday afternoon, I were suddenly to make some new announcement about Article IX and matters of that kind. I cannot think that I can be expected to confirm or deny any statements which may have been made in the Press of this country or in the United States of America. Nor can I say anything about consultations with, the United States of America on the question of Article IX.
§ Mr. Erie Fletcher (Islington, Last)
Will my hon. Friend make it quite clear to the country whether the discussions going on relate to the interpretation of Article IX or to the revision of it?
§ Mr. Marquand
I have not even said that discussions are going on. All that I would say is that it is well known that we are, naturally, in constant touch with the American Government on all these important questions, and I really do not intend—and I think I cannot fairly be expected—to say anything about this 825 wider question this afternoon. I well remember a speech by a colleague of mine on a Friday afternoon which was subjected to a great deal of criticism because he chose at that particular time to make an important statement. But I will refer quite shortly to some of the points—and there are a great many other points—which have been raised. Of course, the hon. Member for Louth was quite right in saying that the first six months' drawings on the United States and Canadian Loans were at the annual rate of £800 million—that is to say, £400million were drawn in the first six months—and that there was £955 million worth of the loan in hand at the beginning of 1947.
The hon. Member then asked whether the statement by the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), that at this rate the loan would he exhausted at some particular date, was a correct one or not. I really do not know. I have not bothered to examine his arithmetic. Quite likely, at this rate, his statement was a correct one, but we do not have to assume that the loan will be continually drawn on at this rate. What we have to ask ourselves is what are the conditions which determine the length of time the loan will last us. My right hon. Friend the Lord President of the Council has already explained in public—and it has been widely published in the newspapers—that by his remarks about the clock striking in the autumn he did not mean that the loan was going to be exhausted in the autumn. Surely, the length of time the loan will last will depend on a great many factors, of which the principal is the rate at which we import. It is necessary, in these circumstances, for hon. Members on both sides of the House to realise and impress on the country the necessity for a most careful scrutiny of all our imports, and for keeping them down to the minimum, consistent with the health, safety and welfare of the country.
§ Mr. Blackburn
While I agree with that entirely, surely the people are entitled to know the truth, and to have a reasonable estimate from the Government now on this vitally important matter of when the loan is going to run out; otherwise people will not know why they have to work harder?
§ Mr. Marquand
No one is going to say that on such-and-such a date in such 826 and-such a month the loan will be gone, for the reasons I am trying to explain. First, it depends upon the rate of our imports. It is necessary to keep these very closely under review. I cannot say precisely what are the intentions of the Minister of Food in regard to dried eggs, which were apparently so very desirable when Sir Ben Smith was in office, and are so undesirable now that my right hon. Friend is in office.
§ Mr. Osborne
It is important that we should know what is going to happen. Surely the very basis of planning is that we should be able to plan ahead, and without having an estimate, we cannot do that.
§ Mr. Marquand
It depends on the rate at which we import, and it depends on the course of import prices. Import prices have been moving very seriously against us, which has increased our difficulties, and that is in fact the main cause of the acuteness of the present difficulties—the upward movement of world prices of raw materials and foodstuffs, particularly the upward movement of dollar prices. If dollar prices rise at this rate, the purchasing power and the real value of the dollar is surely declining. The hon. Member need not be alarmed about some black market prices for sterling in a limited black market in New York at the time when the purchasing power of the £ is remaining more stable than the purchasing power of the dollar. The length of time the loan can last depends upon the extent of the import restrictions imposed by those other nations to whom we wish to sell our exports, as a result of their own shortage of dollars. It is very difficult at the present time to estimate the exact incidence upon our ability to export of these various restrictions which have been put on quite recently.
In general, the extent of the time we can rely on the loan depends on European recovery. It depends very much on the kind of harvest which is reaped this year in Europe and, indeed, all over the world, and upon our ability to obtain grains from Europe and to feed Germany from European and not from dollar sources which, again, is not quite certain at the present time.
§ Mr. E. Fletcher
Are we to assume from this that we are committed to feeding Germany for an indefinite time?
§ Mr. Marquand
Somebody has to teed Germany, and the feeding of Germany has to come out of the total resources of the world. If the corn and grain have 'o be used from dollar sources it will be more difficult for us to obtain the necessary grains which we ourselves require whoever pays for it
§ Mr. E. Fletcher
Would not my right non. Friend agree that a great many people think that the time has now come when we should limit our responsibility for feeding Germany from our limited dollar resources?
§ Mr. Marquand
My hon. Friend knows perfectly well that I do not intend to answer questions of that kind this afternoon, for the reasons I have already given. The length of time that ale loan will last, and the extent to which we have to rely on the dollar credits obviously depend in turn, in a large measure, on our own ability to export goods in payment for our necessary imports. I want to deal with this as my final point and at some length, because the hon. Member asked several questions on the subject. He asked about the figures of the numbers of persons returned as employed in the export trade as compared with the movement of the volume index. In a Debate quite a long time ago, I tried to explain that those figures cannot very easily be compared because the numbers of persons employed in the export trade are confined to the manufacturing industry, whereas the exports upon which we base the so-called volume index include all exports, including those drawn from the non-manufacturing industries. In 1938, that included a very considerable quantity of coal. In short, the figures need to be interpreted with a good deal of care.
I will not attempt a lengthy exposition of what exactly we mean by volume. It is obvious that we cannot add together tons of coal and bottles of whisky, so that the volume index is in fact a value index corrected for the movement of prices but it relates to a quantum of exports, including coal, whereas the labour index refers only to manufacturing industries.
§ Mr. Marquand
I should prefer not to do so, because I have only seven minutes left. The hon. Gentleman asked whether we were satisfied with the vigour of the export industries, and there I want to say a word about what we have tried to do to increase our exports to the dollar markets. Last autumn my right hon. and learned Friend the President of the Board of Trade held a special meeting with the Federation of British Industries and other bodies fully representative of the export trade. He devoted two sessions specially to the consideration with them of ways and means of increasing the volume of exports to the dollar markets in view of the approaching dollar shortage which he could then perceive.
I want to assure the House that a great deal has been done in this matter of trying to increase the proportion of our exports which go into the dollar markets. I am glad to say that in the United States of America we have extremely able men on the commercial side of the foreign service. Hon. Members will be familiar with the name of Sir John MacGowan, and there are on his staff extremely able people who have devoted a great deal of time and attention to special surveys and studies of the dollar markets. I myself sent out the permanent head of the Overseas Trade Department to make a study of our organisation in America and Canada in order to be sure that it was ready to assist us in this drive. Later, special civil servants were sent to study the markets of New Orleans. Chicago and those around the Pacific Coast, because we felt that in the past they might have received insufficient attention from British traders who had been apt to concentrate very much on New York.
A great deal of information about these dollar markets is now available at the Board of Trade for the use of manufacturers. We believe that many hundreds of British firms are concentrating on this effort to expand their trade in those markets. I am glad to say that they are receiving a great deal of co-operation from the other side. Is it generally known that the United States Department of Commerce has itself set up a special importing department to encourage import of manufactured goods into the U.S.A.? I would like also to pay tribute to the work done in London by the American Chamber of Commerce which has set up,a similar com- 829 mittee to explain to British firms in England the opportunities for sales in the dollar market. I would also refer to the special efforts which we have made to encourage visits by American tourists as well as, of course, other tourists to these shores. As I mentioned in another place before I came to the House this afternoon, we estimate that 140 000 foreign tourists came to this country during 1947 up to the end of June. We fully expect that tit? target which we have set ourselves for foreign tourists will he met this year.
§ Mr. Baxter
Can the non Gentleman give an estimate of the average length of the visits of these tourists?
§ Mr. Marquand
I have not the figures at the moment. The hon. Member for Louth referred to the possibilities of American investment in this country, which is a potentially important element of this problem and I can say that we do not turn a deaf ear to American firms who wish to consider the establishment in this country of new undertakings. We apply to them the same principles s we apply to British firms wishing t) set up new undertakings, and already several American enterprises have been located in the Development Areas. The same sort of conditions will apply to them as apply to British concerns.
With regard to American investments in another form, namely, in obtaining holdings in British enterprises, obviously, that matter has to be approached with a little more circumspection for reasons on which, I am sure, both sides of the House would agree. Even now there is certainly no prohibition. As for any fears which American investors may have about inability to withdraw dividend or interest payments from this country, I wish to say very definitely that they need have no 830 such fears. Throughout the war, we upheld the principle of allowing the dividends of investors overseas to be remitted to them in their own currency. We hope that we may be in a position to continue to observe that principle.
Lastly, I must refer to the plea of the hon. Member for Louth that our own people and the American people should know of our position. "What do the American people know," he asked, "about the state of things in this country?" I hope that they are being told the truth about our achievements. So far as we can through Government agencies we give this information, but it should not only be done through Government agencies. Indeed, what is done through Government agencies is always to some extent suspect. I hope that every hon. Member who goes abroad and every businessman who visits the U.S.A. will tell the story of the proud achievement of our people during the last two years. I hope that they will be told that this country has suffered the burden and strain of two world wars, in which she mobilised more of her manpower than any other country in the world. Already she has remobilised seven million people from war production to peace production. They are happy and harmoniously at work, with a lower record of industrial disputes than ever before in our history, and one unparalleled in any other country. Our coal consumption is higher than it ever was, despite all the difficulties. Indeed, part of our difficulties are caused by the prosperity of our industry, and I hope, and know, that the British people and the British Government are determined that it shall remain prosperous.
§ It being Half-past Four o'clock, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.