HC Deb 30 June 1947 vol 439 cc958-66
The Chancellor of the Exchequer (Mr. Dalton)

As is usual at this time of year, His Majesty's Government have been giving careful consideration to the import programme for the 12 month beginning on 1st July. This programme must be related to the needs of our own people on the one hand and to our external balance of payments on the other Owing to a serious rise in world prices of food and raw materials and to the disappointingly slow rate of postwar recovery, both in Europe and Asia, a severe shortage of dollars is making itself felt in almost all parts of the world. In particular, our own line of credit under the Anglo-American Loan Agreement is being drawn upon much more rapidly than we expected. It is our clear duty to take further steps to close the gap between our necessary imports and our exports, especially to hard currency areas.

While the present discussions are proceeding upon the general economic situation of Europe it is not possible for His Majesty's Government to arrive at any final decision as to the import programme for the coming year, but they feel it necessary, nevertheless, to make certain adjustments to meet the existing situation. The guiding principle which they have adopted in framing this programme is to sustain the productive power of Britain, and, therefore, to safeguard, in the first place, those imports which are essential to the health and strength of our people, to their full employment and to the efficient equipment of our industry. To do otherwise would not only weaken us, but would hold back recovery in Europe and elsewhere.

While, therefore, we shall not be able to afford all the imports of foodstuffs for which we had hoped, His Majesty's Government have decided to maintain, and, indeed, in some directions slightly to increase, the volume of these imports, as compared with the year which ends today. Owing to the unexpectedly large rise in prices this means that a substantially larger sum, in terms of foreign exchange, will have to be found for food imports in the next 12 months. But in some cases imports may be restricted by shortage of supplies, and the possibility of cuts in particular foods, including rationed goods, cannot be ruled out. We count, however, on increased imports of animal feedingstuffs and fertilisers, and on rebuilding some of our stocks which have run down very low.

Food, raw materials and machinery must have first place in our import programme. There must be some limit to the expenditure of hard currencies upon raw materials, but any necessary economies will be so designed as to cause the minimum of difficulties to our industry. We shall continue to find foreign exchange without restriction for machinery essential for our industrial re-equipment. On the other hand, we must achieve economies in less essential imports. There will be a substantial reduction in imports of tobacco. We shall reduce our imports of petrol, and there must be economies in the allocation to the Armed Forces, and in consumption for commercial purposes. Some restriction of supplies of newsprint is unavoidable, which will render it necessary to return temporarily to four-page newspapers. I am also asking the House to give me power to levy an import duty on films, so as to enable me, if necessary, to economise foreign exchange under this head. Some reductions will also be made in the comparatively small volume of imports of consumer goods other than food.

In order further to reduce our adverse balance of payments, we must make available for export an increasing proportion of our production, especially of those goods which can find a market in hard currency areas. This applies, in particular, to our textile industries. The Government regret that this should be necessary in the existing circumstances, but they hope that, with the good will and co-operation of all those engaged in the textile industries, an exceptional effort will be made, so that our domestic consumers do not suffer in any way as a result of this special drive for hard currencies.

The situation, as regards prospective supplies and foreign exchange, is very serious, both for this country and for many others, and, as the House knows, discussions between Governments are now taking place. His Majesty's Government will keep a close and constant watch on the future course of events in this field, and it may be necessary to revise this import programme from time to time.

Mr. Eden

I am sure nobody, on this side of the House at any rate, disagrees with the gravity of the situation with which the right hon. Gentleman is dealing. If I have any criticism of his brief statement it is that I do not think it has yet sufficiently underlined the gravity. If I may say so, I find the implications of the right hon. Gentleman's statement a little difficult to follow, because in one part of his statement he talks about a reduced supply for our own people as a result of the need for increased exports, and in another passage he talks about there being no increased hardship. That seems to me inevitable. If we do increase our exports there must be increased hardship. Of course, if we increase the proportion of textiles, for instance, which are mentioned in this statement, the result must be less textiles for our own people. I do not wish to argue; unless, of course, we can so step up the output—[Interruption.]—If that is what the right hon. Gentleman is relying on we should like to be told, but I should like to forecast at once that it cannot be done on the basis of these figures.

I should like to ask the right hon. Gentleman this. The House must not just be given a general statement. It must be given figures. We were given a White Paper for 1947, which is now hopelessly out of date. What I would like to know from the Government is, will they be good enough to give us the figures? What change does this mean in our import programme in' relation to the figures of the economic survey? What change does it mean in our export target in relation to the 1947 survey; and, therefore, what will be available for the British people in respect of products like textiles as compared with the forecast of the Government in their own White Paper?

Mr. Dalton

With regard to the first point mentioned by the right hon. Gentleman, the clear implication of my words —and if it was not clear I at once seek to make it so—is that we must increase our export of textile products, because that is an export which goes better than almost any other into the hard currency area; therefore, our exports must be stepped up. I have, however, on behalf of the Government, expressed the hope that this will not mean any further imposition of scarcity, coupon restriction, and the like, upon our own people. It is obvious—as I think the right hon. Gentleman himself recognised in the latter part of his remarks—that this does mean an increase of total production. It is our hope to step up production, and an appeal will be made, which I hope will be generally supported; anyway, we shall appeal to the textile industry to make, as I have indicated in another statement, an exceptional effort, if need be by working overtime during this period. That is on the point about textiles.

With regard to the figures, I am quite prepared—although I doubt whether a White Paper would be the appropriate medium—to issue a statement of the essential figures. It would, I think, have overburdened the statement I have made today to have interlarded a lot of statistics into it. We have no desire other than to make public to the House and the country—in order to make clear where we stand in the problems which face us— the essential figures in the matter. Of course, I will undertake to see that those are issued, by circulating them in the OFFICIAL REPORT or by some other means. I will undertake to see that the necessary and essential figures are placed before the House and the public.

Mr. Eden

There is one other point. If an appeal is made for increased production of textiles I have no doubt that would have the support of all sections of the House; certainly we would do what we could to use our influence to help. If the right hon. Gentleman contemplates a really serious increase of exports, par- ticularly of textiles, which he must have if he is to get more dollars, there is bound to be hardship on our people, even if production increases. [Interruption.] Yes, there is bound to be. If there is, it is much better to say so. That is the only point I wish to make. In his statement the right hon. Gentleman takes powers at some future date, if he thinks fit, to deal with films. Does not he think films should have a higher priority for being dealt with than other things; that they should at least have the same priority of reduction as petrol for this country, and tobacco, and a higher priority than reduced textiles for our own people.

Mr. Dalton

It would be very natural that we should deal with that when the Resolution which I have put down on the Order Paper is considered at the next stage of the Finance Bill.

Miss Jennie Lee

The Chancellor of the Exchequer says that there must be a reduction of newsprint. We accept that, but, in dealing with weekly opinion-making newspapers and school textbooks, will he bear in mind that there are weekly journals requiring more paper than before the war and weekly journals with more paper than they require, and, instead of having an allocation based on out-of-date years, will he vary it in accordance with demand?

Mr. Dalton

That is a matter which might be looked into, but the principal point I desire to make is that we must cut imports of newsprint.

Mr. Edgar Granville

As the right hon. Gentleman knows, the increase of exports of textiles to hard currency areas will depend to a great degree on an increase in the allocation of raw materials. Will the right hon. Gentleman consult with the President of the Board of Trade to see that a proper adjustment is made in the allocation of raw materials as between soft currency and hard currency areas?

Mr. Dalton

That is a matter, as the hon. Member knows, primarily for the Board of Trade. It is an important detail, but none the less it is a detail. The total supply of raw materials is not among the factors that trouble us— neither cotton, wool, nor rayon.

Mr. Henry Strauss

Will the right hon. Gentleman bear in mind that there is no industry where so little raw material can produce so great a return in' hard currency as book production?

Mr. Dalton

That may be so, but there is also a home market for books.

Mr. Bowles

In view of the desire to close the gap between imports and exports, particularly in relation to hard currency areas, will the Chancellor of the Exchequer go into the question of whether we cannot get a great deal more from the export of Scotch whisky? I do not know whether he realises it, but the amount of Import Duty, State duties and everything else, with the exception of commission and marine insurance, is exactly the same, whether we export bottles from this country at 5s. or 25s.? 'Assuming that the same amount of whisky is exported as is expected at 25s. a bottle, my right hon. Friend will find that there would be an increase of 200 million dollars this year.

Mr. Dalton

It sounds to me to be almost too good to be true.

Mr. Bowles

Will the Chancellor see me afterwards?

Mr. Dalton

I shall be very delighted to consider any evidence which goes to show that we can attain more dollars from exports. I understand that my hon. Friend is in touch with the Minister of Food, and that certain discussions are going on.

Lieut.-Commander Braithwaite

I understood the right hon. Gentleman to say that we shall have to go back to four-page newspapers.

Mr. Dalton

Yes, temporarily.

Lieut.-Commander Braithwaite

Will there be a corresponding run-down in Government White Papers and Orders in Council?

Mr. Dalton

I had that point in mind when I did not rise to the suggestion made by the acting Leader of the Opposition for a White Paper.

Mr. H. D. Hughes

Will the right hon. Gentleman review the allowance of foreign currency for travel abroad, and particularly the special business allowance at the rate of £10 a day, which seems somewhat excessive and open to abuse?

Mr. Dalton

We have reviewed that among the possibilities of making economies. I do not recommend it to the House at present, because the saving would be relatively small. It has been looked at, and we hope that some of the proceedings we have taken in the courts will provide a certain economy in that field without further action.

Mr. Darvid Eccles

In view of the fact that the Chancellor's statement means that unless we get a second American loan, or raise our production substantially, we are slipping down hill rapidly to widespread unemployment and grave food shortages, is if not time that the Government abandoned their present economic policy in favour of one which would unite the people to give us the production we want?

Mr. Dalton

In a democracy such as ours, in which differences of opinion are widely held and freely expressed, there is no one economic policy which would unite the country. We had an economic policy for which the electors voted, and hon. Members opposite had an economic policy for which the electors did not vote.

Mr. Douglas Jay

Will the Chancellor of the Exchequer bear in mind that a very large number of people in the country will welcome the cutting down of all unnecessary imports?

Mr. Martin Lindsay

Is the Chancellor aware that his statement is the most depressing piece of news which has been given to the British public for several years? Is it the intention of the Government to give us an early opportunity to debate it?

Mr. Dalton

The hon. Member is very easily depressed this afternoon, if he thinks that it is the most depressing news he has had for some years past, including the war years. I think he had better cultivate his sense of proportion and memory. With regard to a debate in the House, my right hon. Friend the Lord President of the Council will, no doubt, consider representations made through the usual channels.

Dr. Barnett Stross

Is the right hon. Gentleman aware that one of the best methods we have of obtaining hard currency is through the export of pottery, and that in that industry every man, woman and child is worth 500 dollars a week in exports. Will he, therefore, sympathetically consider letting us have a little more coal so that we can increase our exports?

Mr. Dalton

My hon. Friend has a good point which I will pass on.

Sir John Barlow

In view of the necessity for increasing textile exports, how does the Chancellor account for the recent importation of 64 million yards of Japanese gray cloth for finishing in this country?

Mr. Dalton

That is a question which had better be addressed to my right hon. and learned Friend the President of the Board of Trade.

Mr. Blackburn

While welcoming the Chancellor's statement today, for which most Members on this side of the House have been pressing for some time, may I ask whether he will adopt the principle of telling the people now the worst that can happen, and also indicate in detail just how much harder the workers have to work if we are to avert what appears to be an impending disaster?

Mr. Dalton

The whole question of publicity is one which will reecive constant attention.

Viscount Hinchingbrooke

Is the Chancellor really entitled to assume that he can get increased production on the basis of increasing austerity.

Mr. Chetwynd

The right hon. Gentleman mentioned economy in the Armed Forces. Will he indicate whether there is to be any specific reduction in the Armed Forces?

Mr. Dalton

No, Sir. I was talking about the supply of petrol. I have reason to suspect that we could perhaps make some economy in the total amount of petrol consumed in the Army.

Mr. Wilson Harris

As the right hon. Gentleman did not say anything definite about the reduction in the allocation of paper for books, will he, if he finds that it is necessary to reduce the allocation, arrange for an increased priority in respect of educational books professed to be necessary for schools and universities?

Mr. Dalton

We will, of course, look at all the details to secure the best allocation we can of the paper supplies available. The point I made was simply that we must have a cut in the import of newsprint, and that there must be a cut in the daily papers, which are the major consumers to the four-page level.

Mr. Keeling

Does the right hon. Gentleman intend to continue the expenditure of dollars on the so-called token imports of certain manufactured goods, including such things as women's frocks.

Mr. Dalton

Relatively speaking, that is an exceedingly small matter, which we do not seek to deal with It can be dealt with on another occasion.

Mr. Eden

I do not want to raise the issue of the White Paper again, but in view of the gravity of the situation, can the right hon. Gentleman let us have the figures this week, without which, quite frankly, the statement does not mean a great deal? We should like to have the figures this week, because we can then ask for a Debate on the situation for next week.

Mr. Dalton

Yes, Sir, that is a pertectly reasonable suggestion Although I do not think a White Paper is the right way, I will see if there is not a convenient method of making available to the House essential statistics lying behind this statement— perhaps about Thursday.

Several Hon. Members rose— —

Mr. Speaker

In view of the fact that there is to be a further statement. I hope we can now get on with the next Business.