HC Deb 06 April 1948 vol 449 cc41-2

Imports for the first half year have been fixed at £792 million sterling. Our import programme has been built up on three principles—the first, to buy as little as possible from countries to whom we must pay dollars or gold; the second, to buy the minimum of food to maintain a healthy standard; and the third, to buy the minimum of raw materials to enable us to maintain a high level of industrial activity.

For the first six months of 1948, our import programme, so constructed, will result in an overall deficit on our balance of payments of at least £136 million. But, as some surpluses in sterling area countries cannot be used to offset other deficiencies, we estimate the drain on our reserves at over £220 million. Such a high rate of continuing drain on our reserves must give us all the gravest concern and it cannot be allowed to continue. The preservation of our reserves must be a cardinal principle of our planning. If, without further external aid, this drain were to continue, then our remaining reserves, which we estimate at a maximum of £450 million in June next, would be halved before the end of the year, and would be wholly exhausted in 1949.

During, this last week-end we have all seen that the Congress of the United States of America have passed the legislation for the European Recovery Programme and that the President has put his signature to it. That is an event of the most profound world significance. At this moment of doubt and difficulty in world affairs it comes as a light and hope to the freedom-loving peoples of the world. I could not let this occasion, on which we are dealing with matters so intimately affected by this action of the United States, pass without recording what is I am sure the deep and genuine gratitude of the whole Committee for what is being done and for the speeding and helpful way in which it has been done.

I need not emphasise what would have happened if no aid had been forthcoming from the United States. We should have been forced to cut down drastically our imports of food and raw materials, with the gravest consequences to our standard of living, our employment, and our productive effort. United States aid cannot, however, add significantly to our reserves; it can help to reduce the drain upon them. We must, therefore, so manage our affairs that the drain on our reserves over the whole period of aid is brought as low as possible and virtually eliminated. We shall need all the reserves we can muster when Marshall Aid comes to an end. This means that we must control our imports, both in total amount and also in composition. We must make sure of our necessities and we shall not be able to indulge in luxuries. It means also that we must send more goods abroad even before satisfying our home market unless we can increase our production to meet both export and home demands.