§ The President of the Board of Trade (Mr. Harold Wilson)
Mr. Speaker, with your permission I should like to inform the House that I have today signed an Order ending completely the clothes rationing system. From tomorrow morning coupons will no longer be required for the purchase of any kind of clothing or textiles.
On 31st January I told the House that wool cloth, and garments made from it, was being taken off the ration and that as a result of that and previous changes we had got rid of rationing over about half the field it originally covered. I said that it was my policy to take off rationing as soon as it was safe to do so, but I was not then entirely satisfied that we had reached that position. In order to get further evidence of what would happen if rationing were completely removed, I made this further experiment of taking off this further large block of clothing. I watched the results of this change very closely and discussed the matter with my two Advisory Committees. Their advice on this question last week was for the first time unanimous. Both they and I are now satisfied that, taking clothing as a whole, demand and supply are in reasonable balance and, in accordance with the policy I am pursuing on the general relaxation of controls, I have decided to take the final step.
1739 I must emphasise that my decision to get rid of rationing will not involve increasing supplies to the home market at the expense of exports, and the necessary measures to ensure the allocation of textiles required for the full export targets will remain. Nor will there be any change in our requirements of dollar raw materials as a result of this decision. It would have been easy for us to abolish rationing at any time in the last three years by retarding the export drive and putting the home market first, but I need hardly say that neither I nor my right hon. Friend who preceded me in this office were ever prepared to contemplate such a course. The export drive in textiles must continue to be pressed with the utmost vigour. This action does not, therefore, mean an abundance of clothing—indeed, some items remain in short supply in the home market—and it is no doubt a fact that higher prices, resulting mainly from increases in the price of imported raw materials, are themselves a restraint on buying. But the utility clothing scheme will go on, and I am at present, as the House knows, taking active steps to increase the proportion of utility in certain sections of the clothing trade. Close control of prices will be maintained as long as necessary.
I trust that those who have found it possible, and I know there were many, to respond to the appeal of my right hon. and learned Friend the Chancellor of the Exchequer, and sell below maximum prices, will continue to do so in the conditions of greater freedom which will now prevail. I am sure the House would condemn any increase in prices due to selling up to the maximum, where this has not previously been done. If such a tendency developed we should obviously have to see what we could do to stop it by freezing prices at today's level.
Though shortages of some articles of clothing will persist, I am satisfied, after careful consideration, that it is impracticable to devise any rationing system which would be flexible enough to cope with every slight change in supplies that may occur from time to time. If particular difficulties should arise I shall rely on the good sense of wholesalers and retailers to see to it that supplies are distributed fairly, and I hope to have the continued help and advice which has 1740 come to me through the Advisory Committees. The textile industries have now the double task of achieving their export targets and of wiping out the remaining shortages, and I believe they will respond to the call upon them.
Arrangements are being made for the release from the Board of Trade of staff which will no longer be required as a result of this change. These arrangements will, of course, comply with the scheme governing the release and discharge of redundant temporary staff agreed with the Staff Side of the Whitley Council. Manufacturers and distributors will find that they have staff set free from the work of handling coupons, and I hope that, as I have been so frequently assured, these people will be transferred as quickly as possible to more productive work. I estimate that there will be direct saving of not less than 10,000 workers, of whom over 1,000 will be from Government Departments and 9,000 from the textile and clothing industries and from distribution. This is a not unimportant contribution to our economic potential.
To sum up, therefore, I am now able to bring to an end a complex system of rationing, made necessary by the extreme shortages of the war—a system which has been with us for nearly eight years. For all its complications the clothes rationing scheme has served us well during that time in giving fair shares all round and much credit is due to all those, in the trade and elsewhere, who have been responsible for its effective working. But I am glad that because of increased production, and other things affecting the supply and demand situation, I can now take this further step towards freeing the trade and the shopping public from control. I can now do this and provide for a considerable release of labour for more productive activities without in any way impairing our paramount effort to secure a satisfactory balance in the country's external payments.
§ Mr. Oliver Stanley
I am sure the whole House will be glad that the President of the Board of Trade has at last come to the decision which has been pressed on him for several months, and will congratulate him on the fact that he has been able to overcome his indesion just in time for next Wednesday. I should like to ask the right hon. Gentleman two questions on points which I do 1741 not think were clear in the statement he made: first, is it quite clear that the abolition extends not only to clothing but to all household textiles as well? Secondly, does his decision mean that there will be more goods available for the consumer, or is this merely a transfer from rationing by control to rationing by price?
§ Mr. Wilson
I should have thought the right hon. Gentleman would have realised, if anyone did, that we fight by-elections on our record and our policy, and that we do not need stunts as a means of winning. I thought I had made clear—but perhaps I was going rather hurriedly—that de-rationing applies to household textiles as well as clothing. This does not mean any increase in supplies to the home market, however, except those which will come from increased production.
§ Mr. John E. Haire
Has my right hon. Friend made sure that in the competition which is bound to occur between hotels and housewives, the latter will not be at a disadvantage in the matter of household linen?
§ Mr. Wilson
No, Sir; it is impossible to take any step to ensure that the hotels will not buy too many of these supplies, but I am relying on the good sense of the hotel trade and the boarding-house keepers not to go in for a run on the shops at this time.
§ Mr. Erroll
As we have the Minister's assurance that this announcement is not made with a view to what is to happen on Wednesday at Sowerby, would it not have been better to have made the announcement on Thursday, the day on which the Minister normally answers questions?
§ Mr. Wilson
The hon. Gentleman will realise that if this announcement had been related in any way to by-elections, it would have been made two or three weeks ago. So far as the second part of his question is concerned, I have already informed the House that I took the very first opportunity of making the announcement, and the hon. Gentleman will remember that, in the case of a number of previous statements, I made them at the beginning of the week, because of the effect on the trade and because of the trade Press.
§ Mr. Collins
Whilst congratulating my right hon. Friend on having resisted Tory pressure to make this announcement prior to the South Hammersmith by-election, I should like to ask him whether provision has been made to provide textiles for manufacturing industries, particularly for the manufacture of such articles as utility furniture?
§ Mr. Wilson
Yes, Sir. I think supplies to manufacturing industries will be as well ensured under the new system as they have been under the previous system of control.
§ Mr. Boyd-Carpenter
Is the staff of 1,000 to be released from the Department as a result of this change, the whole of the staff previously employed on clothes rationing, or merely part of it?
§ Mr. Wilson
Yes, Sir; practically the whole of the staff engaged on this rationing will now be freed. I do not imply at all that in several cases the same persons will be released, because, in accordance with the arrangements made for release and discharge, there will be some switching about into other jobs, but the total number of releases will be broadly the equivalent of the total engaged on this work.
§ Mr. George Porter
Is my right hon. Friend aware that, in regard to the abolition of coupons, the expressed opinion of people who should know is that it is desirable, in order to make it successful, that price control should be strictly maintained?
§ Mr. Assheton
Will the right hon. Gentleman tell us whether we should be safe now in disposing of our clothing coupon books?
§ Mr. Wilson
Yes, Sir. I hope the right hon. Gentleman will see that his finds its way into the appropriate salvage channels.
§ Mr. Somerville Hastings
I should like to ask my right hon. Friend whether this decision of the Government does not inevitably mean that the rich will get more and the poor less of these necessities?
§ Mr. Chetwynd
Is my right hon. Friend quite satisfied that the present powers of price control are adequate to prevent exploitation, instead of waiting until that exploitation arises before taking any action?
§ Mr. Wilson
I think I am satisfied, but if some of those traders who have been selling below the maximum price—and I welcome the fact that they are doing so—were to raise their prices, I should have to reconsider the position and contemplate the possibility of a price freezing order.
§ Miss Bacon
In addition to the price control of clothes, will my right hon. Friend keep a special watch on the price of household linen, which is still in very short supply?
§ Mr. Peter Thorneycroft
Will the right hon. Gentleman explain to some of those behind him that the system of rationing by price now adopted, is the only alternative known to man to the system of rationing by coupons?
§ Mr. Awbery
My right hon. Friend spoke about pegging present prices, but that will not be sufficient for the people of this country. What we want him to do is to go back to the time when prices were lower than they are now and peg them at that level. Is the Minister aware that shirts, which were 14s., are now 50s. and 60s., and will he peg the old prices and not the new?
§ Mr. Wilson
My hon. Friend is referring, of course, to non-utility shirts. If it were not for the fact that we maintained a large proportion of utility shirts, the greater number of shirts now available would be selling at the prices quoted. It is certainly a fact that prices have risen very considerably owing to the high prices we have had to pay for raw materials from abroad. The price of wool has risen more than cotton and, as I have said before, wool is bought on a free market. However, we are taking whatever steps we can to begin a reduction of prices, which, of course, cannot really take effect until we see some fall in the prices of raw materials.