§ The President of the Board of Trade (Mr. Harold Wilson)With the permission of the House, I should like to make a statement about import relaxations which I regret that I have been unable to make before this afternoon.
In the statement which I made to the House on 7th July last I described the considerations which had led His Majesty's Government to take the initiative, within the Organisation for European Economic Co-operation, for the general liberalisation of intra-European trade. At the same time I indicated the intention of His Majesty's Government, subject to certain conditions which I explained, to take the lead in removing licensing restrictions on imports into the United Kingdom from all countries to which the relaxations could be applied without involving loss of gold or dollars.
The O.E.E.C. supported this initiative by calling on their members to introduce measures for relaxing their restrictions both as a step towards the long term objectives of the Organisation in getting rid of trade restrictions, and as a means of encouraging competition and increasing efficiency. The Organisation have accordingly requested member countries to report their proposed measures for trade liberalisation by 1st October.
Section 9 of the Anglo-American Loan Agreement and Article 5 of the Anglo-Canadian Loan Agreement remain in force but it is considered, as stated in the joint communiqué issued at the conclusion of the Washington talks, that the present proposals would not now be regarded as inconsistent with the spirit of our undertakings. The existing arrangements in Washington for continuing consultation between the three Governments who are parties to the Agreement in question will provide the means for keeping the situation under review.
I am now in a position to announce the removal of import licensing restrictions on imports into the United Kingdom of a wide range of goods from countries to which the relaxations can, in present circumstances, be applied without involving risk of loss of gold or dollars. This covers countries both in O.E.E.C. and in other areas.
301 The relaxations take the form of the issue of open general licences, in general valid as from 5th October, which will permit anyone to import the goods concerned without the need of an import licence from any country other than those specifically excluded from the scope of the licences.
I am circulating in the OFFICIAL REPORT a summary of the goods to be put on open general licences, together with a list of the countries to be excepted from their scope. The complete list of Roods runs into several hundred items and will be printed in full in this week's Board of Trade Journal. I am arranging to place copies of these in the Library immediately.
The total value of the articles now placed on open general licences which were imported into the United Kingdom from the O.E.E.C. countries concerned amounted, in 1948, to about one half—some £75 million worth—of the total trade on private account from those countries in that year. Bearing in mind the substantial proportion of our imports from these countries still on public account and which we are purchasing freely subject to commercial considerations, these relaxations represent a very substantial contribution to the objectives of the Organisation. We may hope, indeed, that the adoption of the import relaxations policy by O.E.E.C. countries will prove to be an important step forward towards our long-term aim of achieving a fully multilateral pattern of world trade.
In accordance with the Government's promise to bear in mind the legitimate interests of our own industry, the Government have, in compiling this initial list of relaxations, excluded from the open general licences a number of goods which are not allowed to be sold in the home market or of which production for the home market is subject to very severe restrictions, and also articles for which there is a particularly high export target, coupled with a large unsatisfied demand at home and an important hard currency market.
§ Mr. Clement DaviesI congratulate the Government on their partial if rather belated conversion to Free Trade, which was the accepted doctrine of so many Members on the other side of the House.
§ Mr. Oliver LytteltonBy the courtesy of the Government I had a chance a few minutes ago of seeing the statement which has been made by the President of the Board of Trade. I should like to ask one or two questions but would first of all say that we on this side of the House regard this as a step in the right direction.
I should like to ask the right hon. Gentleman whether he considers it is right to time this matter at this moment, because the trading community have just had very serious readjustments to make in their position owing to devaluation. Now another major adjustment is required of them in this matter. Secondly, has the right hon. Gentleman consulted the industries in question, and has his previous experience in these matters led him to suppose that it would be a good thing to do so before rushing in with decisions of this kind? Thirdly, are these foreign imports subject to Purchase Tax and other regulations such as Utility markings? In other words, do they come into the market on all fours with, or with advantages over, our own goods?
§ Mr. WilsonOn the question of time the House will agree that a step of this kind, which was called for by 1st October by O.E.E.C. ought not to be delayed a moment longer than is necessary. Apart from the effect it has in providing that "blast of competition" to which the right hon. Gentleman once referred, it will be an important factor in helping to reduce the cost of some of the goods in the shops. From that point of view it is a good thing to do right away, and after the speeches we heard yesterday about the need for removing controls as quickly as possible, I am rather surprised to hear that the timing is questioned in the slightest. On the subject of consultation, we have not attempted to discuss with every one of the thousands of industries concerned the particular proposals to put these goods on open general licence. To have done that would have taken very many months indeed. Unlike tariff negotiations, a list of this kind cannot be subject to bilateral bargaining with every other country in Europe. In answer to the third question as to the liability of these goods to Purchase Tax, that is a question for my right hon. and learned Friend, but I can assure the right hon. Gentleman 303 that these goods will not enjoy any advantage over similar goods produced in this country.
§ Mr. Kenneth LindsayWhile I warmly welcome this policy, could the right hon. Gentleman say whether books will be imported freely into this country from all soft currency areas?
§ Mr. WilsonYes, Sir. Books and printed music and similar commodities—if I may use that term—will be freely imported from all soft currency countries included in the list.
§ Viscount HinchingbrookeCan the right hon. Gentleman tell the House whether the sterling which will be received by the foreign suppliers of the goods, which will now come in increasing quantities, will have to be held by them, or whether it will be to any extent convertible?
§ Mr. WilsonThe noble Lord should realise that this is part of the programme for the general removal of restrictions on trade, and we are certainly expecting that sterling earned by additional sales to us will be spent increasingly on our exports and the exports of other countries.
§ Mr. TurtonCan the Minister say whether horticultural products are included in this policy, and, if so, whether the representatives of the growers have been consulted to ensure that the British horticultural industry is not adversely affected?
§ Mr. WilsonIn drawing up the list of fruit and vegetables included in these arrangements we have had full regard to the special seasonal problems of our horticultural producers; and the representations the hon. Gentleman has mentioned will be fully borne in mind when the particular seasons are scheduled. Of course, as the House will know none of the proposals I have announced this afternoon for removing quantitative import restrictions in any way affects the normal protection given by the customs tariff.
§ Mr. Henderson StewartAs I understood the question all imports from certain countries would be excluded from this list. Would it not be wise to indicate those countries?
§ Mr. WilsonI did not say all imports from certain countries, but all imports 304 which are scheduled in the list of commodities covered by these proposals. The list of countries is a fairly long one and when the hon. Gentleman sees what I am circulating in the OFFICIAL REPORT, or if he will look in the Library, he will get all the information he requires.
§ Mr. Platts-MillsIn view of the fact that the only liberalisation of intra-European trading which can in the long run be of any use to this country is in the freeing of trade between East and West, can the right hon. Gentleman assure us that there is none of the discrimination between Eastern European countries which have been the mark of O.E.E.C. regulations in the past?
§ Mr. WilsonWe have gone into this scheme making it very clear that we are prepared to open up our import restrictions on a wide range of goods from other countries; but no group of countries in the world have done more to close their markets to the general range of our exports than the Eastern European countries referred to by the hon. Member.
§ Mr. OsborneCan the Minister tell us what trades are mostly affected by the regulations?
§ Mr. WilsonI could not quite hear what the hon. Gentleman said but if he was asking, as I think he was, which trades are immediately affected I would ask him to wait until he can see the information in the OFFICIAL REPORT.
§ Mr. CollinsCan my right hon. Friend give the House any idea of the nature of the reciprocal arrangements and volume of trade and exports likely to be affected?
§ Mr. WilsonNo, Sir. Very few lists so far have been published though all countries are under contract to produce a list by Saturday. Until we have seen them we shall not know to what extent we shall benefit, but we shall study the lists very closely before reviewing future policy.
§ Mr. DraysonArising out of his reply to my hon. Friend the Member for South Dorset (Viscount Hinchingbrooke) on convertibility, can the President of the Board of Trade say to what extent sterling arising out of these transactions will be transferable amongst the countries concerned?
§ Mr. WilsonThese arrangements make no difference whatsoever to the existing arrangement for sterling payment transactions between ourselves and the individual countries of Europe, or in the rest of the world.
§ Mr. DraysonSterling, then, is not transferable between those countries?
§ Mr. WilsonWhere it is transferable today, sterling collected as a result of this will be still transferable.
§ Mr. HarrisonArising from the two replies he has given to supplementary questions, will my right hon. Friend say whether this new arrangement will constitute a possible drain on our hard currency resources?
§ Mr. WilsonNo, Sir. We have been careful in drawing up the list to see that hard currency expenditure is not endangered and the two answers I have given about transferability, safeguard very adequately our hard currency resources.
§ Following is a summary of goods to be included on open general licences:
- (1) Food, drink and animal feedingstuffs, including fresh fruit and vegetables, nuts, game, beer, cider, wines and spirits, edible offals, soups and a variety of canned foods and other items.
- (2) Mineral products and metals, including various unwrought metals, ores and concentrates, pig iron, silex blocks, roofing slates, etc.
- (3) Oils, waxes, gums, resins, perfumery materials.
- (4) Vegetable fibres and feathers.
- (5) Chemicals, drugs and medicines.
- (6) Textiles: a large number of cotton, woollen, linen and artificial silk goods at various stages of manufacture.
- (7) Many kinds of apparel, hard haberdashery, footwear of all kinds.
- (8) Machinery for making a great many things (such as bricks, brushes and brooms, cables and ropes, cement, cigars and cigarettes, electric lamps and valves, netting, pottery and textiles), together with certain agricultural, mining, stone-working, sugar-making and laundering machinery, lawnmowers, road-making plant, etc.
- (9) Motor cycles, pedal cycles, tri-cars, railway locomotives, tractors, trucks, carts, baby carriages, wheelbarrows, various motor accessories and components.
- (10) Undecorated glassware and pottery, other fired clay products, vacuum flasks, blanks and inners.
- (11) Various medical, surgical and dental appliances, instruments and requisites.
- (12) Electrical goods such as hand lamps, lighting appliances, hairdressing appliances, toasters, coffee percolators, vacuum cleaners, batteries, carbons, insulators, wires and cables and certain radio apparatus.
- (13) Metal manufactures, including balances and scales, domestic baths, sinks, wash basins and cisterns of iron and steel, steam boilers, castings, gas cookers, forks and spoons of non-precious metals, metal furniture and trunks, wire netting and fencing, etc.
- (14) Various musical instruments, sports goods, toys and games.
- (15) Books and printed music. Various fancy goods, hardware and stationery, including artists' materials, ironmongery, imitation jewellery, smokers' and toilet requisites, umbrellas, etc.
- (16) Miscellaneous goods such as rubber hot water bottles, trouser presses, taxi meters, matches and firelighters, live horses and wooden spoons.
A few of the horticultural items in the first group will not come on to open general licence for about another month and others will revert to licensing control at certain periods in the year, during the main season of home production, the exact limits of these periods being determined later in the light of seasonal avail-abilities. There will be no such changes before 31st March, 1950, except possibly in the case of broccoli, cauliflowers, lettuces, endive, batavia and rhubarb; importers of these items are advised not at present to enter into commitments extending beyond 31st December, 1949.
Pulp, paper and board (other than newsprint and insulation board) and paper and board products will be added to the list as from 1st April, 1950. This deferment is necessary to coincide with the reversion of the buying of paper-making materials to private trade
§ List of countries to be excepted from the scope of open general licences
§ The United States, Canada, the Philippines, the dollar account countries of Central and South America (Bolivia, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, and Venezuela), Argentina, Uruguay, Japan, Iran, Tangier, the French Somali Coast, Liberia, the U.S.S.R., Roumania, Bulgaria, Hungary, Czechoslovakia, Poland, the Russian zone of Germany, Yugoslavia, Albania and, among the O.E.E.C. countries, Belgium and the Belgian Congo, Luxembourg, Switzerland and Western Germany.