HC Deb 18 December 1952 vol 509 cc1625-7
Mr. Edelman (by Private Notice)

asked the Chancellor of the Exchequer whether, in view of the harmful effect on employment in the motor industry caused by uncertainty concerning the future of Purchase Tax on motor vehicles, he will make a statement.

The Chancellor of the Exchequer (Mr. R. A. Butler)

Yes, Sir. I have received representations on this matter from the industry and from Members of this House, but I am not convinced that it would be right to anticipate the normal process in which the claims of the motor industry for relief from Purchase Tax will be taken into account together with all the other similar claims by other industries.

Mr. Edelman

While thanking the right hon. Gentleman for this clarification, may I ask if he will make it clear to the manufacturers that it is still his general policy to give the export trade in motor cars precedence over home sales? Would he also say whether, arising out of the Commonwealth Conference, Australia has agreed to restore the cuts in imports which have been so harmful to the British motor industry? Finally, will he say whether, during the three critical months ahead, which may see mass unemployment in the motor industry, he will do everything in his power to use the home market as a buffer against unemployment?

Mr. Butler

I will deal with the first and third points raised by the hon. Member together. We must, of course, keep the export necessity as the first priority. There has been a relaxation of sale on the home market, and in respect of his third point, namely, will we watch the situation in view of possible difficulties. the answer is that our policy must be flexible in this matter and that we are as concerned about employment as the hon. Member and many other hon. Members.

In regard to the hon. Member's second point, about the Commonwealth Conference, if I may be permitted to do so, I should like to refer to paragraph 7 of the now famous communiqué, which stated that there had been an understanding that the restrictions which had to be put on through necessity would be raised if balance of payments difficulties permitted.

Mr. Erroll

As a further contribution to this matter, will the Chancellor prohibit Nigeria from using up our spare dollar reserves by importing American cars when equally good English cars are now available for that territory?

Mr. Butler

All I should like to say about Nigeria and the Colonial Territories in general is that we are extremely grateful to them for the help they have given us in our balance of payments difficulties. I will, of course, also look into the specific point raised by my hon. Friend.

Mr. Roy Jenkins

May I ask the Chancellor, first, whether he does not consider that some leading motor manufacturers have themselves created a large part of the uncertainty which has been affecting the industry by their own irresponsible and premature statements about the effect of the Purchase Tax, and whether he will issue a word of warning against this behaviour in the future? Secondly, is he not aware that if he moves too fast towards convertibility and non-discrimination he will do the motor industry far more harm than his statement this afternoon will do good?

Mr. Butler

I cannot interfere with statements made by public men or by public organs, as has been clearly seen in recent days. I must leave the responsibility for this matter to responsible leaders in the industry, but I hope that my statement will now create a greater atmosphere of certainty than was created previously. Secondly, in regard to convertibility and non-discrimination, the hon. Member may be quite satisfied that these aims are such as must be achieved only if they are to the advantage of the employment and standard of living of our own people.

Mr. Fell

Will my right hon. Friend consider whether there is any other way of ending the annual uncertainty caused for something like three months of the year, which is having an effect not only on the home trade but also on the export trade, which is founded on a healthy home trade in these industries?

Mr. Butler

I can assure my hon. Friend that the uncertainty is not created by myself or the Government, and that it has been the practice of Governments for many years to have annual reviews of the finances and economic situation of the country. As long as that continues, I am afraid that people must adjust their nervous systems to that situation.

Mr. Jay

In view of what the Chancellor has just said about convertibility, has he seen the statement made by Mr. Menzies, the day before last, that the Conference agreed on clear-cut and constructive proposals for partial conversion at least, and as that is not contained in the communiqué can he tell us whether it is true, and if so, why we have heard about it from Mr. Menzies and not from the Chancellor?

Mr. Butler

I have been asked whether I can control the statements of motor manufacturers. I must say that it is equally impossible for me to control the statements of Prime Ministers of other countries. [HON. MEMBERS: "What about your own?"] I do not desire in this case either to comment on or to criticise the statement made by the Prime Minister of Australia, except to say that it seems to me to fall into general line with the terms of the communiqué which was published.

Mr. Gaitskell

The Chancellor cannot leave it like that. In the first place, his extraordinary disclaimer of responsibility for what other people at the Conference say does not coincide with all the glowing tributes he has paid to the good feeling at the Conference. I would ask the right hon. Gentleman, as this is an extremely important matter which may affect hon. Members opposite as well as those on this side of the House, whether be will confirm or deny what Mr. Menzies said about the Conference?

Mr. Butler

I am not aware that the question of convertibility comes up in answer to a question about Purchase Tax.