HC Deb 23 March 1953 vol 513 cc490-3
The President of the Board of Trade (Mr. Peter Thorneycroft)

With your permission, Mr. Speaker, and with that of the House, I should like to make a statement about the relaxation of trade restrictions.

The House will recall that in November, 1951, and March, 1952, the Government were obliged to reimpose quantitative restrictions on a wide range of our imports from Western European and certain other countries in order to check the drain on our reserves. The Government made it clear at the time that these were emergency measures and that it was the Government's intention to proceed with the removal of the restrictions just as soon as circumstances permitted. The Government have recently reviewed the situation and decided to take an important step in this direction.

Full details of the measures which we are taking are being published this afternoon, and I am placing copies of the Notices to Importers in the Library. These measures may be summarised as follows. We are restoring to open general licence a considerable range of goods, mainly foodstuffs and manufactures, including unrationed cheese, textile yarns and piece goods, gloves, footwear, carpets, plate and sheet glass, and cork and cork manufactures. We are also increasing the global quotas, for the second half of this year, for certain other goods which, for the time being, must remain subject to restriction. The effect of these relaxations will be to raise from 44 to 58 the percentage of United Kingdom imports on private account from Western Europe, which is free from quantitative restriction. These percentages, which are calculated on the basis of trade in 1948, compare with 75 per cent. the minimum standard set by the Organisation for European Economic Co-operation for countries which are not in balance of payments difficulties, and with the figure of 90 per cent. which we reached before the restrictions were imposed in November, 1951.

The open general licences will come into effect on 25th March; the licences under the global quotas will be issued in the course of the next few weeks, and will be valid as from the date of issue.

The Government have also decided to increase the travel allowance, as from tomorrow, 24th March, from £25 to £40.

My right hon. Friend the Chancellor of the Exchequer is today informing the Council of the Organisation for European Economic Co-operation of these measures.

In making these relaxations, we have had regard to what is of traditional importance in our trade with Europe, and, in particular, to measures helpful to France and Italy, whose trade has been most affected by the restrictions which the United Kingdom has been obliged to apply. While the United Kingdom's position in the European Payments Union has shown some improvement in recent months, we are still in serious overall deficit with the Union, and the relaxations which the Government are making represent the maximum possible in the circumstances. But it is of great importance to this country to maintain at the highest possible level our trade with Europe, and to increase the openings in Europe for our exports. We cannot expect to do this unless we are prepared to play our part to the fullest extent that our balance of payments situation permits. The measures which we are now taking are an important contribution to this end.

Mr. Gaitskell

While we shall want to study the details, which, I understand, will be available in the Library, may I ask the President, in the first place, whether any estimate has been made of the total increase in imports which is likely to result from this relaxation, and how much the cost of the concession on the travel allowance is likely to be?

Mr. Thorueycroft

The right hon. Gentleman and the House will recognise that any calculations of total cost are bound to be very speculative. One cannot say how much advantage will be taken of open general licences, or of the opportunity to travel, but it is estimated that, roughly speaking, the total additional expenditure may be in the neighbourhood of £40 million in a full year, of which £8 million, approximately, would be the amount to be attributed to the addition to the tourist allowance.

Mr. Gaitskell

While we on this side of the House appreciate the importance of encouraging intra-European trade, is it not a fact that our cumulative deficit with the European Payments Union is still some £300 million, that, as regards current account, we are only barely in surplus, and that, if we move into deficit, possibly as a result of these relaxations, it will cost us gold to the extent of 50 per cent.? In these circumstances, could the President say what prospects there really are of an expansion of our exports as a result of the move which he is now making, and, in particular, what action we expect from the creditor countries in the European Payments Union—what relaxations they are likely to make—because I am sure he will agree that the onus is really on the creditor nations, and not on the deficit nations, to make the relaxations which are so necessary in order to improve European trade?

Mr. Thorneycroft

It would be correct to say that there is a deficit of £200 million, in addition to a gold payment, which we should reasonably hope to win back, of £100 million. It is against that background that I emphasised in my statement that this is the most which Her Majesty's Government feel it would be prudent or right to do at the present time. We do, however, think that it is a proper contribution to make in the circumstances which now exist and we make it in the hope that the creditor countries —and I share entirely the view of the right hon. Gentleman about the creditor countries—will also take the oppor- tunity of relaxing still further any restrictions that they have, and that all countries will continue at least to maintain the conditions of liberalisation which at present obtain.

Mr. Glenvil Hall

Can the right hon. Gentleman say what period the additional £15 in travel allowance will cover? I assume that it will be the period to October, but, if not, perhaps he will let us know? Secondly, what effect will the additional allowance have on the present children's allowance?

Mr. Thorneycroft

The allowance for children under 12 will be raised from £15 to £30. The period will remain unaltered; that is, it will extend from 1st November in any one year to 31st October in the next.

Viscount Hinchingbrooke

Will there be any addition to the allowance for motor cars?

Mr. Thorneycroft

The motor car allowance will be increased from £15 to £20.

Mr. Boothby

Have any special representations been made, or are they contemplated, to the Belgium Government, who, if it be a sin to be a creditor, are the greatest sinners of all?

Mr. Thorneycroft

These concessions affect European trade generally. It is our hope that the creditor countries—and Belgium is certainly a creditor country, as my hon. Friend said—will maintain their present liberalisation, and, where possible, extend it.

Mr. A. Woodborn

Am I correct in understanding that this is a gesture from the Government, without any previous negotiation or understanding with the other Governments concerned?

Mr. Thorneycroft

I think it is really more than a gesture. I think it is a positive contribution to the expansion of trade between ourselves and Europe.