HC Deb 24 March 1955 vol 538 cc2251-3
20. Mr. Bottomley

asked the President of the Board of Trade if he will make a statement about future trade prospects with Australia.

22. Mr. H. Wilson

asked the President of the Board of Trade whether he will make a statement about the effect on United Kingdom exports of the import restrictions imposed by the Australian Government and on the representations which Her Majesty's Government have addressed to the Government of Australia.

Mr. P. Thorneycroft

The Australian Government have felt obliged to impose new import restrictions in order to arrest the fall in their reserves. It seems likely that, in the next financial year, they may achieve a saving of up to £80 million on the current rate of imports. The effect on the United Kingdom may, therefore, be of the order of £30 to £40 million out of exports amounting in 1954 to £278 million. It is not possible to forecast the effect on particular industries since quotas are available for imports from any non-dollar source and in some cases for a variety of alternative goods.

I do not consider that any formal representation against the general policy of the Australian Government in seeking to safeguard their balance-of-payments position would be either effective or appropriate. I shall, however, be in touch with the Australian authorities on detailed matters arising from these measures. The Australian Government have made it clear that they intend to relax these import restrictions as soon as their balance of payments permits.

Mr. Bottomley

The Australian Minister of Commerce and Agriculture, at the beginning of this year, said that unless the United Kingdom Government stopped buying wheat from the Argentine and other subsidised products from other countries, the Australian Government would be compelled to stop importing goods from this country. Can the President of the Board of Trade say whether Her Majesty's Government made any representations at all in view of that warning?

Mr. Thorneycroft

It is no part of the policy of Her Majesty's Government to do barter deals in wheat with Australia or anyone else. It is true that the general movements in commodity prices—in wool, particularly—have had an effect on the balance of payments of Australia.

Mr. Wilson

Has the right hon. Gentleman seen the delight with which this announcement was received by the Australian Union of Manufacturers and other protectionist circles in Australia? Is he aware that it is considered in Australia to go very much further than is required by the balance-of-payments situation in that country? In those circumstances, and in view particularly of the serious effects on the Lancashire cotton industry, will the right hon. Gentleman now make representations to the Australian Government about their action?

Mr. Thorneycroft

The Australian reserves have fallen by more than £100 million in the last 12 months. In the last resort it must be a matter for the Australian Government to determine the measures which they deem to be required to safeguard their position. I have no doubt that in Australia, as in other countries, any action taken by the Government is greeted by diverse shades of opinion.

Mr. Bottomley

Can the President of the Board of Trade say what steps were taken by Her Majesty's Government to meet this warning?

Mr. Thorneycroft

There is no question of a warning. It has been known for some time that the reserves of the Australian Government were declining. Those movements were observed on both sides of this House. I think it was well within the purview of everyone that some cuts might be possible.

Mr. Stokes

Why does the right hon. Gentleman consider that it was sound business to build up sterling trade balances in this country in time of war in order to blow Hitler to blazes, but that it is unsound business to build up sterling balances at the other end in order that everyone can have what they want?

Mr. Thorneycroft

I should not wish to enter into debate with the right hon. Member in the high realms of finance, but I think it is regarded as sound business at all times for a country running into balance-of-payments difficulties, and whose reserves are declining to take some steps to deal with that situation.