§ 11.9 a.m.
§ Sir Charles Taylor (Eastbourne)
I beg to move,That this House, recognising the vital necessity for increasing Britain's export trade, both visible and invisible, and in view of the steady growth of foreign competition, urges Her Majesty's Government to give every encouragement to industries in their efforts to achieve a substantial increase in export markets.When one talks about Britain's export trade, there must of necessity be constant references to taxation and to the Exchequer. We are delighted to know that the export trade figures published recently show that there has been a substantial increase in export trade, but I do not believe that this should in any way lead to complacency. It is perhaps difficult to explain why, when the country has recently become so prosperous, it was necessary for the Chancellor of the Exchequer to introduce a supplementary Budget. We have full employment here at home, we have high wages, but of course wages have to bear a relation to production figures. If wages are increased, which they have been, then production figures must also be increased, otherwise, as has been said so often before, we shall price ourselves out of the export market.
The situation may not affect the home market because we have here full employment and high wages and there have been facilities for hire purchase and buying by instalments, and the very fact that wages are higher enables our people to buy goods in the home market, goods which, because of the high price they command, could not be sold in the competitive markets of the world.
In addition, we live in an over-populated island which cannot grow sufficient food for its own use. Therefore, we have to import many essential foodstuffs from overseas countries. Being largely a manufacturing community, we have also to import, for the manufacture of goods here, raw materials which are not produced and not grown in this country. In the main, therefore, the two classes of goods which we have to import are food and raw materials for manufacturing.
These essential goods have to be paid for in foreign currencies, and unless we can sell manufactured goods in the markets of the world, or unless we are 916 able to supply invisible exports, we shall not be able to obtain the wherewithal to buy the goods that we so urgently need. This is perhaps reducing our economic problems to over-simplicity.
There is one individual industry, of course, which could put our economy very nearly right, and that is the coal industry. This island has very large natural coal deposits, and if we could produce sufficient coal for our own domestic use and use in our manufacturing industries and at the same time provide coal for export, instead of having to import it at high prices, we should be sitting pretty for many years to come.
The nationalisation of coal has proved a flop. I cannot help thinking that many people in the industry were misled by members of the party opposite into believing that when nationalisation came the golden gates would be open for everybody, everything would be fine, there would be cheaper coal, wages would rise, and there would be greater production. But there never can be, and there never are, rewards in any industry without work. I hate to have to draw the attention of the House to the fact that, in spite of nationalisation, there have been more disputes and stoppages in the coal-mining industry since the change than in any industry run by private enterprise.
I appreciate the misgivings of all those engaged in the coal-mining business, because I remember only too well the grim days when there was very great unemployment in the coal-mining areas. It must be difficult to convince those who also remember those grim days and suffered from them that the world demand for coal for many years to come will produce a ready sale for all the coal that we can produce in this country. We should be grateful to the Government and to the trade unions for trying to impress upon the coal miners these very real truths. What more we can do except try to point out these truths I do not know.
The Treasury Bulletin for September contained a very interesting article under the heading "Britain and World Trade." Post-war trade—I am referring to general post-war trade throughout the world—is very much larger in volume than it was pre-war, and except for 1952 there has been a continual rise in trade throughout the world since 1947. Half the total world 917 trade now consists of trade between manufacturing countries on the one hand and primary producing countries on the other.
It is curious that this growth of activity in recent years has not carried with it a proportionate increase in the demand for primary products. There are various reasons for it. There is the realisation that agriculture should be encouraged and expanded in many industrial countries, there has been a growing substitution of synthetic materials for natural materials, and there has been an increase throughout the world in the demand for engineering goods in which the value of the primary product content—that is a bit of a mouthful to say—is a small part of the total value. The conclusion is that, unless we export more to the other manufacturing areas, we shall not get our full expansion in world trade compared with such countries as the United States and Germany.
One of the terrifying things in the Treasury Bulletin is the figures showing our share of the world export trade in manufactured goods in 1950 compared with the period 1954–55. Our share dropped from 25.7 per cent. to 19.8 per cent., a very substantial fall. Germany's share increased from 8.3 per cent. to 15.2 per cent., a very substantial rise. Other countries, including the United States and Japan, have not had either a very great increase or a very great decrease. The conclusion must be drawn from the figures that Britain is not increasing her exports and that we must expand our export markets for manufactured goods as soon as we possibly can.
That is the background of the case that I want to make today, and I should now like to make one or two comments on what I believe to be Government policy. In the first place, I want to say something about the effects of Purchase Tax on our export trade. There is the danger of the effect which Purchase Tax may have on the mass-producing industries engaged in trying to sustain our markets overseas. Many examples could be given, and some were given during the debate on the Finance Bill.
The one example I shall give is that of the vacuum flask industry. I have no personal interest whatsoever in this industry. I have merely heard details, and it is an illustration useful to me in show- 918 ing how Purchase Tax may affect our overseas trade. Before the war about 5 million vacuum flasks a year were imported into this country, mostly from Germany and Japan. Companies over here assembled the bits and pieces of the flasks but did not manufacture them. There are now five or six manufacturers of vacuum flasks in Britain and they are producing 7 million flasks, vacuum jugs and vacuum bowls a year, and of that 7 million 50 per cent. are exported.
Those exports can be sustained only if continuous production methods are employed and if the price remains competitive. Today we import from other countries a mere token import of 100,000 flasks. In this industry low manufacturing costs have been achieved by the use of mass production methods, and any drop in sales on the home market may very greatly increase manufacturing costs. This industry believes that the increase in Purchase Tax on these articles sold at home may have that bad effect. This is a single example, and there are probably many more, where Purchase Tax can be wrongly applied to the home market and may lose export markets of great value to our country.
My next point is completely different. I want to draw attention to British-owned companies abroad who benefit from overseas tax laws. Many companies with their headquarters in Britain have subsidiaries abroad solely for the purpose of promoting their export business. They may be in Canada, the West Indies, or elsewhere. This is done simply because it is found that the overseas tax laws are more helpful to them than are those of the United Kingdom.
For example, in Canada a company which is engaged solely in holding foreign investments and shares is obliged to pay tax only if and when it distributes the profits to the shareholders. It may, therefore, reinvest the money which it gets from one country in another country and continue reinvesting the money without paying any intermediate taxation. This must mean that it pays many large companies with export business to form overseas associated companies, perhaps registered in Canada, with the consequent loss of foreign currency to the Bank of England and the revenue of the United Kingdom Exchequer.
919 In the long run, the introduction of tax laws similar to those enjoyed in Canada, if introduced here, would not appear to create any technical difficulties, and there would be no ultimate reduction in the amount of tax collected in this country. To put it simply, if we want British companies to increase their export trade, they should be allowed to keep more of the profits which they make in the export markets so that they can reinvest them. I believe that we should give companies all possible assistance and cut red tape and then, in the years to come, we shall again see our export trade increasing and the building up of foreign investments abroad once more.
I want to say a few words about invisible exports, the greatest of which are the tourist trade and insurance. I have recently heard some rather disturbing stories from American friends that American tourists are not welcomed in this country as cordially as in France, Italy and Western Germany. I find that hard to believe, but at any rate we should take note of the complaint. We are meant to speak the same language, but there are vast differences in our languages and sometimes that leads to misunderstanding, and, of course, it is proverbially difficult to get on with "cousins."
But we cannot afford to lose our tourist trade. We cannot afford to see its annual receipts drop, so we have to do two main things. First, we have to improve our facilities for tourists to enable us to compete with other nations and, second, we have to increase our hotel accommodation in the cities and tourist centres. I should disclose the fact that I am interested in the hotel industry. I did not do so earlier because I thought that by this stage it might be fairly generally known.
To improve our facilities, the first thing we should do is to review our licensing laws. The American visitor, when he returns to his hotel after 11 o'clock in the evening with a friend has to say, "I cannot give you a drink, I can have one myself, but I cannot give you one." His guest may also be an American and he will probably say, "Let's have one in your room." But even if they have one in their hotel room, as it were, privately drinking in the bed room, they will still 920 be breaking the law and involving the manager of the establishment in being an accessory to their breaking of the law, if he knows anything about it.
§ Mr. R. W. Sorensen (Leyton)
Does the hon. Member mean to infer that Americans come to this country primarily to get drinks?
§ Sir C. Taylor
That interruption is unworthy of the hon. Member. I am trying to suggest that we ought to improve facilities for visitors, whether American or not. All I can tell the hon. Member about this sort of thing is that it is very irritating to the visitor that he cannot do this, that or the other because of these rather ridiculous restrictions. The law becomes ridiculous, because everybody knows that drinking with a guest in an hotel bedroom is done. It would be better to get away from these petty restrictions and make this sort of thing legal.
My second suggestion is that Purchase Tax is a dreadful imposition on the hotel trade. Some of my hon. Friends and I tabled an Amendment to the Finance Bill on this point, but unfortunately it was not in order and it was not called. Purchase Tax makes it absurdly expensive for hotels to keep adequate supplies of satisfactory equipment. The industry is the only one which has to pay tax on what are obviously the tools of its trade.
Thirdly, because we have over-full employment it is very difficult for nearly every industry to get staff. This also applies to the hotel and catering trades. Traditionally, for many years, many of those engaged in the industry have been foreign people. There are many in European countries who are ready and willing to come here to work in the industry. I do not think that the trade unions would object in any way if they were allowed to come. If they did come, that would perhaps greatly ease the existing situation and it might enable other people who now work in hotels and catering and are unsuited to enter other industries who need them. It would be reasonable for the Government to say that in view of the shortage of staff they would allow at any rate a limited number of foreign workers to work in the hotel industry here.
The fourth point I wish to make in this connection is about de-rating. Why 921 should not hotels be de-rated, like industrial premises? This would enable managements to spend much more on the maintenance and improvement of their facilities, without having further to increase hotel charges. Lastly, if the tourist trade is so important to our country—not only to hotel keepers, car-hire firms and those engaged in entertainment but to all shopkeepers and to many manufacturing industries—why could not the Government arrange, perhaps through the Finance Corporation for Industry, or some other body, for loans free of interest for the construction of new hotels in our cities and tourist centres? Those engaged in the industry believe that it would be unprofitable for anyone to build a satisfactory new hotel in England today with building costs as they are.
What are we to do to increase our exports? Largely, we are tied by G.A.T.T. If every nation played fair in honouring agreements and subscribing to them, I do not think that the provisions of G.A.T.T. would be very unduly disadvantageous to us. However, I believe that at the moment that Agreement definitely works against us. We are not the only nation that must export—even the great, largely self-sufficient United States has to find markets overseas—but we are in an unfortunate position, because we lost many of our investments overseas during the war when we, as it were, cashed them for the benefit of the free world at the time when we were fighting Germany and its satellites alone before the United States came into the war. Also, being largely an industrial country, we have not been able to grow sufficient food for our own consumption.
What can we do to put these matters right? I believe that we must work with more eagerness. We must see more enlightenment among management and trade unions, and more industry throughout the country. It is galling to hear that there are almost identical factories in this country and in Germany, working the same hours and with the same production methods, but that the German factory produces about 15 per cent. more manufactured goods than we produce here. Those figures cast a reflection upon management, workers and trade unions alike. Some of the trade unions have, unfortunately, become too big and they 922 are not able to show effective leadership to their many members.
§ Sir C. Taylor
I.C.I. is, very largely, decentralised, and it is run by very efficient management.
To return to the last Budget, which I can only refer to as one which introduced rather negative controls, I should like to ask whether we could not introduce some positive inducements to industry to increase export markets. I know that the Minister who replies to the debate will probably ask, "What about G.A.T.T.?" Are we to carry on with G.A.T.T., knowing that if we can get other nations to agree everything will probably be all right for the world in future? Are we to continue this idealistic approach in the hope of achieving a sort of heaven on earth in international trade, knowing quite well that country after country is trying to "get round" G.A.T.T. all the time, and that some are succeeding?
Although we may have made certain countries toe the line about the subsidising of exports, we all know that such support is given by many countries. We seem to be the only chaps who are playing the game about G.A.T.T. Are we to continue indefinitely trying to persuade other nations to be as honourable about G.A.T.T. as we are; or are we again to see that industry in this country is protected by trade barriers, and so on?
I should like to suggest two positive approaches to the idea of giving inducements or help to manufacturers to sell more exports. Why cannot we give promise of home tax relief on export sales? This could not be considered as subsidising exports; it would be a home tax concession. Just as Purchase Tax is not charged on exports, why should not there be a tax remission scheme for those companies which increase their export business?
I know that there are many administrative difficulties attaching to any such suggestion, but I cannot believe that it is beyond the wit of man to evolve some scheme of that sort. It may be said that it would react unfairly as between industry and industry and that no fair tax remission scheme could be produced which would cover all the exporting 923 industries. That is probably true, but no tax has ever been fair and no new tax or tax remission scheme could ever react fairly throughout the whole of the community.
I believe that were such remission granted on export trade, or increased export trade, every managing director of every company which could possibly export would go out once again into the markets of the world to try to increase our exports.
§ Mr. F. A. Burden (Gillingham)
May I ask my hon. Friend where he proposes to start with such a scheme? Take, for example the motor car industry. Would he give a tax remission to every one of the makers of motor car parts—the tyres and the flex enclosing the electric cables? Or would he confine the scheme to the finished product?
§ Sir C. Taylor
I have said that such a scheme would require a lot of detailed working out. One could not expect that all the manufacturers of car parts would get a tax remission. It could not be given for the paint, for example. If paint manufacturers want to sell their paint abroad, they must try harder to persuade the manufacturers of foreign products to use it. I do not see why the highly geared sales force of the motor car industry should have to compensate all the spare-part manufacturers. None of the spare parts would be abroad were it not for the salesmanship of the motor car sellers.
§ Mr. David Price (Eastleigh)
Is my hon. Friend aware that in the case of some products, like machine tools, for which there is a high demand both at home and abroad, the type of incentive which he recommends would mean that even more would be going for export; and some of us feel that there is certain equipment of which we should export less, but use it for new industries in order to encourage the export of high conversion margin products?
§ Sir C. Taylor
My hon. Friend knows more about machine tools than I do, but I suggest, although I have not worked out the details, that such a scheme as I have outlined would not be beyond the wit of man to devise in order to induce our manufacturers to export more.
I am certain that when the Chancellor is framing his Budget he takes advice 924 from all sorts of people—the secretary of this and that association, the Federation of British Industries, the Associated British Chambers of Commerce and so on, and that he listens to many people. Would not it be a good idea to have a kind of informal committee of industrialists, union representatives and others—people who are experts at their job—who could advise the President of the Board of Trade, and perhaps the Chancellor, on how to sell more goods abroad? Such a committee would not be appraised of some economic problems known only to the Chancellor and the Treasury and might therefore produce some silly ideas, but I am willing to wager that it would also produce some jolly good ones.
My last point deals with the position of businessmen travelling abroad, particularly in the United States, and endeavouring to increase our markets overseas. With the exchange controls as they are at present, it is ridiculous that a businessman, travelling in America or Canada, for example, should receive only £10 or £12 a day in dollars. Such a man must watch his expenses all the time, because everything is much more expensive in America than in this country. Probably he can invite an American buyer to have only a very small dry Martini instead of entertaining him to lunch, or something like that. If we have faith in the British businessman, it is quite ridiculous to send him abroad in the guise of a pauper. I hope that my right hon. Friend will bear this point in mind and make representations to the Chancellor on the subject.
If we are to increase our export trade, I believe that we should go back to the adventurous spirit which existed in the time of the first Queen Elizabeth. If we we can give guidance to British industry and provide opportunities for our businessmen such as are enjoyed by many other countries, we shall see them produce the results which we all so much desire.
§ 11.47 a.m.
§ Sir Victor Raikes (Liverpool, Garston)
I beg to second the Motion.
I think the House owes a debt to my hon. Friend the Member for Eastbourne (Sir C. Taylor) for raising this very wide question. We have spent a good deal of this week dealing with other matters 925 relating to the Finance Bill, and I would remind hon. Members that, in the long run, Finance Bills and Budgets may very well depend on the sort of broad development which we must have in our trade policies if we are to survive. The more we take advantage of occasions like this to approach these matters, I hope in a more or less common spirit, the better. I propose to be controversial, but I shall probably be more controversial with my right hon. Friend the President of the Board of Trade than with hon. Members opposite.
These are matters which need to be tackled with good will and determination by whatever Government may be in office, for the future of the country depends on the Government being in the position to maintain a trade policy which will give immediate and reasonable standards of life to our people. This year, we have seen an increase in industrial production amounting to about 6 per cent. But we also must realise that there has been an even greater increase in production by a number of our competitors and there are possibilities that within the next few years, and unless we develop our traditional markets to a greater extent, we may find industry in such a position that it is unable to sell its goods abroad.
I confess that when my hon. Friend raised the question of coal, I was almost tempted to get going on that subject. I do not want to be in any way controversial, but there are two facts which we have to face. The first is that it seems most unlikely that in the immediate years ahead we shall increase our coal exports, and there are two reasons for this. First there has been no increase since 1950 in the production of deep-mined coal in this country, but rather a tendency towards a decrease. If that decrease continues, and if, at the same time, the production from opencast mining is reduced, there will be less and less coal to spare for export.
The second point on that—and I merely mention it in passing, because it very much affects the whole picture of where we are to look for increased exports—is that at the moment a miners' charter is being considered by the National Coal Board. I propose to make no comments one way or the other on that charter, except to say that if it were implemented in full without, at the same time, a very substantial increase in the production of 926 coal per shift—it is a charter for reduced hours, and so on—we might well find that we should be producing some 30 million tons less coal than we are producing at present. I only mention those matters to emphasise that we have very little hope of restoring our coal export position in the near future.
We have also seen, in spite of our increased industrial production, that the gap in terms of money between exports and imports has rapidly increased during the past few years. In the last two years that gap has almost doubled. In the first nine months of this year, there was a further increase in our imports of about 15 per cent. That is the picture.
Turning to the question of those markets in which we can expand our export trade, we are sometimes inclined, when we talk about G.A.T.T.—particularly when we come to the question of retaliation in the matter of preferences—to forget that the great majority of our export trade today is done not with G.A.T.T. countries, but with non-G.A.T.T. countries. At present, 67 per cent. of our exports go either to the Commonwealth or to countries outside G.A.T.T. That is a fact which I want the House to bear in mind as a background to what I now propose to say about the question if increased trade within the Commonwealth and Empire.
The Ottawa Agreement is now 23 years old, and, if one thing is certain, it is that although that Agreement was the greatest major factor, between 1932 and 1939, in improving our trade and employment position, it is quite clear that, unless we revise and modernise the system of trade treaties, those treaties tend to get out of date and to become more and more useless the longer they are left untouched.
I have been told that if we tried to revise the terms of the Ottawa Agreement—of course, as the House knows, at the present we cannot—we might find that, as a result of the development of secondary industries, and so on, within the Empire since 1932, we should be faced with new difficulties. I quite admit that, but just because we may be faced with new difficulties is no reason, to my mind, for not trying to bring up to date something which has worked well in the past and which today is not so valuable as it was in 1932. We cannot touch 927 the Ottawa Agreement today unless we are prepared to tackle the question of the first cause under the G.A.T.T. Agreement. It is sometimes said that whatever a Jeremiah like myself may say about G.A.T.T., nevertheless, in the days since the war, we have considerably increased our export trade not least to the Dominions.
I suggest that what we have to consider is whether in our traditional markets we are increasing the percentage of our imports from those countries or whether that percentage is falling, because, in the long run, we must aim at trying to get a larger share of our imports from those markets which we consider provide the main employment and the security of our people. Even so far as Australia and Canada are concerned, our percentage of total imports from those countries has fallen during the last four years.
I will give two examples. First, Australia. Four years ago we took, roughly, between 51 and 52 per cent. of the total exports of that country. That figure has now fallen by 5 per cent., whereas during the same period the United States have increased their imports from Australia by something like 3 per cent. In Canada, which, of course, is much more a market for the United States, the same picture is to be seen. During the last four years, we took only 9.6 instead of 12.7 per cent. of the total exports of Canada, whereas the United States increased their imports from Canada from 67 to 72 per cent. There is the same import trend from South Africa and elsewhere, and I suggest that it can be very dangerous to our position.
There are limitless opportunities of expansion within the Commonwealth and Empire if that trade is properly developed in the years that lie ahead. Whatever trade we may do elsewhere—and I am the last to suggest that we should neglect opportunities of good trade wherever they can be found—we have, nevertheless, within the Commonwealth and Empire a very suitable market which if, by wise policy, it were improved and extended in the years ahead would do more to make the Chancellor's dream of a 25 or even a 50 per cent. improvement in the standard of living of our people within the next twenty years not a hope, but a fact.
928 The difficulty which I always come across on this problem of giving inducements to Commonwealth trade is particularly apparent when I have to deal with the Board of Trade, whatever Government happens to be in office at the time. I shall have a little bit of a fight with the Minister of State, Board of Trade, before I have finished, although he will have the last word—but I must not get off on to red herrings.
We are so often told that if, by increased preferences or by other methods—and I am not tied to the preference method as the only one which may provide inducements for increased trade—we were to seek to improve our position, other countries within G.A.T.T. would retaliate, and that could have a vital effect upon our economy. That view is often strongly expressed, and I want to make a few comments upon it.
First, we can assume that no country is really likely to retaliate sharply against us, unless, at the time, it has an unfavourable trade balance with us. No country which has a substantial favourable balance of trade with us is likely to endanger it by taking violent punitive steps; nor would such steps be particularly necessary for it. Retaliation would come only from those countries which had unfavourable trade balances with us, if they thought that it was as a result of our giving greater preferences to other countries that their trade position was being made worse. In fact, there are only three countries with whom we have a substantial trade balance of over £10 million a year, namely, Norway, Liberia and Burma.
Norway is a member of G.A.T.T.; Liberia is not a member, and we have a preference arrangement with Burma. I cannot see that the repudiation by us of Article I of G.A.T.T. would have the slightest effect upon British trade in regard to any action which those countries might take. There are 36 other countries in respect of whom we have small favourable trade balances. I shall not waste the time of the House by enumerating them, but only seven are signatories to G.A.T.T., and at present they provide a trade balance in our favour of only £65 million, which is a tiny figure when viewed against the background of the whole vast picture of world trade.
929 Fourteen countries, including the United States of America, have favourable trade balances with us, and we can hardly imagine that if we took certain steps to protect our interests they would have any violent cause for complaint. Why should they? It is known throughout the world that G.A.T.T. is not an idealistic conception. It is a very good instrument of trade for the United States of America, without the least doubt, and they are quite entitled to make what use they can of it, but we are also entitled to look after our interests.
I do not think anybody would suggest that if we were to increase preferences within the Commonwealth and Empire, the United States of America, with a gasp of fury, would cut off all trade with us and injure our position. Let us consider what would happen if they did so. From 1950 to 1954, United Kingdom exports to the United States have averaged between £140 million and £141 million a year, and imports from the United States have averaged £288.4 million. The balance in favour of the United States has been about two to one. I hope I shall not be told that if we were to upset the United States by increasing these preferences they would go out of their way to cancel and upset the existing trade set-up between us, which is now infinitely in their favour. In fact, the balance could be brought down quite a bit and they would still be in an extremely favourable position.
Great Britain is not even able to move the tariffs that every other country is able to move, as was stated by the President of the Board of Trade himself some time ago. Are we to be hypnotised by the idea of retaliation if we take certain bilateral steps to induce other countries to accept our goods? How can we sustain or increase our preferential position unless we offer other buyers some economic advantage if they increase their trade with us? If we do not take such action, we shall go round and round in a sort of giddy whirl in our export trade, which is governed so largely by G.A.T.T.
I shall not deal with the G.A.T.T. proposals from the Empire point of view, except to say that all hon. Members will welcome the advantages for trade that can be and are being obtained as a result of the waiver recently granted in respect of the Colonies. There is one 930 comment on that which should be made. Much as we should welcome the waiver, it is rather curious that we can claim such waiver in respect of the manufacture of commodities within the British Empire only if the waiver is of no substantial advantage to the United Kingdom home market. That is a rather one-sided arrangement. If we are to go to the United States and the other G.A.T.T. countries and tell them that we wish to develop this or that project within the British Empire, we shall receive the benefit of the waiver only if it is of no special advantage to our home market.
A good many people have been making a great deal of fuss about Jamaicans and others coming to this country in large numbers at present and about the difficulties which have been caused, but, speaking as a rather old-fashioned Imperialist, I would say that we, as the centre of what is still an Empire, have little right to refuse persons from that Empire coming here unless and until we are prepared to develop those territories so as to ensure that their peoples have reasonable employment there.
Perhaps I am keeping the House unduly, but one does not often have an opportunity of dealing with these questions without members of the two Front Benches taking up all the time. There is one other aspect of Empire development and trade to which I think the Government should give further consideration. They should consider more closely how far we can maintain a definite quota of migration of our own race to various parts of the Commonwealth which still need a certain amount of immigration. This matter has been before the Press recently, since Sir Clifford Heathcoat-Smith visited Australia and the rather powerful article, from the long-term point of view, which appeared in the Daily Telegraph earlier this week.
The fact of the matter is that, if we want to maintain colonial economic cooperation and improve trade between this country and the Empire and Commonwealth, it is an enormous advantage if we can continue to maintain at any rate a stream of persons migrating from this country to the Commonwealth to maintain the blood ties, which always will count for something. Sentiment will 931 always play its part beside the cold figures of economic theory.
We are told, for example, that Australia, with which country we hope to increase our trade greatly, wishes to have a certain number of British migrants, but that the cost of training British migrants is £3,000 each, whereas the cost of training migrants from Central Europe is considerably less. This is a matter which requires closer examination, both from this side as well as from the Australian side. We are also told that, in spite of the extra cost of training, they still want more British migrants. I should be talking pure nonsense if I were to suggest that this is a time when we could have an enormous drive for emigration within the Empire—a time of full employment, when there is a great shortage of labour here, and when there is a great deal of inflation in Australia, which affects immigrants.
We could not possibly embark upon a vast scheme, but what I do suggest and urge upon the Government with all the sincerity at my command is that surely the time has come when, with each Dominion that is interested in British migration, we should have some form of bilateral migration advisory council between the two countries to go into the whole question of finance, housing and transport. This would clear the channels for increased migration, whenever that may be possible, and ensure, on the Dominion side, that we give a lead and do not remain merely silent and uncertain in our policy.
I have talked for long enough, but I wished to touch on these two questions of Empire trade as far as Preference is concerned and the importance of inter-Imperial migration. I have been in this House for a very long time, and the longer I am here the more assured I am that, in the long run, whatever the Government of the day may be, we must maintain our Imperial trade and relations and even increase them. By these means, we shall not only prosper as a country, but will also maintain in a distracted world that spirit of the British way of life and British standards which, in my view, is the main hope of mankind.
§ 12.16 p.m.
§ Mr. Frederick Mulley (Sheffield, Park)
I beg to move, to leave out from "invisible" to the end of the Question and to add instead thereof:notes with concern the relative decline in the exports of many British industries and deplores the failure of Her Majesty's Government to take any positive action to encourage and promote our export trade.As the two hon. Gentlemen who have spoken developed their arguments, I began to wonder if it would not have been appropriate for them to have moved the Amendment as well. I should like to congratulate both hon. Gentlemen on their speeches, and the hon. Member for Eastbourne (Sir C. Taylor) in particular for having chosen this very important subject for today's debate. Although perhaps the hon. Member for Eastbourne did not realise it when he put down the Motion on the Order Paper, I think it is very appropriate that the kind of medicine which has been handed out to the Chancellor of the Exchequer during the week should also be handed out, though in a smaller dose, to the President of the Board of Trade today. I hope that we shall have further speeches of the quality and critical argument that we have had already from the Government benches.
I would, however, say that while I would be the last to deny the vital importance of the coal industry, both from the point of view of exports and that of the internal working of the economy, I think it was a little overdone to try to focus the blame for the difficult export position on the coal industry, or indeed to blame the nationalisation of the industry for the difficulties that now confront us. I think it is time that hon. Members opposite realised that if the coal industry had not been nationalised there probably would not have been any coal exports at all, and it really is time, now that they have been in power for four years, that they should learn to take some responsibility for the state of things as they exist, and not try to go back in time five or ten years and suggest that if this or that had not happened we should not have been in our present position. If they do not like the way in which the coal industry is being run, let them say so and do something about it.
§ Mr. William Shepherd (Cheadle)
Surely, the hon. Gentleman will realise how difficult the coal position is? Even had we had available during the last six months more steel capacity—more industrial capacity in general—we should not have been able to use it because of the shortage of coal. We could not even import more because of the shortage of shipping.
§ Mr. Mulley
I thought I had made it clear that I was the last to deny the importance of coal, and, if that is the situation, as I think it is, we want positive action, and that is why we have put down this Amendment, because there is no positive action from the Government to deal with the situation. It is all very well criticising the trade unions, but it is not for them to take the lead and direct the countrys' economy.
I should, perhaps, give some evidence to justify the phrase which we have used in the Amendment relating to the decline in the exports of many industries, and I am grateful to the hon. Member for Garston (Sir V. Raikes) for giving us a good deal of information of that kind. I should like to quote first the overall position of the engineering industry, both electrical and mechanical, whose exports represent about 40 per cent. of our total exports. Of course, it is in this sector that we must look increasingly for an extension of exports if we are to improve our position.
The British Association of Engineers, reporting on world trade in Engineering Products for 1954, said that the increase which we had contributed to the total increase in world trade in engineering products of over £200 million was only £8 million, out of something over £500 million exports of our total engineering exports. Our percentage of the international trade in engineering products has decreased, due perhaps to German competition, and in Latin America we have been losing very heavily not only in the engineering products section, but in others. Charts in the Economist bear testimony to that, and much of the decline is due, I believe, to the Government's policy.
I appreciate that the hon. Member for Twickenham (Mr. Gresham Cooke) knows a good deal more about the motor car industry than I do, but it is worth taking as an example, not because we 934 want to make another attack on the motor manufacturers, but because it represents such an important section of our export trade, and because the kind of things that are happening in the car industry are symptomatic of the general cause of our present economic difficulties. Figures published in the Financial Times of 17th October show that in 1950 we exported 398,000 cars, but in 1954 the figure was only 366,000—having dropped in 1952 to 309,000.
The significance of those figures is understood only when they are compared with the total production of motor cars in the same years. The total production in 1950 was 522,000 and in 1954, 769,000 vehicles. In other words, the industry's exports declined from nearly 80 per cent. to less than 50 per cent. of the total output and, as far as one can see from the 1955 figures, I suggest that the percentage has been dropping still lower, although I am glad to say that the number of cars exported in 1955 has increased.
§ Mr. R. Gresham Cooke (Twickenham)
It is worth pointing out that while the percentage has naturally been going down because of more cars going to the home market, the actual export of cars has been climbing steadily in the last three or four years.
§ Mr. Mulley
I have read out the figures. Presumably the hon. Member for Twickenham is questioning the authenticity of the Financial Times.
§ Mr. Gresham Cooke indicated dissent.
§ Mr. Mulley
I will repeat those figures. In 1954 we exported 366,000 cars, as against 398,000 in 1950. The hon. Member is obviously not correct.
§ Mr. Gresham Cooke
If I get an opportunity to speak, I will show the whole picture—lorries as well as cars.
§ Mr. Mulley
I agree that that is a factor to be considered, but I hope that the hon. Member will also take account of the enormous increase in the cost of each car due to a general rise in prices. If he takes account of that increase he will not, I think, be able to convince the House that there has been any substantial increase in the rate of the industry's exports. It is for that reason that I am talking in terms of volume rather than value, because unless we take account of the increase in the value of 935 the exports we clearly get a false picture. If we take the general index of the volume of exports and ignore the alterations in price, we find no significant increase in the period of office of the present Government. Indeed, it shows a decline in the years 1952 and 1953. I will not read out the volume index because, as hon. Members know, it is readily available in the Monthly Digest of Statistics.
As a country dependent particularly upon exports, we face this problem. We are, in a sense, a supplier of luxury goods and capital equipment and, in return, we require raw materials and food. Should there be recession in world trade, luxury goods and capital equipment are the commodities which are most speedily cut. Nobody buys luxury goods when in economic difficulties, nor does anyone buy capital equipment at a time of declining trade. On the other hand, the things that we need from abroad we simply must have in any existing economic conditions. Therefore, when world trade is favourable to us we should be building up reserves instead of running them down, as has been the case recently, so that we can have something behind us to deal with an adverse world situation which might be outside our control.
Our vulnerability to every economic wind that blows in the world is not, I think, fully understood by the electorate at large. I wish that the party opposite would try, as we did in our Election manifesto, to bring these points home to the electors. We tried, and may have lost votes as a result, but unless the country appreciates the knife edge on which our economy rests, no Government will get the support necessary to face these problems.
As has often been said, but needs saying again, the Government have been very fortunate in the last five years because the decline in the export trade has been masked by favourable terms of trade. The ratio of import to export prices was 113 in 1951, it is down to 100 today, and has been as low as 96. We have had to export less to buy an equivalent volume of imports. Had that not been the case, the failure of the Government to press for exports would have brought the difficulties which have resulted in the Finance Bill very much earlier. Although hon. Members oppo- 936 site have attacked the President of the Board of Trade it is my contention—and, I think, that of my hon. and right hon. Friends—that the real villain of the piece in this respect is, again, the Chancellor.
I shall not dwell on the Purchase Tax changes at any length—we have already had a long discussion on them—but I would make the general point that if Purchase Tax is to remain—as I think it must, for revenue reasons, perhaps—it ought to be used on a much more selective basis. The hon. Member for Eastbourne made a very strong case for the exclusion of hotel equipment from the very substantial increases in Purchase Tax on a wide range of household necessities. On the other hand, again turning to the motor car industry, I would say that if we want to restrict home consumption by Purchase Tax, a mere 10 per cent. increase is not enough. If there is not to be a penal tax on the industry, why have any increase at all? That argument could well be developed, but time does not permit.
At the same time, the recent reduction in the Purchase Tax on a number of expensive textile clothing ranges will, I think, have the reverse effect to that intended and will reduce rather than increase the export trade. I understand that, in the cashmere woollen section, the increase in home orders today is such that export orders have had to be cancelled.
That brings one to the basic problem—this is a matter beyond political controversy—which must be faced by whichever party happens to be responsible for government. When firms can go merely round the corner and sell their goods much more advantageously at home, how are we to get them to go into the export markets, with their uncertainties and increased selling costs and the possibility that when a good market has been built up in Australia, for example, it may be cut overnight?
Hon. Members opposite must recognise that the twentieth century problem of this character that faces us cannot be dealt with by nineteenth century economic methods. This is a problem of the Chancellor's economic policy over the last four or five years. He has been relying on the Bank Rate as though the Bank Rate can today correct an adverse balance of payments. It is true that in 937 the days of the gold standard, when the £ sterling was the major currency of the world, an increase in the Bank Rate brought foreign capital into London. But today and in the 1930's, the foreign investor has been much more concerned about preserving his capital than seeking an odd extra half or one per cent. by switching it to London from Paris or from New York. The Chancellor's rather unfortunate observations at international conferences has not strengthened the position of the £ or people's desires to bring their money here when they might at any moment be faced with devaluation. Clearly, an American would not lend money in London if he expected, or even thought it possible, that the £ might be devalued while his money was here.
The net effect of the Bank Rate has not been successful in dealing with the balance of payments position and, of course, it has not been successful in dealing with inflation in the home market. The Chancellor has had to admit this himself by his credit squeeze policy. No one would suggest that that is not just as much a directive as he might have exercised officially by a directive under the Bank of England Act. It is a direct interference, and, I think, a proper interference, by the Chancellor of the day with the banks; but the Government cannot have that kind of thing, on the one hand, and then say, on the other hand, that they are leaving industry free.
The Government must realise, from the point of view both of controlling our internal economy and of promoting exports, that they must take responsibility and give a lead. The net effect of the Chancellor's operation has been to impose restrictions on the so-called freedom of the economy and yet the control of it has been handed over to the individual bank managers.
It ought not to be the job of the bank managers to decide whether a particular overdraft would further the national interest or whether one venture should be encouraged and the next discouraged. That is not the kind of way in which the Government should control industry. To get what we want—a balance at home and a balance abroad—we must have central direction, and it is the Chancellor of the Exchequer and the President of the Board of Trade, the Ministers responsible to this House, who should be exercising 938 that control and not the individual bank managers, who are obliged—they do not seek the job—to do it today.
§ Mr. Dudley Williams (Exeter)
Is the hon. Member suggesting that a whole apparatus of controls and a system of licensing should once more be set up throughout the economy?
§ Mr. Mulley
I have not said anything of the kind. I am only at the middle of what is not intended to be a long speech, and I hope to deal presently with what ought to be done. The hon. Member should get out of his mind the idea that the business of controls is a fantasy. Is not the general directive on the banks a control? The people who have told me about what they think of the Government's credit policy have been much more bitter about it than ever they were about building licences. I want to come to that point in a moment.
Industries have not really done enough to help themselves. I do not say that the Government alone ought to do everything. If we have private industry, it ought to do something about it as well. I can illustrate this briefly by a quotation from the Recorder, a newspaper which I do not find usually quoteable in these matters. In a leading article on 12th November, it said:It is no use having the most wonderful goods in the world to sell if no one knows they are for sale … Too many British firms, enterprising otherwise, still seem to feel it is 'bad form' to let people know what they have done. The fact that the Germans, Americans, Japanese and the rest gave up this attitude (if they ever had it) many years ago, may partially explain why British exports tend to be sluggish when everyone else's are booming.
§ Mr. D. Price
Would the hon. Member relate his remarks to the strong suggestion from his side of the House during the Budget debate that only 50 per cent. of advertising expenses should be allowable as a business expense?
§ Mr. Mulley
I do not recall that being put forward as an official point of view. It may be a good suggestion that internal advertising for the home market ought to be taxed but that advertising in the export market should not be taxed. That might be one of the incentives that the hon. Member for Eastbourne had in mind.
While I agree that business people who are sent abroad should have an adequate 939 allowance to do the job for which they are there, I would point out that one of the tendencies of British people abroad is to entertain their British counterparts and not to entertain the kind of people who might further their business purposes. It was reported recently in the Press that at an international motor show the German manufacturers were entertaining the foreign Press, whereas the British manufacturers entertained the British Press. Surely, there is no point in having an entertainments allowance if our people entertain only the British Press, who ought to know already about the cars on sale.
The trade unions cannot be blamed for this aspect of British industrial policy. It might be a good thing if we did have salesmen organised in the T.U.C., but the section of management concerned with overseas sales efforts of certain individual firms surely cannot bring out the old bogey that the reason why we are slipping up is that the ordinary work man does not do a day's work. Anyone with any knowledge of what goes on in the export trade realises that while some firms are doing a first-class job—and that must be said—many others are either not making any effort at all or what effort they are making is particularly badly directed.
One of the difficulties of small firms is that they do not themselves have the finance to tackle export promotion programmes. It has been suggested before and I suggest again that the Government ought to consider the fostering of cooperative selling agencies or organisations to further the export trade. Without wishing to anticipate a future debate, I might say that it is possible that some of the other functions of trade associations might be taken from them. One of the functions that they could fulfil would be to foster selling on behalf of their members.
§ Mr. Mulley
It has been done in a limited way, but there is jealousy among a lot of small firms. If there is an export order, they want it. Export orders cannot be dealt with on the basis that associations must circularise all their members before they can reply to the customer who happens to have made the inquiry.
940 That is a matter I should like the Government to consider—the possibility of co-operative selling organisations. I do not see how it will be practicable to make tax concessions in favour of the export trade. I do not feel it is desirable to give tax concessions on the basis of exports. The first obvious difficulty, which has been pointed out by one hon. Gentleman opposite, is that of distinguishing between the man who makes the goods, who may have contributed only 2 per cent. or 3 per cent. of their value; and the second difficulty is to distinguish between the home sales and export sales of a great number of our industries. Some part of the cost of the operations of a co-operative selling agency, however, could be subsidised and assisted by tax concessions made by the Government.
The ultimate step the Government should take is to give directives to the firms concerned. That is not the same thing as control, as I think hon. Gentlemen opposite will agree. The directives could be of the same kind and in the same form as the directives the Government are quite prepared to give to the banks. A directive could say, "You must increase your exports and if you do not it may be necessary to take other measures." The directive could prescribe the quantity or value of the exports to be sold. That, in effect, is what the Government have told the banks. The bank squeeze may be on what, I believe, is called the "old boy" basis, but it is quite successful. The Government should take the same line with the export firms.
If the Government want to use fiscal measures it may be a good idea to say to firms, "We are not going to put up the rates of Purchase Tax nor reduce them on all commodities altogether, but if you achieve a 70 per cent. export figure we will take your commodities out of the tax range at home. On the, other hand, if you do not, you will probably find a 75 per cent. or 100 per cent. tax on your commodities." Without the reintroduction of a large number of controls there are many ways to put pressure on the firms.
However, if the choice is between introducing a steel control or a building control, if the choice is between introducing one or two of those selective physical controls and letting the export 941 trade of this country run down, then I would introduce the controls.
§ Mr. Mulley
I said that I would not introduce the whole range of controls, unless that was necessary. But if the hon. Gentleman is prepared to see the export trade go down hill rather than have some licensing and controls—I suppose that is the point of his intervention—I am not. That, presumably, is the point he was trying to make, but, perhaps, he will be able to catch your eye, Sir, and develop his argument more intelligently later.
A way in which the export trade has been assisted and could be assisted is that of bulk purchase and of State trading arrangements. When a section of the world's economy is in the hands of nations which sell their produce by way of State trading agreements then, whether we like it or not, we must be prepared to have similar State trading arrangements. One of the difficulties the Labour Government found, and I imagine that it would be a difficulty now, was that many individual firms could not be relied upon to honour delivery dates.
§ The Minister of State, Board of Trade (Mr. A. R. W. Low)
Is the hon. Gentleman suggesting State selling of engineering goods? Is that his suggestion?
§ Mr. Mulley
I have not applied this argument to any one industry, but if the only way of dealing with the trade of a country is on a national, State basis I think the Board of Trade in this country has to be prepared to buy stuff and act as an agent of a foreign Government to carry out the transactions. Otherwise we shall not get the business at all.
The Government might be a little more active in making it quite clear to the United States of America that we take a very poor view indeed of their tendency, every time a British product begins to bite into the American market, to put the tariffs up against it. I know it is not possible for our Government to regulate the tariff rates in America, but I think a much more effective protest could and should have been made on behalf of the bicycle manufacturers of this country—a protest more like that which was made by the Dutch cheese 942 traders and the Swiss watch manufacturers.
Moreover, I think it was a scandal that the generating plant orders were taken from firms in this country when those firms put in the lowest tenders. We have to make it quite clear to the United States that if they want us to pay our way in the world, and if they want the other countries in Western Europe to do so—for this case applies not only to us but to them also—the United States must be prepared too assist at least by letting us continue to trade on the terms existing when we begin successfully to enter an American market. The Government should take a very much stronger line in their public utterances about that sort of thing than they have done till now.
The difficulties in the foreign markets are very well known. Mr. Steel, a director of I.C.I. and chairman of the International Chamber of Commerce, said recently, it is reported:If I had charge of a small business making a useful product, nothing would induce me to try to export it to the United States.That may be a very realistic but it is also a very pessimistic view to come from the chairman of the International Chamber of Commerce.
§ Mr. Low
This is a rather important point. I also saw that. Is the hon. Gentleman quite clear that he has aright the context in which that remark was made? He has indicated that the chairman of that body was suggesting that it was wrong to sell to dollar markets. I am assured that that was not in fact so, and that that remark was made in a quite different context. I think I ought to make that clear.
§ Mr. Mulley
I have a copy of the Economist for last week, 12th November, which states:The attitude they have to soothe, as regards both these matters of import policy and the commercial difficulties of the dollar markets, had been epitomised the week before, in Sir Edward's hearing by Mr. J. L. S. Steel"—and then come the words I quoted just now. They are to be found on page 587 in last Saturday's Economist. I hope that the right hon. Gentleman will study the words, and, perhaps, give his observations upon them when he speaks in the debate.
It is quite clear that there are difficulties, and I believe not only that the 943 Government have failed through the years they have been in office to give assistance to the export trade—the shortness of the time at my disposal has prevented me from developing the matter in detail—but also that their general economic policy is such that it is impossible to achieve a balance in the economy at home, with full employment and without inflation. They have failed to abolish inflation and to create the economic climate in which we can win the export trade we must have.
§ 12.48 p.m.
§ Mr. Robert Edwards (Bilston)
I beg to second the Amendment.
This Amendment has been moved ably by my hon. Friend the Member for Sheffield, Park (Mr. Mulley). I listened very carefully to the hon. Member for Eastbourne (Sir C. Taylor), who moved this very important Motion, and I listened with sympathy to the hon. Member for Garston (Sir V. Raikes), who seconded it, but I had great difficulty in discovering what practical solutions they were offering to deal with the vast problem of export trade. I gather that they suggest an extension of the tourist trade and an increase in the invisible income of the country, and that some drastic changes must be made in G.A.T.T.—
§ Mr. Edwards
—in one article—and that we must do something about developing the Commonwealth. It was not suggested how. They suggested that Purchase Tax should be eliminated from things used in the hotel industry, that miners should produce more coal and that there should be better relations in industry.
These solutions, while very interesting and of some importance in a minor way, do not go anywhere near solving the problem of increasing the volume of our trade in world markets, so that we may be able to purchase an increased volume of food and of the raw materials which our industries need if we are to maintain ourselves as an important world trading nation. As a new Member of the House, what has astonished me so far, though I presume that I shall learn from experience, is the complete absence from the speeches of hon. Members opposite of 944 realistic solutions for the problems of our age.
We live in an age of revolutionary change. The only way to live in a revolutionary situation is to make the revolution oneself, otherwise it will be made for one at the barricades. In an age of scientific advance which has changed the industrial landscape of our country and the world, the only solution offered by hon. and right hon. Members opposite is to increase tourism, to change an article in G.A.T.T., and to reduce the purchasing power of the people at a time of tremendously increased productivity.
My hon. Friend the Member for Sheffield, Park has very carefully analysed the situation and I can, therefore, spend a few moments in suggesting what are the real problems which need to be solved. The Minister challenged my hon. Friend's quotation of the remarks of Mr. Steel on trade with America. I also have heard Mr. Steel talk about the problem and I have not the slightest doubt that he meant what my hon. Friend quoted. The facts are that it is becoming increasingly impossible for British industry to trade with dollar America. It is becoming increasingly impossible not because of the high rate of tariff, but because of the structure of the tariff and of the activities of the terrific American lobby. Important British industries which could be earning more American dollars and so helping our balance of trade find an American lobby in operation and cannot maintain long-range production because of the changes in the American tariffs. That is the problem, and not the height of the tariffs. The structure of the tariff must be changed by positive, realistic negotiations between the British and American Governments.
Most of my remarks must be critical, but before I go on to attack the Government's conception of world trade and economics, I should like to make a positive, constructive suggestion. I believe that this country needs, particularly in America, a "House of British Industry and Trade," an important centre, not a niggardly, cheap penny-farthing exhibition of one section of British trade but a great centre to represent all British industries which have products to sell in the American market.
945 There should be a co-ordinated effort by all industries—textile manufacturing, motor engineering, lace and carpet making, pottery making and the like. Representatives of all these industries should get together and say to themselves, "This is a vast problem of earning dollars so that we can live and also assist in balancing the trade of the world. We must tackle the problem in a big way." The Government must back industry. We must not let British commercial travellers earn easy orders on the coast. They must go inland and meet the millions of American consumers who do not know anything about our goods because we do not trade with them seriously.
§ Mr. Gresham Cooke
Where is this vast trade centre to be set up? if trade is to be developed in the middle of America, away from the coastline, how will a trade centre in New York be any good for selling goods 2,000 or 3,000 miles away from the coast?
§ Mr. Edwards
I am glad to hear that you are interested in the suggestion. I suggest that the centre should be in the metropolis of the country and that there should be branches elsewhere radiating from the centre.
§ Mr. Burden
Has the hon. Member ever been to America to try to sell British merchandise? I have, and I assure him that it is a difficult proposition.
§ Mr. Edwards
I know America and I am the secretary of a trade union. I know the people of America perhaps better than you do.
§ Mr. Speaker
The hon. Gentleman is a new Member and I do not wish to interrupt him unnecessarily, but when he says "you" in this House he is addressing me; and I have not set myself up in the debate as an authority on America.
§ Mr. Edwards
I beg your pardon, Mr. Speaker. I would not dream of pointing to you in that disrespectful manner. I ask you to accept my apology.
I was developing the practical suggestion that we should have these selling centres not merely in America but in all the great consuming areas of the world. We should have great co-ordinating centres representing British traders and manufacturers in the capitals of the 946 countries concerned, with smaller centres in the principal, local consuming areas. We should organise fairs to sell surplus British products, not once a year but as a continuing effort to advertise British products and their price and what we cam do generally. That is a practical proposition which should be carried out in a big way under Government leadership. We will leave that point, which I repeat is a constructive one, because now I want to be critical.
The hon. Member for Eastbourne said we must do something about the unions which were getting too big, and there was an interjection from this side of the House asking about the big firms such as I.C.I. The hon. Member for Exeter (Mr. Dudley Williams) who was interested in the remarks of my hon. Friend on controls, put the point of view of the big firms and controls.
§ Mr. Dudley Williams
I did not say anything about the large firms. In fact, it is my personal belief that some firms are far too large.
§ Mr. Edwards
I am happy to hear that, because I was coming to the point of controls, which the hon. Gentleman was questioning.
In talking about controls we must consider not only Government controls but the powerful controls exercised by monopoly firms, as they relate to British trade at home and abroad and to prices at home and abroad. It seemed strange to me to hear strong criticism of controls voiced by people who have never attempted to criticise the attempt of the Federation of British Industries to link our economy with that of Germany in the Dusseldorf Agreement of 1939. At that time a large concentration of firms was negotiating with German industry to set up a network of cartels covering steel, chemicals, engineering and a vast number of other products, to plan their exports all over the world and to arrange quotas of exports.
It is that kind of cartelisation which has limited the expansion of world trade. I can easily prove it. There was a series of restrictive agreements between the wars. There were times when we could not send drugs or dyes into the Scandinavian market because, by cartel agreements with I.G. Farbenindustrie of Germany, the market was handed to that German 947 firm and every order which came to England was passed on to Germany. Again, because Latin-American markets had been handed over to Duponts, we could not trade in those markets and every order which came here was sent to Duponts. Again, there were vast areas of the world where we could not sell our matches because the match cartel had parcelled out the markets of the world so that they had to be supplied with Swedish matches. So the world was kept poor, and is still being kept poor, by this network of international agreements by which businessmen restrict production, keep prices high, and limit the expansion of world production and the possibility of the people of the world improving their living standards.
The point I was making when I was challenging the talk about cartels was that the only control which hon. Gentlemen opposite can talk about is Government control. They forget the powerful, developing control of private individuals represented through monopolies at home and cartels abroad. For instance, the hon. Member for Eastbourne said that nationalisation of mining was a flop. Yet Lord McGowan, the chairman of Imperial Chemicals Industries, in an address in Canada stated that had it not been for the Labour Government nationalising the British coalfields, coal production would be down by at least one million tons a week. That statement was quoted all over this country, and I.C.I. at that time was the biggest consumer of coal apart from the steel and railway industries.
The big problem facing our exports is how to bring prices down in order that they may compete in world markets. We must bring prices down at home in order to expand home consumption and so provide a, surplus for export. The most important factor in bringing down prices, and in stabilising them, is that provided by our nationalised industries. [Interruption.] Do hon. Gentlemen doubt it? The price of coal is much less in relation to the price of food, clothing, boots and shoes and all the other products manufactured by the privately-owned sector of industry. The price of electricity has increased by only half as much as the price of goods and services controlled by the private sector. Productivity in the nationalised industries is considerably higher. [HON. 948 MEMBERS: "Oh"] Do hon. Gentlemen doubt it?
§ Mr. Edwards
The facts are that in aggregate there has been an increase of 65 per cent. in gas and electricity as against 45 per cent. in aggregate in the goods manufactured by privately-owned industries.
§ Mr. Orr-Ewing
Perhaps the hon. Gentleman will argue that out with his hon. Friend the Member for Erith and Crayford (Mr. Dodds), who has made considerable observations on the electricity business outside this House.
§ Mr. Edwards
We do not always agree with the hon. Member for Erith and Crayford (Mr. Dodds), because we agree to differ on such questions. Shall I give hon. Gentlemen the facts? [HON. MEMBERS: "No."] No, hon. Gentlemen do not want to hear the facts.
§ Sir V. Raikes
Since the hon. Gentleman says that the nationalised industries have increased productivity, will he give the production figures at home between 1938 and 1955?
§ Mr. Edwards
With the exception of one year since vesting day, coal production in this country has increased.
§ Mr. Edwards
Productivity is a big problem—[HON. MEMBERS: "Hear, hear."]—but that does not arise in this debate. I could talk for an hour on this subject if hon. Gentlemen wish, because I know something about it. I am the secretary of a trade union. But we are talking about production now, not productivity. Productivity in the coalfields relates to mechanisation. It relates to the fact that we have to go further underground now to reach coal. It relates to the fact that our mines are becoming old and that with the passing of every year coal is more difficult to get out. The question asked was whether we were producing more coal, and the answer is that we produced 35 million tons of coal more last year than we did in the year before vesting day.
§ Mr. Edwards
Yes, because exports relate to coal. Do hon. Members opposite want fun? They can have plenty of fun. I can be quite funny if I wish. The trouble is that hon. Gentlemen opposite cannot take their medicine.
The next, and fundamental point, is that in the absence of controls and a planned economy we cannot produce on the basis of abundance. We are all afraid of plenty. I admit that the workers are afraid of plenty, and the employers also are afraid of it. Therefore, to solve the problem of plenty we impose restrictions on the purchasing power of our people at home. Other Governments follow our line. In this world of inflation all the Commonwealth countries say that they must cut their imports from Britain.
I remember the effect of the cuts on the chemical industry in 1952. The decline in world trade that year led to 13 per cent. of the labour power being declared redundant. That year, also, we allowed America to enforce the Battle Act against us. This country had an order from China for £5 million worth of drugs comprising sulpha drugs, penicillin and streptomycin, and could not supply it. The matter was debated in the House. The first £500,000 of the order went to Western Germany, and the shares of the firms which supplied the order were 70 per cent. American-owned.
The point that I am making here is a political one, and a very important political one, that today we are not free to expand our exports. All kinds of political limitations are being imposed upon us, and that is another aspect of the problem to which I hope the Minister will refer.
§ Major H. Legge-Bourke (Isle of Ely)
If the hon. Gentleman is now condemning the fact that we have not got political freedom, why is he seconding an Amendment which means less political freedom than we already have?
§ Mr. Edwards
If depends upon one's interpretation of "freedom." I have listened to speeches by the hon. and gallant Member several times since I have been in the House. I respect his independence very much, but his views are rather like the old-fashioned anarchist's views. The world has changed from the 950 acceptance of complete individual freedom, and it is our view that we get more freedom in a planned society than in a society dominated by monopolies and cartels which give individual business men great power, often more power than Governments.
There are other hon. Members who wish to speak. I am sorry I have taken so long.
§ Mr. Edwards
I have been rather provocative, so interruptions were to be expected.
To summarise, our economy without planning is an economy based on scarcity. Because the economy is based on scarcity, it cannot respond to abundance. Because we have so much influence in the world, the whole world is influenced by our economy of scarcity. We must have more planning before we can create a greater demand in the home market and expand our markets abroad.
This kind of scarcity economy is in no way related to the great industrial and scientific changes which are taking place in the world today, and particularly in our country. We have to do some new thinking on the subject. We must get away from Industrial Revolution thinking. We must face the great new scientific revolution of our times. Unless we do that, Britain will become poorer and poorer and have less and less influence on world trade. I hope that some consideration will be given to the positive suggestions that I made about the establishment of British houses of industry and trade in the markets that we want to develop.
§ 1.17 p.m.
§ Major Sir Roger Conant (Rutland and Stamford)
I should like to begin by offering my congratulations to my hon. Friend the Member for Eastbourne (Sir C. Taylor) upon his continuing good fortune in the Ballot. I do not know how many times he has done it, but if ever he wants a partner in his football pools, I am willing to sign on.
The House has enjoyed considerably the speech by the hon. Member for Bilston (Mr. R. Edwards), but I did not regard it as a very realistic one. It is nice to find that the hon. Member has ideas, but his proposition that 951 nationalisation in one form and another would provide the solutions to our export problems did not seem to me to be realistic. Nor was his suggestion about the establishment of British houses for trade in New York even worth consideration. I cannot see how we could possibly advantage ourselves in that direction. The hon. Member suggested that American tariffs should be reduced, but, of course, he was talking to the wrong Government.
In spite of the Amendment, it seems to me that there is a very great deal in common among all of us when we consider the export trade. Whatever may have been their views in younger days, all right hon. and hon. Gentlemen now appreciate the immense importance of our exports to our standard of living. I used to be taught that countries could not sell their goods abroad without buying in exchange. Although that may be true as a generalisation, it certainly is not true when one is considering the position of a particular country vis-à-vis the other countries in the world. I see no reason whatever why we or any other nation should not enjoy at the same time a thriving export trade and a prosperous agriculture.
It is, I suppose, a truism to say that it is much more difficult to sell than to buy. Fortunately, our exports, both visible and invisible, are in the hands of private enterprise. But that is not to say that they do not need, and in fact receive, very great help and encouragement from Her Majesty's Government. It is right that they should and many hon. Members, in the course of their speeches, have made interesting suggestions about how the considerable help already given to industry to encourage exports might be extended. I have mentioned what is already being done, because so often we hear criticisms of the support prices paid to agriculture, the subsidies for ploughing up, and so forth, designed to increase agricultural production.
It is at least as important as expansion of our exports that we should reduce our imports of those things which we can grow or produce at home for our own needs. Hon. Members have already referred to the coal industry. It is a tragedy that we are unable to persuade people to dig up more of our coal and that we have to import so much. The 952 hon. Member for Sheffield, Park (Mr. Mulley) said—if I heard him aright—that had it not been for nationalisation we would not be exporting any coal. I think that I am right in saying that on balance we are not exporting any coal and that we are importing a very great deal.
§ Mr. Mulley
I was not going into the rights and wrongs of the export trade in coal, but merely making the general observation that the total production of coal, had we persisted in private ownership, would have been 50 million or 100 million tons below its present figure.
§ Sir R. Conant
I quite appreciate that and no one could say that nationalisation is the whole source of the trouble. But the fact is that such exports as we do have are in token form and maintained entirely to keep alive foreign markets in the hope that some day it may be possible to rebuild the export trade in coal. In the circumstances, the Government were wise to reduce our exports of coal. We were losing money on them, I am told, and the hope of rebuilding the export trade in coal seems small. It is terrible to realise that with the development of nuclear energy all the vast resources of coal which lie beneath this island will all be wasted and become valueless. Surely a way could be found of persuading miners either to produce more coal themselves, or to allow other people to do it.
It is obviously mainly through the expansion of the export of manufactured goods and agriculture that we can improve our balance of payments position. When we consider how greatly agricultural production has increased in the last thirty years and all the mechanisation and scientific developments of recent years, it is apparent that we have nowhere reached the capacity of this country to grow food. But we must remember that just as industry needs help and encouragement from the Government in order to export and to surmount increasing competition in the world today, so does agriculture need support and I hope that that support will be maintained.
§ 1.23 p.m.
§ Mr. B. T. Parkin (Paddington, North)
I should very much like to follow the hon. and gallant Member for Rutland and Stamford (Sir R. Conant) and to take 953 up some of the arguments that were advanced by the hon. Member for Eastbourne (Sir C. Taylor) and the hon. Member for Garston (Sir V. Raikes), but there did appear on the Order Paper an Amendment signed by about 60 or 70 hon. Members, including myself, regrettingthat Her Majesty's Government has done so little to remove the barriers to trade with the People's Republic of China".It is understandable that that Amendment has not been called, because it is important that my hon. Friends should have the opportunity broadly to discuss the whole of the Government's policy on export trade.
But I feel it my duty to call attention to the merits of this proposition, and, indeed, the Minister of State may be grateful that one speech at least will be made today which will enable him to promise immediate action. He is in a very difficult position in having to reply to propositions from both sides of the House suggesting wide alterations in the policy and in the activity of his Department. Indeed, he must feel that he is in a peculiarly tragic situation, since throughout the period in power of the Conservative Party, it has been busy, not only sapping the will to act from his Department, but actually destroying the machinery through which positive and creative work can be done by the Board of Trade.
That is the sort of old-fashioned feudal attitude of hon. Members opposite on the subjects of trade and commerce, the sort of attitude they would adopt in their baronial halls where they would say, "It is not for us to deal with such matters; leave it to the butler." Today I shall ask the Minister of State to consider not only the whole subject of trade with China and the whole subject of the development of East-West trade, but two specific things which are the remaining outstanding barriers to the development of this trade.
The first is the existence of a Resolution of the United Nations and the interpretation of Her Majesty's Government of its significance compared with the interpretation still placed upon it in other parts of the world. The second is that there is a list of goods drawn up by the Government of the day as their interpretation at that time of where their duty lay in carrying out the Resolution of the 954 United Nations. May I for one moment deal with the Resolution itself? It is important that we should know from where we start and to where we have now got.
The Resolution of the General Assembly in precise terms on 18th May, 1951, is important, because the General Assembly noted the report of the Additional Measures Committee of 14th May, recalled its own Resolution and noted that:The Additional Measures Committee … has considered additional measures to be employed to meet the aggression in Korea,… has reported that a number of States have already taken measures designed to deny contributions to the military strength of the forces opposing the United Nations in Korea,… has also reported that certain economic measures designed further to deny such contributions would support … the military action of the United Nations in Korea which would assist in putting an end to the aggression.It therefore recommended, first:… that every State:Apply an embargo on the shipment to areas under the control of the Central People's Government of the People's Republic of China and of the North Korean authorities of arms, ammunition and implements of war, atomic energy materials, transportation materials of strategic value, and items useful in the production of arms, ammunition and the implements of war;And, secondly, it recommended that every State should:Determine which commodities exported from its territories fall within the embargo, and apply controls to give effect to the embargo.A great deal has happened since that time. It is clear that the whole object of the Resolution was to cut off the supply of arms to those taking part in the war on behalf of the authorities of the fighting forces in North Korea. It was framed to deal with the specific situation arising out of the hostilities and it was left to each country to determine which commodity should fall within the scope of the embargo.
We are now in the stupid position that the Minister of State has lists of various strategic goods which he may not allow to be exported to various countries. There is a great difference, for instance, between the list of goods which it is allowed to transport to the Soviet Union and the list of goods which it is allowed to transport to China, in spite of the fact that many of them might travel the same route in 955 either case, whether the label remained unchanged throughout the journey, or was changed half way.
The original British list was drawn up in the spirit of a Government conscientiously carrying out their obligations to the United Nations. I do not think that it would be fruitful at this point to revive discussion on whether or not it was a good list or whether it was likely to fulfil the object of the Resolution, but at least it was admitted by the President of the Board of Trade at that time that it had not been agreed in any sense with any other country concerned. It was a private decision of conscience by this country, or by the President of the Board of Trade. For instance, rubber was added to it voluntarily and without consultation with anybody else in order to add force to the effect of the list.
§ Mr. Parkin
Yes. There are two points to which I asked the Minister to reply today. The first is, is not it time to take the initiative in the United Nations to have the original Resolution rescinded in view of the change in world affairs since then? Secondly, is not it important in our own interests that our own list should be drastically revised? I can understand that the Minister of State should ask to which date I was referring, because this matter has been debated intermittently every few months ever since.
On the general issue of the United Nations, the right hon. Gentleman the Member for Woodford (Sir W. Churchill) said as recently as February last year, that:We cannot relax restriction of trade with China until a Korean or, perhaps, a wider Far Eastern peace has been established. But that is the prospect to which we hope the conference at Geneva will open the road."—[OFFICIAL REPORT, 25th February, 1954; Vol. 524, c. 588.]I am very happy to quote those words of the right hon. Gentleman because I think that probably at the time, in the spirit in which they were uttered, they did offer a prospect of negotiations leading a Far Eastern settlement. But it really will not do if we are to keep on thinking up fresh reasons for not rescinding that Resolution. It really will not do if somebody is allowed to improvise 956 suddenly and say, "We cannot do it now, because there has been trouble in Indo-China," and then after the Indo-China trouble has been settled, "We cannot do it now because there might be trouble somewhere else."
I should have thought that it was hardly possible to separate the subject entirely from the difficulties that the Government say they are in about the admission of representatives of the People's Republic of China to the United Nations. There can be no doubt that all this business could be settled and that we should have a much better chance of a general Far Eastern peace settlement if the People's Republic of China sent her representatives to the United Nations and took her whole part in the discussions which would, of course, include trade and economic agreements over the whole area of the Far East.
The second point on which I really think we ought to have some assurance from the Minister now is that our list went far beyond the terms of the United Nations Resolution. For instance, it included all internal combustion engines. The motor industry has already been mentioned, and it is possible that it may be referred to in the near future by an authority on that subject from the benches opposite. It was widely publicised about eighteen months ago that a representative of Austins got an order for £2,700,000 worth of goods for export to China, and he got back home and found that he was blocked by the Board of Trade from carrying it out. Of course, that is nonsense; and it is childish nonsense when reports are available from people who, like myself, have been to China and seen the place practically infested with American cars. How they get there I do not know, but they are there.
This list of ours included all road construction machinery, all classes of iron and steel products, all communication equipment including cables, all oil well drilling and exploration equipment, all metal-working machine tools, ball-bearings, electric generators and motors, all portable hand-held power tools and all measuring and testing instruments. All these are products which the hon. Member for Eastbourne is anxious to see exported in greater and greater quantities.
957 This leads me to my next point in elaboration of this theme. During the time of the isolation of the British business community from its potentially greatest customer, it is not kept in touch with developments in that part of the world. It still imagines that it will have to trade with the community which it knew in pre-war days. It is not realising how rapidly industrialisation is developing in these countries. It is developing indeed through the measures—which I hope are accidental but which are none the less very thorough—taken by hon. Gentlemen opposite who in the course of their political careers have frequently advocated measures of protection, supported by facts and figures and compelling reasons. These measures of protection are now being applied by the British Government to the infant industries of China, Siberia, Poland and so on. They are protecting not themselves but their own potential competitors. They are watching an industrial civilisation growing up which can compete with them, and they are consciously abstaining from doing anything about it.
This is unparalleled in British history. At no time has the British industrial manufacturing community cut itself off from such a market for such silly reasons. We have been in on industrialisation everywhere in the world, and we are leaning backwards to get out of this one and to force a rapid acceleration of productivity and prosperity upon the industries of these countries which are prepared to take advantage of it.
France has not been backward. France quadrupled her trade with China between 1952 and 1953 while this country was still dithering around wondering what it ought to do as a result of the slight improvement in the situation. With Western Germany the situation is laughable. They are improving their trade to a tremendous extent by sending steel products. Western German exports to China multiplied nine times in 1953 and those of France and Sweden multiplied four times, and we lean back and cut ourselves off.
I have no doubt that the Board of Trade is overwhelmed by protests from business men. The letters from business men vary. I regret that I am not able to read letters from business firms on the 958 subject of their own trade with China. I do not read them not because they would not be compelling in their arguments—they would—but because I do not think it is fair to mention the affairs of firms which are still negotiating. They still hope that contracts might be made. I am sure that the Minister will acquit me if I appear to be a little vague. He knows as well as I do that precise examples could be given to support every single word I have used. I mentioned the Austin contract because that was widely publicised in the Press at the time as a matter of public interest.
I think that perhaps I might quote the Governor of Hong Kong. There may be a lot of indignant business men in Hong Kong who have been deprived of their living, but the Governor speaks with some dignity on behalf of the community as a whole. He says:Hong Kong traders feel about the embargo much as a man feels when you give him a knife and tell him it is in the interest of the community at large that he should cut his throat.He goes on to say that the embargo is unrealistic and that it is very doubtful whether it has done a compensating amount of harm to China's war potential.
Anyone who has been to China will realise how little harm has, in fact, been done to the development of China's own industrialisation. It is interesting also, when one discusses the trade possibilities with the Chinese, to note how dignified they are and how they refuse to approach the subject on any other ground except the development of trade to the mutual long-term interest of both peoples.
Last year some of us were there at the time when the floods had done a great deal of damage and threatened to do a great deal more. It seemed to us a rather tragic thing, and it had a great emotional impact upon us, that, as a result of the embargo, the Chinese had been unable to import from us any earth-moving machinery or tractors of any kind. But they were not complaining, they merely proceeded to deal with the situation by their traditional methods. They refused to allow sentimental considerations to come into the discussion.
There were certain developments from the Board of Trade which I do not think proved helpful. A British Trade Mission to China in 1953 came back with £15 959 million worth of orders. A good many of them have not been implemented because of the refusal of the Board of Trade to issue licences. The Board produced a list of things with which trade could be done with China, and it takes a little explaining to the Chinese. It appears as though someone is trying to be deliberately insulting.
There may be an explanation, it may be that the Board of Trade, interested in productivity and efficiency, is completely mechanised. It may be that there is some sort of electronic device, so that when the commodities which are on the embargo have been suitably marked and one presses a button they all fall out into one tray and everything else falls out into another; and one needs only to press the second button to get the other items. This list was produced in the Board of Trade journal only last year, and one may look through it and find some of the things with which trade may be done. For instance, conveyors and elevators other than of an underground type. I do not know how an overground conveyor does not help the war potential but an underground conveyor does.
It is a little tragic to read that no agricultural or horticultural equipment is permitted but that we are allowed to sell them garden tractors—it is tragic to us, but is it not insulting to them? Does the Minister know that his own Department has solemnly listed taxi-meters and parking meters as an item suitable for sending to China to redevelop our trade? Does he know about the stapling machines that be advocated should be sold there, or the butter-pat machines? But I think that the real gem—although of course I may be quite mistaken—is the cheque-writing machines.
Have I missed something? Has there been recently developed in this country a machine for writing cheques in Chinese? Has it been shown at the World Fair? Was the Minister himself photographed in the act of working it, and will he tell us more about it? After all, the list was supplied to business people going to China and I think that we should know more about this new development. I could understand if it is a major production that it should be kept in security until it is completed and that experts must have been working on this for years. 960 But if a Chinese cheque-writing machine, which would be a great achievement, has been recently developed by British industry, we should be told something about it. If not, we are left with the very nasty feeling that this list must have been rather subtly drawn up by someone wanting to block any possible development of trade. We cannot any longer permit this funny business while other people are getting on with the job.
We are exhorted from the Government Front Bench from time to time that we must wait and see how our friends in the United Nations feel about things. But it is not so much what they feel as how they are acting. Most of them interpret the Resolution much more liberally than we do and they like being in a favourable position compared with us, because it is a great help to them. The Swiss and the Swedes are supplying China with steam turbines and turbine generators, switch-gear and all the things which this country should be able to supply. I do not think that the Government deny the inequity of the present situation any longer. What they want is some sort of push. I think they are trying to find a way to act, but we cannot any longer have the exclusion of British industry from this rapidly expanding market.
There is no need for me to quote figures today, they know how much the economy of China has recovered and expanded and that all the machinery and experience of assessing the standards and qualities of exportable goods is still there and can be worked. The Chinese themselves who used to work on behalf of British firms are perfectly able to work it. and it could swing into operation at a moment's notice. We know that the traditional goods are available for export and that a richer, fuller and broader demand for industrial equipment exists in a country which is rapidly raising its standard of living. There is no doubt that the average annual trade with China could be raised three, four or five times what it is and we could have the prospect there of an almost continually expanding market.
I do not wish to make a political speech in any sense, or to appeal to sentimentality or the efforts of a struggling people to set their own economy on its feet and to expand. I wish this to be a speech calling the attention of the Board of Trade to the possibilities open to us, 961 and asking them to give an answer today about how soon they propose to revise their list—which they could do between now and the end of this debate—and how soon Her Majesty's Government will take the initiative at the United Nations to have this nonsensical Resolution removed now that the progress of events has made it out of date.
§ 1.47 p.m.
§ Mr. Martin Maddan (Hitchin)
Before I come to the remarks I wish to make, I should like to comment on what has been said by the hon. Member for Paddington, North (Mr. Parkin). After all, trade is a two-way thing and for it to be mutually beneficial both parties to an agreement must get some product better in benefit than the product they are selling. The question about East-West trade generally, and trade with the Communists in China, is what goods would this country be able to buy in return for what we could sell of a comparable value both financially and materially?
If we, in the West wish to use trade as a weapon of international diplomacy, we must do it openly by means of an embargo published to the world. The Communist countries, on the other hand, without ever publishing an embargo at all, can merely tell the people in charge of the production of various goods that those goods are not available for sale to the West. They can say to us, "We do not impose an embargo. Why do you?" It is important that my right hon. Friend should bear in mind those points when he replies to the debate.
§ Mr. Parkin
I do not want to prolong the discussion on this point and to keep out other matters as a result, but the hon. Gentleman suggested that the explanation might be that the Chinese had not got the right kind of goods for sale. That is not the impression given by the traders who want to buy the goods, the traditional exports of China. We are very pleased to spend £1¼ million a year on tung oil from Hong Kong. We know what the valuable exports of China are, but we also know that they will go to the countries which send China valuable exports. We know that the Chinese are already our second-biggest customers. The business world is well able to work this out, and I do not think that there is any political argument to be drawn from 962 this. The hon. Gentleman seemed to be making the sort of speech that would be made by Chinese trade organisations.
§ Mr. Maddan
I would point out to the hon. Gentleman that many of the goods which China could no doubt export can also be obtained from other places in the world, such as our own Colonies. My second point was that the Communist countries can and do use trade as a weapon of international diplomacy. We cannot deprive ourselves of that weapon, but we suffer from the disadvantage that we must wield it publicly.
I now turn to the field which I wish quite briefly to develop in support of the Motion moved by the hon. Member for Eastbourne (Sir C. Taylor). It is that in developing our export markets, long-term planning is essential. It is not easy for firms to carry out long-term planning with success when political interference is met with in the form of overseas Governments closing down our export, markets.
I am well aware of the upset which this causes in the marketing plans of firms. For six or seven years after the war, I was concerned with marketing overseas, and many plans had to be changed or dropped owing to political factors being introduced. Perhaps I ought to declare an interest in this matter, because I am connected with a market research company which carries on activities in various overseas countries, although I am no longer concerned with that side of research.
To succeed, marketing plans must be based on facts, and these facts can only be obtained by research. Some facts, particularly those relating to general company policy, can be obtained from the mass of material already published and available in the files of the Board of Trade; and there are the reports of semi-official bodies, such, for example, as those given by the Federation of British Industries, the Dollar Exports Council, the Association of British Chambers of Commerce, the National Union of Manufacturers, and so on. I wish to draw attention to the tremendous range of information available to people who will search for it, put it together, and use it.
There are other types of facts, particularly those on which marketing plans are based, which, very often, can only be obtained by carrying out sample sur- 963 veys of the wholesale and retail trade in markets overseas, or among the consumers, the housewives, and, indeed, the industrial users.
Such surveys cost hundreds or thousands of pounds. They may not always pay for themselves, because they may reveal information showing that it is really not worth while carrying on in certain markets. The investment required in these surveys is quite heavy, particularly for firms which export to many overseas countries and which have a large range of products, because a survey, being by its very nature specific, has to be made into a specific product in a specific country. When one multiplies that procedure, one realises that it is a very big task. When the cost of the survey is related to a particular product in one market it becomes quite a heavy ratio of expenditure.
Even though some of these surveys produce negative information—the sort of information that we used to get during the war, to the effect that the enemy is not on the top of the curious shaped hill—it is still useful information. It may be to the effect that it is not worth going ahead, and expenditure on such surveys may well be more economic than the cost of trial and error, of building up stocks in a market and having to pull them out, or of setting up an organisation and having to pull it down again, and all the rest that follows.
The responsibility for the making of market surveys, which must be the very foundation of long-term marketing plans, is that of the exporter. He has to finance them. The Export Credits Guarantee Department of the Board of Trade gives help in this matter to exporters to dollar countries. The Department has a market research policy which, broadly speaking, works like this. If an exporter wishes to make a survey in one of the dollar countries, he can get a quotation and inform the Department what it is likely to cost. He will pay a premium, and if after two or three years the profit derived from the extra trade is not sufficiently great, the Department will bear a proportion of the cost of the survey.
Such a policy is of particular benefit to the smaller firms which have not the 964 resources or the width of markets over which to spread the cost. Unfortunately, these facilities provided by the Export Credits Guarantee Department are not being very widely used at the present time. On Tuesday last, I spoke at a conference on export market research which was opened by my right hon. Friend the Minister of State, Board of Trade. The conference was held in a big hall which was filled with people, all of whom seemed to be there because they were interested in export market research, but very few of them knew of the existence of the facilities available through the Export Credits Guarantee Department.
I suggest to my right hon. Friend that the following three things might be done. First, the policies of the E.C.G.D. should be very much more widely publicised, and, in this, I think that my right hon. Friend could get the help of the trade and industrial associations. Secondly, the assessment of profit derived from the extra turnover should be simplified. At present, it involves complicated cost accounting, and many firms have not a cost accounting system adequate for supplying the very detailed information which the Department wants. There is room for simplification there.
Thirdly, these policies which are only available for the dollar countries should be extended to other countries, particularly to those of the European Payments Union: partly because from the economic point of view, trade with Europe is valuable, and, of course, because the European countries provide a natural market for small exporting firms in the sense that they are near at hand, thus enabling small firms to exercise control over the marketing of their products in these countries.
To sum up, we must recognise the role of marketing in developing our export trade. We cannot leave it all to the Government. Only exporters can formulate marketing plans, and they have the responsibility for obtaining the facts on which those plans can be based. The Export Credits Guarantee Department can help these firms, especially the smaller ones. I end by repeating my plea to the Board of Trade to put the market research policies of that Department right in the centre of its shop window.
§ 2.0 p.m.
§ Mr. A. G. Bottomley (Rochester and Chatham)
With other hon. Members, I join in thanking the hon. Member for Eastbourne (Sir C. Taylor) for raising the vital subject of exports. I join issue with him to the extent that he spoilt a good speech by his references to the miners. They are making as great a contribution to our economic recovery as any section of the community. What is wrong is that we are failing to get sufficient men into the pits. If I wanted to be political I would tell him that there is nothing to stop him from getting his friends to volunteer to do this most important job.
The hon. Member for Eastbourne and the hon. Member for Garston (Sir V. Raikes) suggested that an easement should be given to industrialists in order to help exports. That is a rather unwise plea to make at this stage, when the effect of the Budget and the whole endeavour of the Government is to burden the wage earners with heavier responsibilities by sending up the cost of living. I do not want to pursue that digression, because the question of the export drive is a most vital one. The Government, the trade unions, the bankers and the industrialists all agree that it is inevitable from the nature of our country that we must export to live. The bulk of our food and raw materials must be obtained from overseas, and we cannot get them unless we are able to pay for them.
The suggestion I now want to make is not a new idea of mine; when I was a Minister myself I advocated it. I consider that exports are so important that we should have a Minister responsible for the export drive, and he should have a seat in the Cabinet. When I was a Minister I had a vested interest in the matter, and could not press it so strongly as I do now. At this time, with growing competition from other countries; with tariffs, import quotas, and Customs difficulties—we could go on adding to the list of questions which have to be considered by the Government of the day and which cannot be left to private enterprise—I believe that if we had a Minister in charge of exports he could get some things done which are not being done at the moment.
When I was a Minister I served under a very good President of the Board of Trade, and when I asked him if I could 966 do a certain thing he usually said, "Yes, go ahead." Soon after I became Secretary for Overseas Trade I received a complaint from businessmen that they were being sent from the Export Promotion Department to the Commercial Relations and Treaties Department, or vice versa, and that this was causing a good deal of complexity and difficulty. These businessmen suggested that it would be a wise thing to amalgamate the two Departments. The President of the Board of Trade gave me a free hand, and the organisation which rose from that amalgamation, and which is now known as the Commercial Relations and Treaties. Department, is generally agreed by all to have made a very useful contribution to the export drive.
I must tell the Minister, however, that I heard privately that to many people who had a vested interest in the status quo, what we were then trying to do was regarded as "Operation Confusion." I suppose that that is only natural. Once we gain a vested interest in something and become set in a way of life we do not like to change. I suggest that we should have a Minister for Overseas Trade. The Minister of State already has some statutory obligations. He is responsible for the Export Credits Guarantee Department. I am disappointed to learn that its work is not as widely known as it used to be, but I do not blame the Minister. Changes in his Department have been so rapid that successive Ministers have not had a chance to do all the things that are required.
I do not want to go into the subject of export credits today, however, because references have already been made by hon. Members on both sides of the House to the excellent work which that Department does—and may it long continue to do so. It is the fact that the Minister has a direct responsibility for this particular section of his Department which makes it much more successful than some other sections.
§ Mr. Low
The right hon. Gentleman appears to have forgotten that since he left the Board of Trade an Act has been passed which now makes the President of the Board of Trade responsible for the Export Credits Guarantee Department. As he would naturally know, in the way the Board of Trade works, some of the 967 responsibility devolves upon me, but the President himself is statutorily responsible.
§ Mr. Bottomley
Yes, but I assume that the Minister of State still has some responsibility. When we hear hon. Members opposite saying that the same excellent service is not being given today as it was before it just shows the danger of placing upon the President further burdens.
I want to refer to another department in which the Minister has a responsibility in much the same way as he does in the case of the Export Credits Guarantee Department, namely, the British Travel and Holiday Association. He will know that tourism is a very valuable export commodity. It ranks as the seventh largest of our export industries. I am glad to see that the number of visitors to this country in 1955 broke all records. The earnings from this industry were £150 million, and it brings in about £42 million or £43 million worth of dollars. That is an indication of the way in which the Government can greatly help an industry by interesting itself in it.
That is a further illustration of the advantage of having a Minister intimately connected with an industry and able to devote all his time to it. It is much to be preferred to the present situation, where the President is already overworked and yet, as we were told during a recent debate, a further heavy responsibility has been removed from the Minister of Supply and placed upon the President. I suggest that a consideration of my proposal is overdue.
I want to widen the scope of the debate. I promise not to review the whole world, but we should consider world markets, and in doing so I want to make one or two suggestions, and some criticisms why we are not doing better than we are today. The Government take pride in the knowledge that the export figures for October are a record, and we all join in expressing a feeling of satisfaction at the improvement and look forward to continued progress. As the Chancellor has said, however—and he does not overemphasise the position, as some of his hon. Friends do—one of the reasons for our difficulties is the fact that we had dock strikes in June and July of last year.
968 This made some contribution to the position, but if it is argued that it had some effect upon our economy in June and July it is also fair to say—because there have been no such difficulties since—that exports were bound to rise in later months, and October is always a record month. We should be fooling ourselves if we did not take that fact into account. In the same way that the June and July figures misrepresented exports in an adverse sense, I warn the right hon. Gentleman that the October figures could equally misrepresent the basic trade situation in a favourable sense. I am sure that that possibility has not been lost sight of by him. It is something that we should all remember.
I now want to turn to the position in the Commonwealth. Just before the Recess, on my initiative, we had a debate upon Canada, so very little need be said about that country. What was said by the right hon. Gentleman and myself, and other hon. Members on both sides of the House is on record, but it is discouraging to know that whereas the pre-war imports from the United Kingdom into Canada were 18 per cent., today they are only 8.5 per cent.
I recently asked the President of the Board of Trade when the Anglo-Canadian Economic Committee last met, and the right hon. Gentleman replied that the Committee was meeting within a few weeks. I am sure that we all wish the Committee well, but that was a body established by the Labour Government. I have no doubt that these overworked civil servants have done their best, and, equally, I acknowledge the work that has been done by the Dollar Exports Board and its Canadian counterpart, but, when all that has been done, the fact that in that most vital market our export figures are so low, and we are continuing to lose trade, calls for even stronger action. The Canadian and Americans, on Canadian initiative, have a ministerial committee, and I see no reason why we should not from now on establish such a ministerial committee to give firm consideration to this question of Anglo-Canadian trade.
To take Australia, we all know of the import cuts that have recently been made. It is very distressing, but we ought to have been prepared. The Australian Minister of Commerce and Agriculture 969 from the beginning of the year has said that if we did not buy more goods from Australia, if we did not decide to go to their market for wheat and things of that kind, they would have to cut their imports and could not continue to take goods from this country. That has happened, but when I drew the attention of the President of the Board of Trade to the fact by a Question in this House, his Answer indicated that the right hon. Gentleman did not seem to be disturbed. Now, however, he ought to be disturbed, because we have continued with that policy and further import cuts have been made. Import cuts by Australia are one thing, but when they want us to sell them our goods and we decline, that is a matter which seriously requires looking into.
I have before me—and I imagine that the Minister has also seen it—a statement by Sir William Hudson on 11th November, when, speaking at a Commonwealth Press Conference, he said that not one United Kingdom tender had been received for the Snowy Mountains Hydro-Electric project. When we consider that the value of that scheme is £24 million, it is a tragedy, when we are patting on the back certain industries and talking of the great efforts they are making, that such a thing can happen. We have said things about some sections of other industries, and will continue to do so, but this matter ought to be looked into.
Then there is the case of India. There was a Question in the House last week about the trade fair at Delhi, in which we are not taking much part. I regret that, because India is probably the shop window for Asia, which is a developing part of the world, and we should do more there. I am delighted to find that our former Parliamentary colleague, now Viscount Chandos, has made a move in this direction in encouraging a spirit of adventure, and if only more business men would turn to that kind of thing it would rapidly have effect.
When we look at the dollar countries, other than Canada, we find that the quantity of imports which the dollar markets take is worth about £6,500 million. What is our share? It is very small indeed. I know that it is disappointing to our manufacturers and business men to try to get into these dollar markets, particularly as reference has been made already to the tariffs on cycles, and to 970 the way in which tenders lower than those of our competitors have been submitted, when the Government of the day have interfered to prevent us getting the orders.
It is true that the Chancellor and the Foreign Secretary make representations, which is only part of their job, but this emphasises the point I have made about having a Minister responsible. Since we began to criticise the United States Administration for interfering in the tender for the Chief Joseph Dam, and since Questions have been put in this House, they have begun to make a move, and there have been further tenders in the last few weeks. I have reason to believe that orders might go to British manufacturers. However much the Chancellor of the Exchequer or the Foreign Secretary may make protests, we ought to ensure that our views are made known before a decision is taken.
There is another market, Latin-America, in which we ought to be more active. I am told that the Germans are getting in there now. We had about seven per cent. of that trade before the war, but today it is only 4.6 per cent., and we ought to export more. There has been criticism of the Government for importing more, while not exporting as much as we should. The right hon. Gentleman rather left out the question of steel imports, about which I have been making some criticisms. I will not pursue the point now, because the President of the Board of Trade was giving me a reply which was not as good as the one given to me previously by the Minister. I had criticised the Minister for importing steel from America, and my hon. Friend the Member for Rugby (Mr. J. Johnson) produced figures which showed tremendous imports of steel from dollar markets, which, I thought, should have been obtained from elsewhere.
We are also taking many other commodities. We had a bad harvest last year, and we had to buy large quantities of feeding stuffs. Why could we not get them from the Soviet Union, which we used to do before the present Government? Why do we spend dollars on this kind of thing? In speaking of the Soviet Union, I think the President of the Board of Trade is again, necessarily ruled by political considerations as well as by the need for the export drive. My criticism 971 of the right hon. Gentleman is that he seems to be far more moved by political than trade considerations. I would say that the trade barriers are only necessary if there is urgent political justification.
There is a report by the United Nations which shows that if nations impose these trade barriers, they hurt the country imposing them as well as the country on whom they are imposed. We should be realistic about this, because, although the position is not very encouraging as a result of the Geneva talks, this may be a way of sending Mr. Molotov for a ride. We cannot speculate, of course, but we do know that at Geneva there was a free exchange of views about nuclear energy. Strategically, this is the most dangerous subject of all. All other things pale into insignificance compared with it, and if we can get together in that way, why should we not do so in these matters? These trade restrictions really are unrealistic. Our competitors see that and treat them as such. The Americans and Germans are moving into the East-West market, and I suggest that the recent visit of Dr. Adenauer to Moscow was not made for political reasons alone, but that there were trade implications in the visit.
I also notice that the United States is showing great interest in the Soviet Union, and planning a great expansion next year by putting the emphasis on agriculture, large-scale irrigation, opening up sub-Arctic areas for the growing of crops, as well as advanced soil conservation, and chemical and biological methods of farming. We know more about this sort of thing than they do, because we have been doing it longer than they have, and we should be moving into and trying to capture these markets, instead of sitting back and being silent.
I will not deal with trade with China, because my hon. Friend has done so very well already. I had the opportunity of meeting members of the Chinese Mission earlier in the year, and I pay tribute to their realism. When talking to them, I raised the very points which an hon. Member had raised earlier, suggesting that trade must flow both ways. I mentioned some of the commodities, and said that we were getting a good deal of them already, but, in any case, there were other things that we needed. I was told that 972 they knew about it and that we were going to get them.
They told me that they had the means of carrying out geological research and market research investigation to make sure that they produced the things we needed. They told me that they had sufficient gold and dollar reserves to pay for imports in the meantime, and we know where they got the dollars, and we can guess where they got the gold. If we do not take this opportunity, other nations will, and, after all, China is a very great country and we ought to make sure that this market, which is developing already, is exploited by our own manufacturers.
I want to return to the point upon which I have been pressing the President of the Board of Trade—that about trade fairs. I think we neglect these fairs, and that we should do more about them. We are told that industry knows best, and I am prepared to accept it if the President of the Federation of British Industries says, and his view is accepted, that there has been a good deal of apathy about trade fairs. There is, but I suggest that there are not only trade fairs but other ways in which we ought to push our wares, such as in the way in which Italy is now exploiting the situation, by selling more textiles, opening up shop windows, having "Italian Weeks" and offering prizes for people who go to Italy. I do not think that enough attention is being given to trade affairs.
§ Mr. F. A. Burden (Gillingham)
Would not the right hon. Gentleman agree—and in this, I think, we are in absolute and complete agreement—that the Board of Trade should negotiate with the Customs authorities to ensure that when goods are brought back from fairs abroad they are released from the Customs with the utmost speed?
§ Mr. Bottomley
I am sorry that the hon. Member has to criticise his right hon. Friend again. I did not meet with those difficulties when I was in office. It is probably stretching it a little to say that I did not meet them, but as far as I can recall the number of occasions were rare and the business men got satisfaction. If the Minister had more time to deal with it the same could happen today.
To turn from trade fairs, I realise, of course, that there are a good many busi- 973 ness men who go overseas and really push their wares. They are real merchant adventurers, and they deserve full credit for it. But that does not excuse the company chairman who lives, say, in Dorking or Redhill, who travels to town each day and reads about world markets. That is not helping our export trade—that is not foreign travel. We must shake that type of man and make him realise that that is not the way to boost our export trade.
I suggest to the right hon. Gentleman that he should find out how many salesmen actually speak the language of the country in which they hope to sell their goods, and how many businesses still advertise in English. I will not blame any particular industry, but I know that the Department has a record of one or two instances when I was overseas and saw this kind of thing, and really did make things hum for a little while. I wonder whether means can be found to put that over. A move should be made in that direction.
Our discussion on exports has ranged fairly wide, and has, I think, been useful. A good deal of politics intermixed has been with it, and I should not wish to end without adding a little politics myself. If the right hon. Gentleman makes a spirited defence in support of our exports and says that they are better than ever, I would ask him to remember that in 1950—when we were facing a war economy, with all its difficulties—we had 26 per cent. of the world's markets for our goods, as compared with 22 per cent. before the war. In 1954, the percentage was 18.4. It will no doubt be said that in 1954 we had the dock strikes, but the Treasury figures for March to October, 1955—a reasonable period—show that our exports barely reached 20 per cent. They are, therefore, still 6 per cent. lower than in 1950.
In the economic field we drift and drag behind—our efforts are limp and lame. Perhaps I could make this contrast. In the Middle Ages, when the nation was in the hands of the feudal lords it was suggested that a central Government would be the best for the administration of our country. If we could go back to those days, the argument would be that that was interferring with freedom, but no one would deny that we have more freedom now than then. If for that feudal lord we substitute the merchant prince 974 we have approximately a similar position today. The fact that today we have a number of firms differing in size and standards, but each manufacturing the same article, competing with each other, overlapping each other and involved in a multiplicity of overhead expenses as a result, with high costs in marketing, middle man's profits, the costs involved in fighting competition—they all mean higher costs, not only in the export markets, but in consumer goods.
In conclusion, I would say that this emphasises the political difference between the two sides in the House. We believe that a planned economy is best but, in the meantime, the urgent need for us all is to make sure that British industry does boost its exports.
§ 2.25 p.m.
§ Mr. Dudley Williams (Exeter)
I was very interested in the speech of the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley). He put a finger on one of the serious problems of the day when he referred to the percentage fall in exports between 1950 and 1954. We must all be gravely concerned at what lies behind that indication of a change in our basic trade. In 1950 there was still a considerable backlog of orders which had been piling up during the period of hostilities. We are now reaching a period of really intense competition, and that is why my right hon. Friend the Chancellor of the Exchequer is right to point out to the people the great dangers which will befall us if there is any sign of greediness on the part of any section of the community. We, who are discussing this all-important question of the export trade this afternoon, should also send that message to the people.
Whilst I agree with many of the things said by the right hon. Gentleman, I do not agree with a lot that was said by the hon. Member for Sheffield, Park (Mr. Mulley) who moved the Amendment. Still less can I agree with the remarks of the hon. Member for Bilston (Mr. R. Edwards) who seconded it. As a small boy of about ten years, I lived in Plymouth. In the market place there a well-known gentleman used to talk about the evils caused to mankind by the Liberal Party's pursuit, in the early part of the last century, of the policy of laissez faire, saying that a terrible 975 revolution would result. I remember one young man pointing out that the old man was out of date. That old gentleman has been dead for many years, and I thought that he could no longer influence us, but I see that his spirit has passed into the body of the hon. Member for Bilston, and when he is addressing the House in future I shall always make a point of attending.
The hon. Member for Sheffield, Park doubted whether the present Government are pursuing the right course in raising the Bank Rate and imposing the credit squeeze. He deplored the use of those weapons. I can only say that this Government have used the Bank Rate correctly, whereas the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), who had a ripsnorting boom on his hands when he was Chancellor, did the wrong thing. He reduced the Bank Rate and intensified the boom. My right hon. Friend has applied the right technique by raising the Bank Rate in a period of inflation.
§ Mr. Mulley
Perhaps I may be allowed to correct the hon. Member's impression of what I said. I made the point that today the Bank Rate weapon is quite useless in affecting the economy. I made no comment about the wisdom or otherwise of the credit squeeze, but merely said that the Chancellor's need to employ the credit squeeze to reinforce his Bank Rate policy was an admission that today the Bank Rate was not the influence it was in the days of the gold standard.
§ Mr. Williams
That may be so to some extent, but it is still a very effective weapon. I am connected with a concern, and we were left with a rather large order to hold for two or three weeks as the customer was not ready to take it. I should hate to say how much we had to pay in interest to get the money to enable us to hold that order.
There is no doubt whatever that a high Bank Rate and a credit squeeze do a lot to damp down the inflation in an economy. I know that my business will not do much expansion while this high rate of interest is maintained. Without these techniques, if we do not use monetary weapons and credit control through the joint stock banks, we must introduce a system of governmental control. I gather that the hon. Member for Sheffield, Park was of opinion that it was the 976 responsibility and duty of the Government to control the economy and not to appeal to the joint stock banks to make use of their credit facilities, or lack of them, to damp down the inflation in our economic system.
That course is possible, but I do not think it would be very successful. It would mean the introduction of a system of close control by the Government from top to bottom of the economy. At the recent General Election, that was the one thing that people made it clear that they would not have. The only other thing that they were certain about was that they wanted no more nationalisation. I do not think, therefore, that there is any likelihood of any Government introducing the kind of system that the hon. Member thinks is most desirable.
The hon. Member went on to criticise my right hon. Friend the Minister of Fuel and Power. He said that my right hon. Friend had taken no action in the shortage of coal and had fallen down on his job also in the generation of electricity. My feeling is that my right hon. Friend has done a very useful job of work since he became Minister. I agree that he has not increased the output of coal to the extent to which it should have been increased, but one cannot turn round and say that if the industry had not been nationalised, the coal situation would be worse. We simply do not know. All I am certain about—and I believe the people are coming more and more to realise it—is that the production of coal could not have been much worse than it is today if it had not been nationalised.
The hon. Member went on to say that little had been done with the electrical power industries. But my right hon. Friend the Minister of Fuel and Power has pursued a vigorous course to ensure that atomic power is made available to the nation as early as possible. Furthermore, I need hardly remind the hon. Member that, since the present Government have been in office, there has not been a complete breakdown in fuel supplies as we had on one memorable occasion when the party opposite were in control of the country's destinies.
Great play has been made of the importance of the dollar export drive. I do not want to say anything to detract from the overwhelming importance of 977 that side of our export affairs, but I want to say a few words about one or two difficulties which are being encountered in our Commonwealth trading. In this connection, I cannot at the moment give much support to my hon. Friend the Member for Garston (Sir V. Raikes). I do not believe there is any likelihood, certainly in the near future, of any form of Imperial Preference being revived.
It is fair to say that the bulk of our Colonial Commonwealth will be dependent upon this country for markets for its commodities and agricultural produce for many years. In return, we should ask those territories to treat our manufacturers fairly when they attempt to increase their exports to them; for as everyone knows, unless we can find markets for our goods, it is of no use for the Colonial Territories to continue to send us their products, because they are not likely to be paid for.
Some aspects of the trading policies of the Colonial Territories have been criticised in business circles in the United Kingdom. Particularly are they being criticised for the way in which they permit imports from behind the Iron Curtain. It is well known that many of the imports into certain Colonial Territories, especially from East Germany, are sold at well below the cost of production. My information in this example is from a West Country firm which until the last year or two sold something like 98 per cent. of its output abroad to comply with the Government's desire to correct our balance of payments problem. I do not wish to disclose the product because I do not have the company's permission to mention its name.
Much of its output went to Nigeria and the Gold Coast. Its products were sold at £2 per dozen until a few months ago. Recently, the same kind of product has been sent to the same area from East Germany at a figure of 38s. a dozen. The British firm reacted immediately. It improved its method of output and managed to bring down its selling price to about 36s. per dozen. In the course of the last few days, however, the German price, I am told, has been reduced to between 34s. and 35s.
I think both sides of the House agree that competition is desirable. We may disagree in the techniques that are employed but, generally speaking, it is 978 realised that without competition the consumer does not get a square deal. We all know that especially in export markets there will be fierce competition in future and that we must do everything possible to combat it. The competition must, however, be fair. It is not right that countries should try to undercut each other by driving down the standards of life of certain sections of their society by underpaying their work people. That is wrong and I hope that we will get away from this kind of thing. I do not think we can ever compete with this technique.
The same thing is happening in the other Iron Curtain countries as happened in Germany between the wars. With the Schacht system, a central organisation bought the products for sale overseas and sold them throughout the world at any price it could get. In effect, that represents a concealed subsidy to the manufacturer. A product was obtained at the cost of production and it was sold below that figure to collect foreign exchange. That is a most unfair method of trading but it is taking place all over the Commonwealth today. Textiles in particular are being purchased by exporting firms in this country, much to the annoyance and irritation of their competitors, who see these goods being re-exported to Commonwealth and Colonial territories. If the Iron Curtain countries continue this course, we should make representations to them.
§ Mr. A. E. Hunter (Feltham)
The hon. Member has mentioned the Iron Curtain countries but has not mentioned Japan.
§ Mr. Williams
I am not conversant with all the trading policies of Japan. I agree that Japan pays its workpeople a very low wage, which I deplore, but I do not think it uses the technique of a collective selling organisation as is used by countries behind the Iron Curtain. I think I am right about that.
My plea to my right hon. Friend who is to reply to the debate is that he should discuss this question with the Colonial Secretary to see whether some steps can be taken to protect our manufacturers from this sort of action in our Colonial Territories, because it is causing great distress amongst manufacturers in this country, and I think that in the end it may lead to many disasters.
§ 2.40 p.m.
§ Mr. R. W. Sorensen (Leyton)
We have had a very interesting debate today, and we have found much common ground. Many of the arguments have been supported by hon. Members on both sides of the House. Indeed, it is a little embarrassing to one who comes late in the debate to find that some of the points which he desired to make have already been made. One may emphasise them, but emphasis may become tedious. The hon. Gentleman the Member for Exeter (Mr. Dudley Williams) will, I trust, forgive me if I do not follow him in some of the things he said. Some of those have been dealt with by my hon. Friend the Member for Sheffield, Park (Mr. Mulley), but in one respect I hope to make some brief reference to others later.
It may be supposed that I have some temerity in venturing into this debate, seeing that it may be assumed I have had very little experience of business in general and of the export trade in particular, though it is true that many years ago I was engaged in a modest way in food production and also that later I kept a shop, though I confess that it did not keep me. Apart from that, however, we are all of us very intimately involved in the question of securing the maximum export trade possible, if for no other reason than that those of us who have humanitarian interests know full well we cannot maintain our relatively high standard of life or sustain our Welfare State unless our export trade is of sufficient volume to maintain the wealth of this country at the level required for that.
Unless this country, with 50 million people, dependent, as they are, for 50 per cent. of their food on overseas supplies, not merely maintains the export trade it has but increases it, many of our social ideals will not be maintained in the practical way we desire.
We should appreciate the wonderful efforts of the Labour Government immediately after the war, not merely to recapture the whole of the 70 per cent. of the export trade we had lost, but to increase the volume very substantially. Although I do not deny that there has been a further increase since the end of the Labour Government, let us not forget that the rate of increase in exports per year has been less in the last four or five years than it was in the four or five 980 years before that when the Labour Government were in office. I say that not to score any contentious partisan point but as a fact, especially in view of the other fact, that too little credit is given to the Labour Government in those days who were faced with even greater difficulties than the present Government are in respect of world trade.
Unfortunately, I see that the hon. Member for Eastbourne (Sir C. Taylor) who began the debate has gone out. I should have liked to have taken him up on one or two of the things he said in his address. However interesting his remarks may have been, they were, I think, totally inadequate in the face of the problem before us. In his absence, therefore, I would put on record this fact. He referred to coal nationalisation being a flop. I would say that the figures indicate precisely the reverse, and I am hopeful that when the Minister replies to the debate he will put on record not only that he disagrees with his hon. Friend in this respect but also that there is not the slightest intention on the part of the Government to reverse the decision, the very wise and statesmanlike decision, of the Labour Government to place coal on the basis of a national service.
What are the facts regarding coal? The facts are these. In 1938 this country was producing 226.99 million tons of coal; in 1945, before nationalisation, 182.79 million tons; and in 1954 it produced 224.09 million tons. That does not indicate that nationalisation of the coal industry is a flop. Further, so far as saleable coal is concerned, although there was a drop from 226.99 million tons in 1938 to 174.66 million tons in 1945, in 1954 we produced 213.99 million tons. That has to be put alongside the other fact that the number of men employed in the mines has dropped substantially. There were 781,000 miners in 1938, but there are only 707,000 today. When one takes those figures into consideration and the fact that output per man-shift at the coal-face has increased from three tons in 1938 to 3.26 tons today, or from 1.14 to 1.23 overall, one must conclude the remarks made by the hon. Member for Eastbourne on that subject were not only unworthy but also untrue.
On the contrary, I would ask him this question. Does he believe if the mines had been left in the chaotic conditions 981 in which they were in those days they would be producing more coal now or that there would have been more peace in the industry?
§ Mr. Dudley Williams
If the hon. Gentleman is saying that they were in such a chaotic state in the old days, then surely he is not giving a very good write-up to the increase since nationalisation?
§ Mr. Sorensen
I was only pointing out the relevant fact that the number of miners in the mines now is less than it was. Reference has already been made to the fact that many mines had to be re-equipped and re-capitalised and that the business of producing coal is in many cases much more difficult now than it was. In those circumstances I think we should be proud that Britain has enabled this industry to stand on its feet with so much promise for the future.
I say this only because it seems to me the hon. Member for Eastbourne made on this subject statements which were at once incorrect and irrelevant. If the coal industry had been left where it was I am perfectly certain—and I am sure that he is, too—that there would have been unrest in the industry not merely among the men but among the managements, and that it would have been such as would have been likely to have led to far less production of coal than we have at the present time. Therefore, I say that the hon. Gentleman's statement was utterly irrelevant as well as utterly incorrect.
§ Sir C. Taylor
The hon. Gentleman cannot possibly say that it was irrelevant. We know that if in this country we could produce enough coal for our home consumption and to export more, instead of having to pay to import coal, our economy would be helped. Answer that one. I mean the hon. Gentleman, not you. Mr. Speaker.
§ Mr. Sorensen
Perhaps Mr. Speaker will answer it in a private conversation. I was referring to the hon. Gentleman's statement that nationalisation had been a flop. I am not disputing the fact that there are many problems in the coal industry. Of course there are, but those problems would have been more chronic if the industry had not been nationalised.
§ Mr. Leslie Hale (Oldham, West)
Would not my hon. Friend agree, moreover, that a coalmine is a rapidly depreciating asset, and that as the coalface is driven farther and farther from the pit shaft every year the men have to walk or crawl mile after mile to get to the coalface, and that that puts up the costs, and that in the period from 1909 till nationalisation, apart from one small area in Nottinghamshire, scarcely a new pit was opened?
§ Mr. Sorensen
I am very grateful for the assistance given me by my hon. Friend on my left, just as the hon. Member for Eastbourne must be grateful to his hon. Friend the Member for Exeter who a few moments ago came to his assistance.
I do not want to over-emphasise this aspect of the matter, because I want to touch on two other points which the hon. Member made in his remarks. He referred to the tourist trade. I quite agree that the tourist trade is very important, though I hope we shall never descend to the level that some other countries have done, which appear to look upon the tourist trade almost as their main industry.
It is certainly a vital industry, and I agree that much more should be done to make overseas visitors feel at home. I should like to see the Government inspect all the hotels and similar institutions and put them on a graded list, corresponding to certain standards of efficiency, cleanliness and general amenities. This is done in certain guide books but, since the industry is so important, why cannot the Government investigate it and, with the collaboration of those concerned, classify the hotels and similar services in the country so that we and the visitors will know where we are?
I do not agree, however, that American visitors are deterred from coming here because they cannot obtain drinks when they like. My intervention in the debate when that point was mentioned was thought unworthy, but I believe it is more than a minor point. Visitors come to see something of the life and institutions of the country, and that surely does not mean putting drink at any time on the highest level of priority. Personally, I should like to see special efforts made to enable visitors to see far more of our social services. It is not enough to look 983 at shop windows in the West End or to visit our historic monuments, although those are extremely valuable. Why cannot we show visitors our splendid schools, and housing schemes and hospitals?
§ Mr. Sorensen
Why not? That remark typifies the different approach of some hon. Members opposite to these social matters. Why not enable visitors to visit the new town of Harlow, to see that magnificent new community being built, just as much as enable them to visit the ruins of Stonehenge? When I was last in India I again saw some of the ancient monuments there, but I was far more thrilled when I saw the great Bhakra-Nangal dam being built, because the monuments belonged to the past but the dam belongs to the future.
Let visitors see Stonehenge, and even some hon. Members from either side of the House as examples of ancient institutions, but let us be proud of the fact that we are building a new Britain. Why it should be implied that there is something unworthy and unexciting about seeing the new Britain being built I do not understand. The existence of that implication establishes the different assessment of values among some hon. Members opposite compared with that on this side of the House. Turning to another point in the hon. Member's remarks, I will say that tax remission as a means of assisting exports may be of some value in certain circumstances, but I cannot see any basic difference between that and the subsidies for exports which some Governments are alleged to be giving to their nationals.
One can place any proposals for encouraging our export trade roughly into two categories. There are the subsidiary proposals and the basic proposals. On the subsidiary side, I am sure we all agree that we must aim at cheaper production, consonant with quality. A great deal of that depends upon management as well as on men. A great many trade unions are still said to be encouraging restrictive practices, but that criticism could be applied even more in some instances to outworn ideas of management and even of production itself.
I am sure we all agree that, as far as we can secure it, an endeavour should 984 be made to persuade the American Government, first to lower some of their tariffs to enable us to sell our goods, and secondly not to discriminate unfairly against our tenders for some of the commodities which we can supply. It is monstrous that tenders are accepted because they are not only the lowest but the best and then means are used to prevent our securing the contract. We should do all we can with the American and any other Government which fall into that category to prevent that happening.
There is great advantage also in turning far more attention to the various fairs and exhibitions which are held in many parts of the world. Here it pays to advertise. It does not always pay to advertise, and the difference between internal and external advertising is precisely in this context. We do not want to increase the demand for our goods internally. Excessive home demand is one of our difficulties, but we certainly want to increase the demand outside this country for our goods.
It is lamentable to find how other countries are doing all they can to advertise their goods at international fairs while we have some petty show which does disservice to our country. I am not a business man but I have seen this happen. While other countries bring forth their wares and give exhibitions which, superficially, at least, are attractive, our concern appears often simply to show one or two articles in a humble and almost humiliating fashion. Much more should be done to ensure that when these fairs are held we go boldly forward to put our high quality goods in the shop window. Let us tell the world that we can still be relied upon to produce high quality goods, and that our skilled craftsmen are second to none. Although that is self-evident in the case of some commodities we can do much more to advertise the fact in the case of others.
We should do a great deal more to adapt ourselves to the markets and go out of our way to meet the needs of those who criticise us for being too haughty in this respect. This is a hangover from the days when this country was the workshop of the world and we had a sellers' market. We must get off our high horse, find out what buyers want and try to go out of our way to meet their needs. I speak as an amateur in this matter, but I believe that I am correct.
985 I believe there is still much to be said for bulk purchase and sale, of a selective nature. I believe this would procure reciprocity, with the advantage of a stable trade of great economic value to ourselves and others. That applies particularly to our Commonwealth and the Colonies. Let us realise that the Colonies—and I speak of them as distinct from the Commonwealth—like the Gold Coast, and particularly Nigeria with its 30 million people—are nations which are just being born. They will increase in stature and capacity and it is to them that we must look increasingly for an outlet for our goods.
Fortunately, the record shows a very striking expansion in exports to Nigeria over the last 10 to 15 years. In 1935 the annual value of our exports to Nigeria was £4.6 million. By 1954 it had increased to £48.8 million. There is no reason why it should not be more. As the standard of life in Nigeria improves and purchasing power becomes correspondingly greater, there is no reason why we should not look to it and similar countries for an increasing demand for our commodities.
We should contemplate more and more entering into mutual agreements with these new colonial areas, so that they will become not only politically independent as we are independent but in their independence enter increasingly into mutual arrangements with us over a number of years to purchase our commodities whilst we purchase theirs. It is not a novel idea, but it would help to integrate mutual inter-dependence. I say that not merely because commercially and economically it would benefit us both, but also because, believing in the British way of life, I want to see that way of life integrated economically. I want to bind not by external coersion or compulsion, but by free choice on both sides, these colonial areas with Britain as they emerge from subordination into the status of independent nations.
Although I appreciate all that has been done by the Colonial Development and Welfare Scheme and by the Colonial Development Corporation, I believe it would be good business on our part to double, treble or even quadruple the amount invested in our Colonies, because it would in time repay us as well as the people to whom the capital is devoted.
986 Although it might be startling to come to this House one day and propose that we should quadruple the amount spent in our Colonies through those channels, it is precisely that kind of thing which not only would create a great psychological response on the part of the people but, in the end, would create an economic development which would be for their good and for ours as well.
Reference has been made by one of my colleagues to the great capacity of China to consume more of our commodities. It is erroneous to assume that this is an entirely one way traffic. According to figures I have here, Chinese exports to the United Kingdom in 1953 were £10¼ million compared with £6¼ million exports from this country to China. I know that there may be some exaggeration in this matter and that we must be cautious, but the 500 million or 600 million people in China offer a market which should be explored but of which, for political reasons, we are only touching the fringe at the present time. I know that political and economic matters are often intertwined, but I submit that there is much substance in the contention of my hon. Friend that many goods on the embargo list could and should be withdrawn, thus benefiting both sides and doing no harm to any necessary security measures.
In conclusion, I urge the Minister to recognise that along the lines suggested, both as regards short and long term policy, there is the prospect not of this country experiencing a decline in its export trade but an increase. I want that to happen because I believe in the future of our country, and because I believe it can only extend its influence to the full if it becomes sound both economically and morally.
§ 3.8 p.m.
§ The Minister of State, Board of Trade (Mr. A. R. W. Low)
It may be convenient for the House if I intervene now in what has been, and what I felt was bound to be, a valuable debate when my hon. Friend the Member for Eastbourne (Sir C. Taylor) had the good fortune to be successful in the Ballot and to select this important subject.
I start, therefore, by congratulating him on his speech and others who have also spoken from both sides of the House.
987 I will not say that I agree with everything that has been said, and, while I thank the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) for his constructive approach to this problem, I do not agree with everything he said, either. However, all that has been mentioned will be carefully considered, and if I am not able to answer all the points raised, perhaps the hon. Members concerned will bear in mind that they themselves found it necessary to speak for longer than usual; if I tried to answer all the points I would probably still be speaking at four o'clock.
As an example of a speech which had in it some helpful suggestions and some with which I would not agree, may I mention the contribution of the hon. Member for Leyton (Mr. Sorensen). I agree with him about the importance of adaptation and change but I do not agree with the hon. Gentleman about the value of State selling. I very much doubt whether he himself was agreeing, because just before that he said that he did not believe in subsidies. The only advantage of State selling is that one can subsidise without being found out. That is what my hon. Friend the Member for Exeter (Mr. Dudley Williams) was complaining about.
§ Mr. Sorensen
To correct a misapprehension, I did not say I did not believe in subsidies. I pointed out the contradiction in the argument of the hon. Member.
§ Mr. Bottomley
Perhaps the right hon. Gentleman agrees with me that the Berating of industry is a subsidy.
§ Mr. Low
That is another and a wider point, and I am not prepared to deal with it at the moment.
I want to mention one or two other points with which I shall not deal. I do not want to say any more about coal, for I feel that we have perhaps spent rather too long talking about it during the debate. It is certainly true—I am sure we all regret this, no matter on which side of the House we sit—that the absence of exports of coal on a large scale administers a severe blow to this country's 988 trade, not only in respect of the earnings we lose but in respect of some of the good will that we lose, particularly in the countries of Northern Europe which have been used to drawing coal from us.
Much has also been said about China. Later, I will pick up the remarks of the hon. Member for Paddington, North (Mr. Parkin), but I should like to say here and now that, however valid some of the points which may be made are—I do not think they are all valid—it would be a great mistake if any of us thought that we could solve the export problem by removing all controls on exports to China. That is all I shall say at this stage. If I have time I will try to deal with the subject at rather greater length later.
Some points were raised by the hon. Members for Sheffield, Park (Mr. Mulley) and Bilston (Mr. R. Edwards), whose speeches I sometimes enjoy. They tempt me to spend the whole of my time on a party political discussion. Because I do not answer the points, it does not mean that I agree with them. Indeed, I strongly disagree, but I hope we can look at the problem in the rather objective atmosphere which the right hon. Member for Rochester and Chatham tried to introduce into the debate after we had listened to some of the points made by the two hon. Members whom I have mentioned.
What about the importance of exports? It is probably true to say that my hon. Friend could not have chosen a better time to discuss this question than now, because we are able to look back over the last few years and over a successful last year to see where we are. I should like to start with a review of British industry's recent export performance. I am bound to give a number of figures and percentages. A helpful review can only be given in that way.
I am not going to compare with 1950. I do not think it is useful to do so because, in 1950—I am sure that the right hon. Member for Rochester and Chatham will agree—there was a sellers' market while in 1955 there is a buyers' market. Between 1950 and 1955 the Germans have got into full production, and the Japanese have very nearly got there. Those two factors were not present in 1950 when, as has rightly been pointed out, we had a larger share of world trade in manufactured goods than we have today.
989 At the outset, it is important to say that, in reviewing our export performance, we really are not reviewing a record of failure. Since 1953, which was a very good year for our trade, the value of our exports has been increasing at the rate of about 6 per cent. per annum. Last year was a record in our history, and there is every sign of that record being comfortably surpassed this year. This is no mean achievement in the face of the severe competition which prevails in virtually all our overseas markets. I agree with those hon. Members—and this has been pointed out by most of those who have spoken—who have said that it reflects great credit on the hard work and enterprise of all those concerned in our export industries, both great and small—and there are many small firms who play an important part in this matter. By "all concerned" I mean those concerned in production and the salesmen, who are very important in this matter.
I should like to take individual industries, although it is, of course, always invidious to single out a particular industry for special praise. Every business has its ups and downs and what really counts is what I might describe as the long, steady haul over the years. It may be helpful to take one or two industries to illustrate the range and diversity of our industrial contribution to exports.
First, engineering products which, as has already been mentioned, form 40 per cent. of the total. It is sometimes forgotten that in the half year April-September this year engineering exports were running at nearly £90 million a month, that is, 7 per cent. above the same period last year. That is sometimes forgotten in what is said from time to time by the right hon. Member for Huyton (Mr. H. Wilson). Within this group are exports of machinery and all types of commercial vehicles and chassis and aircraft frames among others, which are all up on last year's figures. Chemicals, metals, woollen yarns and fabrics have noteworthy achievements to their credit. In fact, the chemical industry has increased its share of world trade in chemicals and is the only British industry which has actually increased its share of world trade this year. I am sorry that the hon. Member for Bilston, who was so gloomy about this trade, has gone. He is interested in that trade.
990 Then there are new products like radar and television equipment, synthetic fibres, anti-biotics, radioactive isotopes, instruments and equipment connected with their use and many others. All those are playing an increasing part. So much for industry.
Now I want to say a word about areas. Exports to the sterling area have risen by 4 per cent. in the first nine months of this year, compared with the first nine months of last year. That is despite the restrictions in Australia, which is our largest customer, and relaxations by the sterling area on some of the controls on dollar imports. That explains one of the points of my hon. Friend the Member for Garston (Sir V. Raikes). Exports to other areas have risen by 7½ per cent. and this figure includes a notable and welcome increase of 10 per cent. in exports to the dollar area and a welcome rise of about one-fifth in trade with Middle East countries. I should like to point to the increase in trade with the dollar area, particularly in view of the very pessimistic remarks made by an hon. Gentleman opposite.
We have increased exports this year and I hope that we will continue increasing them. Our export trade with European countries has increased by 2½ per cent. this year and is now—and draw attention to this—30 per cent higher than it was in 1950.
§ Several Hon. Members rose—
§ Mr. Burden
Would my right hon Friend make it clear whether he is referring to value or volume? That is very important.
§ Mr. Mulley
It is still not clear which are volume and which value and I hope that the right hon. Gentleman, with his responsible position in the Board of Trade, will not be misled by the increasing value of exports and fall into the 991 Prime Minister's error of talking about record figures. He must give cognisance to the true value.
§ Mr. Low
The most important thing is volume and I say that at once. That is the broad picture of what has happened, but we must not be complacent and it is right that it should be pointed out that our relative share of world markets has gone down. As against the 6 per cent. increase a year which our exports have registered since 1953, world trade in manufactured goods increased by 8 per cent. in value in 1954 over 1953, and by no less than 13 per cent. in the first half of this year over the first half of 1954.
Our share of this trade, which was about 22 per cent. before the war and stood at the same figure in 1951, has, since then, declined to just under 20 per cent. in the first half of this year. This is not the result of bad times in particular markets or for particular industries. It is widely spread.
I have given the share. The point has been made by other hon. Members, but the thing that is really important is the absolute level of our export earnings. That is more important to us than our mathematical share of trade. However, it is right to say that the share of trade is some guide to our competitiveness and progress in the export field, and a fall in the share should certainly be a warning signal. The fact is that, so far as we can see, our exports have not taken full advantage of the rising tide so as to match the rise in overseas expenditure associated with the expansion of our home economy. Our major competitors overseas have taken greater advantage than we have of recent world conditions.
In the first half of this year, the United States, Germany and Japan have each increased their share of world trade in manufactures as compared with the first half of 1954. In the case of the United States, this has reversed the tendency of the last few years, when her share of world trade in manufactures had declined, and must stand as a reminder to us that, as quota restrictions on dollar goods continue to be dismantled throughout the world, we shall face ever increasing competition from the powerful United States industries.
992 Germany's economic resources are now becoming more fully employed, but it would be imprudent to count on any significant weakening of her relative competitive power, and Japan's exports have also been showing a strong upward trend. We should not overlook, either, the substantial share of world trade in manufactures held by Western European countries other than Germany. That is a share which some people forget and which exceeds ours and which, though it declined faster than ours after 1951, has remained steady for the last year or two while ours has declined. Incidentally, some of the gains I have been describing have been made not only in Western Europe, or in the Western Hemisphere, through its traditional outlet of Germany, but also in the markets of the sterling area.
§ Mr. Bottomley
Would not the right hon. Gentleman agree that the Germans have used Western Europe as a broad-based home market and have, therefore, been very successful? Ought we not to have done the same?
§ Mr. Low
That point has been made widely. It is fair to say that Europe is traditionally more the market for Germany than for us. I agree with the right hon. Gentleman, but I am certain that our manufacturers would be wise, basing themselves on our market and the Commonwealth market which gives them a fairly broad base, to look more at the advantages of the European countries. As the right hon. Gentleman knows, we have taken steps recently to bring that point to the attention of industry.
I do not need to stress the importance of exports. Every hon. Member who has spoken in the debate has made the point, and now we have got the facts I think it fair for me to pursue the discussion with those who have taken part in the debate on what the Government can best do to help. It is true that we have been subject to criticism, some of it constructive and some of it less constructive. I very much agree with the hon. Member for Sheffield, Park, who said that the real problem is the question: how do we get individual firms to sell overseas when they can sell more profitably here, or when they think they can?
993 There are two views about how to do it, and both views have been debated across the Floor of the House a great many times during the last few weeks. One view is that you do it best by physical controls, and the other is that it is best done by creating the right conditions. It always seems to me that those advocating physical controls are trying to make water run uphill. Those who say that the right way to do it is by creating the right conditions to enable our exporters to export are trying, as it were, to alter the shape of the land so that the water runs in the right direction naturally, and that is the big difference between us. Metaphors are dangerous—we have had some experience of that in past debates—but I think that what I have said exemplifies the difference between us.
I am very glad that, at any rate in my presence, no hon. Member this afternoon has advocated the advantage of import controls to assist exports. If we control imports we encourage others lo do the same, and that does not provide the best conditions for our exporters to increase their trade. But whichever view one takes—and this has been made clear during the debate—there is still room for the Government to give practical help to exporters.
I wish in a moment to discuss what sort of help the Government gives and some of the points made during this debate about what other things the Government should do. First, I would say that it seems to us a mistake for Her Majesty's Government to do anything which interferes with or mollycoddles industry. Nor do we think that the Government should sell for industry. It is a mistake to think that industry can be encouraged to show more enterprise and to be more adventurous if we clamp on physical controls which interfere with day-to-day management of business. I would say to hon. Gentlemen that we think it a great mistake, when in difficulty—and still more when in doubt—to try to solve the problem by dishing out a subsidy.
§ Mr. Low
I am talking about the export trade.
The first thing I wish to talk about is the creation of the right conditions. I 994 do not propose to discuss the economic policy at home, because we are debating that almost every day—except to say that the greatest help any Government can give to exporters is to provide the right economic conditions at home. I should, however, like to say a word about overseas trade policy, in view of the remarks of my hon. Friend the Member for Garston. He will excuse me if I do not rehearse once again the arguments against the anti-G.A.T.T. line which he has taken so consistently, and which I and other of my right hon. Friends had discussed with him from time to time, although I will refer to it in passing. Of course, I agree with him about the importance of trade with the Commonwealth. It is right that we should stress that. I hope that all my hon. Friends will do so, and I think that the right hon. Member for Rochester and Chatham and his hon. Friends will do the same.
Our traditional links and the great opportunities in a developing world both give us a special position and a special interest there. We have a very large investment in the Commonwealth. From the sterling area, we earn about £200 million a year in dividends, profits and interest, and there is a growing investment in Canada. But it is fair to say that trade inside the British Commonwealth can never be the only important export trade either of the United Kingdom or of the other countries of the British Commonwealth. We all have to look elsewhere for some of our imports—we have to get some from the United States of America—and we all have to look elsewhere to increase our exports.
What we in the British Commonwealth need today is investment in order to expand development within the Commonwealth. That is the way to help both the Commonwealth and our own trade. It is fair to say that, according to my information, three-quarters of our overseas investment has recently been going to the sterling Commonwealth. In our trade policy, we are in full agreement with the other members of the British Commonwealth. We have a common policy aiming at freer payments and wider trade, and we agree that expanded world trade gives us all greater opportunities for increasing our trade.
As I have already said, we each enjoy the advantage that the Imperial Preference 995 system gives us of broadening the markets for our industries outside our individual countries. That gives our industries an advantage when they trade with other countries outside the Imperial Preference area. We all think that G.A.T.T. is to our interest. Her Majesty's Government believe that it pays Britain to be in G.A.T.T., with its fair trade rules, and its arrangement for keeping the doors of other countries open, because of the limitations on the use of the quota restriction weapon, and with its arrangements which provide for stability of tariffs.
To refer to one of the points made by my hon. Friend the Member for Garston, I hope that the House will agree with me that an alteration to Article I of the General Agreement on Tariffs and Trade, just like a fundamental alteration to Clause 1 of any Bill in this House. is not a minor matter.
§ Mr. Low
I am very glad that my hon. Friend does agree. It seemed at one time that he did not agree with that.
Do not let us forget that our trade with the Commonwealth is about half our total trade, and that in the first nine months of this year 49 per cent. of our total exports went to the Commonwealth, which is a larger percentage than before the war.
So much for our overseas trade policy. I said that I would say a word or two about the minor steps which the Government take to help exporters. Reference has been made to the Export Credits Guarantee Department, and I am grateful for the kind things that have been said both by the right hon. Gentleman opposite and by my hon. Friend the Member for Hitchin (Mr. Maddan), who has a great knowledge of market research and who rightly attaches importance to market research policy.
The Export Credits Guarantee Department covered, last year, over £400 million worth of British exports. It is now dealing with inquiries about the creditworthiness of overseas buyers at the rate of over 100,000 a year. It has a big business, which it runs on a commercial basis. It is not subsidised, but it seeks to give a real insurance help to those engaged in the export trade. It has special policies for helping people in the 996 dollar areas and it is just devising a specially drafted policy to deal with the problems of overseas constructional engineers.
The Board of Trade provides for exporters a wide range of services about which the right hon. Gentleman knows full well, but which other hon. Members may sometimes forget. A great amount of help is traditionally given, over a period of years, by overseas officers of the Government and officials of the Export Services Branch of the Board of Trade, who keep closely in touch with industry. Help is given by regional offices of the Board of Trade, too. We handle an enormous number of inquiries. Each year about 6,000 inquiries are made for suitable agents abroad, and 12,000 inquiries about the standing of overseas firms.
Then there is the question of the amount of publicity which is arranged through the Board of Trade and Government channels overseas, and the arrangements made through Government channels for providing British technical assistance all over the world. I am surprised that we have not had more mention of the great advantage that we derive from having British technicians all over the world. We used to say, "Trade follows the Flag," and then, "Trade follows the money," but I think it is true to say today that, "Trade follows the money and the expert." We pay a great deal of attention to the number of technical personnel from this country who are serving in various parts of the world. In spite of our shortage of scientific and technical personnel, we lead the world in the number of experts we have supplied to the Specialised Agencies of the United Nations. Last year we supplied 268 experts, out of a total of 584, the United States coming next with 229.
This is in addition to the many experts and technicians who have left this country as part of our technical assistance contribution under the Colombo Plan, or who have taken service directly with foreign Governments. We know that it is often not easy to spare the right man, especially when so many calls for scientific and technical skill are made by our own firms and educational institutions, but I am sure it is right—and I believe this is the sense of the House—to do all we can in this direction, not only to help the underdeveloped countries but also because of 997 the long-term benefits to our own commerce which will undoubtedly flow from the propagation of British techniques and methods. The same considerations apply in the case of arrangements for bringing young men from foreign and Commonwealth countries to learn their engineering and technical skills here.
Comment has often been made in the House about the Board of Trade fairs policy. In the Board of Trade Journal, about a month ago, we thought it right to set out at some length, in two articles, what was our practice. That has been referred to by the President and by myself in answer to recent Questions. It is very difficult to steer a middle course between lethargy and extravagance, but that is what we are trying to do. I would remind the House of the truth of what my hon. Friend the Member for Ilford, North (Mr. Iremonger) said in a Question a few days ago, namely, that trade fairs are by no means the only way—and are not always the best way—of promoting sales overseas. The object of trade fairs is to sell things.
We are constantly in touch with this problem, and circumstances that may change in various countries. I myself took advantage of my visit to Sweden at the time of St. Eric's Fair to visit and study that fair. I was not impressed with the national pavilions there. I was much more impressed, and I say this with all sincerity to the House, with the tremendous advantage that is won for the industries of this country by large successful trade exhibitions, two of which we have had in the last thirteen months. One was at Bagdad at the end of 1954, and the other very recently at Copenhagen.
There one may see the products of British industry at their best, set out according to a co-ordinated plan, with every part of industry co-operating through the Federation of British Industries. It is my view that the advantages of that kind of exhibition are perhaps ten times as great—that may be an overstatement, but it is certainly of that order—as any advantage we could get from national pavilions.
I heard the right hon. Member for Rochester and Chatham mention India, but I have not the time to tackle that subject today. Of course, there are countries in which the importance of 998 trade fairs is greater than in the case of other countries, and we must certainly bear in mind local conditions.
The last point I want to mention on the question of what the Board of Trade does to help industry is in connection with markets. We have recently been bringing to the notice of industrialists and traders the great opportunities that lie ahead in certain markets. I have already mentioned Western Europe. We took special steps about the Middle East oil-bearing countries, which have the great advantage of having money, and, at the same time, being at the start of a great development venture. We had the co-operation of the three ambassadors from the countries concerned to help in talking to the Press, and we were questioned for some time. We also saw the overseas constructional engineers and consulting engineers, which I am sure was advantageous.
Recently, we have taken steps, in conjunction with the Dollar Exports Council, to emphasise to industry the opportunities which there are in the United States market. After all, imports of manufactured goods into the United States have doubled since 1950, and that is one of the good things on which we can congratulate industry as we have kept our share of these imports during that time. The steps which the Dollar Exports Council is taking are of great help, and I am sure that they probably played as big a part as anything else in seeing that we kept our share during that time.
The hon. Member for Bilston, in the constructive part of his speech, mentioned the possibility of trade centres in the United States. I do not think the hon. Gentleman is aware that there are already two trade centres in the United States, and three more in Canada, organised by industry, or by the Dollar Exports Council as well. I am sure they serve a purpose, but, in addition there are our consuls and the commercial men in the Embassy in Washington, and they are of enormous service to industry and traders trying to sell in America.
Then, the right hon. Gentleman opposite mentioned Latin-America. I am sure that he was right to stress the importance of the opportunities there. Some of the Latin-American countries come within the purview of the Dollar Exports Council, and we joined with them in our 999 recent campaign to bring to the attention of industry the great opportunities that there are in these expanding markets. I want to make it quite clear that, in drawing the attention of industry to the opportunities that lie in these markets, it is no part of our object to encourage the idea that they should switch from one market to another at the whim of officials or Ministers. What is part of our object, and this really exemplifies what the Government can do to help industry, is to see that industry has access to all the Information that comes our way and an assessment of the opportunities there.
To sum up on this point, we have never said—and never will—to any trading concern that it should decrease its efforts in the Commonwealth markets. That is no part of our aim. In fact, we have been saying—and I say it again—that we must be careful in the Commonwealth markets not to take our position for granted. That is one of the lessons from the figures to which I referred earlier. In talking of Commonwealth markets, I agree with the importance of India. I am as delighted, as was the right hon. Gentleman, in the success of A.E.I. in getting the heavy electrical plant contract from the Indian Government.
There were certain points that it was suggested we should do in addition. First, my hon. Friend the Member for Eastbourne suggested that there should be closer consultation between us and industry. Consultation is already very close, both formal and informal. We have also just inherited from the Ministry of Supply very valuable consultation machinery with the engineering industry. We have arranged recently for regular joint examination to discuss with the cotton industry its export difficulties and my right hon. Friend will be having another meeting shortly with the industry's representatives. All this machinery gives us the chance, which we want, of keeping in touch with industry. I assure my hon. Friend that silly suggestions are not made to us; he feared that they might be. We keep industry in touch with the facts as we know them and industry keeps us in touch with its ideas.
There has been reference to the policy of special financial help, whether by tax remission or subsidy. I say to my hon.
1000 Friend the Member for Garston that the reason why we do not embark on a subsidy race with other countries is not so much that we have agreed in G.A.T.T. that we would not do so, but that we are satisfied that it would be directly contrary to the interests of the United Kingdom. Instead, we have embarked on a campaign to get other people to end their subsidies, and my right hon. Friend the Chancellor of the Exchequer was successful last year in getting the West German Economic Minister to agree that Western Germany's tax remission scheme on export turnover should finish at the end of this year. We have had some success too with our partners in the O.E.E.C. and in G.A.T.T. in getting them to agree not to create new subsidies and to bring existing subsidies on the export of manufactured goods to an end at stated times.
Then there was the question of the revision of the tax laws. That is a matter for my right hon. Friend the Chancellor, who will, I am sure, take note of what has been said. Those were the three main points put to me. I do not think we can do more about consultation. I do not think we would be wise to do anything about subsidies except to continue to try to get others to bring them to an end; and I cannot say anything at this juncture about the revision of the tax laws.
Two other special points were made, the first concerning China—I can hear the right hon. Member for Rochester and Chatham mumbling that this is very negative. I have taken some time, but whatever else I may have done, I have tried to describe what the Government does. It is not necessarily an attack upon the Government that they should not be able to accept some of the proposals put forward by the right hon. Member for Rochester and Chatham, without, I may say, the full support of his right hon. Friend the Member for South Shields (Mr. Ede), who is sitting beside him.
§ Mr. Parkin
Could the right hon. Gentleman say what it is he is going to answer, and what it is that does not enjoy the favour of my right hon. Friend?
§ Mr. Low
I think subsidies have been mentioned. I now want to speak about China. I am sorry that I was not present 1001 when the hon. Member for Paddington, North was speaking, but I had to get some lunch some time.
As I understand, two questions were asked by him. The first was about when we were to revise our own lists, and the second about when we were to take the lead in the United Nations in seeking the revision of the resolution. As the hon. Member knows, the resolution was brought into force in May, 1951, and since then the procedure adopted by his right hon. Friend, the then President of the Board of Trade, has been followed in this country. The question of when we should revise the list, and how, has been put to my right hon. Friend the Foreign Secretary and to my noble Friend the Minister of State for Foreign Affairs, in another place. I have nothing at all to add to their replies.
Only quite recently, on the major question, my right hon. Friend said that the strategic controls on trade with China were under continuous review, that they were introduced as a result of a resolution of the General Assembly of the United Nations and could only be rescinded by it. That is the position, and I am sure that the hon. Gentleman knows that not I, but the Foreign Secretary is the proper person to ask further questions about that.
§ Mr. Parkin
I am sorry that the right hon. Gentleman did not hear my speech. I can summarise it by asking whether he agrees with the reply given by Mr. Walter F. Robertson, the American Assistant Secretary of State for Far Eastern Affairs, before the House Appropriations Committee on 26th January, 1954. He was asked if it was his view that… there is to be kept alive a constant threat of military action vis-à-vis Red China in the hope that at some point there will be an internal breakdown?His reply was:Yes. Sir, that is my conception.In answer to further questions, he said:If I were the dictator and could lay down the law I would not have any trade with Communist China either by ourselves or our allies.
§ Mr. Low
That seems to make it quite clear that the hon. Member should address himself to the Foreign Secretary.
I am very glad that the question of the tourist industry has been raised. It is one of our most important overseas 1002 currency earners, and I have noted what has been said. The number of visitors this year has been a record, and I know of the excellent services of the B.T.H.A. and its dynamic chairman, Sir Arthur Morse. I shall certainly look at the various points made in this respect.
If I may sum up, I think it has been a good thing that we have been able to discuss this subject today. I hope that it is clear that none of us is complacent about the present position. I am quite certain that industry is not complacent, and that there is a general awareness in many quarters that more active salesmanship is still necessary. I am sure that the Government are right in doing everything they can to preserve and encourage that adventurous spirit which has been mentioned many times today. Of the total British output, one-fifth goes to export. That means that one worker in five is engaged on our export affairs.
Our standard of living depends upon our exports. It can rise fast only if our exports rise fast, and I hope that the realisation this debate has shown of that fact can be passed on to everyone in the country. To hon. Members who have taken such a good part in the debate, I would say that one of the ways in which they can best help is to explain these things in simple words to their constituents on all possible occasions.
I hope that the Motion will be accepted. I cannot say that I hope the Amendment will be. I trust that I have given the House a sign of what the Government do, what the facts are, and of the way in which we view the present position, and that I have been of some help to my hon. Friend the Member for Eastbourne and others interested in these matters.
§ 3.50 p.m.
§ Mr. James Johnson (Rugby)
The Minister has spoken a long time. I think he has spoken a bit too long for some of his hon. Friends. Although I am not an economist or a business man or a market research wallah and cannot check his many statistics, I intervene now because it seems to me that it would be a pity if a Tory followed a Tory Minister and no one on this side of the House rose to follow the right hon. Gentleman.
I agree with many parts of the speech of the Minister of State, Board of Trade. He has been helpful—in parts. Sitting 1003 here and being a miner's son I would thank him for his discreet remarks on coal mining, which were in contradistinction from those of his hon. Friend the Member for Eastbourne (Sir C. Taylor). One gets a little tired sometimes of hearing people who have never been near a coal-mine in their lives—
§ Mr. Johnson
—talking about hewing coal. If talk hewed coal, then more coal would have been hewn by those on the Tory benches or in a pub nearby than has been hewn in Durham or in South Wales. It is so easy for those who have never been near a mine to talk about coal production, but I wish they would go to the pits and see the work being done.
The right hon. Gentleman talked of the 1950 export figures and the 1955 figures, but stressed the fact that the two years were not comparable. He said that the year 1950 was a sellers' market but that in 1955 there is a buyers' market, and that is quite true, for we know of the competition we must meet from Japan and Germany and the U.S.A. and other countries today. We agree with him that far. However, in this context of exports I want to mention firms in my constituency.
I would ask the right hon. Gentleman to tell me, following his remarks about Lord Chandos, what he will do about the motor car industry. I am proud to be a Member for my constituency, because there are some excellent firms there. We have B.T.H., of which Lord Chandos is the managing director, which is doing a first-class job, and I would echo all that the right hon. Gentleman said about A.E.I. getting into the Indian market and doing the job it is overseas. That is fine.
But why is it that the British Thomson-Houston Company is selling almost 50 per cent. of its heavy electrical equipment overseas and is now appointed as consultants to the Indian electrical industry? Why is it that Rugby Portland Cement develops overseas? Lodge Plugs and the English Electric Company are making their sales abroad. Why is it that Lodge Plugs, a firm which makes the best plugs in the world, is engaged in this drive? Because these firms have public- 1004 spirited men like Lord Chandos at their head.
What is the right hon. Gentleman doing about the motor car industry? The motor car manufacturing firms appear more concerned with the lush home market; and are using valuable imports, goods measured in dollars, such as sheet steel, to sell their products at home, in higher degree than B.T.-H. Car firms like the Humber-Hillman in my constituency can obtain a larger and, perhaps, more profitable market in the United Kingdom, and they are not exporting enough to the tough markets overseas where they have to meet intense German and American competition. What message will the right hon. Gentleman send to those firms in the future, if need be, to show their public spirit and their sense of duty to their country? What is he going to do about that?
I suggest that the right hon. Gentleman thinks more in terms of a system of physical controls. It is scandalous that we should be importing about 49 million dollars worth of sheet steel now as compared with 15 million dollars worth last year and not get higher exports. Yet he does nothing more than exhort manufacturers to greater efforts in the export drive, and little or nothing is done to assist them to sell exports overseas against foreign competition.
§ Mr. Gresham Cooke
The hon. Member, of course, is not referring to the greater part of the motor industry, because the exports of the motor industry as a whole are still about 50 per cent, of production, which is a very much higher percentage than is the case in many trades, including even the electrical industry.
§ Mr. Johnson
I readily admit that. All I am saying is that at the moment we must export more than we are actually doing. The Minister was careful to say earlier that we are now in a worse position than we were in 1950. We have now a smaller slice of the world cake of commerce than we had then. We are losing the fight in the export markets. We had 26 per cent. of the world's trade in 1950 and we have possibly a little under 20 per cent. now.
It is no use the Minister saying that he is merely going to exhort and appeal to manufacturers. Some more definite action 1005 must be taken. Manufacturers of motor cars like the Humber, Hillman, Daimler, Alvis and particularly Standard, are obviously doing a first-class job. Our workmanship is good and so are our factories, but on the management side we want a few more men like Lord Chandos as entrepreneurs and captains of industry who will fight in the markets in America and elsewhere overseas and increase our share of the world's commercial cake to the past 26 per cent. and even 30 per cent. If he is not careful, the Minister will soon find himself bad tempered when his exhortations show little effect.
Turning to the subject of overseas migration, I support what the Minister said about the export of "bodies." He could not have done anything more useful than saying what he said this afternoon in advising people who have the technical and other qualifications to go overseas where they are badly needed. The Minister might also advise firms to export factories also. Southern Rhodesia needs a textile industry, and Northern Rhodesia more than just the cement works at Chilanga. We must export firms as well as technicians and technologists. What are the Government doing about it?
We have the Oversea Migration Board which is endeavouring to help people to go overseas by means of assisted passages. It has helped young men and women to go to Australia and elsewhere, but we must do more than we are doing now. Our efforts at the moment are merely derisory. I am not suggesting that we should follow the example of Italy and have a Minister for Emigration and I am not asking the Minister to establish a separate Department for the "export of people" overseas.
I do not want us to follow the example of Norway and Ireland whose chief export is men and women, but the Minister must think in terms of more people going overseas from the United Kingdom, to our Commonwealth and Empire. While I am not suggesting that there should be a Commonwealth conference on the subject, I believe that there is need for many more two-way talks between ourselves and the Canadians and Australians and others.
The question of the maximum number that we could afford to send overseas is arguable, but I have seen the figure put as high as 250,000. Certainly we could 1006 afford an outward flow of 100,000 people from the United Kingdom, and most of our Dominions could support an intake of 2 per cent. of their population. While I readily recognise the difficulties of housing, finance, and other factors involved in our Anglo-Saxons going out to strengthen the spiritual, economic and cultural ties in the Commonwealth, I am convinced that the Minister and his colleagues in the Government are not facing the problem. They are supposed to be the party of Empire.
§ It being Four o'clock, the debate stood adjourned.