HC Deb 15 November 1956 vol 560 cc1112-4
16. Mr. Rankin

asked the President of the Board of Trade what estimate he has made of the effect which the blocking of the Suez Canal will have on imports from Commonwealth and colonial sources; and if he will make a statement.

Mr. P. Thorneycroft

Of our total imports slightly less than one quarter by value came through the Suez Canal in the first nine months of 1956. Most of these imports, with the exception of oil, came from Commonwealth countries. Some routes are more affected by the closing of the Canal than others, and it is not practicable to make a general estimate of the delays which will be involved. I am confident that traders, in co-operation with shipping companies, will be able to accomplish the necessary re-routing in a way which will reduce the effects on our supplies to a minimum, and on examining our stock position I see no grounds for serious apprehension about our supplies from Commonwealth countries.

Mr. Rankin

Can the President of the Board of Trade assure us that any rerouting which is necessary will not interrupt the continuity of supplies in such a way as to cause unemployment?

Mr. Thorneycroft

Obviously re-routing on this kind of scale is bound to cause some interruption in supplies or some delays, but I am satisfied that these matters are being handled in the best possible way. Our stock position, which does have its effect on unemployment, gives no immediate cause for apprehension.

Mr. H. Wilson

Is it still Government policy to continue with the liquidation of important stocks of strategic raw materials in view of the tense international situation, and is it still their policy, by the credit squeeze and in other ways, to force the liquidation of private stocks?

Mr. Thorneycroft

I should have thought that in existing circumstances Governmental action through the credit squeeze to control inflation was certainly as necessary as at any other time. We are always studying the question of the proper level of strategic stocks in the light of developing circumstances, but I have no alteration in policy to announce.

Mr. Wilson

The President will recall that it was in 1950–51, following the tense international situation after Korea, that the then Government invested many hundreds of millions of pounds in strategic stocks—and that was the main reason for the deterioration in the balance of payments in 1951. [HON. MEMBERS: "Oh."] The Government have now published the figures in the last two years, and it is perfectly clear. Hon. Members can study them. In view of that, does the President now feel that the international situation has so much improved on the position then that this is the year when the Government should be disposing of these strategic stocks?

Mr. Thorneycroft

I must say that it has taken the right hon. Gentleman four years to think of that one. If he had thought of it a bit quicker, with the Election on at that period, it would have been more helpful to him. This Question deals simply with the increased length of time and the re-routing necessary in trade with the Commonwealth countries. I have given my answer, that it will take longer and does mean routing material round the Cape, but it does not have a major effect on our strategic stocks.

Mr. Beswick

Does the President agree that it is not simply a question of rerouting but of the availability of shipping, and that there is going to be a shortage of bottoms? Is not this going to result in an increase in freightage? Has he taken that into account?

Mr. Thorneycroft

The hon. Gentleman is quite right. All these events have an effect on freight rates, which is visible today.