HL Deb 07 December 1944 vol 134 cc210-39

2.1 p.m.

Debate resumed.


My Lords, when on the occasion of seconding the humble Address I had occasion to refer to the export trade and the attitude of exporters and industries to Government Departments, the noble Viscount the Leader of the House was good enough to say that he had sympathy—I think he used the words "a sneaking feeling of sympathy" —with me. In the speeches which have been made in your Lordships' House since that date there has been a great deal of criticism implied in the speeches of other noble Lords, notably in the speech of the noble Lord, Lord Winster, but lest this should be interpreted as entirely a critical debate I would like with your Lordships' permission to make a proposal as to the relationship of trade and industry with the Government Departments with which they are intimately concerned.

The noble Lord, Lord Winster, referred to a number of cases of individual firms, industries and concerns who though willing to go into the export trade had found themselves unable to get very much support or assistance or the permits necessary. I do not want to add to that catalogue, but I believe it to be only a sample of a great deal more of the same sort that is going on, which is largely due, rightly or wrongly, to a sense of antagonism in the minds of industrialists and those who are willing now to come into the export trade. They have to be cured of this attitude of mind however it has been engendered, whether it has been engendered by bitter experience or only by their imagination. I find myself very much in agreement with what the noble Lord, Lord Winster, said about the necessity of collaboration between the various Government Departments and would-be exporters if anything positive is to be done, instead of there being a series of continued recriminations which was, I think, an inference in at least one part of what the noble Lord, Lord Faringdon, said.

I am afraid I am unable to follow him in most of his recommendations or suggestions, which really amounted, so far as I could judge of them without reading the text of his speech in the Official Report, to a recommendation of bigger and better controls in one form or another and some rather complicated arrangements in regard to currency, on which he suggested that noble Lords on these Benches were either seething with indignation or bubbling with wrath. There was not, I think, very much bubbling here and his speech on that point of economics and finance was on a scale of altitude rather removed from this Motion. I think it is fair to Lord Faringdon to say that the particular fly thrown over us here is not likely to be taken and that the fishing season for that sort of fish is at the present moment closed. Beyond that I do not think I need say anything about Lord Faringdon's remarks.

To go back to what the noble Lord, Lord Winster, and others have said about what can be done positively to help in this matter of getting the export trade going, your Lordships will be aware that the Department of Overseas Trade, in spite perhaps of its joint dependence on the Foreign Office and Board of Trade, has nevertheless in the course of the last twenty years of its existence earned golden opinions from many firms, especially the smaller firms in the export trade, by reason of the assistance it has been able to render. That assistance has been very largely rendered by giving information and making suggestions rather than in any positive action taken on their behalf beyond introductions and support with foreign Governments. Obviously support with foreign Governments will be necessary. So long as controls which we have experienced here are maintained abroad, we will have to be in exactly the same position in regard to controls being maintained here for a very long time to come. That is not to say that any of my noble friends would like to see controls merely for the sake of control, as the noble Lord, Lord Faring-don, appeared to wish. In fact I think probably we here rather prefer the old aphorism "the best government is the least government". If we have to have controls we should only accept them because they are absolutely essential. If we have to accept the position that we must have controls in the somewhat precarious period of transition from war to peace economy we must see how they can best be applied and managed for the benefit of the export trade.

The Department of Overseas Trade has done—let us accept that as generously as possible—a great deal to help small exporters. The point I want to make is that it could do a great deal more, especially at the present moment. I cannot accept the accusation that has been made that the Board of Trade is either incompetent or unwilling to help. There is no Department of His Majesty's Government that is either unwilling or incompetent to help if it is given the right lead and has a policy laid down for it. We believe that policy is now laid down by the reference in the most gracious Speech to the export trade and by the statements which the Prime Minister and other Ministers have made in another place. Assuming therefore that the Board of Trade and the Department of Overseas Trade have had that lead, there is one constructive suggestion I would like to make which I think will go far to reconcile exporters and shippers in this country to the maintenance of controls which are fundamentally distasteful to them and to many of your Lordships. That proposal is that the functions of the Department of Overseas Trade, or of another office created for the purpose, should be extended to provide active help to the exporter or the would-be exporter. By active help I mean more than the provision of information, introductions and support abroad. I mean active help to be taken here at home.

As things are at present, the exporter before he can export anything has to have licences, permits and, usually, the general consent of a number of Departments of the Government, and the time that he has to waste in obtaining these permits in that field, as in many other fields, seems to the unfortunate victim of these controls to be sometimes quite intolerable. Now since these permits are all issued by one or other Department of His Majesty's Government, I submit that there should be created an office which might be called the Office for Exports, or that by extending the functions and duties of the Department of Overseas Trade an agency should be provided to which all exporters or would-be exporters could go, an agency which would transact for them all their business with all the Departments of the Government involved in their trade. Thus, if an exporter has a definite proposition to make—it might be to sell boots to Ruritania—and has a potential order on his hooks, he could than go to this Export Office, state his case, receive the consent which would, in fact, give the Department an effective control over his activities —that control which is so dear to the heart of Lord Faringdon—and having given their consent that office would then undertake on behalf of the exporter to procure for him all other necessary licences.

The Department would in effect say to "Yes, Mr. Smith, your proposed export of boots is entirely agreeable and most welcome to the Government. Now you go away and get your plant ready, and make your boots, and we will do all the rest for von. You do not have to go and get an export licence, we will do that. You do not have to get an import licence for Ruritania, we will do that. We will get you your financial permits, your permits to deal in foreign exchange, if necessary. We will go to the Ministry of Supply to get you the raw leather you need to make boots. We will go to the Ministry of Labour to ensure that you have the necessary men. We will, of course, deal with your traveller who will wish to go to Ruritania, and we will arrange for his transport, his passport, his finance, his letters of credit. Go away now and do not worry about anything; the rest will all be done by us. When we have collected all the necessary licences from the five or six Departments involved in this we will send them to you in an envelope, and then you can go ahead and do your business."

My point in making that suggestion is that it does seem not only in the export trade, but in others, and in other activities, almost: intolerable that when you have obtained a licence from one Department you then have to go and get other licences from half a dozen other Departments. My noble friend Viscount Rledisloe will know much better than I do, for he has had more experience than I have in the agricultural world, how when you have got a county agricultural committee to consent to certain work being carried out on a piece of land that is only the beginning of your difficulties. You have, after that, to go to the Ministry of Works to license the work. Then, perhaps, you have to go to the Timber Control to get them to provide you with a licence in respect of timber. Next you may have to go to somebody to get a licence for a lorry to move material. It takes, perhaps, four months to get all these licences, and when that time has elapsed it may be found that the contractor has no longer got the necessary labour to do the work. When a licence has been given by the Department in chief, and chiefly concerned, that licence should be a passport for all the rest of the bureaucratic machinery through which a man has to go.

And that is as true in connexion with the export trade as anywhere else. I believe that by creating an Export Office of this sort either by extension of the functions of the Department of Overseas Trade, or by the creation of an ad hoc office in the Board of Trade, you would not only reconcile the industrial, commercial and shipping community in this country to the maintenance of these controls, but you would also satisfy a great many of the aspirations to which expression has been given by many of the noble Lords who have spoken before me in this debate. You would satisfy my noble friend Lord Faringdon in exercising some control over exports by the initial consent to the exporter's transactions. You would satisfy the necessity for co-operation between Government Departments, to which Lord Winster referred. You would also have the support, both at home and abroad, of the offices chiefly concerned in seeing that the piece of trade to which they had given their consent was carried through. In other words the trader would have the support of His Majesty's Government abroad as well as at home, through the Legations, Embassies and Consulates concerned.

I believe that that is a suggestion upon which the noble Earl who is going to reply on behalf of His Majesty's Government might be good enough to comment if he will, because I do not think that it involves a very large extension of the Civil Service machinery at present in existence. It only means bringing together separate bits into one place to which a man can go and get the whole thing done. That idea, which I put forward with all deference in the hope that it will help in the solution of this difficult problem of getting the machinery restarted, is one which was adopted in Germany before the war, and if we have learnt from our enemies from time to time something in the military art we might, perhaps also, I think, learn something of their arts of peace. In other words, I believe that the old Latin tag of fas est et ab hoste doceri is as true in the civil life as in the military life with which we have been much more familiar during the last few years. With the creation of an office of that sort I honestly believe that my friends in the commercial and industrial world would not only be much more reconciled to what they see around them, but would also be very willing to do their best to assist and to get together among themselves to help the Government in creating export trade in places where there was none before. Under the present régime it is honestly just not worth their while to waste time trying to make new openings when it takes anything up to three months to get the permits even to investigate the matter, permits to go or to send men abroad. I have put my plea for co-operation, and the constructive suggestion which I have made is one which I would like to leave to your Lordships and especially to the noble Earl who is going to reply on behalf of His Majesty's Government.

2.18 p.m.


My Lords, it must be almost inevitable that someone taking part in the tail end of a debate in your Lordships' House—a debate of such importance as this which has received so much support—will find that most of the arguments and most of the points he had hoped to put forward have already been dealt with from some angle or other. I should particularly like to associate myself with the remarks of my noble friend Lord Wimborne who, in opening the debate on his own Motion, made an admirable speech covering more or less the whole of the ground. Other noble Lords have dealt, as I say, with most of the points which I had hoped to raise myself. Lord Stanley of Aldcrley has asked me if I would express his regret at not being in his place to-day. His absence is due to the fact that he has had to go into a nursing home. He has expressed the hope that the noble Earl who is going to reply to the debate will make some reference to the novel and interesting suggestion which he put forward in his speech on Tuesday.

There are a few remarks, more or less my own, which I should still like to make. I shall be as brief as possible. I propose to deal with the probable position of the overseas markets after the war, and with the selling organization which will be most useful in those markets. I have a certain personal experience of this subject, as I have spent four and a half years of the war period in Turkey and the Middle East in dealing with affairs of that sort. It is not open to argument that this country can produce and manufacture the best goods that the world has ever seen, or indeed is likely to see for a very considerable period. When faced by the crisis which at one moment looked as if it might overwhelm us, we manufactured new equipment which to-day, in conjunction with that of our Allies, is leading us to victory. Anyone who has read the very impressive White Paper dealing with our war effort will realize that the slogan which is painted on all packing-cases containing merchandise which leave this country, the slogan "Britain delivers the goods," is no idle boast. It is unquestionable that we have delivered the goods, and I believe that in the future, in far easier times, we shall continue to manufacture goods which will be of the greatest value in the peace-time world. On this point, however, I should like to strike a note of caution. I do not think it is generally realized that we are the only great exporting nation which has to import its foodstuffs. The noble Viscount, Lord Bledisloe, with his unique agricultural knowledge, has dealt fairly fully with this subject, and I will say no more about it. Our exports are not something designed merely to improve our standard of living; they are necessary for our very existence.

I should like to ask the noble Earl who is going to reply whether he can give us the fullest possible information on the following points. First of all, has a comprehensive and complete study of overseas markets been made? If that study has been made, will it be published, or at any rate circulated to those who desire to receive it? I am well aware that in the greater part of the world to-day there is a woeful shortage of manufactured goods; but, as your Lordships are well aware, there is also a great shortage of free currency and exchange, and we are going to be met in the markets of the world by very keen competition from the United States, competition of which, of course, we can have no complaint, and which I hope will be the subject of friendly cooperation on both sides. Let us assume, however, that we have manufactured these very high-class goods, and that we have exported them to the markets in which they are going to be sold. Are we sure that the consumers there are going to buy our goods? May not they want something cheaper but equally attractive-looking? There is an old tag which says that the consumer is never wrong, and that is a tag which sometimes in the past the British merchant has been inclined to ignore. He has said: "I know that my goods are the best that can be manufactured, and if the foreigner does not like them he need not buy them." That may have been all right in the past, but now that our main object is to increase our export trade to its maximum capacity that: will not do. I am convinced that in the future foreign markets are going to become more and more competitive. The merchant who has studied the customs, the habits and the fashions of the people to whom he wishes to sell his goods will reap his reward.

This brings me to my second question. I realize, as I am sure every noble Lord here realizes, that nothing we talk about or propose must interfere in the slightest degree with our war effort. At the same time, I should like the noble Earl to assure us that wherever it is possible, in spite of man-power and transport difficulties, His Majesty's Government will give every encouragement to the sending of agents and experts abroad to study the foreign markets. This would be of immense assistance to our export trade. My third point is very similar. I should like the noble Earl to assure your Lordships that, whenever it is possible to do so, His Majesty's Government will demobilize draughtsmen and expert technicians so that in the firms in which they worked before they can get on with the work of planning our post-war output of goods. I am quite positive that speed is going to be the essence of the whole affair; whoever gets first into the field will sell his goods in the market and with any luck should maintain his market position; but there will be keen competition.

I have detained your Lordships for some time, but there are two or three further observations which I should like to make. They arise out of the speech made by the noble Earl, Lord Listowel, in your Lordships' House on Thursday last, in reply to a debate initiated by my noble friend Lord Elibank. In spite of the eloquence of the noble Earl, I was not convinced that the set-up, which I admit he only sketched, was the most efficient that we could possibly evolve. It is true, as he said, that diplomacy and commerce should not, and indeed cannot, be kept in watertight compartments. It is equally true, as he said, that in future economics and finance will make up the greatest part of the modern political pattern. But in the past—and I intend no criticism of the Foreign Office; there are noble Lords here who know much more about it than I do—it has always seemed to me that the Foreign Office has not been commercially-minded. There is no particular reason why it should have been; it has not been trained in that direction, and I do not think that it has had a very great desire to take up that work.

As my noble friend Lord Wimborne said, however, very good work under extremely difficult conditions, usually with lack of staff, has been done by the Consular Service and by the Commercial Secretariat. In the past, however, these two Services have been the poor Cinderellas of the diplomatic body. They have been housed in the basement or in the back premises, and have probably been supposed to use the tradesman's entrance. I know that much has been done recently to ameliorate these conditions by the amalgamation of the Consular Service and the Commercial Secretariat with the main body, but I am certain that it is of the utmost importance that our commercial representation in overseas markets should be strengthened, and that it should be strengthened immediately. This is a vast subject, and I understand that it is to be debated again in your Lordships' House in the near future. There are many noble Lords with far more experience on this matter than I have, and so I shall conclude my remarks merely by once again emphasizing the vital importance of our export trade having strong and efficient commercial representations abroad, and expressing the hope that our diplomatic representatives to the Powers or in the Colonies, or wherever it may be, will do their utmost (as I am sure they will) to assist our merchants in meeting the very keen competition that they will be forced to face after the war.

2.30 p.m.


My Lords, in addressing your Lordships for the first time since my enforced absence for three and a half years as a prisoner of war in Germany, I am breaking a self-imposed silence of twelve months which I thought necessary to give me time to re-orient myself, if not my ideas. Some of your Lordships may think this not a sufficient time, but I would say in my defence that the detachment which one enjoys through being behind bars has perhaps enabled one to have rather a wider vision of some of the world problems, to which otherwise, if one is taken up with the day-to-day administration of events in Engand, one cannot give adequate time. My chief reason for intervening in the debate to-day is to give support to the noble Viscount, Lord Bledisloe, in his remarks on the important industry of agriculture. I find myself in this connexion in somewhat of a difficulty in trying to express myself as freely as I might do, being the chairman of a county war agricultural executive committee and therefore, I suppose, the servant of the Minister. But I feel that if I were to remain completely silent I might perhaps be thought to acquiesce in the failure of the Government to pronounce a long-term policy for agriculture.

I should like to pay my tribute, as others have done, to Mr. Hudson for all that he has done and is doing for the industry, but it is unnecessary for me to remind your Lordships that policy is the responsibilty of the Cabinet, and not that of an individual Minister. From what we have been able to hear so far farmers know more or less what their position will be for the next three or four years, and I very much welcome what the Minister said in another place on Tuesday last. But I think that only goes far enough to enable the really efficient farmer to leave the industry at the end of that period knowing that he will be able to get out with his capital intact; and, to use a parody in regard to this statement, "one fallow does not make a summer." I think the industry and those in it are entitled to know much more of what the long-term policy of the Government is. It is essential that they should know that they will be able to pay reasonable wages to their employees and yet find that they have something left on which they themselves are able to live. I am not suggesting that that is not the position today, but I do not think that farmers as a whole are very confident, knowing what happened after the last war, about what is going to happen after this war.

It may not be possible—it probably is not—for the Government to make a detailed pronouncement of long-term policy, but there is one very important aspect of it on which I think they could make themselves clear. I refer to the question of increasing the acreage under grass at the expense of the total arable acreage. I was very pleased to note in what the Minister had to say that he referred to this, and also again yesterday I was pleased to see his remarks about really active steps to improve the quality of our live stock. But I submit that as regards grass, that being the most important crop of any as far as the live-stock industry is concerned, it is very urgent that a start should be made at once, if I might explain what I mean in rather more detail, what farmers are frightened of is that the grass will be allowed to tumble down, as happened after the last war. Therefore it is most necessary that it should be a very gradual process, and it is all the more necessary that it should begin at once. Your Lordships will be aware that the present position is that no fields at present arable can be put down to grass unless an equivalent amount of existing grass acreage is ploughed up to take its place. I fear that unless that is changed, and changed at once, when the war comes to an end there will be a repetition of what happened last time, and grass will go Clown at a much too quick a rate to permit the planting of an efficient long-lasting pasture.

A lot of this is outside the control of the Ministry of Agriculture and comes within the province of the Minister of Food. The Minister of Food dictates in some detail what must be grown for human consumption. This has resulted, and is still resulting, in a continuing loss of fertility in the soil. I agree, and I expect all your Lordships would agree with me, that this was most necessary in the early stages of the war; and I think you will also agree that the farmers as a whole responded most nobly to the appeal made to them. But just recently we have been passing through rather an alarming time. The potato harvest this year has been an extremely difficult one. The weather conditions have been such that that harvest, long overdue, is not even yet completed. There is a great deal of anxiety amongst farmers as to what is going to be their position next year in regard to the possibly even increased acreage which they are going to be asked to grow. They are very worried indeed about the labour question. As your Lordships will realize, potatoes are regarded now, all over England, as a seasonal crop which requires labour to get it additional to what you employ on your own farm.

I can only speak from knowledge of my own county—Leicestershire—when I say that we have relied, up till now, including this year, on 6o per cent. of that labour being supplied by school children. I would like to pay my tribute to the excellent work and the public-spirited efforts which those children have performed, not only in connexion with the potato harvest itself but also throughout the summer during the grain harvest. But potato gathering in a season such as this is not really suitable work for those children, especially When they get no allowance in the way of clothing coupons for boots or other clothing, after returning to their parents at home wet through and covered with mud. I throw it out as a suggestion—I know it is a difficult one; it may create a precedent—'but I do throw it out to the Government as a suggestion that they may be able to find some way of recompensing the parents of these Children for wearing out their clothes and boots under conditions which, as I have already said, are not really suitable conditions in which these children should work.

Now may I be allowed, very briefly, to refer to the rather wider issues raised by the noble Viscount, Lord Wimborne? If I am not misquoting him, he referred in the earlier part of his speech to the people of this country as sometimes putting the cart before the horse. Well, without disrespect to your Lordships, I think in this debate there has been a tendency for noble Lords themselves to be guilty of that very offence. I will try to explain myself in this way. Is it right, as some of your Lordships have done, to persuade the people of this country that there is any real prospect of permanently—and I lay stress on that word "permanently"—recapturing our old markets, let alone increasing them? I, for my part, am not as confident as some of your Lordships seem to be in this regard. I feel that those countries which have their raw materials at hand will be working at a very distinct advantage over us, who have, with the exception of coal, very few raw materials.

Perhaps I might also refer to a statement made during the course of a speech by a noble Lord opposite—I think it was Lord Winster—when he said that the present position of our export trade was nothing new and had only been accentuated by the war; we were, in fact, living upon capital before this war ever started. If I might be so bold as to make a suggestion as to how this problem is to be solved, I would suggest that the proper approach to the problem is to move the population to the raw materials, and not vice versa. Besides the very obvious commercial advantage, as I see it, of doing this, let us just for a moment examine the strategic folly of placing all our eggs in one basket or, to put it another way, of having our headquarters actually in the firing line, as we have at the present moment.

I feel myself that we cannot, under modern conditions, support in this island our present population. It is true, I know, that statisticians can prove to their satisfaction, if not to that of other people, that this problem is being very quickly solved by the birth-rate factor; but is this the kind of thing we want? Surely that is the very first sign of a declining nation. It is essential that the birth-rate should rise, and if that does happen, we shall have a population, I submit, larger than this country should be asked to carry. May I suggest that, before it is too late, we should treat the British Commonwealth of Nations and the Empire as one unit? It is by that means, and I submit by that means alone, that our fate will be decided. Perhaps I may shock some of your Lordships if I say this: that in my view, held quite sincerely, in the not-too-distant future the acknowledged headquarters of the British Commonwealth of Nations and Empire may not be in this country. I can visualize this island becoming a Malta of the North Sea and agriculture in this country assuming a healthy proportion to a population of something in the nature of 20,000,000. In conclusion, may I just stress the point, which has been raised so often, that to export just for exporting's sake is not what we are after, and that what we should do, as has been pointed out by other speakers, is to grow all we can in this country, and especially agricultural produce.

2.49 p.m.


My Lords, may I begin by saying how greatly pleased we all are to welcome the noble Lord back again and to observe that his experiences have in no way diminished his power of stating a case or of impressing the House? We have listened to speeches which keep very closely to the terms of the Motion. To my mind they keep too closely to the terms of the Motion, because it is really quite impossible to consider the export trade without considering, at the same time, general trade policy. Your Lordships will probably agree that to set this country on its legs again the first essential is very large quantities of fresh capital to equip the factories with the best type of labour-saving machinery; and the second is to ensure that this machinery is driven so as to produce the greatest possible amount of merchandise at the lowest possible price. This is true both for exports and for internal consumption. It is a mistake to suppose that the same general principles do not apply in each case.

The cost of production, especially wages, is a matter of first-class import- ance. I have noted with regret that most of the speakers have avoided this subject which seems to me to be absolutely fundamental. To attempt to put the whole at the working class in a privileged position, as we have read to-day in she newspapers the Government propose to do, seems to me simply to mean that the Government have not grasped the fundamentals of the matter. It ensures inflation, and to suppose that we can continue to import freely, which we must do in order to continue to exist, while we have internal inflation seems to me to be not sane. At the present time we have little free capital. Almost all our savings are for the present sterilized in the form of Government loans and cannot possibly be liquidated on any large scale. Fresh capital can only come from fresh savings. To allow it to come into existence on anything like the scale required the only possible thing to do is drastically to reduce taxation. This of course means that large new Government expenditure must be avoided and, in particular, that the proposed reforms in the social services must be postponed. Kicking against the pricks will avail nothing. The choice lies between sterilizing most of our available post-war savings on social services or spending them on getting our factories going. Can any one be mad enough to hesitate as to which of these two we should do?

2.52 p.m.


.My Lords, I listened with interest to the remarks of the noble Lord who has just addressed your Lordships which I confess aroused in me rather mixed feelings. I will not allow myself to follow the noble Lord in what he said. I think his thesis might well be the subject of an adequate debate in this House in which I should venture to disagree with most of what he said. I cannot imagine that good wages can have any other result, however they are obtained, than that of increasing the spending and purchasing power of the people, which will mean that they will buy more goods. However, I will put that on one side for the present and join with the noble Lord in welcoming to this House again the noble Lord opposite who has recently spoken. I would also join with him in expressing a sincere hope that the noble Lord to whom I refer will be at liberty to take part in our discussions frequently. I should like to make one other refer- ence; perhaps it is not very relevant but as this is the first opportunity of making it I seize it. My noble friend below the Gangway, Viscount Samuel, I am sure we all particularly welcome to-day because he has been appointed the Leader in this House of the great and historic Party with which he has always been associated.

NOBLE LORDS: Hear, hear.


I am sure your Lordships will allow me on this the first opportunity to extend a respectful welcome to the noble Viscount in that capacity. I intend to join in the debate for only a few minutes and I do so at the direct compulsion, if I may so put it, of the noble Viscount, Lord Bledisloe, because of my intimate association with the industry of agriculture. But before saying anything about that I should like to associate myself with what the noble Lord, Lord Rennell, said about the complicated machinery which has to be gone through before orders or even investigations for orders can be undertaken by merchants and manufacturers of this country. I am sure that the case he made is one that urgently requires attention and I sincerely hope that the noble Earl who is to reply will pass on this very practical and important contribution to our debate to the officials of the Departments concerned. I have heard often during recent months that our manufacturers are really almost in despair because of the difficulty in getting a start upon the things that they would like to undertake. We realize of course that everything must be subordinated to war considerations.

It was not my privilege to listen to the debate in the early stages but I have had the opportunity of reading the Official Report. I want to refer to one aspect only of the subject. I am quite sure that if the British manufacturer is given a fair opportunity there will be an immense de-Inland in the world for his goods. I sincerely hope that without fear or favour His Majesty's Government will see that he is given a fair opportunity and is not, say, told to keep off the grass in any particular country. Whilst, however, it is easy to speak of the immense importance to our future existence of the export trade of this country we are apt, and we have been apt for many years in my opinion, rather to exaggerate its share in the national economy. From figures which have been given to me, it is clear that the biggest market for British goods is in this country. There is no doubt about that and I would suggest that it is appropriate in considering the home market that we hould pay special regard to the terms of the Motion of the noble Viscount, Lord Bledisloe. The agricultural market is by far the biggest undeveloped market for British manufacturers in this country. In that respect I welcome what my noble friend Lord Winster said and I will quote it: If the food producers can sell their products at a good price it will most certainly stimulate the demand for imports, and that is surely what we want. … Surely we have learnt the lesson and in the future we will abandon any idea that we can get rich at other people's expense or become prosperous by making other people poor. It seems to me a thoroughly sound sentiment and I should like it to be translated into a national policy more actively than hitherto.

That does not mean that the prices to be paid to primary producers should be uneconomic and unreasonable prices, but it does mean, as was said at Hot Springs, that primary producers whether in this country or other countries must be enabled by what they are paid for their products to get a decent living and be encouraged to go on to make their industry more efficient. We are not going to help our export trade by beating everybody else down to the lowest possible prices at which we can buy goods. That applies not only to the foreign market but also to the home market. I was glad that in one of our former discussions of this subject the noble Viscount, Lord Samuel, said—I cannot pretend to quote his exact words—that his Party recognized that it was quite fair that primary producers should be paid such a price for their products that they could have a decent standard of living. I think that is the effect of what he said. If all Parties in this country can agree on that principle we should get a lot further much more quickly than we have in the past. I do not want to beat down planters in Jamaica or cotton growers in Virginia or the people engaged in British agriculture to any lower prices than will provide them with a decent living.

If we look at the prices prevailing before the war we shall find that the total value of the home market in our rural community was round about £250,000,000. That was at a time when it was in an impoverished condition. I think all those who have been behind the scenes and had a look at the possibilities of a sound efficient agriculture without any fictitious standard of prices will recognize that immense developments are possible. If we can apply the principles of Hot Springs in our own home rural policy it will mean that our country towns, for example, will have a new lease of life. Everyone of us who has lived in the country, as I have done all my life, will know what decadence there has been. It is a tragic story of scores of little towns that were at one time centres of activity coming down to a struggle for existence. That is the best you can say of the position. With the adoption of modern methods there will be great opportunity for all manner of ancillary industries attached to agriculture, using the word "agriculture" in its widest sense. I hope there will be a standard adopted in this country which will enable our country towns, with the many minor industries that will of necessity spring up in and around them, to develop in the future.

I foresee that the greatest market in this country for our own manufactured products will be a prosperous rural community. The potential market for machinery of all kinds is to my knowledge immense. The amount of decrepit machinery now being used is indescribable and the demand for new plant of an efficient kind would be very great. If we look at the housing position we shall see an immense demand in our rural areas in connexion with cottage building, furnishing and a thousand other things that attach thereto. If we develop a rational policy we have there an immense potential market mainly for British manufactures. I do not accept the idea that we need be so completely dependent upon the importation of foodstuffs as we were before the war. It is true that there are a great many things we cannot wisely try to grow in this country. There is a limit to the amount of wheat we ought to grow, and that applies to many things. Our imports will necessarily have to be large, but for all that we can produce on good dietetic principles—and that is very important—food in this country which people want as good as or better than food produced anywhere else. There are two or three directions in which increased production is manifestly possible. The production of milk, live stock, fruit and vegetables can quite well be developed on sound efficient lines so as to add to the prosperity of our country districts. I would join with the noble Viscount, Lord Bledisloe, in exhorting His Majesty's Government when considering the trade of the country to take these matters into their consideration.


My Lords, I think your Lordships will agree that we have had a protracted and interesting debate. It has taken the best part of two days and it has been sustained at the high level which is usual when your Lordships are dealing with an important subject of public policy. We are all indebted to the noble Viscount, Lord Wimborne, for having provided the occasion for such a useful discussion. I shall try within the limits of the time at my disposal to answer as many as possible of the salient points that have been raised during the debate, and I shall also endeavour so far as I can to give your Lordships information that supplements but does not repeat what has already been said on this subject by Ministers in another place. Before I go any further I should like to associate myself with the two noble Lords who have immediately preceded me in extending a warm welcome to the noble Lord, Lord Cromwell, whom we are all delighted to see back none the worse for his experiences.

shall not waste the time of the House or disparage your Lordships' memories by repeating what was said last Thursday about the attitude of the Government to the export trade. The conviction that it will be one of the keys to postwar recovery has been shared by all the speakers in this debate and I would only add that I also share this view. I need hardly remind your Lordships that in the firm of United Kingdom Exports, Unlimited, the Government is only a junior partner whose influence in wartime is indeed considerable—some might possibly suggest excessive—but will qeadily decrease as we approach nearer and nearer to normal conditions. Manufacturers and exporters represent the senior partners in the firm and their initiative and enterprise must be the main impetus for our post-war export drive—a point which was very properly emphasized by the noble Viscount, Lord Wimborne, in his opening speech, which I think your Lordships will agree was a model to all of us both in grasp of essentials and in skilful condensation of a vast subject.

For the purpose of our post-war export drive, the captains of industry will look around for new markets, and will undoubtedly start planning at the earliest possible moment to recover markets that have been lost during the war. They will have, in many cases, to adapt their businesses to the production of such quality goods as will find a ready market in industrialized or industrializing countries —such products as are well suited to our admirable technical and scientific resources. They should also cultivate in this connexion—and I think that Viscount Wimborne and the Earl of Glasgow have already pointed out the importance of this —the art of salesmanship, and give their customers what they want, and not what they want them to want. But much of our industrial equipment is undoubtedly worn or out of date, and the point was made by several noble Lords—Lord Winster, for one, and also, I think, Lord Stanley of Alderley—and was repeated, in respect of farm machinery and tools: by my noble friend Lord Addison, that many industrialists will, therefore, be obliged to re-equip and re-tool their factories because they are losing their place in the race for overseas markets on account of obsolescent or ageing plants.

The high degree of efficiency that will give low costs and maximurn competitive power overseas will largely depend on the capacity of business men themselves to think and act in terms of post-war markets. I am not a pessimist in this regard. It was the drive and vision of business men in the nineteenth century that built up our great exporting industries, and made this country the chief emporium and workshop of the world. I can see no reason why the successors of those pioneer industrialists should be less well endowed with such indispensable qualities.

The long-term object of the commercial policy of His Majesty's Government—to which, I think, the noble Lord, Lord Winster, referred on Tuesday and Lord Faringdon has referred to-day — has already been laid down in Section 4 of the Atlantic Charter and repeated in Article 7 of the Mutual Aid Agreement concluded between ourselves and the United States in February, 1942. I would only remind the House that in the first of these agreements we are pledged to pursue a policy that will secure equal access for all nations to every form of international trade. This expression of principle becomes more specific in the second agreement. There, we undertake, when the time comes to settle up what we owe under Lend-Lease, to include provision for agreed action by ourselves and the United States of America, and by any other country or countries that may, at that time, care to come in, for the expansion of international trade, for the elimination of discriminatory treatment in commercial agreements, and for the reduction of tariffs and other trade barriers. The same Article goes on to say, in practical spirit, that conversations dealing with these subjects will be begun at an early date.

I see a noble Lord opposite who looks as though he were anticipating the practical side of these very general expressions. I am glad to be able to inform your Lordships that in spite of the war we have not allowed this matter to drop. In the last two years there have been exploratory discussions at the official level both in London and in Washington, and we shall continue in this way to prepare the ground for Governmental action. I hope that this may perhaps convince my noble friend Viscount Wimborne that, for some years past, we have, in fact, been very deliberately planning for the postwar expansion of our export trade.

Lord Winster, I think, said that our prosperity will depend on expanding world markets for our goods, and he added, in parentheses, that economic self-sufficiency makes for war while international trade is an influence for peace: We also pin our hopes on a post-war revival of international trade. We realize, as fully as he does, that a substantial and sustained increase in the flow of commerce depends on raising standards of living and improving purchasing power throughout the world. A world-wide exchange of goods is impossible without world prosperity. We are therefore doing what we can to reverse the disastrous drift—which was seen between the wars—towards isolationism and self-sufficiency. It was brought about, in those sad days, by trade depression and militaristic nationalism. I hope that our endeavours will meet with the approval of noble Lords who sit on the Liberal Benches. May I ask the House in general to give us some credit because we are still trying to win the valuable prize of freer trade, both for ourselves and for our neighbours, difficult and uncertain though its attainment may be; and because we have not resigned ourselves to the lesser but more certain advantage of an exclusive system of bilateral trade?

I now pass on from commercial policy in general to more specific points raised in the debate. My noble friend Viscount Bledisloe, who speaks with unrivalled authority on this subject, has directed attention to the special position of agriculture. He started off by asking me whether the speech made by Mr. Hudson last month to the London Chamber of Commerce was a statement of Government policy.


To the London Rotary Club.


Oh, my mistake. It was to the London Rotary Club that Mr. Hudson spoke. I am grateful to the noble Viscount for correcting me. My reply to his question must be that Mr. Hudson's statement was not a statement of Government policy. May I remind the noble Viscount that a Minister sometimes exercises the privilege of ordinary mortals to air his personal views? At the same time, I think the noble Viscount can take it that the general line of policy spoken of is both the Government's and Mr. Hudson's.


May I interrupt the noble Earl? What I really asked, if I remember rightly, was whether the Government endorsed those expressions of Mr. Hudson's on that occasion.


They do endorse the general line of policy, and I hope that what I am going to say now will give the noble Viscount even more satisfaction. The noble Viscount is naturally anxious—and indeed his anxiety is shared by all who have the welfare of agriculture at heart—that the prospects of agriculture should not be blighted by a sudden reversal of trade policy which would expose it to the full blast of every kind of competition from overseas. I can assure him that His Majesty's Govern-met have not forgotten their pledge to maintain a healthy and well balanced agriculture in this country, and that they will do everything in their power to prevent a repetition of what happened to the fanner at the end of the last war. We are all agreed that under normal conditions of trade the farmer should receive a sufficient return to keep his land under cultivation and to enable him to pay a reasonable wage to his farm workers. Those are the minimum requirements of a healthy agriculture, and I can assure the noble Viscount that they will not be overlooked during any negotiations that His Majesty's Government may initiate or enter into for an international agreement on the subject of trade.

What we hope to do is to secure a stable and remunerative long-term price level for our agricultural products, which will enable the farmer to plan confidently over a long period of years. This I understand to be the desire of many members of your Lordships' House, including the noble Viscount, Lord Bledisloe, and the noble Lords, Lord Addison, Lord Glentanar and Lord Teviot. All these noble Lords—and I think that the House supports them—want our policy to be such as will achieve this benefit for the agricultural community. It would be admitted on all sides, of course, that the farmer has little to fear in the immediate future, while the present world shortage of food-stuffs guarantees a market for his goods; and the transitional period of the four-year plan will give him time to correct such distortions of our agricultural system as have been caused by the need for home-grown crops such as wheat and potatoes, which have been unobtainable as imports from abroad. By a steady chanse of emphasis from crops for direct human consumption to live stock and live-stock products, the farmer can make his contribution to a flourishing agricultural industry. Provided that the farming community as a whole goes on working for a sound and efficient agriculture, there is really no antagonism at all between the revival of our export trade and the retention of a healthy and prosperous agriculture. This, I think, was very well expressed by Mr. Hudson in the speech which the noble Viscount, Lord Bledisloe, quoted at some length, when he said: It is vital to the prosperity of the country that home agriculture and the export industries should march forward hand in hand. The noble Viscount, Lord Wimborne, suggested—although he seems to have re- considered his view—that we have done very little in the way of planning for the revival of our export trade. I hope to convince him that we are really doing a great deal, and that our efforts started some time ago. But, before I come to what the Board of Trade is doing and has been doing to help exporting firms, I should like to emphasize first and foremost that war requirements must remain the first demand upon our industrial resources until both Germany and Japan have been defeated. I think that this priority would be acknowledged in all quarters of the House. We must put first those supplies that our fighting men need to bring a speedy victory on the Continent and in the Far East, and this overriding necessity will inevitably slow down the recovery of our export trade. We should not expect, at any rate until after Germany has been knocked out of the war, any substantial conversion of industry to production for export or civilian consumption.

Nevertheless, preparations are already being made for the earliest practicable resumption of manufacture for export. Last July the President of the Board of Trade invited manufacturers to submit requests for facilities for peace-time production. When one of these applications is approved, it includes an assurance that the Ministry of Labour will not withdraw workmen from this preparatory work on the ground that they are being used in this type of employment, such, for instance, as the production of designs or prototypes for post-war models. Out of 714 applications received up to the first of this month, 490 have been approved and only 24 rejected, so that most of the cases not approved are still sub judice. I think the most remarkable fact about those figures is that out of over 700 applications only 24 have been -turned down. I think that that answers the noble Lord, Lord Rennell, and some other noble Lords, who seemed to regard the Board of Trade as being almost deliberately obtructive.

The Board also wishes now, immediately, to encourage the manufacture and dispatch of trade samples to potential markets abroad, and it will give immediate consideration to export licences for bona-fide samples, especially when the quantities involved—and quantities, of course, are thought of in terms of precious raw materials—are small. This raises in a specific but topical case the important and general issue of export restrictions and control. I can assure the noble Viscount that although controls are necessary we want only necessary control. Nobody desires unnecessary interference with business, or control for control's sake; but restrictions on manufacture are inevitable so long as shortages of labour and materials continue, and during this period, the duration of which we cannot exactly foresee, but which will probably last for some time, there must be some authority to decide on the priority between conflicting claims on our productive resources.

A necessary condition for the expansion of our exports will be the relaxation of the present export licensing restrictions on many classes of goods. Our aim will be to remove these restrictions as rapidly as the claims of war production and other essential needs, such as the primary requirements of our own civilian population, will permit. It will be necessary, in order to keep up the output of munitions and other war supplies, to retain export licence control in something like its present form on articles which would otherwise divert labour or materials from essential purposes. In the case of certain consumer goods such as textiles, of which the public has been short for a long time, export licensing control will have to remain until supply begins to catch up with demand. We cannot afford to lower, for instance, the present clothes ration, which is about as low as we can go. It is impossible at this moment to forecast the exact date when supplies of various commodities will improve sufficiently to make possible the abolition of all restriction. This depends on many unpredictable factors, and naturally varies according to the commodity; but it does seem certain that the supply position of semi-manufactured raw materials, such as steel, and of many consumer goods and engineering products, will improve fairly rapidly. We shall thus be able to remove restrictions on their export or, if we cannot do this, at any rate we can administer these restrictions with much greater flexibility. A modest beginning was made in the relaxation of restrictions only last month.

Ever since the outbreak of war with Germany, the main purpose of our exports has been to meet the essential needs of our Allies and to provide neutrals with those goods which we have to give them in exchange for our own essential requirements. During the transitional period, while serious shortages continue and we are still engaged in the war against Japan, we cannot ignore considerations of this order. Moreover, there will be a new obligation to see that the basic relief needs of liberated territories are satisfied. A certain measure of direction of exports to particular markets will therefore have to continue over a limited field of essentials in short supply. For the steadily-widening field, where such considerations do not apply there seems no reason on purely currency grounds for preferring one market to another. We shall want to encourage exports to all overseas destinations, provided of course that we are paid for them. We shall be anxious to export to sterling countries to enable them to use the sterling which they hold and in this way gradually to liquidate our debt in various parts of the Empire, but it will be no less important to export to other countries in order to pay for our essential imports. In short we shall try to do business wherever we can find a sound and willing buyer, whatever the currency in which we shall receive payment.

The noble Lord, Lord Faringdon, expressed anxiety about the possibility of obtaining stable markets overseas to secure continuous demand for our goods. A reason sometimes given for the direction of export is to make sure that proper account is taken of the long-term commercial merits of different markets. Some customers will accept our goods over a long period of years while others may be prepared to pay high prices for them at the moment but later on will probably revert to traditional and accustomed sources of supply as they become available. But we consider that exporters themselves are in the best position to give these considerations due weight and that they should be allowed to expend their allocation of exports as they think best. I hope that this information may be of value to exporting firms.

It is of course extremely important for exporters to know as soon as possible whether they can accept an order from overseas, to be discharged after the war. There is no objection to the immediate discussion and acceptance of such contracts, provided of course that the date of delivery, which must be uncertain, is not fixed but left contingent upon the war situation. The need to reach decisions on these matters is obviously most urgent in the heavy capital goods industries, in which a long period of preparatory work must precede production. For such industries the Board of Trade is now examining with all concerned the extent to which capacity will be available to civilian production, so that manufacturers in these industries may know at the earliest moment how much export business they can expect to do.

I should like now to answer some important and specific points that were raised by various noble Lords. The noble Lord, Lord Barnby, who is not here now but who may care to read the reply in the Hansard report, asked about the possibility of introducing an Enabling Bill to allow industry to make a compulsory levy for research. The Government obviously cannot act in this matter unless there is a sufficient demand from industry itself. About zoo industries have been asked to express their views, but at present only one-third of these have replied. Some of these replies have been in favour of the proposal, and others have been against it. The noble Lord, Lord Barnby, also asked about the possibility of resuming the export of wool textiles. The main difficulty is obviously the release of labour from war production, but I can inform the noble Lord that the Board of Trade and the Ministry of Supply are now in touch with the Ministry of Labour to see what can be effected.

The noble Lord, Lord Teviot, who is also not here this afternoon asked whether the Government would appoint a standing Advisory Council of business men to advise the Board of Trade about export problems. This very function is being discharged by the business members of the Industrial and Export Council, who advise the President of the Board of Trade, and I am authorized to say that the President greatly values the assistance he has received from these busy and public-spirited people. The noble Lord, Lord Rennell, made a suggestion which was rather remarkable, coming from the Liberal Benches, that we should have a new Department which would canalize all Government machinery for dealing with exports. I can assure him that his suggestion will receive the careful consideration of the Government, although naturally I cannot give him a definite reply at this moment.


He was dealing with individual export firms.


Yes, he was dealing with applications from individual exports firms in connexion with their business, and he wanted to set up this Department, which would take over some of the functions of existing Departments, to expedite their claims. The noble Earl, Lord Carlisle, whose experience of trade matters I think the House recognizes and values, asked whether studies were being made of oversea markets with a view to helping our exporting firms, and I can assure him that these studies are actually being prepared at this moment. They are on foot, and they will be published as soon as they are ready. He also asked about the release of skilled man-power for the exporting industries. Of course I can only tell him that that depends on the progress of the war, and that the sooner the war is over the larger the number of men that can be put back into the exporting business.

May I say a word in conclusion—and do not want to take up too much time —about the modifications in Lend-Lease, and the effect of these changes on the export trade? Lend-Lease was an act of generous and far-sighted statesmanship on the part of the United States, for which I think it is difficult for any of us to be sufficiently grateful. I need hardly remind your Lordships that when the Lend-Lease programme started in 1941 America was still a neutral country, and at that moment 'we had almost stopped purchasing war supplies on account of the exhaustion of our gold and dollar assets. Under the revised agreement the United States not only guarantees to continue to send us Lend-Lease supplies with a 5o per cent. cut after the war with Germany is over, until the end of the war in the Pacific, but recognizes fully that immediate adjustments should be made to assist the gradual reconversion of industry to production for export and essential civilian needs.

I am sure your Lordships would not expect or desire these adjustments to bring about any immediate or considerable increase in the volume of our exports, which would inevitably be at the expense of war supplies. In his state- ment last Thursday in another place the Prime Minister said quite plainly that "until the German war is over there can be no significant release of resources" and it is the considered opinion of His Majesty's Government that neither labour nor materials nor factory space should be diverted from essential war production while our Forces are still locked in battle on the Continent of Europe. Nevertheless it is an immediate advantage to manufacturers that on the 1st of January, 1945, we shall no longer receive from the United States free of charge certain raw and semi-fabricated materials, such as iron and steel, which would have continued to prevent us from exporting any products containing these ingredients. Their hands will now be free from the beginning of next year to export a wide range of goods made from those materials and engineering firms will certainly derive immediate benefit.

With regard to the non-ferrous metals, of course aluminium and magnesium are already off the list. Among other important non-ferrous metals the position of copper and zinc is being reviewed at this moment, but of course the increased demand for ammunition is a factor that must be taken into account. Your Lordships will remember General Eisenhower's recent appeal for more shells for his artillery on the Continent. Many noble Lords in the course of this long debate have quoted figures to illustrate the reduction in our exports since the war, to show the serious inroads that have been made into our foreign assets, to illustrate the dwindling away of our Mercantile Marine and the growing competitive power of the United States of America. They have, as is always the case, observed a meticulous accuracy in all these matters of fact, and 'the picture that emerges is not a shade too black. I believe they have done the country a service by forcing it to face up to the facts. Unless our people realize in time the gravity of the trade position, they cannot hope to grasp the magnitude of the effort that will be required.

But no picture, however admirable, is complete 'without some finishing touches. Let us not forget—we cannot afford to do so—that when the war is over tired bodies and stifled desires will reassert their claims and there will be an almost irresistible urge throughout the land to slacken off and have a good time. What is more, the hydra heads of innumerable sectional interests are only masked by the war, and they will reappear very much as they used to be as soon as the danger is passed. But we are still a free land, and the future is ours to shape. Belief in our future is not in it-elf enough, for we shall find justification in this life not by faith but by work. If—what a challenge there is in this little conjunction!—if we do overcome the temptation to rest on our wartime laurels; if during the sharpening social antagonisms that lie ahead we do not lose sight of the larger loyalties, and if, above all, we manage as a nation to recapture even a scintilla of the spirit that has carried us through the war, then, my Lords, indeed our time for greatness is just beginning.

3.44 p.m.


My Lords, I should like to thank the noble Earl on my own behalf and that of your Lordships for the really brilliant reply he has given to this debate. I do not think he missed one point, and he spoke with great knowledge of the subject. I am indebted, and the House is indebted, to all those noble Lords who have spoken to this Motion. We have had a most interesting debate. We have, as the noble Earl said, taken up more than our fair share of Parliamentary time, and in those circumstances I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.


My Lords, there is another Motion on the Paper which stands in my name, but in the light of the heartening assurance which the noble Earl has given us in regard to the fate of agriculture in a revival or stimulation of the export trade, speaking as he does on behalf of the Government, I shall not pursue that Motion now.