Lords Sitting of 22 March 1961

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield

DEPARTMENT OF TECHNICAL CO-OPERATION
2.35 p.m.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, with the permission of the House, I should like to make a personal statement. Yesterday, when we were discussing the new Department of Technical Co-operation, the noble Lord, Lord Rea, asked me a question as to the effect of setting up the new Department on the position of the Colonial Development Corporation. I said that I thought the new Minister would become responsible to Parliament for the Corporation's activities. The noble Earl, Lord Listowel, corrected me; and he was, in fact, quite right to do so. It is not proposed that the new Department should be responsible for Her Majesty's Government's relations with the Colonial Development Corporation. On the contrary, the intention is that these will continue to be dealt with, as at present, through the Colonial Office and the Commonwealth Relations Office. My Lords, I can only apologise for my mistake.
LORD REA: My Lords, I thank the noble Viscount for his great courtesy in making that statement, which was quite unnecessary, except for the Record. I am most grateful to him for doing so.

TRADE WITH EASTERN BLOC COUNTRIES
2.36 p.m.
VISCOUNT ELIBANK: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question, was as follows:
To ask Her Majesty's Government whether they will now announce for the benefit of Parliament and industry
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the conclusons reached in the recent inter-departmental discussions on future trade relations with China, the Soviet Union and Eastern bloc countries.]
THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF DUNDEE: My Lords, as with many other matters, Departments consult each other all the time about trade relations with these countries, but it is not the practice to disclose the outcome of such consultations.
VISCOUNT ELIBANK: My Lords, I thank the noble Earl for his Answer. Are the Government aware that this is not merely a private issue between themselves and individual industrialists but a matter of vast importance to the whole of the export trade of this country? How can exporters make their plans for the future if they do not know the results of discussions of this kind?
THE EARL OF DUNDEE: However important it may be—and it is indeed very important—it seems to me a very stupid course of action to announce in advance what line you intend to take in trade negotiations with these countries.
VISCOUNT ELIBANK: The noble Earl says, "to announce in advance", but surely there have been some results from these discussions? Can he not let us know what those results are?
THE EARL OF DUNDEE: My Lords, I think that if the noble Viscount had listened to the original Answer, he would have understood that. They are consulting all the time about what line they will take when they have trade negotiations with China, Soviet Russia and various other countries. But it is not sensible to make public your own private discussions about the line you are going to take in trade negotiations in trying to make a bargain with another country.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, in view of the present export position of our country, can we have any measure of hope from the noble Earl that something is being done to improve it? What sort of date has the noble Earl's Department in mind as to when some announcement of a change for the better in our trade relationships with China may be expected? Our export trade is not in a very good condition.
THE EARL OF DUNDEE: My Lords, we have negotiations every year with all these countries. Negotiations with Czechoslovakia took place last month; with Hungary they are in progress; with Bulgaria we expect to have talks at the end of March; with Poland in the middle of May; with Russia during the summer and with Roumania in the early autumn.
THE EARL OF LUCAN: My Lords, the noble Earl has been talking about "negotiations", but negotiations are not mentioned in the Question. The word in the Question—
THE EARL OF DUNDEE: But they were mentioned by the noble Viscount in his supplementary question.
THE EARL OF LUCAN: The noble Viscount was asking whether the Government have any plans for their future trade relations.
THE EARL OF DUNDEE: My Lords, I have given your Lordships the dates on which these various negotiations are going to begin.
VISCOUNT ELIBANK: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware that the figures show that the continued and very considerable growth in West Germany's imports from China, the Soviet Union and Eastern Europe is having the tendency to make it on the whole more advantageous for these countries to trade with West Germany than with the United Kingdom, and whether they are satisfied that all possible steps are being taken, by reducing restrictions on imports into the United Kingdom from Eastern bloc countries, to enable British manufacturers to compete with West Germany's lead in this respect.]
THE EARL OF DUNDEE: My Lords, Her Majesty's Government are aware that West German imports from China and the Soviet bloc countries (excluding inter-zonal trade with East Germany) rose from £123 million in 1958 to £169 million in 1960, compared with an increase of United Kingdom imports from those countries (excluding East Germany) from £117 million to £158 million in the same
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period. As the rate of growth of United Kingdom and West German imports has been very similar, the figures do not indicate a tendency of the kind suggested by the noble Lord.
As regards the second part of the Question, Her Majesty's Government are satisfied that controls of imports from Eastern bloc countries are being used consistently with the national interest to enable those countries to increase their sterling earnings and therefore their purchases from us.
VISCOUNT ELIBANK: My Lords, while thanking the noble Earl for his Answer, may I ask whether he is aware (it is impossible to bandy figures across the Floor of the House, but my figures would show some difference) that it is common knowledge in British industry that West Germany and other Common Market countries are giving greater encouragement and facilities, including those for imports, to their business men, than the British Government are giving to our business men? Does not that indicate why the figures, from my point of view at any rate, and, I think, from that of the Government, show this growth in favour of the Common Market countries?
THE EARL OF DUNDEE: My Lords, the figures which I have given to the noble Viscount show no appreciable difference in the rate of growth.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, is there not an outstanding case in which the Government have lost a £40 million contract in East Germany, which has now gone to a Common Market country—I believe to France—because we could not match up to what were the competitive credit conditions? Surely, when we begin to lose orders at £40 million a time, it is very serious.
THE EARL OF DUNDEE: My Lords, I understand that the contract has not yet been lost, and indeed has not yet been settled. But I hope that if the noble Viscount really wants information about it, he will put down a separate Question.
LORD REA: My Lords, could the noble Earl give an indication of what was the basic principle underlying the restriction of imports into the United Kingdom from Eastern bloc countries?
THE EARL OF DUNDEE: My Lords, do not think that that arises out of the noble Viscount's Question.

MERSEY TUNNEL BILL
Read 2a, and committed to an Unopposed Bill Committee.

THE EXPORT DRIVE
2.43 p.m.
THE EARL OF BESSBOROUGH THE EARL OF BESSBOROUGH rose to call attention to the vital importance of mounting a national crusade to make the people of Britain more export conscious; and to move for Papers. The noble Earl said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. After the Questions of the noble Viscount, Lord Elibank, just now, I felt that we had almost had this debate, and wondered whether I had not arrived a little late in the proceedings. We have had certain contributions from noble Lords whose names, I see, are not down on the list for this afternoon, and therefore perhaps what I am about to say may be considered almost as a continuation of those questions. I had thought that perhaps I might delete the word "vital" from this Motion as it is a word which is often wrongly used. However, I have kept it in because the matter which we are discussing this afternoon is truly a matter of life and death to this country. I shall be brief. The situation is too critical for long speeches or vain exhortations. I will state the facts and some of their consequences and refer to certain possible remedies.
Britain's balance of payments in 1960 made the worst showing since 1951. The trade gap last year was £879 million, and our reserves were maintained only with the aid of so-called "hot" money attracted here by high rates of interest. At the same time, the countries of the Six in the Common Market, and Germany in particular, have made exceptional progress, and so has Japan. Perhaps even more significant, Soviet Russia is rapidly moving towards the position where she, too, can be a major challenger in the export markets of the world.
What does all this mean? It means that we are losing the export race. Some of the established firms (and I happen
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to have the good fortune to be associated with two successful ones) have been doing very good work—magnificent work—and it is largely due to the fresh efforts of these larger firms that the trade figures have improved a little during the first two months of this year; but this is not enough. Unless we can reach and hold a stable balance of exports against imports we are going to be faced with a perpetual series of crises, with all the attendant consequences, such as fresh credit restrictions, import controls and, of course, unemployment.
What are the remedies? I believe they fall into two categories: first of all, action which can be taken by Her Majesty's Government, and, secondly independent action, private action, by industry itself. First, what are the Government doing about this? We all know that Ministers and others have been exhorting industry and commerce until, shall I say, they are "blue in the face". But although there has been a slight improvement recently, these exhortations have not yet succeeded in producing the solid results which are needed if our future is to be assured. The figure required is only something like a 2 to 3 per cent. increase in our exports, and one would have thought a really determined effort could not fail to achieve this. But, of course, in order to achieve an even more stable position. I should like to see us go even further than that.
It has been said (I should not care to say how justly) that Her Majesty's Government have failed to recognise that what is needed is a forceful and imaginative campaign to make the whole nation more export-conscious. I was recently told by a highly reputable business friend that while my right honourable friend the President of the Board of Trade was exhorting industry and commerce, he was at the same time exuding an air of complacency about the Government's rôle in the export drive. Well, the right honourable gentleman is too-food a friend, and I admire his ability too much, for me to accept that statement. I leave it to your Lordships to judge from his recent remarks, his speeches to the Annual Conference of the Institute of Directors and also to the Export Action Now Conference at Church House, whether such an allegation is justified.
I have been asked, however, whether it was not this complacency which made it necessary for bodies as responsible as the Institute of Directors to see a situa4ion so critical that it required this special Export Action Now campaign. We live on an island, and the concept of exporting does not come easily to the people as a whole; nor does the man in the street recognise that we live or die by our international trade. To overcome this it has seemed to many of us that there must be support for a national crusade to excite the spirit, to revivify and stimulate every facet—I repeat, every facet—of the export drive.
Following the call of the noble Viscount, Lord Chandos, who I am sorry to see cannot be with us in the House to-day, and the energetic action of Mr. Charles Stanley, the Chairman of the Export Action Now Committee, such a national crusade is the aim of the Institute of Directors. Their campaign has brought thousands of letters from this country and from abroad. Many new ideas have come in, and these are being directed into channels best equipped to deal with them. I believe that some 3,000 suggestions have been received, although, of course, many of these are duplicated. The Institute have also prepared a register whereby the strong can help the weak to sell in foreign markets—the kind of "piggy-back" scheme which was indeed recommended by the President of the Board of Trade at the last Conference—and I am glad to say that several hundred firms have already promised their co-operation. Other organisations like the Federation of British Industries, chambers of commerce, the National Union of Manufacturers and the trade associations are also playing their part in providing a pool of knowledge and special assistance for prospective exporters.
The Board of Trade is undoubtedly trying to play its part, but it is said to be failing to do so through lack of imagination. Is it not time that the Government re-examined their approach and services to the exporter? Are Embassies abroad doing as much as they can? My own view is that their services have been greatly improved in recent years. This is a matter I discussed at some length in the debate in July, 1959, on the Motion of the noble Earl, Lord Jellicoe, about
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aid and trade with emergent countries. On that occasion I made some critical remarks; I will not repeat them now. I think the situation is much improved, and I know that the noble Lord, Lord Rootes, who is himself attending three important export meetings to-day, and asks your Lordships to excuse his absence, is impressed by the remarkable services which he has received from our commercial attaches all round the world.
I am told that when the noble Lord appears in an Embassy the whole Embassy is turned upside down to help him, but that sometimes perhaps some of the smaller exporters find it difficult to get such full and energetic co-operation. However, Lord Rootes tells me that this simply is not true, since he has been in touch with people at all levels, both among exporting firms, small and large, and in the Embassies themselves; and he believes that the smaller firms are given the fullest possible assistance. In that connection, I should just like to repeat what I said in that previous debate: that I believe a system of exchanges (I hope that this is not an impracticable suggestion) between the Foreign Service and industry, particularly between the commercial sections of Embassies and business, would prove rewarding.
I do not think that a week or two studying business methods at the Administrative College at Henley is anything like enough for a commercial attaché really to learn about business methods. What I should like to see is a good Commercial Attaché, or even perhaps a Head of Chancery, in an Embassy doing a couple of years in industry and vice versa; a good manager doing a period in the Board of Trade or at a post abroad. I do not think that security reasons should in any way preclude such possibilities. I remember at the time mentioning this matter to the noble Lord, Lord Strang, who is sitting on the Cross-Benches, in the hope that he might support me in this. Perhaps now that we have the noble Lord, Lord Gladwyn, also on the Cross-Benches he might be interested to do so. I know that the Foreign Office have gone into this matter carefully, and I think they appreciated some of the points I made, both in that debate and at subsequent meetings in the Office itself. But I hope that further consideration may be given to this idea of exchanges.
My Lords, of the 3,000 letters which the Institute of Directors have received, I have looked at some 300 of the better suggestions. I cannot recite them to your Lordships this afternoon, but I will, with your Lordships' permission, mention just a few of them. I take a few somewhat at random. One of them suggests that the Board of Trade should reinstate the export priority system that existed after the war, under which firms were bound to honour certain export orders with priority over material for home service. Another suggests that duty-free shops should be opened at airports in this country, such as we see in the great Republic of the Free State of Ireland at Shannon. Another suggestion is that design centres should be set up in capitals abroad, and these might perhaps be attached to British Embassies.
Your Lordships may have read the article on showmanship by Mr. Paul Reilly in the Daily Telegraph a few days ago. But a very important point I feel that I should make is that we must do more to tailor our goods to export requirements. In order to simplify production and in order to improve export possibilities, we may have to accept in this country standards or designs required by the export market. It is no use manufacturing purely for the home market and then finding that the standard of the design is not an overseas requirement. That, of course, is a reason why in my own industry I should like this country to change to the 625-line television standards which have been adopted in most of the countries to which we could now be selling receivers in greater quantities. In addition, production should, to my mind, be designed for the metric system.
Then I think that improved facilities could be extended under the Export Credits Guarantee scheme. Terms under this scheme compare unfavourably with longer-term credits granted, for example, by Germany. I believe that this is a subject which the noble Lord, Lord Nelson of Stafford, would have mentioned had he not been temporarily indisposed and unable to make his keenly awaited maiden speech to-day. I hope that it will not be long before the noble Lord is able to come and give us the benefit of his great experience in these matters. We do not lack a maiden speech this afternoon, however, for, fortunately, we
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are to have another maiden speech—that from the noble Lord, Lord Peddie.
Of course there are other incentives which I should like to see accepted by the Government: not only tax incentives, the reduction of sur-tax, but also incentives to travel abroad in order to encourage some of our best export salesmen, and even technicians, to establish themselves overseas, perhaps for some years, without being penalised in this country. I believe that the noble Lord, Lord Ferrier, may have something further to say on this point.
To turn to the home front, might I ask whether my right honourable friend the Minister of Education appreciates the need for introducing export education at the earliest reasonable school ages? What, too, are the Government doing about using the great publicity media, such as the Press and the radio and television, to put over imaginative stories with an export theme? I am glad to see that my
own company, A.T.V., are giving prizes to the best Export Action Now poster designs. But, above all, my Lords—and I come to perhaps the most important point—I would ask this: what is being done to bring home to the trade unions the great damage caused by restrictive practices and strikes, and what is being done to enlist their co-operation in educating their members to the real facts of our economic life? As Mr. Stanley said at that Export Action meeting, the problem is far bigger than merely inspiring the active support of some 36,000 directors. The real thing we have to face is firing the ordinary man in the street with a new feeling about exports.
Where, my Lords, is the master hand, the sense of crisis, the real personal responsibility? What is needed, to my mind, is not a Minister of Export, who, perhaps cast in the established mould, would have to create another Government Department, but an outstanding industrialist who, together with a team of his own choosing, could examine and promote this country's export position with a critical and an uncommitted eye. Some hundreds of other interesting suggestions have been made. I hope that other noble Lords will mention some of them. I urge upon the Government to consider them all, to look at them most seriously and to support by every means that they can the urgency

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of enlisting national support and enthusiasm. Without it, the present piecemeal attempts will be bound to fall on unsympathetic ears and, I fear, into unproductive hands.
In his speech to the Annual Conference of the Institute, Lord Chandos said that
"in the economic field, on the escutcheon of the United Kingdom, there can be only one device—Export or Die!"
In reading this the other evening, these words rang a bell and I thought back to that famous poem by Longfellow—Excelsior. It is for your Lordships to judge how great a poem it is, but I thought back to it as I had learnt it as a boy, and perhaps your Lordships will permit me to read a few verses of that poem, slightly adapted to the present situation. The verses, as amended, represent the cry of the young export crusader:
"The shades of night were falling fast,
As through an Alpine village passed,
A youth, who bore, 'mid snow and ice,
A banner with the bold device,
Export or Die!
In happy homes he saw the light
Of household fires gleam warm and bright.
Above, the spectral glaciers shone
And from his lips escaped a groan
Export or Die!
'Go not abroad', the old man said,
'Dark lowers the tempest overhead.
The roaring torrent is deep and wide'.
But loud that clarion voice replied,
Export or Die!
'Oh stay', the maiden said, 'and rest
Thy weary head upon my breast!'
A tear stood in his bright blue eye,
But still he answered with a sigh,
Export or Die!"
My Lords, even if the shades of night may be a little less deep than they were last month, I hope that these verses will not fall on deaf ears and, above all, that the following last two will not come true:
"A traveller, by the faithful hound,
Half buried in the snow was found,
Still grasping in his hand of ice,
That banner with that strange device,
Export or Die!
There in the twilight cold and gray,
Lifeless, but beautiful he lay,
And from the sky, serene and far,
A voice fell, like a falling star,
Export or Die!"
My Lords, I beg to move for Papers.
3.6 p.m.
LORD SHEPHERD: My Lords, I feel that I should declare an interest, in that
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the subject of the debate to-day, exports, is the manner in which I earn my living. I feel I should also make it clear that if I have any hard words to say against the export community, they are not directed to those firms which I represent in overseas markets, particularly as there are a number of noble Lords on both sides of the House who happen to be directors of those companies.
We on this side of the House welcome the debate this afternoon. I personally had one regret when I saw the Motion on the Order Paper: it was that I felt that the terms of the Motion should have been drafted with a greater spirit of resolution and urgency. But the noble Earl's approach to this debate has, I think, strengthened his Motion. Over the years I have been horrified at the appalling complacency, not only of Her Majesty's Government but of industry and of the country at the economic position of this country in the past few years and to-day. We on this side of the House have repeatedly drawn your Lordships' attention to the economic difficulties and dangers of this nation. On many occasions we have been forced to move a Vote of Censure against Her Majesty's Government. Generally, we have been met with speeches of assurance; speeches that rather scoffed at us. We have been accused of being Jeremiahs, alarmists and the like; and yet the facts and the figures that are before us give a very different picture. I think, from the manner in which he has moved his Motion, that that picture has been seen very clearly by the noble Earl, Lord Bessborough.
The facts and figures are very serious indeed, and I beg noble Lords opposite, and particularly the Ministers who are going to reply, not to play down these facts and figures but to present frankly to the country the grave economic dangers that we face to-day. My Lords, this country has responded to challenges through the years. In the dark days of war, Churchill never hid the bad news: he used it to goad the people to a greater effort. To-day, the noble Earl asks that the Government should lead a national crusade for exports. Before the people will go on a crusade they will need to know the facts. They will need to have leadership of the highest order. And, above all else, they will need a Cross;

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they will need a motive; they will need a purpose. I would submit that that attitude of mind, that leadership and that challenge, do not exist to-day.
Golden opportunities lay in front of this country immediately after the war. Its people emerged with a determination that the "bad old days" would never come back. We set out deliberately to build up our export markets, and a lot was achieved, when one takes into account the shortages of raw materials, the shortage of factory space and of labour. I would ask the noble Earl, Lord Bessborough, who spoke of the need for a "master mind" for exports, to remember the name of Stafford Cripps. That man never ceased to drive home to the country the need to export or die. But what was the response?—"Misery Cripps".
Great efforts were made in those days, but what is the situation to-day, sixteen years later? I would submit that, economically, this country is more vulnerable than at any time in the last ten years. We are faced to-day with great competition in Europe in world trade. In the days immediately after the war, Europe lay destroyed; but, rather like a, phoenix, it has arisen, and to-day it is more powerful, more prosperous and more virile than ever before in its history. Those industrial countries of Europe are to-day infiltrating into those markets which, by custom, we have regarded as our own privileged field. During the last Election the Prime Minister said that the economy of this country had never been so sound in his lifetime. My Lords, I should prefer the other description given by the Government: that our economy is balanced on a knife's edge. There is no stability or security on a knife's edge; the very best one can say is that it is uncomfortable.
I am not an economist. I believe that the basic difficulties of this country stem primarily from the balance-of-payments problem—the difference between our imports and our exports. It is true that in recent years inflation has been a bugbear: it has dominated our thoughts. The answer to inflation was increased production. But far too much of our increased production was being absorbed into the home market. Let us face it. In 1951 the home market was empty of consumer goods. As production took
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its natural course of development the Government permitted—in fact on occasions definitely stimulated—home consumption. It is natural that. business should have gone into that soft market, because that market provided high profits and a quick return on capital, very different from that of the hard export market. A businessman, by his very training and nature, is called upon to use his resources to the maximum advantage. I would submit that on many occasions the directors and managers of concerns in this country have had no option but to go into the home market, because their shareholders said: "We want a high return on our capital".
My Lords, what is the situation to-day? The noble Earl Lord Bessborough, indicated it, but I think we should have the figures. In the first nine months of 1960, the visible deficit between imports and exports was £160 million. The deficit of our total balance for the first three-quarters of the year—that is, after taking into account invisible earnings—was £136 million. I would submit, from my own information, that the situation is perhaps graver than that indicated by the noble Earl. I would submit that the order books of the vast majority of the factories and mills of this country to-day are shorter than they were this time last year. It cannot be said (as I have heard it said) that the cause of our export difficulties is a stagnant world trade. Between 1956 and 1959, there has been an increase in world manufactured trade to the tune of £2,355 million. The British advance in exports in that period was £200 million. In 1950, our share of world trade was 25½ per cent. In 1955, it was 19·7 per cent., and in 1960, 16·8 per cent. And I understand that in the third quarter of 1960 it was clown to 15·4 per cent.
Nor can it be said that the terms of trade were against this country. In recent years the terms of trade have been advantageous to this country. Why is it that we have not been able to keep abreast of countries in Europe? I will not weary your Lordships by giving quotations. It is known that we are at the bottom of the batting list. But why is this so? I would submit, as I said earlier, that it is because we created in this country a home market climate

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which has made it impossible for business to refuse to go into it. It has put its full exertions into the home market, and relegated to an inferior position the export department and the export effort. From this country's point of view, this is a most serious position. We have always been impressed with the speeches of the noble Earl the Foreign Secretary. He wants a dynamic foreign policy; he wants a dynamic Commonwealth policy. As the noble Viscount, Lord Bruce of Melbourne, recognised in a speech some months ago, neither of those dynamic policies is possible without a dynamic economic policy. It is here, I am afraid, that the Government must stand condemned (to use a hard phrase): they must accept the responsibility.
What can be clone? I thought that the noble Earl, Lord Bessborough, made some useful suggestions, though in the main probably no more than palliatives. But there was certainly one suggestion which we on this side of the House would fully support—that is, the recreation of an export priority scale. I do not suppose that it is possible to convert the Government to a form of managed economy. By that, I do not mean hard-and-fast controls, but a long-term planning of investment in production that will give us quickly the overseas earnings we require. At present we have not got that planning, and much of our capital is being squandered in consumer industries. I should like the Government to undertake to review the future expansion of investment, to find out whether investment is going into the wrong industries and is being dissipated. At the present moment, we can only come to our own conclusions. I think that for the good of this country and for the good of industry the Government should undertake a very careful survey.
I would indicate one matter on which I frankly question the wisdom of the Government and of this House—namely, our agreement to the cotton scheme, in which the country provided £30 million for scrapping equipment.
LORD ROCHDALE: My Lords, may I interrupt the noble Lord to correct the figure of £30 million which he has quoted? The figure that the Government stand to pay on scrapping is no more than £10 million.
LORD SHEPHERD: My Lords, I stand corrected. The overall figure of £30 million was for scrapping and redevelopment. I did not see the noble Lord, Lord Rochdale, in his place; but I am glad that he is here, because I think he will agree with me that there has been no co-ordinating plan in scrapping and redeveloping in the cotton industry, when we take into account the spinning, weaving and finishing sides. This money has gone into the cotton industry, but what has been the result? Speaking as an exporter, I can tell your Lordships. Our deliveries of cotton piece goods have become more and more extended, and our prices have continually risen. In fact, I can say that my exports of cottons are now dropping, in spite of the hardest possible work by the salesmen.
The export business is the most difficult business into which anybody can go. It is fraught with all possible dangers, including credit-worthiness and political risks, and the margin of profit of export companies is very small. I can say, for my own business of financing, that our gross margin on a contract is between 2½ and 3 per cent. If we were to turn ourselves into an import house, we could make 15 to 20 per cent. gross. So your Lordships can see that there is not a great deal of financial attraction to encourage people to go into exports. In many cases, manufacturers anxious to obtain export orders have to cut their margins. I do not know whether it is possible within the province of taxation to make the earnings of an export house a little more relative to the profits that are earned by a company purely in the home trade. But as things are, a number of efficient mills are frightened to go too much into the export market because the profits that can arise from this are so poor that the firms become extremely vulnerable to the takeover bidder who wants an efficient mill.
So, my Lords, I think that it is in the interest of industry, and not just of the shareholders, that something should be done to make the earning capacity of exporters more profitable to them. I was pleased that the noble Earl referred to the question of commercial officials at our Embassies. These officials work under great difficulties, and often have to do entertaining out of their own rockets. We should also remember the

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Board of Trade trade commissioners in the Commonwealth. I think that there is a case for bringing both these services together under one head. I would ask the noble Lord, Lord Mills, if he would look at that matter.
My Lords, I have spoken too long, it would ask your Lordships to accept the Motion of the noble Earl, Lord Bessborough, and to make sure that those around you understand the grave economic situation of this country. Do not play it down for Party reasons. We are going to "export or die" and, on the present trend, it is going to be a long while before we are safe.
3.27 p.m.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, so important is it to all in this country that our overseas trade should be expanded, that the Motion by the noble Earl, Lord Bessborough, is both timely and welcome. I have been stimulated also by the speech of the noble Lord, Lord Shepherd, because, like him, I have spent most of my life in the export trade and have visited most countries in the world in pursuance of that trade. There is nothing new, of course, in the fact that our exports must expand if our balance of payments is to be on the right side.
I remember, immediately after the war and ever since, making speeches to chambers of commerce and trade associations about the national importance of exports, because of the fact that most of our raw materials and half of our food have to be imported and we have to pay for all this by exports. The noble Lord, Lord Shepherd, mentioned the campaign launched by the late Sir Stafford Cripps. I remember it well; it was so useful and proper. I hate to look back at what our state was then, due to the war, and I think that he rendered a great service to this nation. I should certainly not like to believe that anyone thought ill of him for the great things he did.
While this concept of the necessity to export in order to keep our balance of payments right is basic, I think we should remember one or two things that have been happening. We are living to-day at much higher and improved standards. In fact, if I tried now to portray what the position was after the war, I think most people would hardly
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believe me. The standards that we are enjoying mean that we are calling for more and more from our factories for our use and pleasure at home. This means that more and more materials have to be imported to provide the things that we need, or think we need, or that we desire. That is all right, so long as we remember that we can do that only if we go on exporting more.
It is true that in recent times the growth in our exports (it is not a small growth; it is almost double, in volume, what it was before the war) has not matched the growth in our imports. Without being complacent—and I am not complacent about this matter; nor do I think any member of the Government is—I am going to say that that is a natural state, because of anticipation of demand and the building up of our stocks here at home. It is quite true that, eventually, our exports must bear a proper relationship to our imports.
Not only is it essential that we should earn enough from our exports to keep our balance-of-payments account in balance, but we are committed to playing our part in expanding world trade, and this can be done only if we devote some of our resources to helping the under-developed countries, thus enabling them to buy our goods and services. There is not only a moral duty in this aid; there is a real business reason for it: because they cannot buy from us unless we help them to improve their standards. In the last two or three years we have been giving aid on a greater scale than our earnings. But at least we must continue this aid, as well as encourage others to give their aid. But all this means increased exports, and that is why exports are of additional importance at this present time.
It is my belief that the prospects for our exports depend on our competitive position and our outlook in the different markets of the world. Some markets, I well know, are more difficult than others; but in all of them we must be competitive. I was glad that the noble Earl, Lord Bessborough, drew attention to the need for design and quality to be right. It is true that we have been experiencing a slowing down in world trade as a whole, and so long as that continues export markets will be increasingly competitive. But there are signs

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that world trade will start improving again, and we must be not only eager but ready to take advantage of it. The quality must be right; the design must be right; our delivery dates must be right, and must be kept to; and our prices must be competitive.
Exporting is not done by the Government but by manufacturers and traders. That
is why it is necessary to continue to impress upon all concerned the part played by exports in our national economy. But the Government have a part—an important part—to play, and I will try to tell your Lordships what they are doing. The noble Earl, Lord Bessborough, said that we need a great businessman to take charge of this campaign, but I do not think that that is the way to do it. It is quite a different thing from getting a big businessman to run a production job or a service job. This is a matter for everybody. The Government are responsible for seeing that our economy as a whole is sound, and that inflationary pressures do not develop which would either result in our consuming at home too great a proportion of what we manufacture or raise our costs and so reduce our competitive position in overseas markets.
The Government's policy in regard to external trade is to work towards the reduction of trade barriers and the greatest possible freedom of trade and payments. This is reflected in our membership of the General Agreement on Tariffs and Trade (commonly known as the G.A.T.T.), in which we are about to take part in negotiations that we hope will lead to further substantial reductions in tariff barriers. The United Kingdom will be negotiating with the United States of America and the six Common Market countries, and will offer to exchange tariff reductions over a wide range of imports, in return—and this is vital—for comparable reductions in tariffs against our exports.
I cannot see any complacency at all, but just a great endeavour to get people to export. I do not quarrel with the statement "Export or die!"; but I would put in one more slogan, and it is, "Pride in exports". I always had the greatest satisfaction when I could open up a new market or see the figures of a new market going up and up. The
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British Government's services for exporters are described in a pamphlet bearing that name, issued by the Board of Trade, which anybody can read. What it amounts to is that the Board of Trade are equipped and ready to give information, advice and assistance on most of the problems which intending exporters are up against.
There is the Export Services Branch, whose headquarters are at the Board of Trade, and there are the Board's Regional Controllers throughout the country, and their staffs, who are directly at the service of the exporters. Exporters can be put in touch with Trade Commissioners and Commercial Diplomatic Officers in overseas countries. The network of these officers overseas is world-wide. I have noted the noble Lord's suggestion that they might combine, and I will see that my right honourable friend considers it. These officers have a detailed knowledge of the countries in which they serve. I was myself very impressed, before I joined the Government, at the number of these officers who came home on trips to this country and talked to manufacturers at such places as the local chamber of commerce, and tried hard to equip themselves with knowledge of what this country could do, and how they could help.
The noble Earl referred to shops abroad. British Weeks are organised from time to time in various countries overseas. They frequently include shop window displays, exhibits and so on; even fashion parades. The Government help in trade fairs and exhibitions wherever they can. They have decided to increase the provision for trade fairs in the next financial year by £200,000, to £530,000. The services of the Export Credits Guarantee Department were also mentioned. I served for many years on its Advisory Council, and I have seen its growth and its value to industry. That does not mean to say it could not be more valuable still, and that is being carefully considered. My noble friend Lord St. Oswald told your Lordships yesterday of two directions in which it was being expanded. These changes make it easier for British exporters to match the credit terms for capital goods which are offered by foreign competitors.
The Board of Trade are stepping up their personal approach method of acquainting firms with the opportunities

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and the services available. The Minister of State at the Board of Trade is half way through a second direct mail campaign—the first was in 1953—with every firm employing more than 25 people. That means an approach to some 30,000 firms, and he is getting a large number of replies. They have been followed up, and the firms are being helped in every possible way. Ministers and Members of Parliament, too, are touring the country for public and private discussions with industry.
But, my Lords, while the Government are helping in these and other ways, the point is being made again and again, in the Press and in public discussions, that it is primarily the task of our manufacturers and exporters themselves to develop existing markets and to find new ones. The newspapers have devoted a great deal of space to this subject, and there has been criticism, including much self-criticism, of the shortcomings of our exporters in the past. I think the Press have done much to help people to become export conscious. Manufacturers and exporters, for their part, are responding well, and there is a tendency for exports to rise again. I. will not say much about that, because it is a very short period over which the graph has gone up.
As your Lordships know, an Export Council of Europe has been formed, and has got off to a flying start, while the Dollar Export Council has been expanded into a Western Hemisphere Council. Sitting on these Councils are some of the busiest and most influential men in business, in industry, commerce, and in banking, who have been roused to tackle the export problem with new vigour and determination. I am sure that we all welcome the part that the Institute of Directors are taking in this matter, and I should also like to say a word of praise for such institutions as the chambers of commerce, the Federation of British Industries and the National Union of Manufacturers. Going up and down the country I have been impressed with the developments that are taking place. People are starting committees to deal with separate countries, so that they can get information over to the smaller people.
We can all help in many ways but, above all, our goods must be dependable and of high quality. This is where men
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and women engaged in production help our export business. Our thanks are due to them and to the trade unions who co-operate in improving production. I have been in many places where firms publicise what they are doing in the export markets for the benefit, interest and help of their workpeople. I should like to see more of them do that., because, after all, a man is not interested only in making something or helping to make something; he is interested in where it is going.
I know that there have been many suggestions that exporters should be helped by taxation reductions, and so on. That is not my province, but I should like to point out to your Lordships that there are many practical difficulties in that direction. It is not only the people who produce the finished machines; it is the man who makes the bolts and nuts and component parts who is also helping in this export business. Yes, I agree, "Export or die!" Exports are vital to us. I think we have been going through a period, for which there is good explanation, as I said earlier; imports have been rising more quickly than exports and I think that is a natural phenomenon. I believe we shall get through it. But I am not going to be complacent. We are going to go on striving and doing all we can in the terms of the noble Earl's Motion.
3.50 p.m.
LORD PEDDIE: My Lords, it is with a feeling of great trepidation that I rise to make this my maiden speech on so important a matter, but I am fortified by my recognition of the tradition of tolerance which this House shows to the person making a maiden speech on these occasions. I promise your Lordships that I cannot rise to the heights of oratory of the type that we have already heard; I have no experience in poetical expression, and at this particular moment I feel rather like the person on the edge of a pool, dubious of the temperature. I can only hope that in a few minutes the analogy will be complete and I shall experience that degree of pleasure I usually did after taking the plunge.
The Motion of the noble Earl, Lord Bessborough, has been expressed in the widest possible terms, and none can object to the suggestion that the public be made aware of the tremendous importance and significance of exports to our economic

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life, particularly if that awareness results in a recognition of the seriousness of the present situation, which all have emphasised, and has in addition the effect of exerting public pressure upon those in a position to influence exports and economic policy that has some bearing upon them. I recognise though, as the noble Earl indicated, that there is a widespread feeling among all sections of the community that exports are the concern only of big business, banks and economists, and I think there is tremendous virtue in a campaign of the kind which has been described that could bring home, starkly and vividly, that the standard of our national life is determined by our exports. As the noble Lord, Lord Mills, has stated so clearly to us, much of our food and raw materials comes from abroad and has to be paid for by exports made by this country. It is an appalling paradox that there is no nation with a longer experience in exports and none better equipped with inherent industrial skill than is Britain, and yet our export record justifies the deepest concern.
We have already heard from the noble Lord, Lord Shepherd, statistics which bring home vividly the seriousness of the situation, and perhaps I may he excused if I underline one or two of those points by reference to statistics recently published by the Monthly Digest of Statistics, which give our exports for 1960 as £3,555 million as against £3,330 million for 1959. True, the noble Lord, Lord Mills, has indicated there is a slight increase, but far less than that of our competitors and falling far below the increase in the volume of world trade. There lies the true significance of those figures.
But I might go on to quote something of probably even greater significance. From the United Nations Bulletin of Statistics we learn that between 1953 and 1959 the British volume of exports increased by 22 per cent. The West German volume of exports increased by 122 per cent. over that same period, that of Italy by 131 per cent., that of France by 65 per cent., and that of Japan by 185 per cent.; so that other countries have been increasing and improving their export performance at a far faster rate than has Britain. It is, indeed, significant that we are falling short, far short, of the rate at which world trade has increased, and it is interesting to notice that over that
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same period we are showing a relative decline in our national production. It was recently stated that if in the 1950s we had expanded our exports at a rate commensurate with the growth of world trade, British earnings in 1960 would have been at least £1,000 million more and the British standard of living would have risen by at least 15 per cent., a demonstration of the close connection between exports and the general standard of life which this country could enjoy. In addition, it is an appalling indictment of the failure of the export drive.
Exhortation or publicity drives, of which we have heard a lot this afternoon, in my opinion are not enough. We have had publicity drives and we have had exhortation from all quarters for many years. When we compare our achievement in this field with that of our foreign rivals we certainly cannot claim that exhortation and publicity drives have been of any great significance, if we undertake such a drive—and I would not condemn it out of hand—it must be combined with positive action, positive action on the part of the Government, positive action on the part of industrialists and, I would add, positive action also on the part of the worker himself.
There is no single cause of this relative decline, in my opinion, and I do not think the solution can be found in any one single miraculous formula, but among the welter of causes there is one that stands out very prominently, and that is the lack of overall, consistent planning of our economic export programme. We have been vacillating in our programming and we have been almost bereft of co-ordinated planning; and on the whole, as I think has been admitted by other speakers, the effort has been left largely to the individual effort of private persons, private industrialists, who have been governed, of necessity, by short-term private considerations.
I was glad the noble Lord, Lord Mills, made reference to the contribution in this field that has been made by Government agencies, and particularly the Government commercial offices. I speak with some experience in this regard, and I would pay a measure of personal tribute to the work that they are doing under considerable difficulties in many parts of the world. Yet I have found

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that the effectiveness of these officers and offices is directly related to their willingness to be identified and immersed in a foreign business community. Some do it quite a lot; some, in my opinion, not enough.
It has already been indicated that there are many facets to this problem of relative decline. Some industrial firms have done quite well; others have done badly. There has been a wide range of motivation that has inspired individual firms either to seek or to reject export trade. I would suggest that that justifies investigation. I think a great deal would come to light if there were an investigation as to the reasons why firms engage upon foreign trade or reject it. When we examine the causes of our relative decline I personally believe that, compared with many European nations, we have not developed the type of industrial structure that facilitates economic development.
My noble friend Lord Shepherd has made reference to the home market and the concentration of too many British firms upon the home market. True, to a great number of industrial concerns the home market is the natural market but there are many who have contributed, and who could contribute more, to the export market but who have yielded to the easier prospect of concentration upon the home market. It is my sincere belief that many manufacturers look upon exports as an extra, taken when easy opportunity presents itself and dropped when competition becomes intense or conditions difficult. In consequence, there is a lack of continuity.
It is also necessary in any campaign of this kind to drive home the relationship that exists between our export trade performances and our production costs. In this respect it would, I think, be of considerable interest to have regard to a recent census which was taken of forty engineering firms engaged in the export trade. Their performances were quoted in the National Institute Economic Review. That census demonstrated that the firms with the best export performance usually had the highest overall production increase, with its consequential effects upon unit production costs. Twenty of those engineering firms who were successful exporters, with an increase in exports over the past three
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or four years and now exporting at least 30 per cent. of their output, were compared with twenty firms that were unsuccessful in exports and were exporting less than 30 per cent. and whose trade was tending to fall. It was found during the period that the successful exporter had been able on an average to increase his overall production by at least 10 per cent., whereas the unsuccessful engineering exporter who had the greater concentration upon the home market had increased at an average of only 4 per cent.
There is a moral in this, and there is also an explanation of the fact that national productivity in this country is not increasing as rapidly as it is in those countries that are beating us in the export race. I personally believe that there is no substantial evidence that British goods are being priced out of the market, although occasionally we hear the fallacious opinion that high wage rates in this country are the cause of our decline. I would point out that in some exporting countries wage rates have increased at a faster rate than they have in Britain. But the really great influence, in my opinion, upon present and future costs, which must inevitably have some bearing upon the export trade, is the rate of capital investment compared with our foreign rivals.
Our labour costs to-day, as always—this will apply even more so in the future—are determined by the efficiency of our tools and equipment. I must say, without being controversial (because I must not be that), that the worker as such has very little influence upon the efficiency of the tools that he is called upon to employ. Of course, I know that West Germany and Japan have shown a tremendous increase in the proportion of the national income that they have been able to invest in the physical reconstruction of their country. I recognise that they have had enormous advantage since the war. I might point out that that seems to be one of the virtues of losing a war and one of the penalties of winning it.
But there is another aspect to this problem of exports and the attitude of the producer and exporter which has not, as yet, been touched upon—namely, the extraordinary fallacy in the minds of a great number of people who are themselves exporters and manufacturers. The

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fallacy is that there is a static pool or fund of foreign trade. That policy is not of recent origin, because in time past it has been the cause of a great deal of national antagonism. But in its modern form I sincerely believe that the existence of that fallacious idea acts as a deterrent to closer co-operation among the exporting firms, who unwittingly fear that because the export cake is of limited size it does not permit of others taking a larger bite. Foreign trade begets trade. I say it is not static. It varies in form, but its inherent quality is of natural expansion. I think there has been a benevolent spiral in foreign trade, and it is a factor which makes for greater world productivity, higher standards and, in turn, stimulates demand.
I am sure we are all agreed that no country in the world has a deeper vested interest in the development of world standards than has Britain. Indeed, I was delighted to listen to the noble Lord, Lord Mills, when he made reference to the connection between the aid for underdeveloped countries and the development of our own foreign trade. I agree with him that any effort we make in the aid for underdeveloped countries need not be inspired solely by charitable motives but has complete economic justification, because the development of their standard of life can set up a greater demand for the products which this country is capable of producing. I welcome this proposition; but I believe I should emphasise, as I began, that there is need for positive action. I think there is a necessity for universal recognition that exports are an integral part of our industrial economy, and that this influences our industrial costs. I believe also that we should give far greater attention to the consumer angle of this problem. There has not been a great deal of emphasis upon that. I believe that if our own country and those responsible largely for the influencing of exports could recognise the tremendous importance of the consumer in this regard, the exporter would of necessity pay more attention to the question of consumer research, design and so on, instead of attempting to sell goods that are created solely for the home market.
And in the reverse direction I might suggest, as a supplement to what the
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noble Lord, Lord Mills, suggested, that the Government could do something in the promotion of a much more highly developed trade directory—and I speak from a measure of experience in this respect—that would provide an advisory service for foreign buyers, particularly in technical goods. A great number of small firms deal with these products and it is not as easy for a foreigner coming to this country to buy such goods as if he went to seek them in Japan or Germany. That is a job which the Government alone can really tackle.
I think it is necessary to step up our industrial investment and place greater emphasis on our export planning in this respect. I know that the Government in the past 'have been tempted to regulate the economy by the application of a credit squeeze at times, but that seems to have done more to curtail output than income. I believe that more export competition would be a useful check on our own home efficiency. Reference has been made to export credits and the Export Credit Guarantees Scheme. I know that that does a great deal to assist the exporter and relieve him from many of the hazards of the business; but I believe more could be done in that regard, and we are all conscious I am sure, that foreign competitors offer longer-term credit facilities.
May I say, in conclusion, that I do not approach this question with any sense of pessimism. I believe there are still great opportunities before this country, 'providing we seize them and we plan to seize them. I have confidence. And yet I would ask the question: "Are we entitled to allow the future of our industrial economy to rest entirely upon the decisions of individual producers whose unco-ordinated activity is determined, in many cases, solely by what they consider to be personal benefits?" Now in this pursuit, this seizing of opportunity, example is the great teacher; and if, as the noble Earl, Lord Bessborough, indicates, there is virtue in pursuing a great crusade, I think that by the process of example Her Majesty's Government could do a great deal to stimulate enthusiasm by bold and constructive planning. Nevertheless, we welcome, as I am sure every Member of this House will welcome, the opportunity of focusing attention upon the vital importance of exports through

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a Motion indicating, as it does, the basic facts upon which our economic life must rest. Finally, I would take this opportunity of thanking your Lordships most sincerely for the kind and courteous hearing that you have given to my words.
4.14 p.m.
LORD JESSEL: My Lords, I feel sure that the first thing your Lordships will wish me to do is to congratulate the noble Lord, Lord Peddie, on his excellent maiden speech. He acquitted himself very well: he made his views quite clear on a subject which he had obviously studied closely, and we all look forward to hearing him speak again on other subjects.
In my view, the only way to make the people of England more export conscious is by much wider reporting of export matters in the popular Press. At present it is only what I would call the quality Press, such as The Times, which give any news of export orders booked by British companies. I should like to see the Daily Mirror and the Daily Express with headlines such as: "£2 million Order Booked by English Electric"—in some particular country. I am sure that if the noble Lord, Lord Nelson of Stafford, had anything to do with it, that is what would be done.
THE EARL OF BESSBOROUGH: My Lords, perhaps I might correct the noble Lord on this point. I have noticed that some of the popular Press have taken up these points, especially the Daily Mirror. I do not know whether the noble Lord reads that newspaper every morning but it has played a great part—perhaps more than any other paper—in this Export Action Now Compaign. I apologise to the noble Lord for interrupting him.
LORD JESSEL: My Lords, I am glad to hear from my noble friend that that is so and that what I advocate is, in a small way, happening. Then, after those headlines, there should be a colourful story about the intense foreign competition and the long hours of negotiations with, perhaps, something about the personalities of the negotiators. If that were done, the man in the street might become more conscious of exports and discuss with his neighbours on the train or in the "pub" the prospects of
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a British firm vis-à-vis a German firm booking an order for a new steel plant, say, in India. People might even find that just as exciting as discussing the previous evening's televison programme. But of course it is the manufacturer who really matters and who needs to be made export conscious.
In December, 1955, I initiated a debate in this House on this very subject, and on re-reading the speeches made then I realise how similar was the situation at that time to that which exists to-day, with other countries' exports increasing at a far greater rate than ours. I then suggested—and I remember that I had the powerful support of the noble Lord, Lord Lucas of Chilworth—that as man is an economic animal some tax advantage should he given to profit derived from exports. There are many medium-size and small firms who do not bother at all about exports because they can sell the whole of their output on the home market without all the sweat and risk of trying to export. But I am sure that it would be a very different story if they were to get some extra reward for their efforts.
I know the official answer to this suggestion. The noble Lord, Lord Mancroft, gave it to me in 1955, and I am quite sure that the same answer will be given here to-day. It will be said that such a method of stimulating exports would not be in the best interests of this country and would lead only to retaliation by our foreign competitors. I expect some of your Lordships will have read a letter in The Times last week from Mr. R. F. Walker, an exporter of thirteen years' first-hand experience. He is not frightened of retaliation. He writes:
"Supposing the Chancellor were to halve income tax and profits tax on direct export earnings and Dr. Erhardt were to 'retaliate' by giving my German competitor the same stimulus, why should my competitor's luck in any way diminish my own increased effect—the result of feeling that the risks and work involved would after all be worthwhile and, above all, recognised".
He says other things with which I agree, concerning the obstacles to be overcome by the exporter. And he argues:
"Is it not reasonable to ask that the profits earned after all the additional risks of a foreign venture have been faced should be treated more leniently than those made at home?"

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Mr. Walker also deals very forthrightly with the argument that it would be difficult to separate the direct from the indirect exporter. His simple answer to this is: "Who takes the risk?"
In the case of a motor car, of course, it is the firm that sells the finished motor car who takes the risk, not the supplier of the door handles. I have a great many friends who are actively engaged in the export trade, and these are some of the things which they tell me must be done if we are going to do better than we are doing now. First, firms must send out really senior executives, preferably able to speak the language of the country they go to. We English are notoriously bad at languages. Secondly, they should explore the market and follow it up if business is considered to be available. Thirdly, much more money must be spent on publicity, samples, brochures, advertisements, et cetera, and these also should be properly translated into the language of the country. Quotations, again, should be made in the language of the country to which it is desired to export and they should be f.o.b. or c.i.f. It is no earthly good quoting in English an ex-works price. Fourthly, all dimensions and weights should be in the metric units, which the foreigner can understand. I
realise, of course, that some firms which have been in the export game for years are now doing all these things. But there are a great many which still do not.
Another point which I think needs attention is the question of financing credit, because to-day an increasing number of export orders have to be taken on credit terms. A high bank rate and a high premium to the Export Credits Guarantee Department make financing a very expensive business. I think it is true to say (my noble friend Lord Mills will correct me if I am wrong) that the E.C.G D. has, since its inception, made a large profit every year except one. I think it might have another look at some of its premium rates. We are exporting to-day around 25 per cent. of our production; that is, nearly £10 million a day. If only we can make this 27 per cent. we shall be well on the way to a solution of our problems. I am sure it can be done if everybody in industry and commerce, and the general public, realise the need for this little extra effort.
4.23 p.m.
LORD POLWARTH: My Lords, I am sure we all agree that the noble Earl who introduced this debate has done us a great service, because I think that the affairs of industry, trade and commerce do not get discussed in this House nearly as much as they deserve to be. Perhaps in some ways that is a good sign. Perhaps it means that industry is getting along nicely and does not need worrying about. But I am sure we should all agree that that is not the case in the subject with which we have been dealing this afternoon. Also, I think it is a great pity, when there are so many captains of industry who are Members of this House, that their multifarious duties so often keep them from giving us the benefit of their experience on occasions like this. Equally, I am sure that all of us who listened to the noble Lord, Lord Peddie, will agree, even if we do not agree with every word he said, that in his arrival in this place we have a very welcome accession of strength in this field of trade and industry.
Other speakers have already dealt, very fully, with the vital need for exports, with the need for the Government to do more, with the need for more exhortation and with many of the general problems in this field. We have since the war been bombarded at intervals with a variety of slogans, ranging from the grim "Export or Die!" of Lord Bessborough's delightful verses to the more jocular "Exporting is Fun". There is a very definite limit to what exhortation by Government or anybody else can do, and of any campaign in broad and general terms. Above all, what is wanted is specific help and information to individual companies. I should like to get down to brass tacks and just say a little from my own experience as a member of two bodies which, in their different ways, have done, and are doing, a great deal to provide that particular service to industry—because I do not think it is realised quite how much is already being done by industry within itself to become more export-minded.
The first of these is the body best known to your Lordships as the Dollar Exports Council. I should like to say, as a member of that, how glad we are to hear the kind words about our

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activities from the noble Lord, Lord Mills. That body is a remarkable example of private enterprise working in full co-operation with Government for the country's good. Under the chairmanship, first, of that very great Scot, Sir Cecil Weir, whose recent death must have grieved many of your Lordships, and, later, under the most dynamic leadership of the noble Lord, Lord Rootes (and if the noble Lord, Lord Shepherd, is seeking dynamics, as I believe he was, I suggest he has to go no further) they have achieved an enormous amount in making known to industry the opportunities of the dollar market and in helping individual companies to take advantage of it. They have done this because they have specialised in this one group of countries, the dollar market. They have acquired all the information that is available on it; they have put out many publications; and they have organised conferences of British business men. Some of your Lordships will remember the great conference at Eastbourne two years ago. They have sent trade missions to different parts of North America, on two of which I have had the privilege of serving—and if anybody thinks that a trade mission under the leadership of Lord Rootes is a rest cure, I advise him to try it and see.
We welcome missions here such as the Canadian Mission three years ago. We have set up British trade centres in most of the important cities of Canada and the United States, and supported the establishment of British Chambers of Commerce in the same places. I should like to pay a tribute to the dedicated work of the managers of those centres and the staffs and the committees who run them, because I have seen something of their work. They work most closely with the British Government Trade Service, whether it be in Canada or the United States. There is a happy relationship, and I should like to add my tribute to those officials, too.
One of the D.E.C.'s latest developments has been a scheme to mail direct to 3,000 selected Canadian business men the British trade periodicals in which they are particularly interested. Another has been the support of these British Weeks or Fortnights, of which Lord Mills spoke, put on by leading North American departmental stores. The president of one was here last week and
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he is full of enthusiasm for this project. He is going to have an immense display of British goods in his store. His enthusiasm has run so far that on one side of his store in the main street of Chicago there will be a six-storeys high replica of Big Ben and, on the other, of Balmoral Castle. So you see, a lot is going on.
The results can be seen in the trade figures. For the last ten years British exports as a whole have increased by 40 per cent. To Canada they have increased by 55 per cent., and to the United States by no less than 140 per cent. But, my Lords, the battle is not yet won. Last year's figures were a trifle disappointing. The previous years' had been boosted by very heavy exports of motor cars; and that emphasises how dependent we are on comparatively few large industries for our exports and the need to spread the net wider and bring more firms and more products in.
As we have heard, the D.E.C. have been reincarnated and strengthened as the Western Hemisphere Exports Council. They are taking in the Caribbean and the whole of Latin America. I know that so far as Latin America is concerned, British industry is a bit shy of it, and that with some good reason from past experience. But I say, not because but in spite of the fact that I am a director of a bank with interests in that area, that I sincerely believe that the opportunities there are increasing, and that there is an increasing stability in many, if not all, of the countries of Latin America. If we do not seize these opportunities, we are going to be too late, my Lords. Already the situation has arrived where we have only 6 per cent. of Latin America's import trade, whereas Germany has 12 per cent.
Anything that I say of the work of the D.E.C. is not to belittle the efforts of the other bodies in this field, such as the Federation of British Industries, the Chambers of Commerce, the National Union of Manufacturers and others; but the fact is that the strength of this Council lies in the very fact that it is not just another such body, but is a co-ordinating body on which all those other bodies work together for the common object, thus avoiding an overlapping and duplication of effort. Now we have had set up, in the same mould, the Export Council for Europe, under the

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energetic chairmanship of Sir William McFadzean. Already they have sent out preliminary missions, or are planning them, to every country in Europe, and I am sure they are going to make great progress in the same way as the D.E.C. I appeal to industry and commerce throughout the country to give their utmost possible support to these two Councils—not just moral support, but financial as well.
But, however strong may be the central effort of all these bodies in support of the export drive, it will all be of no avail unless we are active about it up and down the country. The clarion call that goes out from London is loud and clear nearby, but inevitably it is weaker the further away you go, and it can be quite a lot weaker 400 miles away. As I said before, the large companies are making the biggest contribution to our exports, and, indeed, are carrying their fair share. It is among the smaller and medium-sized companies that we have to make the really big effort; and, without any disrespect to the national headquarters of all these trade organisations, these smaller companies are far more likely to listen to advice from their friends and neighbours on their own home ground, whose experience they can actually see and whose judgment they know and trust. I speak from my own experience in Scotland, because I am privileged to be chairman of a body, the Scottish Council, on which most of these national trade organisations are represented, whose committees are made up of local business men, and which is therefore in a unique position to speak for Scotland; and whose voice, I venture to say, is respected there.
Our foremost aim is to provide more jobs in Scotland, whether by helping existing companies to expand or by attracting new ones there, and in this we have had no mean success. Something like 70 per cent. of all the North American industry set up in Britain since the war has come to Scotland, and we have done what we can to help those new companies find outlets for what they make, particularly in the export field. Scotland is, by tradition, an exporting country—ships, heavy engineering products, knitwear, textiles of all sorts and, of course, whisky. Unfortunately, the trade statistics do not show what Scot-
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land's contribution is to the United Kingdom's exports, but it must be well above her share of the country's population. I am proud myself to come from the town of Hawick, whose knitwear industry produce the highest dollar earnings per worker of any town in Britain. But what is encouraging is to find that the newly-established industries—office machinery, and so on—are already exporting, on average, as much as two-thirds of their production.
We are particularly concerned in making known the variety of different products that we make and can export. The noble Lord, Lord Peddie, spoke of the need for trade directories. We produce every two years a complete guide and directory for the whole of Scottish industry. Since the war, We, have sponsored three major industrial exhibitions of Scottish products in Glasgow. None of these has cost any money in guarantees or subsidies to anybody outside; they have all cleared their costs. They have attracted very large numbers of trade buyers, and the interest of Ambassadors, Government officials, and others from many foreign countries, and they have resulted in very substantial orders.
But, besides what might be called the propaganda side of exports, the task of general education and all that, there is the much more important business of answering specific questions which arise when a firm wants to go into export—questions such as: "How do I get over the language difficulty?", "How do I make my first contacts in such and such a country?", "What are the shipping services?", "What are the customs formalities?", "What are the financial and credit problems?", "How do I find agents?", and so on. We have found that it is far more satisfactory if those problems can be dealt with and answered locally rather than for the people to make long journeys to the fountain-head of information, so we have set ourselves to this task, and I feel that we have been to a large extent successful. Then there is a great deal to be said for introducing manufacturers to a new market through the means of a group visit or trade mission. Perhaps some of the members may have been to the country before and can help other members who have not. But the one essential thing is that they must all be hard-headed businessmen,

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ready to do business. We sponsored one such mission last year to Russia. It was a very considerable success, and orders have resulted; and we have another one planned for Sweden this summer.
Then, we have been busy with the task of handling visiting trade missions. Three years ago the great Canadian trade mission came to Scotland, and we were able, not just to show them around in general, but to put members of it in direct touch with a large number of individual Scottish manufacturers. Only last week we had over here the President of the British-American Chamber of Commerce in Los Angeles, who, during a very busy week in Britain, found time to come to Scotland and talk to industrialists about the opportunities for trade with the West Coast of America. These are only some of the ways in which we in Scotland are trying to increase exports, and I would say that, contrary to what some noble Lords feel, the export drive is not being a failure. It takes time to achieve results, but, from the actual inquiries we have received and from the immense interest that has been aroused in the last few months, I am convinced that these will be reflected in improved export figures before very long.
Now, anything I have said about our work does not in any way belittle any of the other organisations, because, as I say, they work together with us, and we pull together to avoid wasteful overlapping and duplication of effort. I suggest that it is an example of co-operation that other parts of the country might do well to follow. It is only by such combined effort, a combined effort not merely at the centre here but out in the many industrial areas of the country, that we can achieve the object which all of us to-day agree, on all sides of the House, is not only for our well-being but is vital to our existence.
4.39 p.m.
LORID TWEEDSMUIR: My Lords, I shall take up the time of the House for only a very few minutes, and my speech will come as something of a Postscript to what my noble friend Lord Polwarth has said. He has mentioned the work of the Dollar Exports Council, and I should like to pay the warmest tribute to the work that he, Lord Rootes, and his colleagues have done. I am going to say a few words about
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the Canadian export market, because it is a vitally important market to us, actual and potential, just as ours is to them. But, first, I should like to congratulate the noble Earl, Lord Bessborough, on the speech with which he opened this debate. He said that he was in two minds as to whether to change the wording of his Motion, and to delete the word "vital". I am happy that he left it in; but I think that, without being unduly pedantic about words, I might possibly have changed "crusade" to "campaign". I always like the opportunity, or the excuse, for going to the Oxford English Dictionary. I looked up the word "crusade", and I was told that it meant "an aggressive movement against a public evil"! I think that the word "campaign" might have been a little more suitable.
My Lords, Canada may not sound very attractive as a market when one considers that there are only 18 million people living there; but owing to their high standard 'of living, and the pattern of their economy, it provides a market as important as some countries with three times the population. Canada is the biggest single importer in the world of engineering and electrical machinery. She has now started a vigorous export trade to Britain. She knows perfectly well that, if she is to sell to us, she must buy from us. In the 'last decade she has had the most tremendous surge forward in production. Her gross national product has doubled, with a rise of only 19 per cent. in her labour force. This great period of expansion, I think, is at present temporarily Checked, and she is at a period of pause. She has built up a very considerable industrial pattern. But there are gaps in that pattern which they well realise in Canada, and they would be only too pleased to see us fill those gaps.
If you are going to succeed in exporting to Canada, you must, quite soon, set up a sales subsidiary there; or, if you are a manufacturer, do part of your manufacturing there. I am told on very good authority that there is probably room in Canada now for 3,000, and upwards, new plants, small or middle-sized, or
sales subsidiaries, an enormous part of which could be furnished by this country. The figures of exports to Canada improved slightly last year. However, it is a fact that while, since

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the war, 5,000 United States firms have set up subsidiaries in Canada, only 1,000 subsidiaries from this country have been set up. I admit that the two figures are not really comparable, and that there is time to make up lost ground, but I do not think there is too much time.
A great deal has been said by other speakers about how much easier it is to sell at home than it is to sell abroad. Of course it is. I should like to give your Lordships some of the difficulties you run into when you are tackling the question of exporting to a country like Canada. Those who have known Canada over the last quarter of a century must have been struck by one thing in particular, more than any other—the steady growth of a clear-cut national identity. There is an equally clear-cut Canadian taste in goods, and the like, and a way of doing things. If you do not meet that taste as an exporter, then you will not sell your goods. In fact, you may have the right kind of goods; but if the
package which contains them does not meet their taste, similarly you may fail to sell them. In this matter the Americans have enormous advantages over us. They have proximity. Quite a lot of what they export to Canada is really surplus—the overspill from their own home market. This is landed in Canada, many have told me, at practically cost price, as a form of advertisement.
My Lords, nothing "sells itself" in Canada; you have to go out and sell it. The tempo of advertising is something which has to be seen to be believed. It is said that a Canadian housewife is confronted by 700 different advertisements every day. In these days no cause is so just that its justice is apparent. If you do not make a case, it is held that you have no case to make. That is the kind of thing you are dealing with in Canada. A tremendous number of people have gone out there to try their luck in the export trade and have never really armed themselves with these simple facts. They stumble here and stumble there; and they come back, in rather a huff, and say that there are not enough prospects there. I think many people do realise that it is essential to make a very careful sales survey of that country, and they are somewhat appalled at the size of it.
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There is no doubt that it is undeniably large.
I recently heard a story of the Canadian High Commissioner, on a visit to Germany, talking to a young man in a Canadian unit who had just been posted back to Canada. He said to this young man: "I expect you will be very glad to be getting home again?", and this young soldier replied: "I am very much nearer my home where I am. My home is in Newfoundland, and I have been posted to Vancouver". My Lords, only too many people take a half-hearted approach to the export trade to Canada, and do not realise that to do one of two things is bound to end in failure. One is to send out a catalogue of goods suitable for our own home market, paying no regard to differences of climate, taste, and all the rest of it. The second thing is not to send one of their top men, as the noble Lord, Lord Jessel, rightly insisted, but to send somebody who is more easily spared, which in itself is a rather suspicious circumstance, who then decides to try somewhere else, because Canada is not for him.
There are others who shipwreck on a most extraordinary fallacy. Relying on the immensely strong bonds of friendship which exist between our two countries, they imagine that Canadians will overlook shortcomings in styling, delivery or price just because of this great friendship which the two countries enjoy. My Lords, affection is a great thing, but it is not a motive for buying. If your Lordships go into a shop and have to choose between two different articles, I do not think you are influenced by the warmth of the treaty relations existing between Her Majesty's Government and the country which manufactured the articles. You will, in fact, buy the best article at the best price.
The burden of the point I am making is that I do not think we have exploited the Canadian market anything like so far as we might. But our competitors the Germans, the Italians, and the Japanese, who possess no advantages that we do not possess ourselves, have gone ahead at great speed and continue to do so. As has been pointed out by other speakers, the most admirable machinery exists in Britain for finding out about this and other markets. We have the services of the Board of Trade

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and the Dollar Exports Council. Then, so far as Canada is concerned, we have the High Commissioner's Office, the Trade Commissioner, the Agent General's Offices, the Canadian Banks, the chambers of commerce, and many other bodies. We do not need any more machinery. All the advice we require is there. If I were replying to this debate on behalf of the Government, I think I should wonder what constructive reply I could give. It is difficult to see how the Government could take any dramatic step.
A great deal has been said (and the noble Lord, Lord Peddie, referred to this in his admirable maiden speech this afternoon) about exhortation having considerable shortcomings. The noble Lord said that incentives, in one form or other, should be given, and I am tempted to think that what the noble Lord, Lord Jesse', said, is the answer. On this question of threats and exhortation, a friend of mine told me the other day that he went to see an acquaintance of his who was in hospital in North America, and he saw written up, or printed, on the wall a large notice which said "Positively no smoking". Below that notice, and plainly more recently printed, had been stuck to the wall with sticky paper this exhortation: "Please don't smoke; it makes the patients envious". On a table underneath that was an ashtray.
I was absolutely delighted to hear the noble Lord, Lord Mills, say that the Board of Trade are to step up their expenditure on trade fairs. The big firms can do their own advertising and be their own shop windows. What we want, as the noble Lord, Lord Polwarth, has just said, is to associate a much wider range of different-sized firms with the export drive. In many cases small firms cannot afford to send out to a country like Canada a representative who can spend a long time studying the market. I should like to see the Government go deep into their pockets and make it possible for small firms to exhibit their products at the important trade fairs, which take place several times a year in Canada, and also in other countries. They can exhibit their goods at a very cheap rate, and this amounts very nearly to a free shop window in Canada. Almost for certain the
goods which they would exhibit in Canada would not be
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saleable in their existing form; but Canadian buyers would probably say to each representative: "I like the look of that. It will have to be a different colour, stronger, lighter, and will have to be advertised. If you can do that, I think we can find you a market". The more we exhibit our goods at trade fairs, and the more financial help the Government give us, then the easier it will be to export.
I have said that this is an extremely appropriate time to go into Canada, which is now having a pause between two periods of expansion. It is easier now to buy land and buildings, and to recruit a labour force, than it has been, and easier, I am convinced, than it will be in the future. Our competitors—the Germans, Italians and Japanese—are making great headway in this market. My advice to firms in Britain who are turning their eyes to Canada (and I hope that an increasingly large number will do so) is: Send your top men over there to find out what the Canadians want, and decide whether you can make it—and send them now.
4.51 p.m.
THE EARL OF DUNDONALD: My Lords, I am not going to speak for long to-day, as many of my points have already been covered by speakers before me. I should like wholly to support the Motion of the noble Earl, Lord Bessborough. My interest in speaking to-day is that, like many other noble Lords, I am concerned with exporting. I am a director of a private group of companies which are entirely concerned with exporting British engineering products to Scandinavia, to some countries in the Middle East and to Central and South America.
A crusade is an admirable idea, but my contribution to-day is going to concern the help of which I feel the manufacturer and exporter still have need. I am sorry that the noble Lord, Lord Nelson of Stafford, is not here to speak on the subject of credit, because I am sure he would do it much better than I. I mentioned one or two aspects of this matter in my maiden speech in your Lordships' House a few weeks ago, and now I should like to revert to one aspect in particular. The Government Export Credits Guarantee Department are much improved in their flexibility and in their attitude to manufacturers

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and exporters, but I understand that their present attitude to long-term credits is that they will not go beyond a certain period in years, usually seven years, unless they can receive proof that a foreign competitor is offering like terms. My point here is this. The proof that a foreign competitor is offering eight, nine or ten years' credit is often difficult, even impossible, to obtain, and I should like the Government to give an assurance that, if a customer says that he wants ten years' credit and that he has been offered these terms from a foreign competitor, our organisation, the E.C.G.D., will match them. I am not asking that the Government should lead a credit race; I am asking only that the British organisation for insuring the export trade risk should equal that of other countries. Competition, particularly in the heavy engineering field, all over the world, is now desperately keen.
The subject of taxation has been mentioned by the noble Earl, Lord Bessborough,
and by the noble Lord, Lord Shepherd. Personally, I very much doubt whether it will ever be possible to establish separate scales of taxation for firms engaged in different types of business, but where I am sure the relief and the incentive are required is for the individual. I raise this matter now because the Budget is not far distant in another place. If an executive goes abroad on a long and extensive trip and takes his wife, the view taken by the Commissioners of Inland Revenue is that his wife is unnecessary and her expenses on the trip are not admissible. I entirely agree with the noble Lord, Lord Jessel, that a senior executive must go abroad and get the business. And I am sure that on a long trip a wife is essential. Apart from the strain of travelling and negotiation, the strain of entertaining and being entertained, all through the night usually, is often considerable, and in my view a wife is essential on a long trip of this sort unless her husband is to arrive back with an upset, or even ruined, stomach and incur a large doctor's bill, for which he cannot claim any relief.
Moving on from here, I come to the whole subject of surtax. Putting it simply, what incentive is there at the moment for a young manager or a young executive to rise and improve his status,
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with the surtax level at £2,000 a year on a joint or individual income? I hope that the Government will take note of these points concerning taxation before the Budget announcement is made in another place.
Lastly, there is the subject of representation abroad, about which much has been said. I will confine myself here to one point, as everything else I was going to say has been covered. We know that there are now Ambassadors and commercial counsellors or attachés who are business men. Our Continental competitors are bringing into the staffs of their Embassies abroad fully-trained business men who have been used to working and are able to work, round the clock in hard negotiation. In the case of the Dutch Embassy in Colombia, recently an executive from Royal Dutch Shell has been appointed in a position of commercial importance—a business-trained, hard negotiator, put there for a specific purpose. I endorse the remarks of the noble Earl, Lord Bessborough, and hope that the Government will give consideration to bringing in, where necessary, people from business into our foreign Embassies.
4.58 p.m.
LORD FERRIER: My Lords, as chairman of a group of companies with a certain percentage of export business, of course I am interested in this subject. It is, however, in much more general terms that I feel bound to address your Lordships this afternoon. Not only did I spend over 30 years trading in the East, but my father, one of my grandfathers and one of my great-grandfathers before me also traded in various parts of the East. To me, it has always been a striking thing that the most important victory of the Nazi and Japanese propaganda service seems to have been the defaming of the British civilian overseas. Snarls about "exploitation" and sneers about "settlers" were mud, some of which has stuck; and I personally believe, with other Members of your Lordships' House, that too little is being done, and has been done, to give people in this country the true perspective about those who are working overseas. Indeed, some organs of the Press perpetuate some of the rubbish of which I speak. I feel that this has a direct effect on our export trade.

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To-day, as never before, the men who sell our goods are our most important export. They are the best medium through which consumer research, about which the noble Lord, Lord Peddie, spoke in his excellent maiden speech, can be done. There was a day, despite the fun poked at the "Jos Sedleys" of this life, when there was a sense of mission about trading overseas: and there was a chance, perhaps an even chance, of making a fortune. Few seem to realise, and fewer still to appreciate, that the great expansion of our exports in the 19th century and in the early 20th century depended as much on the men who worked abroad as on the technical skills which this country employed in manufacturing the goods they sold.
Not only the merchants in every part of the world, but also the soldiers and administrators in what once was the Empire, and who helped to establish the Pax Britannica, set an example and created a climate where trade could develop and industries could be created. The Flag, indeed, followed trade. It is only proper to remember within the four corners of this debate (and in the light of the position to-day we are grateful to the noble Earl, Lord Bessborough, for initiating it) that generations of Britons overseas have, by their industry, their integrity, their skills and their clean living, established a market and
reputation for. British goods and for British services equal to none. I would also express the view, with which I hope many of your Lordships will agree, that they ploughed back into the countries which they served far more than they ever took out of them.
But to-day the gilt is off the gingerbread, and the "cachet"—the challenge to which the noble Lord, Lord Shepherd, referred—which was represented by the chance of working abroad has practically gone; and our lunatic sur-tax system has destroyed the incentive to the individual which made the merchant adventurer to whom we and our trade owe so much. Other noble Lords have mentioned this matter in their speeches, and the noble Earl, Lord Dundonald, said better than I can say what it means to the small man. It is virtually impossible for the small man to-day to turn know-how, which may be his only asset, into cash for himself and his family.
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My Lords, can something be done about these two matters? First, can we rebuild the sense of mission, the sense of adventure for the young man and for the young woman by a more general recognition of the part that work overseas has played and can play in the building of our prosperity and in the payment of wages to our workers? For instance, I welcome the new Department of Technical Co-operation, though I have not had time to work out exactly how that will have an impact on our export business. But the increased establishment of our Overseas Information Service which was announced to-day seems to be a step in the right direction and along the lines which I have felt bound to put forward. But do not let us forget the need for, as it were, a spiritual build-up here at home in regard to exports.
As for our Overseas Trade Commission services and the like, which were also
mentioned by the noble Lord who has just spoken, are our existing establishments strong enough in personnel? I agree with the noble Earl, Lord Dundonald, that that question would seem to be worth looking into. Are the right men there in the right places? Are they well enough paid? I imagine that the official in a Dutch Embassy in Colombia to whom the noble Earl referred is paid a good deal more than a corresponding official in the British Trading Commission. Is promotion rapid enough? Is the differential in terms of pay sufficient to make it worthwhile for officers in Trade Commissions in the tropics and unhealthy climates to stay for longer spells in such climates? I have reason to say, from my own personal experience, that often a move in this service means a transfer to another place of a man who may be just getting to know the job and really getting to know the local people who can serve him best. Is it possible that men are moved about too much? Of course, the rub comes, as we all know, when children begin to grow up' and the inevitable separations loom ahead. Do the people at home (and here perhaps the Press could help) realise how desperately difficult it is sometimes to arrange for the care and education of children when the father and often the mother are abroad? I will not weary your Lordships with an incident that I came across the other

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day in which a curious difficulty, simple in itself, arose which meant a blow to an individual who might have been serving overseas.
I should like to mention one private effort here at home which I believe is deserving of attention, and that is an undertaking called Oversea Service, at Eaton Place. I have been greatly struck by the position that it already occupies as a centre from which intended traders and workers abroad can get up-to-date training in conditions overseas; and I know of one organisation which sends its men and women to this body if they are even being transferred from, say, India to East Africa, in order to obtain a refresher course and bring them up to date with the needs and the language of their destination for their business. This seems to me to have some element of the dynamic for which so many noble Lords have asked.
To turn again to the question of taxation, I hope that the Chancellor of the Exchequer, in his Budget, will produce some adjustment of taxation that will make it possible again for a young man to be a merchant adventurer. I agree with the noble Earl who has just spoken that it seems impossible to imagine that there can be any differentiation in terms of the source of income; but we have only to look back a few days to the appointment of the new General Manager of British Railways to realise how quite ludicrous our system is to-day in cutting out the incentive which should come from earned income. Under the present system it simply does not make sense for a young man to go abroad—unless he emigrates permanently—on his own account. He must have some background and pension, provident fund, allowance or the like, which can come only through his being a unit in a large organisation; and that, despite their dynamism, means that our export trade suffers by reducing the number of people who are prepared to go on their own account.
I will make only passing reference to the problem of double taxation relief, which is a matter on which I believe our Government Departments overseas would do well to keep a constant eye—and I know that they do. But I would suggest to the noble Earl who is to reply to the
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debate that it is worth while to keep before Her Majesty's income Tax Commissioners the fact that businessmen who travel abroad might be freed from pinpricks such as do occur, where men are asked why they should not pay taxation on the meals they save because they have been abroad, and little things like that. This would make a tremendous difference to their whole spirit; and it is the spirit which I feel—and others have expressed the feeling—should be encouraged as greatly as possible.
My next point is related to this in a way, and it is an appeal to all those who make it their practice to run down everything British: they run down British
management. British quality, prices, service and deliveries. We know that there are bad examples. There always will be, and nobody can succeed who does not make mistakes. But I believe that the bad is far outnumbered by the good. We hear so little about the good, and I feel so much with my noble friend Lord Jessel, who asked: why do we not hear more about the good things that go on in British export trade, and not so much about the bad? It is fair to say, and it is the case, that there is plenty of bad quality, bad service and bad delivery provided by our foreign competitors. Can we have some success stories in the Press? Whether it is a management consultant hawking his wares or a Socialist hawking nationalisation—which they are fully entitled to do—let them please remember that our competitors abroad are quick enough to use adverse criticism here to impress upon overseas markets what they claim to be the decadence of our industries.
I am not suggesting any measure of complacency. There is much to be done: better marketing research, better labelling, and better language study, as my noble friend Lord Jessel pointed out. Here again, such organisations as the Overseas Service—with which I have no connection—seems to offer a line of action in the right direction. This House has already in another debate urged the importance of the Overseas Broadcasting Services as a handmaiden to our exports. Let us hope that this improved grant towards the information services will include increased information about trade matters put over the Overseas Service.

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Many of the points I had in mind have been dealt with already, but there are two more which I should like to make. My first is a constructive suggestion relating to the matter of shipping delays. The Port of London is one of our bottlenecks, as we all know, despite the spendid efforts of the Port of London Authority. There is reason to believe that too much short-haul freight is being booked through London. I refer to "short-haul freight" as freight exports to Europe. Why, oh, why, my Lords, are goods sent from Dundee to Hamburg via London? This is happening and I know of one particular instance. I believe that the manufacturers and, above all, shipping agents, among other entrepreneurs, would do well to remember that there are many developing East Coast ports—Grangemouth, Leith, the Tyne ports, and even Ipswich and Felixstowe, from which excellent freight services exist. Every ton shipped from such ports means a ton saved from the bottleneck of London which is busily engaged in its deep-water export loading.
My final point is not altogether a sentimental one, but it is a little that way. It is to urge again a switch to the decimal system for sterling. How much longer have we to wait until we can quote for export in decimals? Your Lordships' House recently pressed this point, as was done in another place, but it occurred to me in the course of this debate that here might be the dramatic touch, the sense of dynamism which would show to this country and to the world that we intend, as I am sure we will, to streamline our export system. It would be positive action in the direction which we all desire—namely, that our export trade should live and grow, as indeed it must if we are to survive.
5.15 p.m.
VISCOUNT AMORY: My Lords, my noble friend Lord Bessborough has done well, I think we all agree, to raise this question to-day of our export performance, because without any doubt it is of all the problems that face our economy the most urgent. If noble Lords will look back at the speeches I made when I was at the Treasury—which I do not at all recommend them to do—they will find that in almost every one of those speeches I emphasised that our continuing prosperity depended more than on any other single factor on the
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success of our export efforts. At that time the figures were favourable, and when that is the case people do not always pay much attention to what one says.
Before, in a moment of mental aberration, I lapsed into politics some fifteen years ago, I used to endeavour to keep body and soul together as an exporter of textiles. My noble friend Lord Dundonald has told us to-day that he considers that a wife is essential to that effort, and that may explain my only relative success in keeping body and soul together. Your Lordships will remember the cynic who said that in days gone by business men often went to great efforts to pass off their secretaries as their wives, whereas to-day they indulge in equally great efforts to pass off their wives as their secretaries.
By any test we are not doing well enough with our exports, either relatively or actually. I entirely, agree with what the noble Lord, Lord Peddle, said to us about that in his excellent maiden speech just now. There seem to me to be two pre-requisites for success here: first of all, dynamism, and secondly, as my noble friend Lord Mills said, competitiveness—that is, the will to export, and secondly, the ability to do so successfully. Under both those headings the situation requires urgent attention. I think there are a certain number of deadly sins, if I might put it in that way, in this field to which, to a greater or less extent, we may be liable. First of all, there is what I have referred to before as our national besetting sin, complacency—our tendency to look for explanations and excuses for any lack of success we may have. Secondly—and this is a point my noble friend Lord Tweedsmuir made just now—we are sometimes apt to think that products which are entirely suitable for the home market ought to be equally suitable to the taste of our customers under very different conditions.
Thirdly—and this is another point the noble' Lord, Lord Peddie, made—it is absolutely fatal to look at the export trade as a kind of overflow from the home market. And, fourthly, there is the notion that I think we are growing out of, that British products ought to sell themselves through our traditional quality. I believe we can pride ourselves that, on the whole, our quality is being maintained, as it

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ought to be. Let us make sure that that always is so. But that does not mean that the goods will sell themselves. May I say one word about the allegation—I do not think it is a deadly sin but, nevertheless, I think it is insidious and dangerous—to which I have referred before, that the best basis for a strong export effort is a booming home market? That is simply not borne out by the facts. The best recent performance that we showed on exports was during a year when there was an expectation, anyhow, that the home market was not going to be quite so buoyant or so profitable, but was becoming more competitive. What I am quite sure about is that a soft and easy home market is a very bad basis for the export trade.
There are two arguments about an expanding home market which must be treated seriously. First of all, there is what I might call the unit cost argument. That is really this: that a rising turnover should produce a reduction in cost per unit and thereby increase the power for us to compete on price overseas. Within limits there is truth in that. But our experience a year or two ago was that when our home turnover increased rapidly, unit costs did come down, but the pull of the home market was so strong that the goods were simply not there to export. The second argument is what I might call the profit margin argument—that a profitable home market enables prices to be cut to meet competition abroad. Again there is obviously something in that, particularly in the field of capital goods, and the trend of modern big-scale production with its astronomically high fixed capital charges lends support to that argument.
Nevertheless, I think it is a little dangerous and, I believe, on balance, a specious argument if it is carried too far. It works reasonably well if you have spare capacity at home, but when there is no spare capacity at home then there is no incentive to seek an additional volume of sales by cutting prices overseas: the temptation then is to live on the comfortable profits of the home market. So I believe that there is actually more truth in nearly the opposite; namely, that the best background is a home market which is expanding but is a highly competitive market showing conditions in which profits are hard to earn.
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Then there is an incentive to obtain all possible increases from higher productivity and to seek an additional volume of sales from overseas business at rates of profit which probably would be comparable to those yielded by the competitive market at home.
A question which is an important one is, what scope is there in the export business for the smaller firms? I think the trend of trade nowadays makes their role more and more a difficult one. That is not to say that there is no outlet there for the output of the smaller firms, but it does make it more difficult for them to operate on their own, owing to the expenses of effective representation and of selling and services. I think the answer for the smaller firm must be found in one or other of these alternatives, all of which involve some form of co-operation. First of all, the sales can be done through an export merchanting firm. Alternatively, they can be done through an export management firm, a new kind of firm which is growing up and which, I think, has a useful rôle to play. Thirdly, the small firms can group together and themselves form a grouped sales organisation. Lastly, there is the straightforward merger between a number of small units into one bigger firm
Another question I think we ought to ask ourselves is, what contribution to this problem of our balance of payments can be made through import saving, which of course in one sense has the same effect as selling more exports. It is not quite so good because the net effect is to reduce the total volume of world trade instead of tending to increase it. In many things which we are now importing, particularly from the Continent of Europe, there are chances of economical manufacture here, with advantage to our balance of payments.
But the limiting factor is our shortage of manpower: after all, that production, producing what we at present import, would have to be done by manpower released from something else. What would not be to the benefit of our economy would be to build up home production which would not represent an economic use of our manpower, one of the most valuable assets we have. That, of course, is one of the limiting factors in encouraging, for instance, all out production of home-grown food and

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feeding-stuffs, a subject which we shall have an opportunity of debating next week. Touching on manpower, we are at present in a very tight position, taking the country as a whole, and of course manpower has a most important bearing on the problem of getting more exports. Manpower for both increased exports and for increased import-saving production must come either from higher productivity per
worker or the release of manpower which is currently employed on production or services for home consumption. With those two alternatives, I think it is clear that the first 'one is something for which we should go absolutely flat out in every way we can, seeking every opportunity for a real drive for higher productivity, because there the advantages to the economy are entirely unalloyed.
I think also that the moderating of increases in home consumer demand has at times an essential part to play. Your Lordships will note that I said consumer "demand" and not supplies for the consumer, because if one tackles it by trying simply to limit the supplies to the consumer, then the shortage will be made up by increased imports, unless you have physical controls.
Any discussion of our export performance should, I think, cause us to pay a tribute to the work of what is now known as the Western Hemisphere Export Council, to which my noble friend, Lord Rootes, is giving such effective leadership and of which body my noble friend, Lord Polwarth, is a distinguished member; Lord Polwarth also renders great service to Scotland in helping to bring new industries to Scotland.
LORD SHEPHERD: My Lords, before the noble Viscount leaves this matter, which is very important, can he suggest how we can limit the power of the consumer? It has been tried in the past with hire purchase restrictions and the like, and what we have found is that if we cannot buy a refrigerator we go and buy a few more dresses. We never seem to be able to dampen down the total demand. I wonder whether the noble Viscount could assist on this point.
VISCOUNT AMORY: My Lords, I think I have assisted noble Lords and the rest of the country by succeeding in damping down a bit of demand a year ago. I did it partly by monetary action and
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partly by fiscal action, but if that action had not been taken I am quite sure we should now be seeing prices rising faster than they are, and our resources for export even more strained than they are at the present time. It can be done, and if I were still in another capacity l should be having another shot at it in a few weeks' time.
I was referring to the Western Hemisphere Export Council, and I would also applaud the energy with which the Federation of British Industries and their President, Sir William McFadzean, has got under way the new Export Council for Europe, which I am sure has an important role to play. One thing I ant sure we must always expect is for the pattern of our export trade to be continually changing. Those traditional exports by which we used to earn our living are giving place 'rapidly to a new pattern, because they are now largely manufactured, for obvious reasons, by our erstwhile customers. So we must be all the time on our toes, looking for opportunities to develop newer products and newer processes, and the most complicated, the most intricate and the most difficult projects, because those are the ones that suit our skilled manpower and our resources best.
If I may sum up the action that I think would be helpful at the present time, I would mention these points. First of all, we must change our attitude in a way which will result in everyone in industry regarding the export trade as the very heart and life-blood of our industrial and commercial activities—something which, unless it flourishes and is strong, the whole of our national body will wither away. Secondly, and most positively, I think, we need an agreement between the employers and the trade unions that our gains in productivity shall not be wholly absorbed by higher consumption at home, through either wage or dividend increases, but shall be devoted to strengthening our selling effort abroad. Thirdly, I think we must have, as many noble Lords have already said, far more vigorous attention paid to salesmanship, with everything that is comprised within that term. On the production side, I should like to see greater attention paid to research and development, which I believe is the source of all major improvements in industry.

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Then, if I may dare to mention the field of taxation, as I have said before, I think further relief in direct taxation on personal incomes is urgently necessary even, if need be, at the risk of an increase in indirect taxation. I would even be prepared to look again at the most difficult question of a possible variation in profits tax related to the turnover of export businesses; though I am deeply conscious of the great difficulties of doing that, and it is a course of action that has never been favoured by the representative organisations speaking for industry. So, though I should be prepared to look at it again, I would not be sure what the result would be. Lastly, and perhaps most important of all, I think we need the ruthless removal of all influences which tend in any way to featherbed our industry, either through excessive tariffs or restrictive practices, either by trades or by trade unions, or the subsidising or bolstering up of moribund, inefficient or redundant industries.
My own limited experience is that there is no substitute for enthusiasm for exporting and leadership on the part of those at the head of a business. When the heads of the business are export-minded and show by their actions that that is what they are keen on, then their enthusiasm percolates downwards and imbues the whole staff. If we look at the shining examples of the firms that are doing best in exporting we shall find in all cases, I think, that the vigour and the determination is set as an example from the top. So let me finish by repeating again what I thought were the wise words of my right honourable friend the President of the Board of Trade—a Minister whom it is wholly unjust to accuse of anything like complacency. He said:
"Buoyant exports are not the result but the prerequisite of a buoyant home market"
I think that is keeping the thing in perspective.
I agree with my noble friend Lord Bessborough that a new attitude and a new sense of urgency is needed. I believe that public opinion in our country always reacts when it understands the need for action. We have no lack of brains, no lack of energy, no lack of resource and no lack of enterprise; but we do need to ensure that this great
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potential which we have is harnessed to the export effort. I hope, therefore, that the Government will continue to neglect no opportunity, by information, publicity, active help in their appropriate fields, and by recognition and honour to those who do well, to make a real impact on the minds of all sections of our people, and to impress upon them that the fulfilment of all our hopes and our aspirations, our place in the world and our livelihood itself, depend on the success of our endeavours.
5.37 p.m.
THE EARL OF LONGFORD: My Lords, we have just listened to a deeply considered and most arresting speech by the former Chancellor of the Exchequer. I entered the House, having been detained elsewhere, just before he rose, and I have no intention whatsoever of making a speech. My experience in the Division Lobby yesterday does not lead me to suppose that I could sway the House without adequate preparation. But I felt that it might seem discourteous if we passed immediately to the speech which we are looking forward to hearing from the noble Earl, Lord Dundee, without one word from this side to explain why no one is going to wind up for us. The noble Lord, Lord Latham, had intended to perform that office, but unfortunately he has been taken ill. Therefore, I am simply making an apology on his behalf and on behalf of the Opposition.
I understand from my noble friend Lord Lawson, who is such a fine judge of these things, that we have listened to an altogether remarkable maiden speech from the noble Lord. Lord Peddie, about which the noble Viscount, Lord Amory, was most generous. I gather from Lord Lawson that he was most weighty and deliberate, and made a great impression on the House; and I know that Lord Shepherd also spoke very well. As I have said, my real purpose in rising is simply to explain why, in fact, no one is going to wind up on behalf of noble Lords on this side of the House, but I would entirely echo the words that have fallen from the noble Viscount, Lord Amory, about the urgency of this new attitude towards export trade. I am not saying that we are any keener than noble Lords who have spoken; but certainly no one can be keener than we are.
5.39 p.m.
THE EARL OF DUNDEE: My Lords, your Lordships have listened, I think, to a very good debate and, in particular, to a most remarkably acceptable maiden speech by the noble Lord, Lord Peddie, on which I should like to offer him the congratulations of the House and our hope that he will often speak again on many subjects. The noble Lord began by expressing his regret that he had not any experience of poetical expression. But when I listened to his admirable prose, I could not help wishing that he would try to write a little poetry, too. If he attempted it, he might find he was not so bad as he thought.
One thing the noble Lord said with which I very much agreed was that exporting was not only the business of giant firms and banks, but that small men and medium firms had collectively a much greater part to play. Indeed, it is they whom we particularly wish to help and encourage in our export campaign. Since the noble Earl who moved the Motion recorded (not his own opinion I think, for he did not endorse it, but somebody else's report) that only the noble Lord, Lord Rootes, received proper attention from our Embassies in, foreign countries, whereas sometimes small men who went out were not shown so much deference, he may like to know that my noble friend the Foreign Secretary has lately sent a circular to all our Ambassadors in all foreign capitals impressing upon them the great importance of giving the fullest facilities, help and entertainment to all kinds of persons going there with the purpose of expanding British exports.
I should like to say how very much I regretted to hear just now about the indisposition of the noble Lord, Lord Latham, to whose speech I had been looking forward with keen anticipation, as I always do. I earnestly hope that his indisposition is nothing very serious, that he will have a speedy recovery, and that we shall soon see him back again among us. I am grateful to the noble Earl, Lord Longford, for formally fulfilling the function which was to have been fulfilled by the noble Lord, Lord Latham.
Some of your Lordships have made interesting observations this afternoon upon the general economic situation, and
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I hope that we may, as we usually do, have a debate on that subject after the Economic Survey has been published. If I rightly understood the intention of my noble friend Lord Bessborough in moving this Motion, it was, I think, not so much to have a general debate on the economic or export situation as to call for some special action to make the British people more conscious of their need to earn their living by exports. Exports have been a vital necessity in the economy of Britain—very much more so than in that of any other country—for more than 100 years. Why, then, is there any special need to call attention to this basic, elementary and fairly well-known fact in our economy in 1961—or perhaps I should say in 1960, because it is about a year now since Her Majesty's Government started the drive to stimulate the will to export more than we have been exporting? But in the year 1960 we exported more than we have ever done before in our history. 1959 was a record, a "boom" year; and the exports for 1960, in spite of the fact that we had a set-back half way through the year, were actually 6 per cent. higher for the year as a whole than for 1959.
Why are we not pleased with this all-time record? As your Lordships know, there are obvious pitfalls in founding an argument on percentage figures—though we all have to try to do it sometimes—which, I am sure it is not necessary for me (to explain to your Lordships. But it is true to say, as my noble friend Lord Bessborough said at the very beginning of his speech, that lately a number of other exporting nations, particularly Germany and Japan, have been doing relatively better than we have done.
I believe that most of your Lordships would agree that some competition in trade is a good thing and that in the long run a reasonable amount of fair competition is to everybody's advantage. Some of your Lordships have talked about being "knocked out of the export race." I prefer not to use a phrase like "export race" because I do not believe that the growth of world trade ought to be regarded as a kind of contest in which there is only one winner. But it is quite clear that we can export a great deal more than we are doing now; and it is also clear that if we want to give the economic help (which I know we all

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want to give to the undeveloped parts of the Commonwealth) upon a scale which is large enough to be really effective—not just a consignment of agricultural machinery here, or an irrigation dam there; but sustained and substantial help—then we must export more, and a great deal more, than we are doing now.
When we give help to a backward country, whether by a gift or a long-term loan, we do not get paid for a long time. That creates an adverse balance against us, and in order to redress that adverse balance we have to export still more to
highly developed countries which can pay us at once for what we sell them, so that we may not become insolvent as a result of our own generosity to undeveloped countries. We are only a small island, with not very great natural resources, and we must earn money by trading with countries which are economically strong in order that we may give more to countries who are economically weak, while at the same time maintaining in our own country a standard of life which most certainly could not be supported from our own soil.
International co-operation in world trade is not and probably never will be as good as we should like, but it has come on a great deal in our own time. The fluctuations or recessions in world trade which we have had in the 1950s and 1960s are troublesome hindrances to our expansion, but they are not at all to be compared with the severity of the world depressions—which some people called "economic blizzards"—which we used to have before the last war; and to anyone who is more than fifty years old I think it must still seem a little odd that we can have a fairly widespread recession in world trade such as we are having now and at the same time have full employment in Great Britain; indeed, not only full employment but a serious shortage of labour, and most particularly of skilled labour, as my noble friend Lord Amory pointed out, which is a very severe impediment to our expansion and, particularly, to our export trade. We cannot get enough skilled men to make what we could sell abroad, and one of the problems which industry will have to
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face is the problem of making a more economical use of the available labour supply.
But, my Lords, this trading recession which we are still in, as so often happens, followed a downward trend in world commodity prices which coincided with certain disinflationary measures in the United States of America. Although the economy of the United States is immeasurably more self-contained than ours is, it is so gigantic in size that even that part of it which is devoted to overseas transactions is perhaps the most important single factor in stimulating or depressing the commerce of the free world. Whatever we may think about American policies, I think we shall all agree that there is no country which has ever done so much to help the economy of the others as America has done.
THE EARL OF LONGFORD: I believe that my noble friend Lord Amwell wants to raise a point.
LORD AMWELL: My Lords, I am sorry to intervene, but may I be forgiven for putting a question before it passes from my mind? The noble Earl put the point that it is accepted, and there is no question about the fact, that we cannot sustain a decent and healthy standard of life from our own soil. Is he aware of the fact that at the last review of the British Association for the Advancement of Science the exact contrary was said by at least some members of that Association? It is not so much a cliché as all that. There is a large technical opinion in favour of vast development of our own agriculture and our own production of our own food.
THE EARL OF DUNDEE: My Lords, I am most interested to hear that, but it seems to me that the people who thought so were perhaps a little optimistic.
My Lords, regarding this recession, what the Americans are trying to do is to help the world economy and, at the same time, so far as they can, preserve the stability of their own internal price level, which is exactly what we have always been struggling to do here. This world recession which we are now in is not likely to last for very long. In fact, we may be almost at the very end of it now. While it does last, we should probably not expect any sensational rise in

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British export figures, although I think it should be noted, without any complacency at all, that the January and February figures for this year are by no means discouraging.
Loin SHEPHERD: My Lords, may I interrupt the noble Earl? He is talking about world trade recession. The figures I have in front of me from the report of Overseas Trade, issued by the Board of Trade, for February, 1961, show that the world export of manufactured goods in nine months of 1960 is 18·3 per cent. over and above the figures for the same months of 1959. When looking through the figures one sees that, apart from 1958, they are all pluses. I cannot understand the noble Earl when he is talking about a world trade recession at the present time.
THE EARL OF DUNDEE: My Lords, there was a falling-off in world trade which affected us and everybody else after the first quarter of 1960. But, as I have told your Lordships a little earlier, so far as our own export figures are concerned, in spite of that, our total exports for the whole year were greater than those in 1959. There is not what we should have called before the war "a depression", with heavy unemployment; but there is now a recession in world trade, and for that reason there is not likely to be a
striking increase in anybody's export figures until that recession has come to an end. Indeed, we may find, when we get the next available figures, that those countries which have been mentioned as doing so much better than we have, may have been considerably adversely affected by this trade recession.
But what we have all to do now is to prepare ourselves to get ready to take advantage of the turn of the tide when it stops ebbing and begins to flow, as it will assuredly do very soon. One cannot make any kind of exact forecast on that kind of matter, but it may very likely be before the end of this year. And now is the time when we must get ready to take advantage of the trend of world trade when it turns upwards.
My Lords, the Government are very grateful to your Lordships for all the suggestions which you have made in this debate, and also for such publicity as your Lordships' debate may give to our
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export drive in the country. All the suggestions which your Lordships have made will be very seriously considered by the Government. There are, of course, some which will need a good deal more looking into before I can say anything in your Lordships' House about them. Some of your Lordships have raised the question of whether we could not do certain things by control.
My noble friend Lord Bessborough suggested that we might renew the compulsory priority given to exports ten or twelve years ago, which would, of course, mean the re-establishment of really strict controls. The noble Lord, Lord Shepherd, made some suggestions in the same sense. I think that is perhaps a wider
question which had better be left for any future discussions we may have. All I would say, as I have often said before, is that the Government have no doctrinal prejudice against control. If we decide not to have a control, it is not because we think it morally wrong, but simply because it seems to us that it will not have the result of increasing expansion or export trade.
A large number of questions have been asked and pressed about taxation and various means by which we could help exports by giving various kinds of tax advantages. The noble Lord, Lord Ferrier, my noble friend Lord Dundonald and, of course, the noble Earl who moved the Motion all said a good deal about that. My noble friend Lord Amory also suggested that various things might be done. As Lord Amory knows, until last year I had the duty of justifying all his deeds to your Lordships in this House, which I did not always do as I ought to have done. But I always agreed with them. I always thought, whatever he proposed, that they were absolutely right. My only difficulty was that occasionally I did not know what it was that he had done until about two minutes before I had to answer a perfect barrage of questions from your Lordships about it. I am sure that my noble friend, better than anyone else, will understand that I have to be very careful not to go putting unauthorised ideas into your Lordships' heads.
There is one thing that I can say, which I think my noble friend Lord Ferrier was particularly anxious about, and that

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is on the penalisation by taxation of British salesmen on return from abroad. I know that I can say something about this, because my right honourable friend the Chancellor of the Exchequer said, on February 6 last, in another place [OFFICIAL REPORT, Commons, Vol. 634, col. 61]:
"We can avoid irritants to exporters over expenses, and I intend to do what I can to meet reasonable complaints on that score."
Your Lordships must interpret this oracular announcement as you think best. But, of course, your Lordships' representations on the subject of taxation will no doubt be considered by my right honourable friend.
Lord Bessborough made a particular point about education. We have that point very much in mind—the question of what more might be done in schools to make children aware of our position and our history as a great trading nation, and of the vital importance of our export trade. Of course, the curricula of schools are the responsibility of the local authorities, not of the Ministry of Education, but the Board of Trade are considering whether we could gain anything from an approach to schools to suggest a greater emphasis on teaching an outlook of that kind.
My Lords, I was delighted to hear from my noble friend Lord Tweedsmuir an argument about the necessity of having more trade with Canada. As your Lordships remember, the noble Lord's father, for some years before and during the war, was Governor-General of Canada, where my noble friend spent part of his upbringing, and it is a subject we always like to hear him talk about. When I went to Canada for two months on a Commonwealth Relations Office tour at the end of 1956, I formed impressions which thoroughly agreed with what my noble friend said. Indeed, I made a speech every year in your Lordships' House on exactly the same lines as my noble friend Lord Tweedsmuir until I joined the Government, and I do not think I disagree now with what I said then; but I am very glad to hear it said so much better by my noble friend.
My noble friend Lord Dundonald has, as your Lordships know, lately returned from
a tour of South America, where he has trading responsibilities which are of very great value to this country. I am
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sure we all sympathise with what he said about the necessity of having one's wife with one on tours of that kind. It is, indeed, of the highest importance, not only to our digestions but for other reasons, too. I am glad to think that my noble friend had not only this good fortune on his recent tour but that, soon after his return from it, he was presented with a son and heir, in respect of which I should like to give him your Lordships' best congratulations.
I was very glad to hear the speech of my noble friend Lord Jessel about the popular Press. I do not think that is a matter in which the Government can take any kind of direct action, but I do think it is very important that this kind of thing should be featured and advertised by newspapers of all types—by what is called the quality Press and the popular Press. I should also like to thank my noble friend Lord Polwarth for what he has said. He is connected with so many institutions which are concerned with this export drive—the Dollar Exports Council, the Exports Council for Europe and, of course, the Scottish Council.
LORD POLWARTH: My Lords, might I interrupt the noble Earl just to say, not the Exports Council for Europe, but the Scottish Council and the Dollar Exports Council?
THE EARL OF DUNDEE: But he knows much more about the Exports Council for Europe than most of us, and I was therefore particularly grateful to hear what he had to say about it. I was also grateful to hear him say that the export drive was not a failure. I do not think it has been a failure, although, as my noble friend Lord Mills said, we are in the early stages of it, and we are not going to be complacent about it in any way. I think, as Lord Polwarth indicated in his remarks, that the most important thing we have to do is to direct the attention of business men who might export more than they are exporting to all the help and assistance which they can get. My right honourable friend the Minister of State, as I think your Lordships know, sent 30,000 communications to business firms—all those firms who employ, I think, over 25 men—and about one-third of them have replied saying that they would like information and

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to be put in touch with the people who can give it them: that is, either regional officers of the Board of Trade or the Export Credits Guarantee Department, or our representatives, maybe information officers, trade commissioners or Embassies abroad.
As for making speeches, which a large number of members of the Government have to do, my noble friend Lord Bessborough suggested that we have been doing this until we are blue in the face. I made one or two speeches, and my face did not feel at all blue afterwards, but I was very encouraged by the lively interest which was shown, particularly by those chambers of commerce which had just specially appointed a new export committee in order to help their members with this export drive.
My noble friend Lord Amory, whose intervention we appreciate so much, mentioned the difficult question of the relationship between the home market and the foreign market—which, of course, he knows far better than I. Whatever we do, we are always attacked. If we do not try to discriminate in favour of exports, we are condemned for having an unplanned economy. On the other hand, if we try to restrain excessive demand at home we are accused of creating stagnation. What think we should all agree on is that, on the one hand, a flourishing export trade must be based on a flourishing home market. On the other hand, if domestic demand becomes excessive, more than our capacity to produce can meet, then the effect will be inflationary, and that will have the worst possible effect on our exports; and, of course, my noble friend, having been at the Exchequer, knows probably better than any of us how very difficult it is to maintain exactly the right balance between too much restriction on the one hand and inflationary pressure on the other. It is the Government's duty to try to maintain that balance, as much for the sake of our export trade as for anything else.
But the achievement of a higher volume of exports from this country depends ultimately on an attitude of mind on the part of the business community, and that is why I do not think it is right to say that exhortation or advertisement, without legislative action
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or controls, is necessarily futile or ineffective. I do not think it is at all. I think, as my noble friend Lord Polwarth said, it is having a very good effect, which we hope will, before long, show itself in practical results.
It is the attitude and the actions of business men and workers which will exercise the decisive effect, and we will go on encouraging them to expand their exports in all parts of the world, I hope with more judgment and more discrimination, perhaps, than Lord Bessborough's young man, whom he adapted from Longfellow and who had a banner wit h the device, "Export or die!" What always annoys me about this young man is that he never had the sense to tell anybody where he was trying to go, and I am afraid he would not quite have agreed with the Prime Minister, that exporting can sometimes be great fun. The only thing that was clear to me about the story was that, whatever else might have happened, this young man did not succeed in exporting anything at all. He would probably have done far better if he had had the sense to remain in the arms of the young lady who so kindly invited him to stay.
We certainly do not want British exporters to practise unreasonable austerity like he did. We want them to expand their business in the spirit of joyous adventure, as I think most of them do. All we want now is that they should be a little more adventurous than some of them have been for the last few years. We are grateful to all the organisations which have been mentioned in this debate—the National Union of Manufacturers, Chambers of Commerce, the Institute of Directors, Trade Unions, and many others—for the support which they are giving to our export campaign, which we certainly intend, with their advice and their help, to continue.
6.11 p.m.
THE EARL OF BESSBOROUGH: My Lords, I hope it will be agreed that it was useful to put this Motion on the Order Paper. Personally, I think that this has been a most satisfactory debate. All of the speeches have been brief and to the point, and many most useful suggestions have been made. I should like to retain the word "crusade", despite the remarks of my noble friend Lord Tweedsmuir, who suggested that the word "campaign" would have been

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better. I think this is a crusade, and we must carry the Cross against one of the deadly sins which were mentioned by the noble Viscount, Lord Amory, particularly the sin of lethargy.
There is no doubt whatever that all noble Lords present recognise the seriousness of the situation. The noble Lord, Lord Shepherd, spoke of the balance of payments, as I did myself; and we all recognise the seriousness of that problem. We recognise that there must be a dynamic economic policy, and I am glad that there has been some support, at any rate from the noble Lord, Lord Shepherd, for the idea of reviving an export priority scheme. I am also glad that the noble Lord, Lord Mills, and the noble Lord. Lord Shepherd, referred to the campaign which Sir Stafford Cripps himself launched so many years ago. It is the same story; for, fundamentally, our position has not really changed. We are at the moment, as Lord Mills said, giving aid on a greater scale than our earnings. But it is quite clear, from the replies given by the Government spokesman to-night, that the Government are doing a great deal. The Government export services are doing much, and I am very glad to hear that there is a possibility that the various services may be combined.
I did not accuse my right honourable friend the President of the Board of Trade of complacency, but I thought it was necessary to say that this had been said. I do not think the Government have been complacent. I should just like to see a little more imagination, spirit and energy in their appeals to us in this country. I was glad that the connection was made with the question of aid for the emergent countries. It was made not only by the noble Lord, Lord Mills, but also by the noble Lord, Lord Peddie, in his most remarkable maiden speech this afternoon—one of the best maiden speeches we have heard for some time. I hope that we shall hear much more from him. He took his plunge extremely well; let us hope that he plunges in again very often. He, too, realised the seriousness of the situation, and it was he who quoted the comparative figures of the increases in German, Italian, Japanese, and even French, trade, which had risen at a far greater rate than our own. I agree with
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him, however, that we must not be pessimistic.
The noble Lord, Lord Jessel, made a great point about the smaller firms and the importance of sending out senior executives. I would add on this point that I have the impression, from going abroad—and so have some of my colleagues—that other countries send out stronger export teams than our firms send. They send out their top men, with a team of men around them. We, I think, often send out only one man, who feels rather out on a limb and then has to refer back to this country.
I was pleased to hear from the noble Lord, Lord Polwarth, who was the first of a series of speakers from across the Border. I am always impressed by the number of speakers who come from across the Border and speak in your Lordships' House, and some of them made speeches which carried very great weight. We all know the great value of the contribution of the Dollar Exports Board, and the immense
energy which Lord Rootes has put into it, ably supported by the noble Lord, Lord Polwarth. I was very glad that my noble friend Lord Tweedsmuir spoke of Canada, and I am sure that we must try to meet Canadian tastes.
To revert to speakers from across the Border, the noble Earl, Lord Dundonald, spoke of longer-term credits, and agreed with me, I think, that more should be done. I hope that I am not detaining your Lordships too long with these final words; I must remember that I am not a Government spokesman winding up the debate. Then I was so glad to hear that robust and well-informed speech from the noble Lord, Lord Ferrier, who has had very great experience overseas, especially in the Orient. I am glad it was he who suggested that we should adopt the decimal system; that would indeed be a dramatic gesture.
Finally, there was the noble Viscount, Lord Amory, who not only gave us his humour about wives and secretaries but also gave us a great deal of substance. As he said, we must have the will and ability to sell; and it is undoubtedly true that it is advisable that the home market should be highly competitive if we are to improve our exports position. His speech contained many other good

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points which I feel would bear repetition, but I know that your Lordships will read it in Hansard with the greatest possible interest. I am particularly pleased that he again referred to the possibilities of reduction in personal taxation, and even, maybe, in profits tax. Let us hope that a former Chancellor of the Exchequer gives a hint of what may soon come.
The noble Earl, Lord Dundee, in winding up the debate, gave us a most important assurance about the Foreign Secretary's circular to Ambassadors. I am very glad to hear that that has gone out. I was also glad to hear of the Minister of State's letter to firms in this
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country, which has had such a favourable response. It is still very obscure in my mind whether or not we are going through a world trade recession. There is evidently no agreement between the noble Earl and Lord Shepherd on that point. All I would say is that I am sure your Lordships will agree with me that we must continue this campaign—and let me call it a crusade. In expressing that hope, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at twenty minutes past six o'clock.