HL Deb 26 November 1964 vol 261 cc949-55

4.3 p.m.

THE LORD PRIVY SEAL (THE EARL OF LONGFORD)

My Lords, with your Lordships' permission, I should like to repeat a Statement which my right honourable friend the Chancellor of the Exchequer has just made in another place. Perhaps your Lordships will allow me to use the word; of the Chancellor of the Exchequer. They are as follows: "The House will recall that in my statement on Monday, I said that the Bank of England were in close touch with other Central Banks with the object of maintaining co-operation. Yesterday evening the Bank announced the result of these endeavours.

"Three billion dollars (£1,070 million) have been placed at their disposal by eleven Central Banks to defend sterling. This massive support, the promptness of which we appreciate, demonstrates the vital importance of the strength of sterling not only to ourselves but to the monetary and trading systems of the world. These credits are separate from the assistance already received which will be repaid from the drawing of one billion dollars (£357 million) which we intend to make next week from the International Monetary Fund.

"This concerted action of the monetary authorities of the Western world will demonstrate to those who have been influenced by rumours about the future of sterling that their fears are groundless.

"A stable currency is the product of a strong economy. The value of these credits is that they give time to press forward with the Government's longer-terms plans to strengthen the economy.

"The Government intend that we should be seen to be paying our way overseas as well as at home. Firstly, therefore, priority is being given to increasing our exports through measures that are being urgently worked out as well as those already announced. Secondly, a strict review is taking place of the whole range of Government expenditure including overseas defence commitments in order to secure a reduction in the burden on our balance of payments. Thirdly, we intend that resources of skilled manpower and of capacity should be released in order to put them behind the export effort.

"The Government are confident that these measures, together with others already announced and begun, will enable us to pay our way.

"The new credits announced yesterday are a measure of the confidence which has been shown in Britain and in our ability to achieve our objective."

I hope that the House will feel that I was right to make this Statement here, even though it is entirely of a financial character. The Chancellor of the Exchequer may well be giving carefully considered replies to supplementary questions elsewhere; but I hope the House will not wish me to to try to compete with him in this House this afternoon.

A NOBLE LORD: Why not?

THE EARL OF DUNDEE

My Lords, we are grateful to the noble Earl for repeating this Statement. I do not think this is the right occasion to discuss the background of the Statement, which we shall, no doubt, have an opportunity to do in the near future. Nor do I wish to cross-examine the Government now about their long-term plans for strengthening the economy which are referred to in this Statement; I do not think that would be useful in this House at this moment. But there is one point on which I should like a little more enlightenment. When the Statement says: … we intend that resources of skilled manpower and of capacity should be released in order to put them behind the export effort". what exactly does that mean? Released by whom and in what way? Does it imply that direction of labour is being contemplated? If not, what on earth does it mean?

LORD REA

My Lords, may I say that we on these Benches also welcome the Statement? I think, from the Liberal Party point of view, it puts us in some little embarrassment, because we wish this Government well and want to see it have a fair run. It seems to me that the unfortunate Chancellor of the Exchequer is being overtaken by events as he speaks. It is not very convincing to say that those who have had fears about the future of sterling are now convinced that their fears are groundless. This afternoon I do not think they are. But this is not a point to pursue. I must just say to Her Majesty's Government that we hope that things will go better for them, but, so far as we are concerned, we do not think that this Statement is a complete assurance, that they have gone better at present.

THE EARL OF LONGFORD

My Lords, perhaps the noble Earl will allow me to reply first to the noble Lord, Lord Rea. I am glad that he hopes that things will go better. I should have thought that this was encouraging news, in view of the difficulties that have arisen, and I should therefore think that in that sense things had gone well in the last 24 hours. But there is a long haul in front of all of us. We must agree about that. It is not a question of saying we are out of the wood. But I hope that the noble Lord, on reflection, will feel that what we have announced is a case of "so far so good."

In reply to the noble Earl, Lord Dundee, I feel he has raised very wide questions as to how resources should be released for export. Certainly, I am sure he would be alarming himself unduly if he thought there was any sort of coercion of labour intended. He can put that out of his mind. But as we are in the hands of this House in regard to debate, it seems to me that these matters could be better debated on another occasion, when the noble Earl has had the chance of studying the answers which may be given on one or two of these points by the Chancellor of the Exchequer this afternoon.

THE EARL OF DUNDEE

My Lords the last thing I wanted to do was to raise a wide question. I was trying to keep very narrowly to the terms of the last sentence in the list of measures which the noble Earl announced, namely, we intend that resources of skilled manpower and of capacity should he released in order to put them behind the export effort. I wondered if he could tell us at least by whom and in what way, because it seems to me that if this does not mean direction of manpower, it means nothing at all.

THE EARL OF LONGFORD

My Lords, I think it would be only courteous to reply to the noble Earl. He can rest assured that there is no question of the direction of labour; but if he asks me what are the measures involved here, I suggest that he raises the whole question in the House. Some of the largest issues undoubtedly are touched on have, and, with great respect, I am afraid I have no intention of going further this afternoon than I have done.

VISCOUNT ECCLES

My Lords, further to what my noble friend says, surely what lies behind this Statement is a credit squeeze, exactly the kind of thing which the Labour Party always said they did not believe in. That is the only way to release these resources. Can the noble Earl tell us how soon the credit squeeze is to come on?

THE EARL OF LONGFORD

My Lords, if the noble Viscount is being serious, I can only imagine that he has not studied the programme of the Labour Party. I take it that his remarks are ironic, and perhaps he will allow them to go on record as a reflection of his attitude without expecting an answer from me. Frankly, we feel that these things are too serious at the moment for irony.

LORD LUCAS OF CHILWORTH

My Lords, may I ask the noble Earl whether he anticipates making a Statement in your Lordships' House shortly, either to confirm or to contradict the inspired statements in the Press that the Government are prepared to make certain statements to allay the fears of the investors of this country regarding the scope of the corporation tax and capital gains tax? There have been obviously inspired statements. They do not bear the print of authority. Will the noble Earl tell us whether he will be prepared to go further than his noble friend was in this House last Thursday, when he said that we should have to wait until his right honourable friend the Chancellor of the Exchequer made a statement about Budget Day of next year?

THE EARL OF LONGFORD

My Lords, I think the noble Lord, who has been in this House about as long as I have, is perfectly well aware that I do not intend to add in any significant way to the Statement—I hope that the noble Lord, Lord Conesford, will restrain himself until I have flushed the answer. I do not intend to add significantly to this Statement. I had thought I was doing a courtesy to the H ruse in making this Statement at all; I was under that impression. This is rather a borderline case because it is a financial statement. If the noble Lord will allow me to answer the noble Lord, Lord Lucas of Chilworth, first, he is perfectly well aware that I do not mean to add to this Statement. He is also perfectly well aware that any matter can be raised by giving notice in this House. We are not afraid to debate these issues with him or with the noble Viscount, Lord Eccles. If I was discourteuos to the noble Viscount, Lord Eccles, I am sorry; that was not intended. We are perfectly ready to debate these and all other matters at any time, but this afternoon I do not intend to add significantly to this Statement.

LORD CARRINGTON

My Lords, I did not wish to intervene, but the noble Earl said on two occasions that he was doing the House a courtesy by repeating this Statement. I remember an occasion not so long ago when the noble Earl, Lord Alexander of Hillsborough, and Members of the Opposition at that time took me to task, when I was Leader of the House, for not repeating in this House a routine, run-of-the-mill Statement on the Bank rate. I got into terrible trouble, and the question why we did not repeat the Statement here was debated for forty-five minutes. We then came to the conclusion, through the usual channels behind the scenes, that all Statements which were of significance and importance to our financial affairs should be repeated in this House. I hope the noble Earl the Leader of the House is not now going back on that, and suggesting that he is doing the House a courtesy by repeating a Statement of this magnitude and seriousness.

THE EARL OF LONGFORD

My Lords, if I said I was doing something that was courteous, I still think that is true. I certainly did not think that I was conferring a favour on the House by making this Statement. I think the House is entitled to this Statement, but in our view it was rather a borderline case. I was not aware of the discussions to which the noble Lord referred, but he can be quite sure that the conclusion reached will be honoured, now and in the future.

VISCOUNT ECCLES

My Lords, may I try to clear myself of the charge of irony? I believe as much as any noble Lord opposite that it is necessary to do something pretty drastic for exports, and that it may be necessary to release for the export market certain capacity which is now supplying the home market. I also think that the size of the borrowings that has just been arranged is very largely due to the muddle the Government have made of their problem since they came into office. But, since we are in this position, may I ask the noble Earl this? Is it not essential to use the quickest and most effective method there is to reduce home demand in some directions, in order to do better in the export market, and will he not say that such actions are the kind the Government have in mind?

THE EARL OF LONGFORD

The noble Viscount, Lord Eccles, knows perfectly well that I do not intend to answer questions of that kind, because I think it is important that this House should study the Answers given by my right honourable friend the Chancellor of the Exchequer to questions no doubt of this character and we may well want to debate these matters. I think that is extremely likely. The noble Viscount raises very wide questions, and if I began to answer them we should be in the middle of a debate already. I do not want to be discourteous, but I have no intention whatever of involving the House in a debate this afternoon.

LORD CONESFORD

My Lords, I wish only to raise one point. I am grateful to the noble Earl for making the Statement he did, and I share the view expressed on both sides of the House that this is not the most appropriate moment for discussing it. The only reason why I rise is that I am interested in constitutional matters, and I thought there was one implication in his Statement which could hardly be intended. I have no desire, and I do not think that any noble Lord in any quarter of the House has the desire, that this House should become involved in matters which are of exclusive concern to the other place, but this Statement, though made by the Chancellor of the Exchequer, went far beyond the matters which are the exclusive concern of another place. It mentions Defence, the release of manpower resources, and all kinds of things which the other place would certainly not claim to be their exclusive concern. If I understand the noble Earl the Leader of the House correctly, he did not, I hope, mean to imply that this Statement did not go far beyond matters which are the exclusive concern of the other place.

THE EARL OF LONGFORD

My Lords, I should be inclined to agree with the noble Lord. I ventured to make this Statement because I felt it did go beyond the exclusive concern of another place. I was not a party to the discussions mentioned by the noble Lord, Lord Carrington, earlier, which, I gather, drew up some procedure in regard to these Statements. All I can say is what I said just now: that I am sure agreed procedure will be carried out.

LORD GRANTCHESTER

My Lords, may I ask the noble Earl a question which does not go beyond the main point of the credit which he announces in the Statement? What I should like to know is whether the 3,000 million dollars affects, or constitutes part of, the 6,000 million dollars which the International Monetary Fund is also authorised to borrow for the purpose of providing liquidity resources?

THE EARL OF LONGFORD

My Lords, I think that the noble Lord had better wait for the replies of my right honourable friend the Chancellor of the Exchequer, but this operation stands on its own.