§ 11.9 a.m.
§ Mr. Stephen Hastings (Mid-Bedfordshire)
I beg to move,That this House, conscious of the vital importance of an improved balance of payments and aware, particularly since the collapse of the Brussels talks, of the need to increase our industrial, commercial and financial power, congratulates the President of the Board of Trade on the various measures he has taken to help exporters, but nevertheless urges Her Majesty's Government to seek further means of encouraging a general expansion of our share of the world's trade in goods and services.I make special mention in my Motion of the Brussels talks. The reason is that I, and I think many with me, had believed that this country would find again her sense of direction and purpose through the European movement and that the European movement in turn would create the incentive necessary for us to modernise our industry as we must. All this is not to be, although I still believe that that reasoning was valid at the time.
The fateful decision taken in Brussels, which has caused the whole process of Western integration to be shaken, has thrown us, in particular, very much on our own resources—as much, perhaps, as at any time since 1940. There is only one ready field available, it seems to me, on which we can focus our national effort, and that is in international trade.
Of course, there is nothing new in this. One could argue, I think with some reason—although historical parallels are always highly dangerous—that the whole story of the Hundred Years War was an attempt to enforce a European solution by this country and that our failure to do so turned us, for the first time, to the world's trade routes; and the whole, thrilling story of our rise to power from then on has been the story of our trade.
789 It is a commonplace to say, but it is not true, that trade followed the flag; rather, the flag followed hesitantly after the trader.
This, broadly speaking, is the reason why I thought it fit to raise this matter today. But before going further I should like to express my thanks to my hon. Friend the Minister of State to the Board of Trade for coming to the House to reply to our debate. I hope that he will feel that a layman's remarks will have been worth it, but, if not, I am sure that there will he more interesting speeches to follow. I have a shrewd suspicion that he had to alter an already difficult programme in order to be here, and I am sure that the House joins me in expressing my thanks to him for his company.
What is the position of our exports today? I do not want to encumber the House with many figures, but in order to show the matter in perspective I want to quote one or two which seem to me to be the principal and most relevant. On the face of it our recent performance is encouraging. I think that anybody taking an unbiassed view would agree. Over 1962—that is, from the last quarter of 1961 to the last quarter of 1962—exports overall rose by 4 per cent., no less, which was an increase of 3 per cent. on 1961, and the April figures this year show that during the first one-third of 1963 this increase continued at the rate of about 3 per cent.
To break this down, the impressive rise in 1962 resulted first from a rapid expansion:n our exports to Western Europe, in particular, and, happily, this continued during the first quarter of this year by as much as 18½ per cent.—a highly remarkable record. In 1962, too, the exports to the Sterling Area as a whole recovered, and it was only our exports to North America which turned down, largely, I think, because of difficulties over Canadian tariffs.
But to see it in proportion we have to balance this with other prognostications and reflections. First, the National Economic Development Council has said that in order to reach a surplus on our balance of payments of about £300 million, which is necessary to finance the growth rate of 4 per cent. which is the Council's target, it will he necessary for our exhorts between 1961 and 1966 to 790 rise by as much as 5 per cent. per year. This is a formidable task, as the N.E.D.C. themselves admit, but perhaps not so formidable if seen in comparison with the rise of production among some of our competitor countries. We must face at the moment that we are apparently running about 2 per cent. behind. I should like to quote a passage from the N.E.D.C. Report which serves to bring the matter into focus:A temporary rapid expansion of exports is needed over the period to 1966 to convert the deficit on current account in 1961 into a surplus. In later years, exports would not have to continue increasing so fast. A rate of growth more nearly in line with that of national output would probably be sufficient.If the Council is right, it is in the immediate years that our effort must increase.
To go back in time, it is also relevant to reflect that our share of the exports of manufactured goods at the end of the century was as much as 33 per cent. and that that had fallen by 1961 to 16 per cent. I should like, lastly, to quote one more statistic, used by His Royal Highness Prince Philip in a notable speech in my constituency this week, in which he pointed out that last year we imported from Western Germany four times the amount of machine tools that we exported to the same country, which seems to me a serious reflection. While there is certainly cause for congratulation and encouragement, equally there is cause for concern and room for improvement.
When one quotes statistics of this kind or when they are quoted in newspapers, everybody is inclined immediately, and perhaps without too much thought, to point an accusing finger at the Government Front Bench. I do not believe—and I say this frankly, and it is in my Motion—that this is justified at all. I think that perhaps, to take it a little wider, as a nation we are a little too much inclined today, when we are presented with embarrassing situations abroad or at home to turn too readily to the Government to get us out of our trouble before we consider what our own responsibility is as individuals. I should like this morning to consider this wide question in terms also of ourselves as a nation and as individuals and our attitude to trade.
791 The Government's record, to deal with it briefly, seems to me satisfactory. They are faced with the central dilemma—should they or should they not subsidise exports? I read an interesting article in the Statist last week or the week before by Mr. Paul Bareau in which he showed, to my mind clearly, the ultimate absurdity of this if we pursued it too far, or indeed if we get on this slippery slope at all. If every exporting nation subsidised we should finally reach a state of affairs in which it would never pay to buy our own goods in our own market. We should export all our motor cars and use nothing here but foreign cars. This is an exaggeration, but it serves to show the difficulty of such a course. I am content, therefore, that it should be left to the Richardson Committee to decide on what should be done and to recognise that there are strong arguments against any such course.
From May 1960 to April of this year, in connection with E.C.G.D., eight separate measures have been undertaken relating to premiums and credits with a view to helping exports, beginning with the comprehensive guarantee facility extended for five years instead of three and going through to the 10 per cent. overall cut in premium rates in April this year. There are also the advisory services provided by the Board of Trade both at home and abroad, which from my own experience in missions abroad and subsequently in business I have found to be excellent.
Discussions on exports tend, I think, always to centre on certain factors, and among them surely are these: we are frequently told that we lack a wide enough spread of technical education; that we neglect research and development; and that we tolerate the survival of too many small firms with low production standards. But I am not sure that all these things cannot equally be applied to our competitors. Of course, quality, after-sales service and, in particular, costs are vital, but broadly, I think, we are competitive as to cost and quality, and for each of our failures in these directions there are a large number of success stories to be told.
Mr. Colin Clark, in a recent Hobart lecture on economic growth, emphasised thatthe principal factors in economic growth are not physical but human.792 I want to examine our trading performance, with the same general considerations in mind, I take three factors and I am well aware that these are not the only ones which are important or relevant. They seem to me at least to be worthy of note. First, the position and performance of our invisible exports; secondly, the relationship between distribution and manufacture in this country with regard to exports; and thirdly, the attitude to profits in what I think it is fair to call our managerial society.
Taking the invisibles first, it makes no sense, it seems to me, to discuss exports except in relation to the balance of payments, for any such discussion would generate into a talk on sales techniques. As everybody in the House knows, I am sure, until recently the gap in our visible trade was closed by invisibles. That was up to 1960 and 1961. But it was no longer so in those two years. One must recognise that invisibles had sunk disappointingly from a surplus as large as £443 million in 1952 to a surplus as low as £65 million in 1961.
This, I hasten to add, represents to a layman more or less the balance sheet of the financial forces of this country and of the City of London. If it were the balance sheet of an industrial company, I dare suggest the Stock Exchange might take a rather grim view of its prospects. It is perfectly true, happily, that there has been an up-turn last year and equally the N.E.D.C. believes that by 1966 there will be a surplus amounting to £230 million.
But I think it legitimate for the outsider to inquire how this has happened and why. The vast reserves of capital in the City of London surely stem basically from two things: first, from the will to risk and, secondly, from the inventiveness and skill in handling the exchange of goods and finance; but the latter is no good without the former and skill in guarding capital is unproductive by itself. This fall-off in the earnings of invisibles is due to certain well recognised factors. There is no doubt that others have learned the tricks of the trade, and this is the case particularly in insurance. There is also the fall off in our percentage of the world's merchant fleet. It is also fair to reflect that the imposition of controls upon 793 finance in the City over the last twenty years has definitely had an enervating and debilitating effect on initiative.
I want to ask two question which seem to me legitimate. The first is; has a young man in this country with ideas and the guts to back them today the same chance of help as he would get, for instance, in the United States? I am not sure of the answer. I am not sufficiently versed in these things, but I beg leave to question. But I believe this young man's existence and future are absolutely vital to the prosperity of this country, and not only that, but to the whole basis of a free society. The second question is, to what extent is it possible to get credit cover for what one might term speculative trade unless it is covered already by E.C.G.D.? Put in another way, is it not that the Government are taking virtually all the risk in our overseas trade? If that is so, is it not a disturbing reflection?
To conclude on this particular factor, the main sources of finance appear to me to be, first, the insurance companies which are interested principally in long-term investment, the merchant banks who are interested in a safe return from industrial enterprises already in existence, the clearing banks who, of course, will not go very much further than the merchant banks, and lastly, the syndicates who are a combination of these factors. One often hears the argument put about that in finance today so many small investors are represented that risk is a difficult thing to organise, if not art irresponsible thing, and that people are not interested in it. I beg to doubt that. I do not think the instinct for gambling is any less strong now than it was in the days of Sir Walter Raleigh. One has only to look at the pools, the dog-tracks and bingo.
Would it not be possible to organise this tendency to invest speculatively in a more productive way? I find myself wondering whether it might be possible to split shares and resources of a financial organisation to make a division of three-quarters for ordinary investment and a quarter for real venture capital. It is not for me to advise how that should be done. I recognise that there are many difficulties, such as proposals for a capital gains tax which have made it no easier for the City. But if the balance of visible trade is in a sense a balance 794 of performance by industry in exports, so the invisible balance must measure for the observer the success or failure of our financial forces. I suggest that there might be room for imagination and perhaps a slightly bolder approach.
To pass to the second factor of the three I have outlined, the relationship of manufacture to distribution, throughout our industrial history it has been the manufacturer who has dominated our trade and distribution has been very much of secondary importance. It is that situation which has given rise, although I am certain it is not justified at this hour, to the statements that British industry tries to export what it makes whereas some of our competitors—the Germans and the Americans, for instance —try to make what they can export. There is a clear difference between the two attitudes.
I believe the functions of distribution today have become so complex and skilled that they should rank at least equal in importance and even direct to some degree the course of production and manufacture. International marketing today is a highly skilled and sensitive task. I am not sure that our view of the salesman is what it should be. In industry the salesman tends still to be regarded as somewhat low in the social scale. This we cannot afford if we are to export with success. I question whether his training is what it might he. How much trouble is taken to ensure that our export salesmen not only know the languages of the countries in which they operate but the background to those countries and the people themselves and how they react? More trouble could well be spent on encouraging linguistic study. It is depressing that languages have such a low market value in industry and that too often one hears—"All you need to get away with it is a good translator ". That is not so.
Can the Government do anything to aid in ditribution? In market research the task of the Board of Trade should be to ensure, first, flexibility in exports and, secondly, direction. By flexibility I mean that it is up to the Government to be ahead of the game, so to speak, and to realise that because of a rise in wages in such-and-such a country there is likely to be a switch from capital to consumer goods. Secondly, the Board should identify ahead of time what are likely 795 to be growing new markets. I was delighted in this connection to read this week in the newspapers that there is to be a trade fair in Spain this year. This is the kind of market I mean.
Distribution is a highly complex function, involving many separate aspects; from market research, design consultancy, shipping, advertising, public relations, legal and tax questions down to the point of sale. I question whether we really understand it yet in international terms and I believe we shall never get our export effort properly aimed until we gear production to correct and precise marketing.
Turning to the third and last factor, which I call profits in a managerial society: we are much concerned in this country, as throughout the West perhaps, with management. It crops up almost daily in the newspapers in some form, management training, and efficiency or inefficiency of management. It seems almost management for the sake of management. Is there not a danger that we may forget that the purpose of business is to sell goods at a profit? What one does with the profit is another argument, but that is the aim. The managerial revolution so far as it has affected us has tended to remove ownership from the control of business, to replace the man whose personal interests and fortune are part of the business by the professional manager whose business it is to manage anything.
What sort of man is our manager today? What rewards does he look for? I suggest that a good pension is high on the list. If he is ambitious, he looks forward to a career analogous to that of a top civil servant. He is concerned with social responsibility and not so much with the aggressive attitude which must go with successful trade. I know that this attitude claims victims among those who work for the successful trader as well as among his opponents, but it is nevertheless a feature, a character which is of extreme importance to successful selling overseas. The complex nature of industry and marketing today reduces the importance of the individual and increases that of the good team member, but we must recognise that selling is an individual operation.
What does the up and coming young man in business look for today? I be- 796 lieve he looks for something to manage rather than something to sell. He is a conformist, increasingly well-trained, intelligent, socially competent and generally acceptable; a nice sort of fellow to have around—but primarily he is a negotiator rather than a risk-taker. What we want —the paragon I am hinting at and which we must find in increasing numbers—is a different kind of person; a personality, sometimes an uncomfortable nuisance, and a person with a streak of tough ruthlessness in him. He may be after the big money rather than a pension. He will not mind changing his job, and he is a trader by vocation rather than a manager by profession.
Having found him, we must reward him; and it is in this sphere that I wish to ask my hon. Friend what can be done in the context of our tax arrangements. Can some way not be found of rewarding the export salesman who fights it out abroad? He is a man who is out for profit, who realises plainly what that means, and he is the type of man we must find, come what may, or we shall fail. We spend a great deal of time in this House and elsewhere discussing how to help the weak. This is a correct and honourable thing to do, but we must not forget that it is equally important to clear the road for the strong.
I have made three main points; firstly, that there is room for a more adventurous and imaginative approach in finance if our invisibles are to rise; secondly, that too little attention is paid to the function of distribution and precision marketing and, thirdly, that our social environment and tax laws to some extent mitigate against the modern merchant adventurer.
What can be done? The Government can certainly help by exhortation, innovation and pressure here and there, but much of this thinking if it is considered relevant and right, seems to fall within the sphere of the N.E.D.C. I would like to see some changes in the structure of this interesting hybrid about which we often speculate. There is some danger of the N.E.D.C. becoming simply a vehicle for uneasy partnership between what are still sadly called the two sides of industry. This would be a passive rôle which I would strongly deprecate.
On the Council of the N.E.D.C. I understand there are no, what one might call, representatives of the City of London 797 and finance. I believe that there are no working engineers or scientists and that, to take the secretariat, the balance is almost equal between industrialists or men with industrial experience on the one hand and economists on the other. There is only one technologist. The structure of the N.E.D.C. should be modified as the Council emerges, as I hope it will, from the contemplative phase into the phase of pressure and action. A proportion of the membership could be functional and it should be possible to co-opt members for specific operations or periods.
I have pointed the preponderance on the N.E.D.C. of industry, unions and economists. We need added strength and representation from finance, trade and, above all, from technology. The N.E.D.C. can help in the future along the lines I have outlined, but I am aware that much of what I have said has been subjective in character and concerned with the human factor in our trade.
I recently read an interesting pamphlet published by Political and Economic Planning entitled "Shape of the 'Sixties''. It constituted an attempt to foresee our life in the decade to come. It predicted the emergence of a class of "new men"—technologists and scientists —who would radically alter our outlook. Their views as forecasted make stimulating reading. It also predicted that we should play Athens to America's Rome. But Rome flourished while Athens failed, and an attitude of graceful deference and surrender is hardly consistent with the qualities of this race as I understand them or the qualities we must have if we are to succeed in the markets of the world.
There will be no "new men". Skills change, fashionable attitudes alter, but what we need today is to rediscover the spirit which animated the merchants of the staple and the merchant adventurers of England in the sixteenth century. It is not easy to detect this spirit today, hidden, as it is, beneath the dross of introspective comment and the words of those who are always hurrying to assure us that we are not what we were. Despite this, it is there and it will emerge again. I would like to conclude with the words of a great American, Emerson, who, speaking of our country, said:…she sees a little better on a cloudy day, and in battle and calamity she has a secret vigour and a pulse like a cannon.798 It has never been more vital than it is today that we should rediscover our sense of purpose and destiny. It has never been more important than now that that pulse should be felt to beat and beat strongly through the veins of the world's trade. I hope respectfully that the House will accept the Motion.
§ 11.38 a.m.
§ Mr. William Warbey (Ashfield)
I am sure that all hon. Members will wish to join with me in congratulating the hon. Member for Mid-Bedfordshire (Mr. Hastings) on introducing a subject of such tremendous importance—a subject, one might say, which represents the key problem of the whole of the British economy. I should like, too, to congratulate the hon. Gentleman on the approach he made to this subject, not in detail but, so to speak, in principle.
His approach was, in contrast with the general approach of economic planners and economists today, to stress the human, objective factors rather than what one might call the mechanical and technocratic ones. I regard that as an approach which is very much to be desired at a time when there appears to be throughout the Western world—in France, Britain and other countries—a wave of emphasis on economic growth regardless of the purpose to which it is to be put; on planning by numbers rather than in terms of people, people's needs, aspirations and reactions; in other words, planning by technocrats who tend to think in quantitative rather than in qualitative terms.
Thus far I go along with the hon. Member. However, I thought it a pity that in discussing the factors of particular human beings, he appeared to be mainly concerned with the merchant adventurers and technologists. That is rather a backward-looking view, because the days when we could leave the standard of living of the people of this country, which is, after all, what we are primarily concerned with, to the outcome of the activities of the merchant adventurers, the shopkeepers, the traders, even private investors, are gone. We have seen from bitter experience that the consequence of their activities is as the hon. Member rightly admitted, personal profit, personal gain, and personal advantage. The outcome of those activities has not accounted to the common good, but to the common disadvantage.
799 The problem of the balance of payments, not just the problem of exports, is the most intractable problem of the whole of the economic life of this country. It is a problem which has baffled every Government since the end of the First World War. It is a problem which arises from the fact that this country almost more than any other, certainly more than any country with a population the size of ours, is so dependent upon food and raw materials derived from other countries. This basic dependence which we cannot eliminate is something that we have to face and which creates problems for which we have to find a solution.
I think that it is quite impossible to find a solution by concentrating solely on one side of the balance of payments, namely, exports. It is in order to call attention to that that my hon. Friend the Member for Enfield, East (Mr. Mackie) and I put an Amendment on the Notice Paper to the hon. Member's Motion. I was glad to see in the wording of his Motion that he stressed that the whole balance of payments problem is the key problem, although in his speech he concentrated, I think, solely on the export side. This is the first error. So long as we continue to think of this economic problem as solely a problem of increasing exports, we shall fail to achieve our objective, which must, of course, be to pay our way in the world and ensure that we are able to keep this country supplied with those necessary imports without which we cannot maintain a high and rising standard of living. In other words, I am afraid that most hon. Members are putting the cart before the horse.
The need for exports arises from the need for imports; not the other way round. Therefore, if we are to begin to tackle this problem, we must look first at the import side of the picture and then consider what are the necessary exports we require to cover our necessary imports. That is the beginning of wisdom.
Secondly, we can begin to tackle this problem seriously only if we accept from the start that we must plan for a balance-of-payments surplus—that has been admitted on both sides. The First Secretary, when Chancellor of the Exchequer, said that we ought to plan for an annual 800 surplus of £300 million in our current balance of payments. Since then, we have departed far from that target—we have gone in the opposite direction—but it is agreed that we should so plan, and it is complete nonsense to think that we can plan our internal economy successfully if we do not cope with planning our external economic relations with the rest of the world.
If we are to plan, we must begin by making certain reasonable assumptions, and not found our plan on myths. The first part of a number of myths that ought to be disposed of is contained in part of the Motion, which is why my hon. Friend and I propose to leave out certain words—
§ Mr. Speaker
I am sorry to interrupt the hon. Member, but I should have made it plain that this Amendment is, of course, not selected.
§ Mr. Warbey
I understood that, Mr. Speaker. I should have said that we had proposed to leave out certain words.
We should like to seek other means of increasing and encouraging Britain's share in world trade. Do hon. Members opposite believe that to be possible in this modern world?
§ Mr. Warbey
Then hon. Members must be thinking of the days before First World War, when that was a possible target and we were increasing our share of total world trade. But a great many things have happened since 1918. A number of other great industrial countries have arisen, and have taken an increasing share of world trade. Can we stop that process? If we are to increase our share of total world trade, whose share will we diminish? Are we to diminish the share of the United States, of Germany, Japan or Italy, of the Benelux countries, of the Soviet Union or Australia or Canada?
We can only increase our own share by diminishing the share of others—
§ Mr. Dan Jones (Burnley)
My hon. Friend the Member for Ashfield (Mr. Warbey) must bear in mind that one can increase the volume of world trade, and thereby increase our trade without taking trade from anyone else.
§ Mr. Warbey
I thank my hon. Friend for anticipating my point. I am refer- 801 ring to the concept that it is possible to increase Britain's proportion of total world trade, whatever that trade may at any time be. That is a myth, and it is necessary to dispose of it because, unfortunately, it has been put forward with great vigour, not only by the hon. Member for Mid-Bedfordshire but by some who are regarded as reputable economists, such as Professor Kaldor.
There was substantial correspondence in The Times recently, in which Professor Kaldor sought to argue that this country should try to regain the kind of share in world trade that it had before the First World War—
§ Mr. John Woollam (Liverpool, West Derby)
When, in years past, other countries wanted to increase their share of world trade at our expense, was that a myth? It proved at that time to be attainable, and a reality. Is it unreasonable for us now to think that we may be able to reverse something that other countries have done in their turn?
§ Mr. Warbey
Yes, because the process of growth in the economies of other countries is an irreversible one, and so is the process of the growth of their surpluses for export. We are, therefore, in a position in which, by a natural economic development in the world, our share in total world trade must, as a proportion, tend to shrink. We may reach, and I hope that we have reached, a stabilising point; that is to say, I hope that we have now reached a point at which we can seek to maintain our proportion of total world trade, but that it is very different from saying that we must try to increase our share.
Our object, therefore, must first be to maintain our proportion of world trade and, secondly, to increase total world trade, and I now come to the point made by my hon. Friend the Member for Burnley (Mr. D. Jones). The only way in which we can increase our relative volume of exports, and continue to do so, is to ensure that there is an increase in total world trade, and that we retain our fair share of it.
That involves an approach to world economic problems very different from that of the hon. Member for Mid-Bedfordshire. It involves an approach based on co-operation and not on conflict, because the approach which says that we 802 must seek to obtain an increasing share of world trade when the trend is in the opposite direction merely means that we should engage in a colossal trade war with our principal trade competitors. The proposition I put forward is that we should seek, by co-operation, to encourage all other countries to promote an increase in total world trade. That would mean that we would seek to assist an increasing total trade rather than to resist it and inhibit it.
That is the significance of something which is sometimes over-stressed by some of my hon. Friends but which is, nevertheless, marginally, extremely significant for this country; namely, the general expansion of what is called East-West trade. The general expansion of East-West trade itself contributes to a general expansion of total world trade from which we can hope to benefit. Consequently, inhibitions on and obstructions to the expansion of East-West trade are themselves a disadvantage both to the general world position and to our own position.
I am glad to be able to join the hon. Member for Mid-Bedfordshire in congratulating the President of the Board of Trade on the way in which he has been conducting a magnificent fight for the expansion of trade between this country and the countries of the Sino-Soviet bloc. He has been conducting that fight with one hand tied behind his back and with blunt weapons in the other hand, but he has been fighting with immense courage and, occasionally, with some success.
For instance, there was the matter of the supply of steel pipes to he Soviet Union in face of the N.A.T.O. embargo. The President of the Board of Trade has fought a magnificent single-handed fight against the whole of the embattled forces of N.A.T.O.—and especially of the United States and of West Germany —in order to keep open the doors of trade and try to ensure that Britain should have some share in that trade. He persuaded the Foreign Office, after a good deal of delay, to say that we were not bound by this N.A.T.O. decision, but I am afraid that he has lost in the end, because I notice that the managing director of the Krupps steel firm in Germany was boasting the other day that the Soviet Union would not 803 require steel pipes from Britain because, as a result of the N.A.T.O. embargo, it proposed to manufacture the pipes itself—
§ Six John Vaughan-Morgan (Reigate)
The hon. Member for Ashfield (Mr. Warbey) says that the Soviet Union was, as the result of the embargo, itself proposing to manufacture the steel pipes. Does he suggest that the Soviet Union's decision was taken as a result only of that, or does he not think it part of the long-term plan of the Soviet Union to make itself entirely independent in this and all similar matters?
§ Mr. Warbey
Thy hon. Gentleman has, in his usual way, carried what might have been a valid point to an illogical extreme. I am quite sure that the plans of the Soviet Union to manufacture large diameter steel pipes were made some time ago, but the decision to rely upon its own production entirely and not to import any large diameter pipes from outside is one which has been forced upon the Soviet Union as a result of the N.A.T.O. embargo.
It is complete nonsense to go on to suggest that the Soviet Union is aiming at complete self-sufficiency. The Soviet Union, like this country, has a marginal interest in the exchange of goods and services with other countries—not so high an interest as ours, perhaps, but still an interest. The Soviet Union has shown an interest, for example, in its willingness to place orders for British ships if we would be willing to admit a certain quantity of Soviet oil into this country. Unfortunately, here the President of the Board of Trade has so far lost the batting. But I hope he will go on fighting for a sensible approach to this problem of balancing British imports and exports.
Another myth that we ought to dispose of is the idea that this problem can be solved simply in terms of total figures—total figures of imports and of exports, and mathematical calculations about the amount by which each ought to be increased globally in order to achieve the desired surplus in the balance of payments. This is the approach which is made by N.E.D.C. for example. N.E.D.C. is doing a very good job within its limits, but I am afraid its limits are that it is 804 making this typical mathematical approach to planning rather than a qualitative one.
Therefore, we have this kind of mathematical syllogism about the balance of payments problem. One starts with the proposition that the economy of this country has to grow year by year by 4 per cent. I do not know on what basis that is founded, other than the fact that O.E.C. or O.E.C.D. some time ago produced a statement to the effect that that was a desirable aim. But still, that has been generally accepted, for some reason or other, as the target to aim at. So we say that our production must grow by 4 per cent.; therefore, our imports must grow by 4 per cent.; therefore, our exports must grow by 5 per cent. therefore, our imports must grow by 4 per cent.— and apparently the proposition is proved.
It is rather like the old "think of a number" game in which one arrives, by what seems to the young mind to be a miracle, at the number that one first thought of. But this approach will not do because it involves one in setting unattainable targets and it saves the very hard work of looking at the actual composition of British imports and exports and seeing how and where they can be changed.
The hon. Member quoted some balance of payments figures, but I would recommend him and other hon. Members to look at the very interesting analysis of our balance of payments with other countries which is contained in Tables 2 and 3 of the March, 1963, edition of "Economic Trends", which divide up this problem into the balance of payments with overseas sterling areas and the balance of payments with non-sterling areas. Some very interesting conclusions can be drawn. The tables cover the five years 1958 to 1962. With the overseas sterling area we had a visible balance in every one of those years, except 1962 when there was a small visible deficit of £47 million, and we had a very large invisible balance averaging around £300 million. So that in each of those years we have had a total balance in our favour running from a minimum of £239 million to a maximum of £477 million. In other words, in our trade with the sterling area we have been able to secure that surplus in our balance of payments which is desired in all quarters of the House.
§ Mr. Peter Walker (Worcester)
The hon. Gentleman has left out the column which follows setting out the long-term investment position. It affects our immediate balance of payments. Our balance of payments situation, therefore, is very much reduced.
§ Mr. Warbey
I was dealing with our current balance of payments in each year. The long-term capital movements are, in a sense, the result of that. They show what we are able to do in the form of overseas capital investment as a result of the current balance of payments. The hon. Member was perfectly right in saying that—that as a result of having this favourable balance with the sterling area we were able to invest in the sterling area a very considerable sum, namely, over those five years a sum of over £1,000 million.
But, in addition, we have still kept a surplus for ourselves of £727 million over those five years which we used in order partly to cover the deficit on the rest of our accounts with the non-sterling area. Of course, it is with the non-sterling area, and primarily with the industrialised countries of the Northern hemisphere, with Europe and North America, that we have had, year after year, this appalling deficit in our balance of payments amounting in 1960 to no less than £659 million.
I should have thought that if anybody wanted to set about correcting the falls and deficits in our balance of payments, the first thing to do would be to see where the deficit arises and begin to correct that. Of course, it arises primarily because we have liberalised our trade with North America and Europe to our own disadvantage and to their advantage. That has been the story ever since we began this process of liberalisation from the end of the war. We began it in response to pressure from the United States, which arose at the time of the American loan, when we committed ourselves very foolishly to this concept of multilateral non-discrimination in world trade, a concept which was entirely to the advantage of a highly protectionist country like the United States. We deliberately gave the Americans the best of both worlds and ourselves the worst, because we allowed them to continue their form of high protection of their own vital industries and agricul- 806 ture while promising to scrap the protections which we had for ours.
This is complete economic nonsense. Until we have reversed this process, until we have altered the rules of the G.A.T.T. —which today work only in favour of highly protectionist countries or countries which create common markets—until we have found a way of protecting our own vital industries while taking part in an expanding world trade, we shall not solve the central problem of our economy.
This calls for quite substantial changes in the G.A.T.T. rules. It involves applying the general principle that we should buy our necessary imports from those countries which are prepared to buy from us. This is a basic principle which we should begin to apply, and we should apply it by all the methods and weapons which are still in the armoury of the Treasury and the Board of Trade but which have been allowed to become rusted and neglected. Bilateral trade agreements, long-term agreements, buying and selling agreements, tariffs, quotas, ceilings, outright embargoes—all these exist and all are actually employed. All these weapons are in our hands, but they are not employed in the right way to the advantage of this country's economy.
§ Sir Stephen McAdden (Southend, East)
With much of this part of the hon. Gentleman's speech I find myself in agreement, but does he realise that what he is saying constitutes a devastating attack upon the Leader of the Opposition who signed the General Agreement on Tariffs and Trade on behalf of this country, at a time when, so far as I recall, the hon. Gentleman himself was in the House?
§ Mr. Warbey
Perfectly true, but my right hon. Friend signed that agreement as a desperate second-best. [HON. MEMBERS: "Oh."] He signed it because he was not able to get the international trading organisation based on the Havana Agreement which was what we were aiming at. That is what the Labour Government were trying to achieve, an international trade planning organisation which would take into account all aspects of trade and all aspects of trade planning, not taking into account the sole item of tariffs in a way disadvantageous to this country. That is what we wanted, but we were stopped, again, primarily, by the Americans.
§ Mr. James Callaghan (Cardiff, South-East)
Before this coalition between the hon. Member for Southend, East (Sir S. McAdden) and my hon. Friend goes too far, can my hon. Friend tell me why, if he really believes the multilateral trade agreement had such bad effects, Italian exports have gone up four-fold, Japanese exports have gone up four-fold, and German exports have gone up at least three-fold? If we had done the same, there would have been no difficulty in our present position.
§ Mr. Warbey
My hon. Friend is really going back to an argument which I thought I had dealt with at the beginning of my speech. I do not want to go over it again, and I am rather sorry that my hon. Friend should think it necessary to intervene in favour of laissez-faire and against planning. I frankly admit that I have had a hard struggle to try to convince my own party that it is nonsense to talk about planning our internal economy if we are not equally prepared to plan our external economic relations. However, I hope that I shall be able to convert my hon. Friends as well. In the meantime, I come back to the central point.
It is the job of this country, as it is of every Government, to look first and foremost to the economic interests of its own people. In doing so, we must ensure that we take our share of expanding total world trade, and we shall do this effectively only if we are prepared to plan our trade and establish the kind of international trade planning organisation which was once envisaged but which was overthrown by a coalition of interests which, I hope, my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) would not be prepared to support.
§ 12.16 p.m.
§ Sir John Vaughan-Morgan (Reigate)
This has been an interesting and lively debate so far. It has in part, somewhat unexpectedly, taken the form of the old debate between the planners and laissez-faire, but I think that the wisest of us do not take a firm stand wholly in either camp. For me, it is a sobering thought that we shall debate this subject for anything up to five hours, but all the words poured out will not add £1 to the value of our exports this year. Indeed, I cannot help thinking that some of the utterances which we sometimes hear from the Opposition, if taken at 808 their face value, might result in a subtraction from our exports.
In his excellent speech, my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) covered many aspects of the problem, and I do not in any way cavil at the words he uses in his Motion. It is a little pedantic to discuss exactly what is meant bya general expansion of our share of the world's trade".I took my hon. Friend to mean an expansion of world trade and, with it, of course, an expansion of our share in absolute terms.
§ Sir J. Vaughan-Morgan
I agree that, perhaps, the wording could have been extended and, perhaps, made even more precise, but most of us understood very well what was meant and it would be rather pedantic to continue an argument on that point.
One can make a similar criticism of the Amendment. Such is the syntax of it that it does not explain to us what the equal amount is to what—if I may put it in that way. The Amendment, if it had been selected, would have omitted all reference to the expansion of trade and concentrated entirely on aspects of contraction. The whole approach of the hon. Member for Ashfield (Mr. Warbey) was well suited to a siege economy. Far from going back to the days before the First World War, the hon. Gentleman took us back to the days before the Napoleonic Wars and to the approach of Colbert and those like him to the economy of nations.
The Amendment speaks of "unnecessary imports". We do not have any clue as to what they might be, except, of course, that we all know that they would come from America, whether they were juke boxes or anything else. The salient point worth remembering is that our necessary exports are often someone else's unnecessary imports. We should be the last people to start thinking along the lines of that approach.
My hon. Friend pays tribute in the Motion to the various measures taken to help exporters. He paid a well-merited tribute to the services which the Government provide to help exporters. He gave the usual laurel wreath to the Export 809 Credits Guarantee Department, which goes from strength to strength. The full history of what has been achieved by that Department in 43 years from its rather obscure and haphazard origins after the First World War is an exciting one about which this country does not really know enough. In the last few years it has been an extraordinary example of the fact that nothing succeeds like success. As its business grows, so it has been able to relax the restrictions.
When I was at the Board of Trade five years ago, the frequent accusation was that the services of the Department were not as good as those of other countries. That was not true. The only danger now is that they are almost too good compared with those in some other countries, and we must be a little careful on that point.
We should also pay great tribute to the Export Services Branch, which provides the services for the small exporter.
In passing, may I apologise if I do not stay for the speech of my hon. Friend the Minister of State and those of other hon. Members as I have an engagement, not, incidentally, unconnected with exports. I hope that my hon. Friend will say something about whether we are making any progress towards a scheme for insurance of investment overseas. This was raised in the debate on technical cooperation which we had a fortnight ago. It is an extremely important matter, and it is the only sphere left in which the Government could ultimately provide an additional service to exporters.
I now return to the question of the E.S.B. There are still some exporters who do not know as much as they should about what can be done. I cannot think how that is possible after all these years, but, nevertheless, they still exist. On the other hand, we must remember that there are others who do not need them. We tend to talk about exports as if it were the duty of every firm, whatever it does, to go into the export market. That is not right. Not every firm should export. In fact, a firm should export only if it is to its profit. There are many small firms which should use export merchants or which are already playing their part as suppliers to those who are exporting.
I forget the exact figure, but I think that it is said that about 40 firms do 50 per cent of our exporting. The only 810 comment that one can make on that is, "so what?" As long as they do it, it does not really matter. I suppose that a hundred years ago the figure might have been 40,000, but nowadays the sophisticated goods which are our staple exports come mainly from our large industries—chemicals, heavy engineering, particularly electrical engineering, and motor cars. That does not mean that small firms are not making their indirect contribution. With great respect to motor car manufacturers, they are really only ironmongers who assemble what other people manufacture, and they do a very good job. But do not let us forget that the firms who make all those odd little bits and pieces which go into the motor car are just as much exporters as those who make the finished product.
This is part of the way in which the pattern of trade has changed. To me, the remarkable thing is how many of our old-established industries are still able to hang on to their traditional markets. One hundred years ago, my own business exported 45 per cent. of its output. Our products have changed and our markets have changed. It is interesting that one hundred years later the proportion of our output is still the same, but the markets have entirely changed.
I should like to speak for a moment or two about some of the other means of helping exports. No one so far has referred to that remarkable innovation, the establishment of the advisory councils on exports, namely, the Western Hemisphere and European Council and that which is now named "Comet" which is concerned with Middle East trade. I think that my hon. Friend has done very well in transferring the Middle East trade from an officially-headed body to an unofficially-headed body. It may be of interest to my hon. Friend to know that I was the first chairman of the Advisory Council on Middle East Trade. Being inside the Department, I was opposed to my being chairman. I was overruled, and I am delighted that my opinion has ultimately prevailed.
These councils are doing a wonderful job, and we cannot pay sufficient tribute to men like Lord Rootes and Sir William McFadzean who are devoting their time and energy to persuading other businessmen to go out and make money, which is what exporting amounts to. It is no 811 good exporting unless one makes money out of it.
Here I wish to tread on more delicate ground and to refer to the proposal made in certain quarters that we should have a similar advisory council for Commonwealth trade. None of us would want to undervalue the importance of our exports to the Commonwealth, but we must enter something of a caveat against what can be done in this field. Of course, it is to our interest as well as to the interests of the Commonwealth countries to develop their industries and agriculture. For that, they need markets. But we cannot absorb everything. They must, therefore, develop other markets. That is roughly the equation.
It follows, therefore, that the percentage of Commonwealth trade must fall. That is not to say that there are not markets still to be sought in the Commonwealth by enterprising manufacturers, and that must be stressed. We must do everything we can to encourage them, but there are other reasons why it would be a mistake to set up a Commonwealth exports council.
One reason is that the success of the existing councils stems from the fact that they deal with a particular kind of market. The common denominator in the case of the Middle East council is sand, Arabs, Mohammedanism or oil, but primarily it is oil and the trade which flows from it. The Western Hemisphere council is concerned with the dollar markets and has perhaps been the most outstanding success story of all. But in the case of the Commonwealth the diversity of the markets is such that it is not possible to have a uniform approach. There is nothing in common between marketing goods in Canada, which is already covered by the other council, and Fiji, or between Australia and West Africa. An entirely different approach is needed.
There are many perhaps over-sensitive countries which would resent that approach and would think that we were going back to the days of the plantation approach when they were merely markets which we were seeking for our surplus goods. But I am not denigrating in any way Commonwealth trade or the important part which it plays, or the 812 way in which we should go out for it. I am discussing only the means.
We had from the hon. Member for Ashfield an excursus on the subject of East-West trade. I am sure that we all noted with pleasure his interest in this subject. In passing I might mention how glad I am to see that three British firms are exhibiting at the Peking Trade Fair in August. They should be given a pat on the back. As one of them is my own —[HoN. MEMBERS: "Hear, hear."]— I will pass the pat on. This is enterprising and it is certainly bread cast upon the waters, and I can only hope that it comes back fairly soon.
We must, however, have no illusions about the possibility of East-West trade. These markets are large and growing, but it will not be rapid growth for us. There are few people who will not agree that it is difficult and frustrating to indulge in those markets. Their people are short of foreign exchange; they have their own priorities, which are extremely difficult to fit into a free economy like our own, and the approach is almost one of barter and, therefore, is baffling to the ordinary manufacturer or exporter from Britain.
All in all, this will be a useful debate if we concentrate on the gaps in the Government services and what the Government should or should not do. I stress, however, that the direct role of the Government is limited. When it comes to the indirect rôle and the role of taxation it is immense. I am still an unqualified supporter of the added value tax, which is now being investigated. It is not that it has any virtue in itself as an incentive to export. It is much more what it replaces that is of importance. I hope that the investigation now being conducted at the instigation of my right hon. Friend the Chancellor of the Exchequer will come down in favour of such a tax, at least as a partial substitute for Profits Tax.
None of these things, however, whether direct or indirect, affects the need for us to be competitive and alert. I support every word of the moving peroration of my hon. Friend the Member for Mid-Bedfordshire.
§ 12.32 p.m.
§ Mr. John Mackie (Enfield, East)
We are all grateful to the hon. Member for Mid-Bedfordshire (Mr. Hastings) for his 813 interest in the economic situation and for raising the subject of exports in the way he has done today. I agree, however, with my hon. Friend the Member for Ashfield (Mr. Warbey) that all this is rather like the student who conned up Napoleon and then, when he looked at the paper, discovered to his horror that the question was about Wellington and to overcome his difficulty, said that anybody who wanted to know anything about Wellington must know all about Napoleon.
In order to deal with exports it is necessary to know all about imports. It was to overcome this difficulty that my hon. Friend the Member for Ashfield put down his Amendment, which the right hon. Member for Reigate (Mr. Vaughan-Morgan) did not seem to think was very clear. As I read it, it is about as concise as anybody could make it. It makes it clear that we would like the Government to pay the same attention to imports as to exports. If that it not clear, I cannot imagine what could be.
The right hon. Member for Reigate complained about those who might take a narrow or old-fashioned look at the situation. I should like to point out that the Government have spent twelve years in looking at it. As we all know the balance of payments affects our reserves, which stand at about the same level as they did eleven or twelve years ago. We may have had odd successes in our balance of payments meanwhile, but we have spent them and we have certainly done nothing to raise the level. Therefore, I am certain that a different look must be taken at the situation before we will be able to get out of our difficulties.
In his Motion, the hon. Member for Mid-Bedfordshire lays stress mainly on exports. We must, however, view the country's complex and difficult economy as most hon. Members opposite who have been businessmen would look at a business. Would they run a business in the way that the Government try to run the country, leaving the buying and selling absolutely to chance? That is virtually what the Government are doing.
The hon. Member for Mid-Bedfordshire made certain suggestions about the training of management and the learning of languages, but he did nothing more than say that we must exhort people to export anything to anywhere. He said 814 nothing about guidance or direction. Equally with imports, everything is left almost entirely to chance. That is not the way to run a business. I admit that the analogy may not be perfect, but it is not far from it. These are the reasons why we on this side certainly do not believe that this business can be left to chance and that we must do something about it. We must sell where we buy, and we have to export to be able to import and to live.
I make no apology for repeating what I have said before. Having been a Member of the House of Commons for three and a half years, I have learned that one has to say things many times before they seem to sink in. To quote an expression used by the right hon. Member for Woodford (Sir W. Churchill), our economy has been balanced on a trap-door since the end of the war. It is still on a trap-door, and therefore we must do something about it.
Of our 60 million acres, ten million are covered by bricks and concrete and our agricultural acreage accounts for only about 32 million. We have a huge population, which, we were told only three days ago by the Minister of Agriculture, Fisheries and Food, might reach 73 million by the end of the century. Our only wealth is our land, some coal, iron and fish and very few minerals, our main asset being our skill. That is too obvious to need to be stressed, but we need to take cognisance of the fact that we rely to a tremendous extent on our skills.
With the best will in the world, my agricultural colleagues can produce only just over half the food that we require. This means that we must buy half our food abroad. I do not want to bore the House with figures, but it should be pointed out that we need to buy also between 70 and 80 per cent. of our raw materials. The first thing to do is to see where we can get those things and where we can buy them in the best market, and to do that we must first know what we want. We need to import food for 25 or 26 million people and we cannot afford to buy it anywhere except in the cheapest possible market.
Tremendous stress has been laid recently on trade with the Continent, particularly in food. When we look at the figures, however, we see that basically 815 the Continent cannot supply us with any of our basic foods. The Continental countries are only just self-sufficient. It is true that we get luxury items like wine from the Continent, but they are not important. Basically, we must first feed the people. Therefore, it is senseless to say that we must trade with the Continent in food, even though we get a good lot of raw materials, although nothing like our main supplies, from Continental countries. We should regard the economy as a business and decide what we need and then see where we can get what we need most cheaply.
I spent some time in Canada last year, as I have spent some time in other countries. I have considered various areas of the world where we now buy things we require, and I have considered whether our balances are in our favour or against. Canada has an adverse balance with America and we have an adverse balance with Canada, but the things which the Canadians buy from America are the very things which we produce best. We need some guidance to be given by the Government along the lines of finding out what is needed and where it can be bought most cheaply. That is the correct way to run the country.
Canada has enormous resources—wood pulp, oil, gas, wheat, feed grains, meat and so on—and has a balance against us. It may be said that Canada does not want to trade with us because in the past we relied too much on the fact that Canada had to trade with us, but the position has now altered, and, as the Minister of Agriculture pointed out only too forcibly on Wednesday, there are other areas of the world which can supply us. This may make Canada more willing to trade with us. Instead of spending so much time still fluttering with the Continent, we should be trying to make agreements which would suit the Canadians and would suit us and would provide us with the things we need at a cost we are prepared to pay. Such results could easily be achieved.
I am not suggesting that international trade is as easily planned as a small business. It is enormously complicated and we do an enormous amount of trade abroad, but let us approach the problem as a business man would approach his own business, considering what we need, what we have to import and where we 816 can get it best and cheapest and how we can pay for it by selling to that country the things which we produce and which it needs. That would be preferable to trading for trading's sake.
The right hon. Member for Reigate said that we had not come across with what we considered to be unnecessary imports. I could give a long list of the sort of things which are unnecessary, the unnecessary luxuries like half-acre-sized American cars, juke boxes, croupiers from the South of France, one-armed bandits and so on. I am more concerned with swopping a Morris 1000 car for a Volkswagen car of the same horse power which takes one from A to B just as uncomfortably. All we are doing at present is simply taking in each other's washing. Those unnecessary imports are far more important than the unnecessary luxuries.
§ Sir J. Vaughan-Morgan
My point was that juke boxes might seem unnecessary to the hon. Member and to me, but a Rolls Royce car may seem unnecessary to the Americans.
§ Mr. Mackie
That may be. I do not propose to continue to deal with what we consider to be unnecessary. The American economy is in nothing like the same position as ours. The Americans can afford these things. Once our balance of payments is in a good position, I do not suggest that we should not afford juke boxes. The Americans can afford Rolls Royces, but we cannot afford Cadillacs, juke boxes and one-armed bandits. What I consider unnecessary is the trading for trading's sake which will get us nowhere.
I know that it is against the principles of hon. Members opposite to have any control on imports, but a start has been made in that direction. One could say that the Minister of Agriculture has been forced by circumstances beyond his control—although I would doubt that—to start controlling imports, so that there is a precedent for the Board of Trade to follow. That would be one of the things which would help more than anything else with our balance of payments position. Again I emphasise that it is ridiculous for any country to try to run itself simply on the basis of chance.
As my right hon. Friend the Leader of the Opposition said some time ago, of 817 course we will require considerable Socialistic economics to be applied, and I know that hon. Members opposite are not particularly keen about that. However, as I pointed out, we have not got much further with our reserves than our position of twelve years ago. Although we appreciate the value of the subject which has been raised by the hon. Member for Mid-Bedfordshire and we shall naturally not oppose the Motion, we believe that it does not go anything like far enough and we doubt that it will get hon. Gentlemen opposite to do anything to help implement its suggestions.
§ 12.45 p.m.
§ Mr. David Gibson-Watt (Hereford)
I congratulate my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) on having chosen this subject, which has needed thorough discussion for some time, and I compliment him upon the very competent way in which he dealt with it.
This, of course, is a Friday, and a Friday debate is different from some of the others during the rest of the week. I could not help being slightly amused when I heard about the signing of the G.A.T.T. and saw the energy of the hon. Member for Cardiff, South-East (Mr. Callaghan) in trying to heal the breach between the two wings of his party. Now we know that the view of hon. Members opposite on this subject is the same as when the G.A.T.T. was signed.
§ Mr. Arthur Lewis (West Ham, North)
Surely the hon. Gentleman will draw attention to the fact that whatever may be the views of my hon. Friend, he could not find out the views of the Liberals because they have not been present for the last 1¾ hours.
§ Mr. Gibson-Watt
I am grateful to the hon. Member for drawing my attention to that, although I am not very surprised because the Liberal Party has a number of things to do.
Not many years ago, someone was foolish enough to say that exports were the will-o'-the-wisp of Tory industrialists. I cannot remember who it was, but I seem to remember using the phrase in speeches in the late 1940s. The hon. Member for Enfield, East (Mr. Mackie) was echoing that view to some extent today. There was a great cleavage of views between what was said by my hon.
818 Friend the Member for Mid-Bedfordshire and by my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) in their attitude towards exports, and the attitude of the hon. Member for Ashfield (Mr. Warbey) towards the problem of importing and exporting.
I believe that if we are to break out of the difficult circle of balance of payments problems which have been with us since the war, we must adopt the merchant adventurer tactics which my hon. Friend the Member for Mid-Bedfordshire mentioned. My right hon. Friend the Member for Reigate spoke of the percentage of exports and the number of firms from which they came. What is interesting is the number of areas of the country from which exports are now going and from which they did not go only 10 years ago. In my own City of Hereford, for example, a city of only 30,000 or 40,000 people, although it is a growing city, a city which only 20 years ago was a large agricultural market, we now have such firms as Henry Wiggin, Denco Miller, A.E.I., Saunders Valves, Painters and others. Their products are being exported all over the world and here we have a diversity of exports from some of the smaller cities in which there was not much industrial activity not many years ago.
I know that the hon. Member for Enfield, East will be with me when I take this line. I draw the attention of the House to the fact that there is one material in this country which we do not make use of half enough, and I refer to the livestock industry. This country has always produced good livestock, and there have always been countries all over the world which have always bought them. The present figure of exports is between £1¼ and £1½ million. This is not half enough. We ought to do much more.
On Wednesday my right hon. Friend the Minister of Agriculture, Fisheries and Food referred to a new step in our agricultural policy, and I commend it. I shall not go into that today because to do so would be out of order. The changes which are bound to come, albeit slowly, and the adoption of standard quantities for the production of meat in this country, are bound to have an effect on the smaller livestock farms, particularly in the West and North. I 819 believe that we ought to explore the avenue of exports to help these people. I do not believe that it is beyond the wit of almost every one of them to breed and produce the type of stock which can be sold all over the world.
Perhaps I might refer for a moment to what is happening with regard to livestock exports. There are many interests concerned, and all these interests are loosely organised under the Livestock Export Council of Great Britain. This is a non-trading organisation, but it is the umbrella which keeps all these interests together. On this Council are represented all the agents and shippers, the National Livestock Associations of cattle, sheep, pigs, turkeys, ponies, and even rabbits, the four Royal Agricultural Societies, the British Veterinary Association, the National Farmers' Unions of England and Wales, the Board of Trade and, last but not least, the Minister of Agriculture, Fisheries and Food. It is a pretty happy family and an active one, but there is no doubt that exporting, whether it is of livestock or anything else, is sheer hard work and the export of livestock raises a multitude of problems both at home and overseas.
The export trade in livestock is, and has been, carried out by the agents and shippers. This is often taken for granted, but I think that we should appreciate that it is these firms, and indeed individuals, who find markets all over the world and provide suitable livestock for them in this specialised business. These, then, are the merchant adventurers to which my hon. Friend referred.
It has been possible over the last 15 months greatly to step up the interest and the incentive to export livestock only because of certain large voluntary subscribers. We are a non-trading organisation and our income is very small indeed. Had it not been for a few rich men—and I add in passing that I am glad to know that there are still in this country a good number of rich men, and that the voluntary organisations would be in a pretty pass if on occasions these rich men did not put their hands into their pockets and pay out—we should not have been able to send livestock missions to Portugal, Argentina, Czechoslovakia, Eastern Germany, and two to Italy, and Italy in return has sent two 820 missions to us. All this costs money, and over this period we have spent £2,400 in helping these activities.
At the same time, we have produced a multi-lingual brochure which carries pictures of all our livestock and has translations in three different languages —French, Spanish and German—as to their particular attributes and qualities. We are at the moment toying with the idea of producing a Russian translation which could be of help to us in Eastern Europe, and to this extent I agree with the hon. Member for Ashfield that if there can be seen to be a future for gain in trade, then indeed trade with Russia and countries beyond the Iron Curtain can be very helpful, because do not let us forget that many of these countries are rising from peasant economies. The plough which was pulled by the ox is today being pulled increasingly by the tractor, and there is more room on the farms of these countries today for beef and dairy cattle than there was 20 years ago. There may well be a market to satisfy there.
I give my thanks to the Government for the way in which they have helped us. They helped us at the Palermo Trade Fair where we had a good stall manned with the assistance of the embassy staff. This was an international South American fair and we received considerable assistance. This is the way in which the Government can help, and we are extremely grateful for their assistance.
There is another way in which the Government are helping. This time it is not the Board of Trade, but the Ministry of Agriculture, Fisheries and Food. Countries will not buy stock from us unless they know that we have the highest possible veterinary standards. In this respect the Ministry of Agriculture—and, for that matter, the British Veterinary Association—in drawing attention to what I consider to be a sensible approach to veterinary matters, has indirectly given us considerable help in our exports.
We hear a great deal about countries wanting beef cattle with liveweight gains per day which are as big as possible. This seems to be the main thing for which they go at the moment. There are other attributes in cattle to which we should look, and one in particular is the question of hardiness. Many of these countries to which we are exporting are not rich 821 enough to have covered yards, and many of these cattle have to be put out in the open. Some of our breeds are extremely hardy and I hope that the livestock industry and those responsible for future breeding will not forget this essential side of animal health.
Our competitors in this line, Holland and Denmark, are much more dependent on this type of export than we are. They are not so industrialised as we are and are being more heavily organised, particularly from the Government point of view. I have not come to the House to suggest that the Government should take any greater hand in our affairs than they do at the moment. We have the representatives of two Ministries on our Council. We are grateful for the support they give us. From time to time we approach the Government when we have particular projects with which they can help, and with this I couple the Councils for the Western Hemisphere and Europe to which my right hon. Friend the Member for Reigate referred. We look forward to both moral and perhaps monetary help as well.
I have spoken for long enough on the question of livestock. Many people complain about the lack of credit facilities. In the two years in which I have had some responsibility on the Council to which I have referred I have never found that credit facilities were any worse than those offered to other countries.
§ Mr. Leslie Hale (Oldham, West)
Many of my constituents tell me that one of the elements of competition today is the length of credit, and that the Export Credits Guarantee Department is not prepared to underwrite the long-term credit that is being asked of it, especially in relation to the South American market.
§ Mr. Gibson-Watt
I am grateful to the hon. Member for raising that point. It stresses the difference between a capital risk and a commercial risk. That difference must always be borne in mind. As for the question of the length of credit in respect of the South American market, anything to do with credit in South America—or, indeed, in any other country—must be bound up with the question of the credit-worthiness of the country.
§ Mr. Hale
The difficulty with the South American market is that it has to face 822 the export surpluses of other countries. This is gradually putting some South American countries in bondage. The world cannot afford export surpluses. I may be regarded by some people as a crank, but I think that I am the only Member of the House who has said that, ultimately, nations must pay for their exports and not their imports. Balances must be dealt with not by an international bank but on the basis of world investment, otherwise our talk about a war on hunger becomes nonsense, because we are creating more and more hunger by placing emphasis on export surplusage.
§ Mr. Gibson-Watt
I would never consider the hon. Member to be a crank. He is one of the Members of the House who, when their names appear on the annunciator, always cause me to come into the Chamber to listen to their speeches. I hope that we shall have a good one from him before long.
I was making my point in connection with credit relating to cattle and livestock exports. I have not found that the E.C.G.D. has been slow or unhelpful in that direction. In that small avenue of exports lies a tremendous source for expansion. It is a line which can appeal to and inspire our younger men and women, and which will take them into every country in the world. If I have not bored the House by taking too long over my speech, I hope that hon. Members will give the matter a fair wind when it is raised in their constituencies.
§ 1.3 p.m.
§ Mr. Dan Jones (Burnley)
I always regard it as a privilege to speak on a subject of this kind. My view is that unless we solve this problem many other problems of the nation will inevitably remain unsolved. The problem that I have in mind most of all today concerns our unemployed. I am not going to refer to it at length today, because it has been my task—and a not particularly pleasant one—to refer to it on many previous occasions. Nevertheless, I am convinced that for some time the President of the Board of Trade—who may be attacking the problems of the unemployed with understandable pre-election good will—has been trying to fill a quart pot from the pint pot in his hand. It just will not work out. For that reason I believe that a successful 823 outcome to an endeavour of this descrption will make a greater contribution towards solving that problem than any other gimmick thought up by Her Majesty's Government, including the gimmick of the noble Lord.
I take a dim view of the fact that the Press of this country sing their hallelujahs at a drop in the employment figures although we still have over 500,000 people leading lives that are definitely sub-standard. I cannot share those hallelujahs. That is why I regard it as a privilege to be able to take part in this important debate, and I join with other hon. Members in congratulating the hon. Member for Mid-Bedfordshire (Mr. Hastings) for choosing this subject.
I want to take sides with my hon. Friend the Member for Ashfield (Mr. Warbey) who put down an Amendment. I shall not go out of order by referring to the Amendment in detail, but I cannot see why anybody should take exception to it, since its words are so clear and so necessary. It merely asks us to:devote an equal amount of attention to the saving of unnecessary imports.If there is anyone in this House who claims that there are no imports coming into the country which are eating into our financial ability to pay and which are quite unnecessary to our needs, that person is guilty of extremely foolish reasoning.
The hon. Member for Mid-Bedfordshire criticised Mr. Paul Bareau, the eminent economist, for saying that the ability to assist those people who were prepared to export was apparently very limited. I am not going to take it upon myself to argue with a man so knowledgeable as Mr. Bareau. I have some knowledge of our industry and commerce, and I believe that it is far more hazardous to export than to sell at home. There is a good deal of evidence to show that for many years our manufacturers, while not being encouraged to sell at home, have certainly not been encouraged to export.
§ Mr. Jones
That would be a charm- 824 ing way of doing it. Be that as it may, I want to apply myself seriously to the problem. While there is much to be said for leaving the present situation where it is, there is much more to be said for encouraging exports. I have spent some time in Ghana and Nigeria. I have referred at length to my experiences there with people who have been good buyers of British exports. I felt that our own British people were letting us down. I am not saying anything that I did not tell our good friends abroad. I reminded them that they were British citizens and that they were under a moral obligation to remember that, and that I felt that they were not discharging those obligations in a manner that I would approve of.
Her Majesty's Government should establish in all countries agencies which can prime our businessmen upon the requirements of those countries. Examples should be set by our own people. I can never accept the fact that a British official abroad, with a fine and well paid job, is doing our country any good when he or she is running a Mercedes-Benz car when we can produce cars of equal quality in this country. That is frank speaking, and I believe it is necessary speaking. I am not going to make any further references because I have made them on other occasions.
I really believe that, if we cannot in some way actually financially assist those who are prepared to take part in the very hazardous business of exporting, our agencies in countries abroad could be of assistance in language, in currency and in supplying detailed information about the respective developments of those countries. The fact that that is not being done—and I have evidence that it is not being done—is something to which I want here and now to take exception. It is for those reasons that I cannot join with the mover of the Motion in congratulating Her Majesty's Government on this vital and tremendously important question of exports.
The next point I want to take up, and which I really believe, rightly or wrongly, is harming our export trade, is another attitude of Her Majesty's Government. Let me give the details. I believe that there is a vast potential for Commonwealth trade. I believe, too, that it is associated with other very important factors. I hold the view that Common- 825 wealth trade is not being properly developed. Here again, let me say, I have previously given details of this and have no wish to repeat myself. But we are at this moment in a position where responsible members of the Government are advocating one policy and their supporters on the back benches are recommending another.
It is not very wise for the hon. Member for Hereford (Mr. Gibson-Watt)and I say this with respect—to talk about the differences of opinion among hon. Members on this side of the House when there are even greater differences of opinion among hon. Members opposite. Let me say precisely what / mean. A few weeks ago, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who has, of course, occupied a very high position in the Government hierarchy and who, I believe, occupies a very high position in the Conservative Party, set flowing the idea about a Commonwealth Economic Development Council. I entirely agreed with him. The only thing to which I took exception at the time was that this idea should be posed in the country as something quite new. That could not possibly be true, because months ago I asked the Government seriously to consider a Commonwealth Export Council, formed on similar lines to the European Economic Council, so that at least the machinery should be set up for the development of this trade. As a consequence I found myself—
§ Mr. A. Lewis
While paying a tribute to the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—by all means let him do so and support the idea—my hon. Friend might also point out that when the right hon. and learned Gentleman was Chancellor of the Exchequer he had every opportunity to put the idea into effect but did nothing about it.
§ Mr. Jones
That might be the case, but at the moment I am trying to prove another point, and, with due respect to my hon. Friend, I should like to continue doing so.
While we have one responsible member of the Government developing, or trying to develop, Commonwealth trade, we have another at the moment, the Lord Privy Seal, trying to convert the Five in order that the Five can convert 826 the Six. In short, I think that the door a the Common Market, rightly or wrongly, has been slammed unceremoniously and with a tremendous lack of dignity in our face. Notwithstanding that, I believe that the whole world knows full well that the Lord Privy Seal is spending a good deal of time today trying to persuade the Five so that, in turn, they can attempt to persuade the Six. The point here truly must be that the Commonwealth realises these things as well as we do and that it would be the height of economic folly to believe that we can still maintain the good will of the Commonwealth while we in this country are performing in that manner.
§ Mr. Gibson-Watt
I am grateful to the hon. Gentleman for giving way. I think that his picture of the alternative of Commonwealth and, indeed, Europe, is a completely false one. Whatever has happened in Europe over the past months, it is surely to the benefit of our country and of the free world that the European countries should get a far greater understanding of our problems, and, therefore, of our problems vis-à-vis the Commonwealth.
§ Mr. Jones
I do not think that the hon. Gentleman should pose the point in that way. I did not say the Commonwealth or Europe. I have no ill-will against Europe—none at all. It is simply that I have a greater degree of good will towards the Commonwealth. Let us be quite clear what I am speaking about.
In reply to the point posed by the hon. Gentleman, let me say—and I ask the House to appreciate this—that the whole of the Commonwealth, rightly or wrongly, was intensely unhappy about our application. I know that from firsthand experience, because I met all of our Commonwealth Ministers at Lagos at the C.P.A. Congress. As a consequence, I learned at first hand the opinion of these people, and, realising how sensible and knowledgeable they are, I cannot help coming to the conclusion that when they realise, on the one hand, that they are being courted and, on the other, that they are being spurned, they will come to the only conclusion possible, which is that Her Majesty's Government are guilty of duplicity. I cannot possibly come to any other conclusion.
827 I do not come to this conclusion with any degree of pleasure, because I know that unless we solve the problem of exports successfully many other problems in the country will remain unsolved. For that reason, I hold the opinion most definitely that we should be completely honest in our dealings with the people of the world. Before I sit down, I will say precisely why I hold that opinion.
I now turn to another part of the world where I really consider—and my thoughts have been shared by people in that part of the world—that our exports to it are very much below what they could be. I want to talk for a moment about Brazil. Last night, at the invitation of the Foreign Office, I met a group of Brazilians, each of whom was very concerned about the development of trade in their country. Each of them was very concerned about the lack of trade between this country and theirs each of them was prepared to say that the good will felt in Brazil towards this country was very high indeed, and each, in turn, was prepared to say that the engineering products of this country were held in very high esteem in Brazil. But, unfortunately, each of them said that it was considerably below what they thought it ought to be.
While I am not going to claim to be encyclopaedic on this subject after one lengthy discussion with these people, I am going to say that one thing could make a tremendous contribution to increased trade with these people, and that is the giving of longer credit to them because of their internal difficulties.
Frankly, I do not see why such countries which have a great deal of respect for us and say that other countries are thrusting forward and pushing them into the background should not be entitled—I say this as a result of my experience in Nigeria and Ghana and in meeting the Brazilians—to say that here again we are in some measure in default.
I would refer the House to my opinion about the aircraft industry. Here again, Her Majesty's Government must bear some measure of blame. I have in mind the unhappy experience over the Trident and the Boeing 727. The details of that episode are particularly well known to the House and I do not want to go into them anew, except to say that the failure to 828 sell the Trident first of all in North America and then in other countries was a severe blow from which our aircraft industry has not yet recovered. I really believe that the aircraft industry had a right to expect a greater degree of support during that unhappy episode than it had. Consequently, I believe that any ventures like the Trident—that is a remarkable aircraft, a tremendous product of British engineering ability—should be pushed much harder abroad than was done in that instance.
I come finally to a point not yet mentioned in the debate. A good deal has been said about statistics relative to controlling imports, a good deal about the importance of tariffs and a good deal about research in the countries from which we buy and to which we ought in turn to be able to sell. There has not yet been any reference to what I consider to be an indispensable asset to trade with anybody, and that is good will. In that respect I want to draw the attention of the House to an event in Africa yesterday which could have very serious repercussions for us.
This is a quotation from a report about a speech by Mr. Milton Obote, the Prime Minister of Uganda, speaking in Addis Ababba at the summit conference of the African peoples:In a speech to the summit conference of 31 African leaders, he also suggested that if Britain granted independence to the white government of Southern Rhodesia, African states should sever 'trade and other relations' with the 'United Kingdom and her fellow travellers'.Mr. Obote was given a very loud hosannah when he came from the rostrum.
I read that with genuine dismay. If these developments take place on that continent, the situation that we rightly complain about today will undoubtedly become progressively worse. Consequently, my final recommendation is that the Government should watch that situation very closely and realise that any foolhardiness there could affect the bread and butter of hundreds of thousands of our citizens in the United Kingdom.
§ 1.25 p.m.
§ Mr. Peter Walker (Worcester)
I followed the remarks of the hon. Member for Burnley (Mr. D. Jones) with interest. I am pleased that he welcomed the pro- 829 posal of my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) in connection with his suggestion about creating a Commonwealth Economic Development Council. In fairness to my right hon. and learned Friend, I would say that his proposals were very detailed and covered a far wider area than the topic of exports and an exports council.
However, I should like to take the opportunity of commenting upon our present pattern of trade, with particular regard to our Commonwealth trade. I do this, not as a former opponent of our entering the Common Market, but as someone who considers that perhaps in the arguments which took place about the Common Market there was an over-simplification of the trends in Commonwealth trade and the trends in European trade. A careful analysis of what the trends have been in recent years would. I feel, result in more positive policies being adopted by Her Majesty's Government in this regard.
First, it is often stated that Commonwealth trade is in decline, that overall the proportion of our trade going to the Commonwealth is bound to continue to decline as those countries develop industries of their own. In practice, the pattern of trade with the Commonwealth countries which have already gone in for industrialisation has shown that our exports to them increase and do not decline, in the same way as our exports to Europe have increased because of the consumer purchasing power that industrialisation brings.
Therefore, I ask my hon. Friend the Minister of State to give careful consideration to the prospects of, for example, that sector of Commonwealth trade which can be described as covering the African and Asian territories, and perhaps one might include in this the West Indies. This group of nations alone takes 50 per cent, of our total exports to the Commonwealth. There is too often a tendency on the part of hon. Members to look upon our trade with African and Asian countries as one which is obtained only by means of giving loans, grants and economic aid—a case of purchasing our own exports.
This is not so. There has, during the period the Conservative Government alone, been an increase of about 100 per 830 cent. in our exports to Commonwealth African, Asian and West Indian nations. I feel that this is a sector of our trade which has immense potentialities. I should like far greater attention to be paid to the relationship between investment in those countries and the increase in our exports to them. Certainly on any measure to date it would show that the investments that we have made in those countries have given us a very large return in increased exports to them.
It is Paul Hoffman's thesis that every £1 million of aid one gives per year over a period of ten years to the underdeveloped countries will result thereafter in increased exports of about £2 million per year. An analysis and study of our trade with African and Asian countries would tend to show that these figures are probably realistic, and if they are realistic, we should consider ways in which we can co-ordinate our investment policies to increase our exports to these newly-emerging nations.
I turn to another sector of Commonwealth trade—the Australian and New Zealand position. I complain of the tendency of people, perhaps when trying to reduce the importance of Commonwealth trade in the eyes of the electorate and others, to suggest that the Australians and New Zealanders are somewhat irresponsible and constantly imposing import restrictions and quotations on our goods and cannot expect very reasonable trading agreements or arrangements with the United Kingdom. Year after year we export far more to Australia than Australia exports to us. Already in the first three months of this year our exports to Australia were 20 per cent. up on those in 1962. So much for the Jeremiahs who in the last 12 or 18 months were constantly decrying our exports to the Commonwealth.
I give a warning, however, that we must pay far more attention to Commonwealth trade than we have done in the past. There has been a tendency to criticise Commonwealth countries for imposing import restrictions while at the same time we have not praised them for the amount of goods they have taken from us. Last year I found that there was commencing to be a genuine hostility towards this country as a result of such remarks made here, whereas they pointed out that they were able to provide us with a favourable balance of trade.
831 Although with New Zealand we have an adverse balance of trade in visible exports, this was made up by our invisible earnings.
This trade is immensely profitable to this nation, and it is likely to increase as other countries in the Commonwealth develop their industries and their populations obtain more consumer purchasing power. Apart from the African and Asian territories and the Australian and New Zealand territories, there is only one sector of Commonwealth trade left. In that sector there are two portions with which we have a considerable adverse balance. The first is of countries which are oil-producing nations, such as Kuwait and Bahrain, which now come into the trade and navigation returns and with which, in view of the large amount we purchase from such nations, we have a considerable adverse balance.
Then there is Canada where there is an adverse balance and, alas, an increasing adverse balance. I express a certain criticism of the Canadian Government in this regard, and particularly of their newly appointed trade Minister. I think it a little too much that he in his first remarks should say that there was not a great deal of importance in developing the Commonwealth pattern of trade and he looked far more to developing the multilateral pattern. His is a country which last year exported far more to the United Kingdom than it encouraged us to export to Canada. His is a nation which could do far more in encouraging the success of British exports in Canada by itself putting more into balance its trade with the United Kingdom and thus balance its trade with the United States of America.
Looking at these three patterns of Commonwealth trade, I strongly urge the President of the Board of Trade and the Minister of State—who has been so kind as to be present throughout this debate—seriously to consider the proposals of my right hon. and learned Friend the Member for Wirral. There is much to be gained by having a permanent secretariat and a permanent organisation which would bring together all the information concerning investment policies, export policies and future raw material commodity agreements. This could be done successfully by following the sug- 832 gestions of my right hon. and learned Friend for looking at these Commonwealth problems.
I wish now to make a few remarks on the subject of invisible earnings. Here I make a plea to the Board of Trade to see that when referring to our invisible earnings the Board should treat them in the same way as visible earnings. It talks of our export and import figures of visible trade; why can it not talk about overseas earnings and payments in terms of invisibles? If that were done, people would realise how tremendously important are these services. We think of invisible earnings bringing in only £200 million or showing a deficit, but we should point out that invisible earnings in fact last year amounted to more than £2,000 million.
It is true that we have to set against these—in the same way as we set imports against exports—very considerable payments, but we should remember that for every pound of visible exports we have 10s. worth of invisible exports. That is a fact which is not recognised in the country generally. If it were we might pay more attention to the problems of our invisible earnings.
In this connection I make one or two suggestions to my hon. Friend the Minister of State. The first is in regard to insurance. The insurance industry depends for its earnings on having all the "know-how" and knowledge and ability to operate with profit in other markets and, secondly, the stability and strength and security of British insurance. There is a real danger to the prestige and the security of British insurance if the Board of Trade does not revise the insurance companies Acts to prevent companies with resources as small as £50,000 from being able to commence as insurance companies in this country. In the last few years immense harm has been done to the prestige of British insurance companies because of one or two failures of insurance companies in the City of London. There are in existence other insurance companies with the very small paid up capital of £50,000. This limit is in urgent need of revision.
I ask my hon. Friend to consider the Private Member's Bill sponsored by my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach) 12 833 months ago to increase the sum to at least a quarter of a million pounds. If there are one or two collapses of minor insurance companies it can have a very serious effect on our invisible earnings. Secondly, I suggest that everything should be done to encourage the insurance and banking industries to train people from abroad. Large numbers of African and Asian students could be taken into the City of London and given a good training so that they recognised the methods of working of our banking and insurance system. They would be able on return to their countries to continue to do business with people they know and understand and whose organisation they have seen.
Much more could be done to publicise the advantages of the British banking and insurance industries in the countries in which they operate. For example, in Australia there is a growing prejudice against the insurance and banking earnings of the United Kingdom. The Opposition in Australia has as one of its suggested policies to try to remedy the enormous amount of money taken out of Australia by British banking and insurance companies. Much of these arguments are based on false facts and figures. For example, they quote as earnings of the British insurance industry premium income taken out of Australia as if there were no claims and as if no investments were made by those companies in the country. If we study the pattern we find that there has been not only a relatively small surplus of premiums over claims, but, much more important, some of the surplus has been invested in new industries to the benefit of the Australian Government.
To this end, I should like my hon. Friend seriously to consider the suggestion for some organisation to publicise the work of our invisible exports. Perhaps it could be called the Invisible Earnings Council. It would be a council which could advise the Board of Trade and liaise with the Board of Trade in suggesting ways in which good will towards invisible earnings of this country could be created in those nations.
I wish to say a few words about the manner m which we could perhaps promote more interest by the small firms in this country in the exporting trade.
834 I should like my hon. Friend to make out a direct approach to the joint stock banks. The bank manager is the one person who is able to influence the thinking and ideas of his customers and clients. I believe our export potential would be radically improved if over the next six months every bank manager in this country asked each of his clients who could possibly export to go to the bank and have a ten minute discussion on the sort of facilities available to him to enable him to export. If the joint stock banks agreed to do that as an exercise, perhaps every three or six months each bank manager could attend some form of conference in which he could be briefed on the facilities of E.C.G.D. and the principles of exporting.
They in turn over the next six months could interview two or three of their clients each day and provide them with the sort of information and facilities available. This could bring about a substantial increase in the number of small manufacturing concerns considering exporting abroad.
I congratulate my hon. Friend and my right hon. Friend the President of the Board of Trade on what I consider the very practical approach which they are making to our export problems. The Minister of State has visited almost every region of the country. He and his right hon. Friend have interviewed many of our top industrialists and have interviewed many retailers to encourage them to use their retailing methods in the export trade. They are making a very practical approach. This may be due to the fact that my hon. Friend the Minister of State was a very distinguished industrialist whose firm did a great deal of exporting. Whatever the reason, I think that the practical work which they are doing, although not receiving much national publicity, will prove very successful and will provide the results which we all wish to see.
§ 1.41 p.m.
§ Mr. Arthur Lewis (West Ham, North)
We have just listened to an excellent speech by the hon. Member for Worcester (Mr. Walker). With his longing for and great support of Commonwealth trade, naturally his speech dealt mainly with that aspect. Later I will touch on the point which he made 835 about facilities for smaller traders, with particular reference to credit facilities and banking assistance.
I congratulate the hon. Member for Mid-Bedfordshire (Mr. Hastings) on having moved the Motion. I agree with almost all the points he made, but I should like to comment on his reference to the difficulties about credit facilities experienced by the smaller type of trader. The right hon. Member for Reigate (Sir J. Vaughan-Morgan) congratulated the Board of Trade and the Government on their activities, but he, too, pointed to the difficulties experienced by the smaller type of businessman in getting credit facilities. The point I emphasise is that if everything is so wonderful and the Government have been doing so well, it seems strange that every hon. Member who has spoken so far has pointed to the Government's failure to help to support the smaller type of trader. Before I conclude I will go into this in more detail.
The hon. Member for Hereford (Mr. Gibson-Watt) talked about a subject rarely mentioned in these debates. I speak with no vested interest in this subject, because I represent an industrial constituency and have no interest to declare in livestock. He made an admirable speech on the need to encourage the export of our livestock. Unlike my hon. Friend the Member for Burnley (Mr. D. Jones), I have not had the opportunity of touring the world, but I have been to a number of countries and, as a townsman with no knowledge of livestock or agriculture, I have been able to ascertain that Britain, which has a wonderful reputation for skilled craftsmen and finished products, also has a wonderful reputation for its livestock. Wherever I have been I have heard that there is a great need for British livestock to be imported into those countries.
That is particularly true of countries of Eastern Europe—as we call it, behind the Iron Curtain. Without exception these countries have great difficulty, first because they are short of livestock and secondly because they have not the same type of cattle as we have in Britain. They frankly admit—and this is rather strange because they rarely admit that they are behind the West in anything— 836 that they have not cattle and livestock of the quality which we have in Great Britain. I therefore ask those interested in this activity to look at the potentialities of exporting livestock to Eastern European countries.
I understand that the hon. Member for Skipton (Mr. Drayson), with a business colleague, has a business interest in this respect and is trying to establish an exhibition of agriculture and livestock next year in Moscow. I am not advertising it and I have no interest to declare, for I have not even mentioned to the hon. Member that I would refer to it. But it is a field of activity which should be encouraged and in which we start with a great advantage over any of the other European countries. Usually we find, for instance in machine tools, finished plant, equipment or chemicals, that other European countries are as good as, if not better than, us, but in this respect we lead the world and there is a great opportunity for us.
I will deal next with the general question of East-West trade and will declare an interest in a particular matter which I want to mention. For 18 years I have been actively interested in trying to help our exports through East-West trade. Only in the last two or three years have I had a personal interest. Here is a great opportunity not only for exports and trade but for ensuring peace. If people become tied economically and industrially the chances of political problems resulting in war are much less than if they had had no trade and understanding.
1 disagree with the right hon. Member for Reigate who said that these Eastern countries have not great potentialities. I think that they have. Hon. Members on both sides of the House have been to those countries and some on both sides have interests in business and have been trying to expand this trade. They will agree that in most of these countries there is a great shortage of the type of manufactured goods, plant and equipment which we can produce so excellently and cheaply.
But I agree with the hon. Member for Reigate that these countries are short of currency. They have to balance their budget and they say, "We cannot spend £X on certain plant and machinery, much as we want it, because we have not earned that amount or because we have 837 other priorities which are more important. Nevertheless, we should like this equipment." I well remember attending the Moscow Trade Fair and I pay tribute to the excellence of the British contributors and what they displayed. They put on a magnificent display and I recall hearing Mr. Khrushchev once again refer to the desire and need for long-term credit so that more business could be conducted between the various countries. I also recall that Mr. Bulganin and Mr. Khrushchev came to Britain for discussions with the Prime Minister. A "shopping list", as it was called, was exchanged and, once again, it was said that if long-term credit could be extended a great volume of business could be done.
What has happened since then? There has been no extension of long-term credit to these countries; and this brings me to a point I wish to make and concerning which I have a personal interest to declare. Some time ago I happened to hear—the means by which I got the information is of no consequence now—that there was a possibility of a contract worth 1¼ million being given to West Germany. By various means—and I have no need to detail them—I personally persuaded the East Germans not to place that contract with the West Germans because, I told them, we in Britain could do the job better and more cheaply.
So far so good. I then tried to ascertain whether, in fact, we could do the job in this country, and after considerable difficulty I persuaded a small British manufacturer to undertake the work and accept the contract. I persuaded the East Germans to delay placing the contract with the West Germans and they agreed to hold it up until the next Leipzig Trade Fair.
In due course I went to that trade fair with a British businessman and, after a great deal of discussion, persuaded the East Germans that Britain, as always, could do the job better and more cheaply —certainly cheaper and better than the West Germans could do it. Thus we persuaded them to place the contract with this British firm. Before I went to the Leipzig Fair on that occasion I had discussed with the Board of Trade the possibility of getting the contract placed in Britain. I pointed out that the firm in question would not only bring the work to this country but would establish a special factory in Northern Ireland 838 which would employ about 200 people for two years.
We appreciated that there would be certain difficulties over long-term credit, which the West Germans were offering, and that there might be exchange difficulties. So we approached the Treasury and received helpful and kind assistance, just as we got from the Board of Trade. But when it came to getting something tangible this is what we found. The contract was worth £¼ million, was underwritten by the State Bank of East Germany—which we do not officially recognise—and we thought that the manufacturer's own bank would grant credit for the contract. After waiting for some time this bank informed us that the necessary credit could not be given. The reason was that there was no E.C.G.D. certificate to cover it. So E.C.G.D. was called in.
We were told that since only a short-term cover was involved the arrangements could not be made because they would have to be on a long-term basis for E.C.G.D. to be able to help. The contract was to have taken two years to complete originally but to put it on a long-term basis, it was extended to three years. The East Germans were only too pleased to extend it for the extra year. Discussions went on over this extension, interest rates, insurances and so on. After ail this we were told, "If you do not have the bank cover you cannot have the certificate", and I thought then, as I do now, that it was rather like the proverbial dog chasing its tail.
The bank would not loan the money and the E.C.G.D. would not give the cover certificate because the money was not there to cover it. After this the firm said, "If we raise £100,000 ourselves could we have cover on the rest on a part-shipment basis"? The answer was "No". To cut a long story short—for it is a tragic story to relate—we, the firm, had to arrange for the contract to be handed over to West Germany, who were only too willing to give the conditions and credit facilities which we were unable to give. If that is happening over a £¼ million contract, one need only multiply such a case half a dozen times to realise that £3 million in orders can be lost so easily. It shows that £3 or £4 million worth of orders can go to West Germany instead of Britain without any trouble at all.
839 When I raised this matter at Question Time in the House of Commons some time later the Minister said, in effect, "The firm was a small one and had no capital assets to cover the contract." That was exactly what the bank told the firm. Thus the bank said, "If you were a wealthy firm and had the necessary credit we would grant you all the money you needed." Had the firm been large enough to have its own credit it would not have needed to seek assistance.
Hon. Members frequently talk of the unemployment problem in this country and today my hon. Friend the Member for Burnley, after pointing out that we at present have ½ million unemployed, said that more exports would not only help our balance of payments position but would help to solve our unemployment problem. I remember, as we all must, how only three months ago we had nearly 1 million unemployed. I do not know what they were drawing in benefits in total, but if they were getting £7 or £8 a week each that represents £7 to £8 million a week being paid out in unemployment benefits, family allowances and so on.
Would it not be far better for £7 to £8 million to be given in credit each week to those countries which will place orders with us? If that were done the work could be placed in factories in Northern Ireland, the North-East and other unemployment black spots so that the workers could draw wages instead of unemployment benefits. I cannot see the wisdom of paying out unemployment benefits to ½ million unemployed—and if they are receiving £10 per week in unemployment pay that represents £5 or £6 million per week that could be devoted to help our export drive—when we could make capital available on a long-term basis to these countries.
The British worker would rather be employed for £10 to £14 per week than draw £10 per week unemployment pay. I am not suggesting that our unemployment troubles can be solved overnight, but a system of giving long-term credit to overseas countries would be of great assistance in solving this problem. The Government should find out what these countries require—and I know that ships are needed—and make, say, £50 to 160 million in credit available so that 840 the work can occupy the people of this country, who can produce these things and are anxious to get on with the job.
This could be done if the President of the Board of Trade and his advisers got busy and tried to negotiate contracts with some of these countries. I agree that good work has been done in the export drive with the Western countries, but with the exception of Czechoslovakia and Russia there does not seem to be any desire on the part of the Government to secure better trading relations with the other Eastern countries. I know quite a lot about East Germany. The Leipzig Fair has been going for 984 years. I attend it regularly. At that fair almost every Eastern and Western country is represented. I know something about their trading problems, for I discuss these matters with the people there.
Because we do not officially recognise East Germany, we do not officially have a trade agreement, but nevertheless there is a trade agreement which is unofficial. The Board of Trade does not officially know anything about it, but it knows what is going on. We do not officially do what we can to encourage trade with East Germany, but unofficially I am told that we do. We do not do this officially as West Germany rather resents the fact that we do big trade with East Germany because of the political tie-up, or lack of tie-up, between East and West Germany.
But one of the biggest traders with East Germany is West Germany. West Germany are not a bit embarrassed about doing trade with East Germany, but they are embarrassed when they learn that the British come in and take trade away which they feel is their right. They are not against sending people to Leipzig. I was there last year, and I was surprised to see there one of the biggest industrialists, by the name of Mr. Krupps. He was not loath to go there. Only this week, I read that one of his representatives had been to Moscow and had gone back to East Berlin. The point I am making is that there is a country which is crying out for all the plant, goods and equipment which we can manufacture, in the areas where we have large unemployment, and which normally produce these things. But we cannot do it, first, because we do not 841 recognise East Germany, and, secondly, because we will not give them long-term credit. I suggest that that ought to be done, not because it will be of benefit to them but because it will benefit us.
Originally, as was subsequently proved, the Americans were very strict in enforcing the so-called strategic embargo and bringing pressure to bear upon the various Western countries, including our own, to see that we insisted on the embargo. Naturally the last thing that we ought to do is to export weapons and materials of war to any of the Eastern countries. I should not want to see that. I remember that a Tory Government just before the war were exporting copper, nickel and steel right up to August, 1939, just before the war started. I think that was rather silly. I would not agree that we should export strategic goods. What I object to is the new attitude of approach, which I think is a false one, which the American are now adopting. It is that we should try to see that we do not export to those countries the sort of plant and equipment which might hasten their development faster, and to a higher extent than the Western countries.
If the Eastern countries want machines of the old type for producing shirts or things which they can do themselves we can, according to the new attitude of the Americans, export them, but if they want the latest type of plant and equipment, electronic, fibre plant and so on, even though it is non-strategic but may help their development, then they must be held back.
I agree with the hon. Member for Hereford, who rightly said that as these countries develop, and the faster they develop, the better it is for us. Russia and the so-called Iron Curtain countries have developed. That is not to our harm but to our benefit, because if these countries consume more and have more of the good things of life, that will help our exports.
For example, we have China with a population of 600 million or 700 million. If we could send them only one pair of shoes each, it would keep Mr. Clore happy. But we will not do that because the Chinese have not the capital or credit, and we will not advance it. It would be far better if the Board of Trade would 842 say, "To keep our people employed, we will advance to these countries money" on good credit terms, so that we can supply them with plant, equipment and finished articles.
There is now a furore going on with regard to sugar. This is tied up with Cuba and world prices.
§ The Minister of State, Board of Trade (Mr. Alan Green)
It is tied up with a very bad crop in Cuba, and poor conditions of harvesting.
§ Mr. Lewis
I agree. It is tied up with various explanations, but the real explanation, which has never been given, is that the Americans are rather loath to have trade with Cuba because they do not like Castro. Therefore, they are bringing pressure to bear upon the Cuban people by trying to stop their stocks of sugar and, I understand, are even trying to make difficulties here about boats coming into Dagenham docks with sugar. It is about time that the Americans, or any country, were told that they should not try to get their political understanding settled by bringing in these stupid, silly, restrictive trade practices, because that does not help the position; it makes it much worse.
Obviously, I would not agree that one should send arms, but I think that we should try to extend in all ways possible multilateral trade between East and West and other countries because once they are tied economically and politically there is a better chance of getting peace and understanding.
I ask the Board of Trade or the Treasury, whichever Department has the job, to look at the position of the smaller trader. Just because a firm may have a paid-up capital of only £10,000 or £20,000 but happens to get a contract worth £1 or £¼ million or £½ million, it is not right that it should be told, "Because you are so small and have not the necessary finances you cannot have help or credit The Board of Trade and the Treasury point out, when approached, "We can't dictate to the Big Five joint stock banks and the industrial bankers."
Nobody asks them to do that, but if the industrial bankers and the joint stock banks will not grant credit facilities on export orders that are reckoned to be necessary and important, there 843 is no reason why one or other of those two Departments should not set up a kind of Public Works Loan Board scheme under which firms could borrow at reasonable rates. That would make the banks realise that if the exporter was not getting what he felt to be fair treatment from them he could go—he might often go in the first instance—to that loan board to get the finance necessary to carry out his export orders.
I am sure that if the President of the Board of Trade were to do that, he would find that there would be a large increase in exports. It would be a very rapid increase because, as several hon. Members opposite have pointed out, facilities, and more facilities, should be given to the small businessmen engaged in the export trade.
§ 2.11 p.m.
§ Mr. John Woollam (Liverpool, West Derby)
The hon. Member for West Ham, North (Mr. A. Lewis) has touched on many topics of particular interest to me, many of which will slot into place in my remarks. It has already been said by earlier speakers that it is fascinating to hear echoes in today's speeches of what has been said in debates going back, I suppose, centuries, on such subjects as mercantilism and the Navigation Acts and laissez faire. I do not think that there is any permanent unchangeable economic wisdom at hand when we are considering trade policy. At any one time, there is always a conventional wisdom about what we should or should not do. In a slightly serious, slightly facetious aside, I would say that I welcome this debate on a private Member's Motion because, very often when we have such a debate on a Government Motion, whatever is the conventional wisdom of the day soon surrounds the debate. It is easier to be free or heretical on a private Member's Motion.
To be fair to the Government, I admit —and I very much welcome it—the extent to which in the past few months they have been rejecting a lot of conventional economic wisdom, especially as it affects balance of payments and exports. First of all, we have at last rejected the notion that if our export markets are to prosper, our home markets must suffer. I will not expand on that, because all the 844 economic arguments are known to us, and were clearly challenged in the Chancellor's Budget Statement.
Secondly, we have introduced tied aid to promote exports. Thirdly, the view is taken that our export prospects, and the economy as a whole, must be allowed to go ahead for one or two years without necessarily being pulled back by the state of imports and the risk of foreign exchange runs. In other words, other solutions that have been tried in the past have had a fair run, and the Government are now rightly trying other solutions, especially those that affect exports so much.
What interests me very much is that, despite these evolutionary or revolutionary points of view, the foreign exchange markets have taken the view since the Budget that these are good developments. We cannot promote economic policies which run against the consensus of world economic and commercial opinion, and so far this year we seem to have world economic opinion going with us rather than against us, which is why sterling has held up so well.
Three or four aspects of our export problems interest me particularly. I expect that I shall express minority views, and I suppose that they are very much influenced by my own experience in exports. Here I must declare my interest. I am an executive director of a number of export merchanting firms exporting to many parts of the world and, clearly, one's business viewpoint influences one's economic and political opinions. The right hon. Baronet the Member for Reigate (Sir J. Vaughan-Morgan) doubted very much whether, after these hours of debate, as much as £1 would be added to our export earnings, but if I did not declare my interest now someone might think that I had made ½ per cent. on my contribution.
First, I do not agree with most of the criticisms made of the Export Credits Guarantee Department. I have made many criticisms in my time of the Board of Trade and the Treasury, but the substance of most of my criticisms has been met. I think that the E.C.G.D. and the Treasury are right in concentrating their available resources on reducing premiums, that is, export costs, across the board. Secondly, I differ from many of the views expressed about the problem of the small or modest exporters. I do 845 not want to see them discouraged at all, and I want them to have all the information and facilities available, but I do not think that, in the aggregate, the small exporters will do the trick.
Compared with the total, the required expansion of our export earnings is still only marginal, and it is much more likely to increase by our concentrating even more on the biggest firms and exporters, and I speak in the absolute rather than in the relative sense—
§ Mr. A. Lewis
If the hon. Gentleman takes that view to its logical conclusion, is it not the case that these big firms were once small firms? They built themselves into big firms by starting in a small way on exports. Why should not today's small firms have a chance to build themselves up?
§ Mr. Woollam
I am not denying anyone a chance. As I have said, I want them to have all available facilities. I only say that there should be a further concentration of persuasion on the biggest firms. That is the way in which the big push can be made towards the necessary percentage increase in exports. I did not always hold that view, but I have changed my opinion in the last few years.
Many of the large companies that are so significant to our export business are not coming to terms with the changing pattern of world trade. I do not expect to find the House agreeing with me in this, but I think that multilateral trade has gone into reverse in the _last year or so. Bilateralism is now on the increase and, broadly, there are two good reasons for it. One is an increasing shortage of sterling and hard currencies in the Soviet bloc, which affects not only trade with the Soviet bloc but with other countries, too. Secondly, we have seen in the last few years the arrival of dozens of new trading nations—in the main, primary producing countries—all of which are favouring bilateralism and adding to the number of clearing currency accounts. Those are broad trends of the present, and the result is to make trade and selling infinitely more difficult and complicated.
For instance, many of our competitors —the biggest steel, chemical and pharmaceutical firms in Western Europe—are carrying out complicated ways of 846 selling which involve third parties. We find them trading in and merchanting a range of products that have nothing at all to do with their own main products. They do it for one reason only—as a result of merchanting activities of that sort they help to sell their own prime products. That is something that we in this country still refuse, in many instances, to recognise as being necessary, or even correct or moral. I hope the Board of Trade will use its powers of persuasion—I know that it has few statutory powers—to try to educate more of our large firms to see that the patterns and idiosyncracies of world trade are changing.
My last point concerns East-West trade. As the Minister of State knows, one of my interests is in an East-West trading company, and it has given me an opportunity in the last few years to see something of that type of trade and to compare it with my experiences in Africa, the Far East and America. As my right hon. Friend the Member for Reigate said. East-West trade is not going to grow rapidly; there is a lot of potential, but it will not grow rapidly. It is important to realise that it is infinitely complicated and difficult. In the past, traditional British exporting houses have not been very good at this sort of trade.
What fascinates me is that such a high proportion of the British share of East-West trade is in the hands of European refugees, immigrants and others who have chosen to make this country their home. Some may say that this is for reasons of affinity and of language. That is not so. If it were so, there is no reason why they should not have made the mainstay of their trade with the West of Europe rather than the East of Europe. The same reasons of language and affinity would apply. These people, who have made this country their home, have not been able to enter the traditional export markets and have found that it is in these less popular export fields where their opportunities and chances lie.
I hope that through some of the export councils, and other means of persuasion which are open to the Board of Trade, we may interest more and more of these merchanting houses which specialise in East-West trade, with their expertise, experience and, most im- 847 portant, their mode of thinking—for a separate way of thinking is required when carrying out trade with the Soviet bloc—to turn to trade with the new States of Africa and Asia.
These people could also apply their mode of thinking with advantage to trade with Latin America. One of the biggest failings of this country in the post-war years has been in connection with trade with Latin America. It seems to me that it is expertise and experience which have a direct relevance and application to the trading experience and patterns which are emerging in other parts of the world. I would hope that many of these new merchanting firms, which have grown up in this country in the post-war years, will not always be committed to East-West trade but could be guided and encouraged to turning their attention to other parts of the world which need their technique and experience.
I often regret at times, when one wants to see something done, that many of our Departments do not have real statutory powers. On the other hand, I think that the Board of Trade in the next few years is going to evolve in much the same way as the Ministry of Labour has been evolving—in other words, will cease to be just a post office, a neutral Government Department passing on advice. Many of our Departments, and particularly the Board of Trade, are becoming and will have to continue to become more and more positive in their recommendations and in their intervention—for I suppose that is what it will be called—in the advice and information that they give to industry and trade.
§ 2.23 p.m.
Mr. Tam DalyelI (West Lothian)
Often in this House we excuse ourselves for not following the Member who has spoken previously, but on this occasion I should like to follow what the hon. Member for Liverpool, West Derby (Mr. Woollam) said concerning the teaching of languages.
My concern is limited to the training of young men who are actually going to do the mechanics of our export business in the next 40 years. I believe that languages are absolutely crucial. Take, for instance, Spanish. I was a 848 member of an all-party group who were recently the guests of Royal Mail Lines, which company does the bulk of British shipping trade with South America. On that occasion those engaged in the trade emphasised that Britain was missing out in so far as we had relatively few people with a command of the Spanish language. It was said that we went to the extent of such absurdities as sending magazines to South America printed in English, and giving lengths not in centimetres but in feet and inches. Perhaps this is particularly relevant to the textile trade.
It is all very well to state a problem, but perhaps that in itself is not useful and I would wish to offer four solutions. The first concerns the teaching of Spanish in schools, and I think that the Minister ought to question his right hon. Friend the Minister of Education on whether it would be possible to encourage the teaching of Spanish far more in Roman Catholic Schools, because here, for self-evident reasons, there is a basic motivation for learning Spanish. One must argue this point in terms of realism and of the school curriculum. There is every argument for getting experienced teachers of Latin to become teachers of Spanish—this would not be very difficult for them—in the same way that the Annan Committee on the teaching of Russian argues that Russian teachers could be found among trained men who were teachers of the classics, for the classics might not be as suitable as they once were in the school curriculum.
The second point concerns language laboratories. I suggest that the Minister should consult his right hon. Friend the Minister of Education about the necessity for a massive provision of language laboratories. It is all very well learning the grammar of a language in school, but what those who are going to do the export business really need is conversational Spanish. This is the advantage of language laboratories. Far more realistically than before they are able to make it possible for pupils to learn languages as they are spoken, rather than the grammatical structure which may or may not improve the accuracy of their minds. The point that I wish to raise is whether it is possible to adapt these language laboratories to Spanish, not as it is spoken in Spain but as it is 849 spoken in South America, for there is an important difference.
My third concrete suggestion is that the Minister himself should contact this year's president of the Association of English, the chief education officer of which is Mr. Gordon Bessie of Cumberland, who has recently been on an educational tour of South America and is full of intricate and somewhat sophisticated ideas as to the advantage which would be obtained by this country taking Spanish more seriously.
My fourth suggestion is perhaps somewhat esoteric, but nevertheless it should be considered—namely, whether there is a need for setting up a centre in British Guiana where pupils, perhaps before they go to university, could undergo a 9 or 12 months' course in the Spanish language in a Spanish-speaking country. This would be expensive, but, at the same time, it would give much needed currency to a developing country. This, after all, would provide finance so that British Guiana could pay for much needed exports from this country.
The next language that concerns us is Russian, and I put it second because I believe that Russian is less important than Spanish. The Minister should consult his right hon. Friend the Minister of Education concerning the recommendation of the Annan Committee. Here I would remind him that many of us went to an all-party meeting addressed by M. Meyer, of the trade delegation from the Russo-British Chamber of Commerce, which recently went to the Soviet Union. M. Meyer's chief point was that the Russians considered us to be slow starters. Whatever the hon. Member for West Derby may say about the importance of language—I thought he somewhat decried it in this context—it nevertheless seemed to be the opinion of this delegation that language was important and that, to some extent, this accounted for the fact that we were slow starters in East-West trade.
Here again, is there not a case for contacting the Russian Government on the possibilities of loaning teachers of Russian—because this is the bottleneck —and getting a large number of perhaps young men and women from the pedagogic institutes to come and teach either in further education courses or senior courses at our schools?
Less immediate, perhaps, but equally 850 devastating is the problem of Oriental languages. Perhaps the hon. Gentleman will send me a written reply to this question, since it would be unreasonable to expect an answer when he winds up the debate today. Will the Minister get someone to study the Hayter Report on the teaching of Oriental languages? How can we increase our trade with many parts of Asia unless our salesmen have a working knowledge of the language of the people with whom they wish to trade? My concrete suggestion here is that his Department contact Mr. David Lees, the rector of the High School of Glasgow, who has an honours degree in Japanese and many ideas on how Oriental languages can be taught both at school and after, to find out whether anything useful could come from a discussion of how those who do not specialise in languages but, perhaps, in science, mathematics or technology can learn a smattering, enough to conduct the export business which we want.
Hon. Members' critical faculties may stimulate them to ask whether it is realistic to talk of 17-year-olds and 18year-olds learning Chinese, Japanese and Hindi. But there would be the motivation in this context. I sometimes wonder whether there is in our society too much compartmentalisation, whether we think that this is an education matter, this is a trade matter and that is an export matter, regarding each in isolation. If we are convinced that the commercial interest of this country required pupils of 17 to 19 to face the difficult challenge of Oriental languages, this in itself provides the motivation. When the motive is there, when it is obvious to young men and women of this age that there is a chance of getting something done, they should be given an opportunity to pursue these studies.
Only this week, I was a member of a panel of three asked by the United Nations Association to interview candidates for Voluntary Service Overseas. What struck me and my two colleagues on the panel was the way in which 15 to 18 months abroad would provide a stable sense of values for those who went in the first place to give service and, perhaps, to improve themselves—not at all an ignoble motive. I think that it comes within the orbit of the Minister of State's interests to ask whether the Government 851 will provide a good deal more funds to enable those who wish to do so—and there are many—to go on schemes such as Voluntary Service Overseas from school, before they go to university or, perhaps, after they have graduated. Is it not arguable that, if they have this experience, they will be much better commercial representatives than if they had gone straight into commerce?
In an earlier debate on a different subject, the right hon. Member for Reigate (Sir J. Vaughan-Morgan) urged that there should be substantial reductions in fares on relatively empty aircraft for stand-by passengers going to places such as Ghana and India. I think that the Board of Trade might well inquire whether it is possible to have cheap flights or cheap travel facilities for commercial representatives or potential commercial representatives up to the age of 22 who were prepared to study abroad. If there were these cheap facilities, both large and small firms would, I believe, be more willing to let them go.
§ Mr. Hale
I am getting a little worried. I am wondering how far, if one wants to sell textile machines to Indonesia, one would be wise to spend 13 months in Indonesia to study the language and customs of the people or spend 13 months in Oldham studying textile machines. My hon. Friend will recall that the advantage the French have over us in languages is due to the fact that their capital has been occupied five times by hostile forces in the past 150 years. whereas we have not had that problem.
§ Mr. Dalyell
Does it not depend on the attitude of mind of so many of our commercial representatives? Would not their salesmanship be more convincing and of better quality if they had the sort of experience which I suggest? The problem is one not only of knowing about textile machinery or whatever it may be but of both knowing about textile machinery and having an understanding of the country in which one is selling. This brings up the basic criticism of so many of our representatives, that they are excellent in knowing about computers, textile machinery or whatever it may be but they are remarkably gauche in the actual mechanics of selling. This is 852 really the point of my contribution to the debate.
I mention next the recurring interest in school trips. It might be possible, in the season when the present school trips of the "Dunera" and the "Devonia" are not over-booked, say between September and March, to run an experimental voyage for potential commercial representatives between the ages of 18 and 20 to, for instance, the East Coast of Africa and going also to India and, perhaps, as far as Indonesia. The running of such a ship is a very expensive business, but I imagine that, if there were the facility of being able to hold seminars on the ship and being able to visit different parts of the world and have discussions with potential buyers, this might be an idea well worth while.
The Minister may ask what this has to do with him. I expect him to be a catalyst in the organising of such an experiment for the first time to see whether it works. If we do not give young people a chance, before they have made their career decisions, to see the developing countries, will their basic understanding of the problems of exporting to the developing countries be as good as it should be? It is this which is so necessary. My concrete suggestion here is that the Department get in touch with Mr. Kenneth Campbell of the British India Steam Navigation Company to ask whether it might be possible to arrange, say, in the Christmas period of 1964–65. some such voyage for potential sales representatives as an experiment.
Because it is irrelevant to the main line of my argument, I do no more than mention the possibility of exporting ships specially constructed as ship schools. It is ironic that, although the experiment was originally made in this country, it is the German yards which are thinking of building ships specially designed for taking young people on academic cruises. If, somehow, the British yards were given a guarantee that such a ship would be used, there could be a potential export market for this new kind of ship.
What can be important in the obtaining of orders is the attitude of those who do the actual placing of orders and the personal contacts possible between peoples. One welcomes the contact which has been made between the University of Edinburgh and the Univer- 853 sity of Baroda Medical School whereby relays of medical staff from the University of Edinburgh go to India in order to improve post-graduate work there and raise the standard of graduate teaching at Indian medical schools.
It may be said. "How does this fit in with exports?" If our graduates maintain a contact with universities in developing countries, does it not follow that that these British-trained medical men, for instance, in India will order British equipment? Does not this sort of link constitute a sort of skill-intensive market for British goods? The corollary to this is that one should pay far more attention to foreign students who come to this country and who will go back to their own countries, because they are the people who will do the ordering.
Most foreign students who come here study law or some such subject. I suppose that it is not entirely philanthropic, but is it not a pity that so many of those who come to study technical subjects in Europe go to countries other than our own? Suppose that a student from Nigeria or Ghana goes to Augsburg or Cologne for his technical education, does it not follow that when he goes back to his own country he will order German equipment, with which he is familiar?
If we could get more technical students from developing countries to study in Britain, and if we took a good deal more trouble about their extra-curricula education, particularly the contact with British industry, this would not only serve them well but would be extremely lucrative in the long run for ourselves and would combine enlightened self-interest with philanthropy.
I believe that the export problem is bound up inextricably with the problem of educating people and that when it comes to ordering skill-intensive products, which is easily the most important market we have, the trouble which we take over people, both our own students and the students with us as guests of Britain, will be well worth while.
§ 2.42 p.m.
§ Mr. Humphrey Atkins (Merton and Morden)
The hon. Member for West Lothian (Mr. Dalyell) has made a most interesting contribution to the debate. have listened with considerable attention to his remarks. I was particularly struck by one thing which he said and with 854 which I find myself very much in agreement, namely, that we in this country tend to become compartmentalised, as I think the hon. Gentleman put it. In other words, we thing that this is the responsibility of this Minister or that Minister when so many problems are very closely tied up. The language problem is one of them. Whenever I go abroad, being one of the many Englishmen who cannot speak a foreign language, I find this a terrific handicap, and I am only glad that I am not trying to sell a complicated piece of machinery to the foreigner to whom I am talking.
A number of hon. Members have spoken about the assistance which the Board of Trade gives to the smaller exporter and also in matters of credit. I wish to say a few words about both these things. I do not agree with my hon. Friend the Member for Liverpool. West Derby (Mr. Woollam) when he says that he feels that the effort of the Board of Trade should be concentrated on assisting larger companies which are already carrying out export business. He felt that the greater potential for increasing exports was with them.
I find myself in a temporary and unusual alliance with the hon. Member for West Ham, North (Mr. A. Lewis) about this. I am sure that all these large exporters started as small exporters. If they had not battled their way through the many difficulties which they encountered and had been assisted, as no doubt many were, by the Board of Trade and other Government Departments, they would never have become the large exporters on whose work we in this country so much rely. In addition, because they have been exporting in large quantities for some time, I venture to think that probably they do not need quite as much help as the smaller man who does not know very much about the great outside world into which he is venturing in a business way.
My right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) said that he found it astonishing that there were still people in this country who did not know the services which the Board of Trade can provide to help exporters. He may be astonished about it, but I am sure that that is true. In spite of all that has been and is being done by the Board of Trade to give publicity to its affairs, there 855 are still many people who do not know about these services simply because they have probably never exported before. They are all working very hard and perhaps have not time to read the Board of Trade Journal or any other publication from which they can get all this information. When they are faced with a new problem they do not know how to deal with it.
I am sure that it is in respect of these people that every effort must be made by my hon. Friend the Minister of State, who, I am sure, appreciates this problem because, as is well known, his own company with which he was connected before his Ministerial appointment was an exporter and, no doubt, once was a very small exporter. I therefore urge my hon. Friend to give continual thought to methods of getting himself across to the small exporter who, for all we know, in five years' time may be a large exporter.
There are many ways in which this is done at the moment. Tribute, quite rightly, has been paid to the work of the Board of Trade and its various departments. But we cannot sit back and say, "The Board of Trade is a good Department. It gives people a lot of help. Therefore, let us think about something else." This is a matter which requires constant attention because it has to change all the time. There is probably a number of minor ways in which it could be improved still further. One of them was brought to the notice of the House about a week ago by a Parliamentary Question in which the President of the Board of Trade was asked about the length of time that it took to answer a letter from the Export Credits Guarantee Department.
I am not interested in that particular case, which I think was very well answered, but what I should like to feel existed in the Board of Trade and all its Departments concerned with exports was the feeling which exists in my business and, no doubt, existed in my hon. Friend's business, that if a new inquiry arrives in the morning something is wrong if it is not answered by lunch time. I do not know whether this happens in the Board of Trade. It frankly does not happen in most Government Departments. We all know that when we write even to Ministers, who are most courteous and helpful, we anticipate that it will be at 856 least a fortnight before we get an answer, and it usually is.
In trade and commerce—and this is what we are talking about—if a new inquiry comes into the business, it is dealt with at once, or it should be if the firm is alive; and it is the alive and enterprising firm which gets the business rather than the one which says, "We will deal with that on Monday". Because the Board of Trade is so intimately linked with all this process, I hope that that feeling pervades the Ministry and that nothing is lost to a British exporter because, for example, someone has not answered a letter. I am not accusing the Ministry of not answering letters, and I do not lay particular stress on this point. I merely use it as an illustration of something which I feel is extremely necessary, and that is that the spirit of enterprise and competition should be as much alive in the Board of Trade as it is in the mind of the exporter.
May I say a few words about credit, to which my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) referred in what I thought was a most excellent speech? Indeed, it has been mentioned frequently today. The Export Credits Guarantee Department, rightly, has been widely praised. It has a very high place in our regard and, I believe, in the regard of other countries. The Department is of enormous help and constantly cuts its rates.
My hon. Friend suggested that the City of London was somewhat lacking in enterprise in helping exporters and was less helpful than formerly. It is not my business to defend the City of London—it can do that for itself—but there is one development of considerable interest which has taken place' during recent months or years. I refer to the development of what is often called factoring by merchant banks or other companies who set themselves out not only to help exporters with the detailed legal and other problems, but also to take over from them for cash the entire responsibility of getting the goods to the customer and collecting the money, the main responsibility of supplying the goods being retained by the exporter.
That is a service which is provided, not by the Government, but by the City 857 of London and which is increasing. It must be of considerable help particularly to the small, rather undercapitalised business which receives an export order but which cannot afford to wait a long time to gets its money and does not want the added difficulties that borrowing would entail. The business may want to make a quick sale and that, in effect, is what it is able to do.
That is a development which, I am sure, my hon. Friend the Minister of State welcomes. I do not suppose that there is anything he can do directly to encourage it, but it is something which should be made more widely known. It is being publicised, quite rightly, by the people who are doing it and, no doubt, my hon. Friend will help to publicise it also.
I, too, have thought about the difficulty of subsidising exports and this question was discussed the other day on an Amendment to the Finance Bill. I must admit that the arguments against subsidising exports are very strong. if they are strong enough that we must accept them and not subsidise exports, it follows automatically that everything that my hon. Friend can think of that the Board of Trade and other Departments can do to smooth the path of the exporter, whether large or small, he must pursue with all his energy, and no possible obstruction should be put in the way and every conceivable help should be given. Nobody on this side of the House, at least, wants to see the Government themselves engaging in trade. We know that my hon. Friend is doing all he can to smooth the path for the exporter and I hope that he will continue to do so long as he holds office.
§ 2.53 p.m.
§ Mr. James Callaghan (Cardiff, South-East)
I was interested to hear the hon. Member for Merton and Morden (Mr. Atkins) speak about the need for dealing promptly with correspondence, but I am not sure that that applies only to Government Departments. I do not know whether every exporter is as lively as he might be in seeking out his contacts and following up inquiries.
When I was in New York last Monday, I was told a story by a large-scale American industrialist who has every reason for good will towards this coun- 858 try. He wanted to buy a large quantity of a special kind of steel and he needed three years' credit. He made inquiries of an American steel company, a German company and a British company. The American steel company telephoned him on the day his letter was received and said that it could supply the steel but as it was not engaged in banking it was not interested. The Germans were on his doorstep within 48 hours. Two of them, who described themselves as directors, did their best and badgered him into accepting a type of steel that he did not really want. When he was on the point of making up his mind whether he should accept it, ten days later a rather crumpled airmail letter arrived from the British steel firm indicating that it might, perhaps, be interested and that if the American would supply more details the company would be willing to see what it could do.
That was the story that was given to me. I have not checked it with the British steel firm. It has a well-known name, but I do not propose to give it. Even if there is a complete defence to the story, I can only say that the impression left in the industrialist's mind is that American steel firms are arrogant, German steel firms are really "on the ball", efficient and going out for the business at all costs, and that British steel firms are still asleep. Whether it is right or wrong, if that impression is left in the mind of any customer of this country it is a very bad thing.
I believe that the question of salesmanship and what I would call a "get up and go" attitude lies at the root of a great deal of the failure of our export industries. It is no use blaming the man at the bench, the fitter in the workshop or the moulder in the foundry. He does not sell the goods; he makes them. It is the people who sell our products who can make or mar the results of our export drive.
This has been an interesting debate. I am grateful, as we all are, to the hon. Member for Mid-Bedfordshire (Mr. Hastings) for initiating it, because it has enabled us, in Madison Avenue terms, to probe the subject in depth. Fundamental questions have been raised about why we need exports and, if so, for what purpose. Even some heretical doubts have been cast about the rôle of the City. If 859 the hon. Member for Mid-Bedfordshire cares to read what I said yesterday in the debate on the Finance Bill, he will find that I share some of the doubts which, I thought, he was expressing. There is every reason why we should go on expounding those views.
It is fairly clear from the history of the last eighteen years since the war that the nations which grow faster and add quickest to their standard of life are those which do most exports. If there is no correlation between the two and if this is merely an accident, it is an accident that we had better try to make. The indications are clear. If one looks at the various nations, whether Japan, the United States, Germany, France or anyone else, one sees that even if their national income has not grown in proportion to their exports, at least those countries which have had a large increase in national income have shown a large increase in exports.
In some ways, this debate is flying on one wing. I quite agree with my hon. Friend the Member for Enfield, East (Mr. Mackie) that it would be a good thing to consider imports too, because there is no doubt that in the sphere of import substitution there are problems to be considered which might relieve some of the strain that we are trying to take on our export programme. Whilst our exports over the last ten or twelve years have gone up by about £1,200 million, our imports have risen by £1,000 million. Therefore, although we have been pushing ahead with exports, our imports have climbed at roughly the same rate. Thus, we are in much the same position as we were before in the overwhelming balance of payments problem, to which the hon. Member for Mid-Bedfordshire referred in opening the debate. The balance of payments must be a feature of life which overhangs, I imagine, all Ministers. They must be constantly striving to improve the relationship between imports and exports. Therefore, I would have liked there to have been some further debate about imports, but we must leave it out of the debate now.
Although our exports have increased by £1,200 million in the last ten years, we must ask ourselves why this is a failure, for there is no doubt that it has been a failure. We have failed to hold our share of tthe world's trade. We have 860 failed to improve our balance of payments to any noticeable extent and we have failed to have real growth to anything like the degree which has been secured by a number of other comparable nations. We must write this down against the Government's responsibility as a failure because, whatever else they are not responsible for, they are responsible for ensuring that there is a favourable balance in our trade and that there is growth in the economy. Those things are inescapable responsibilities of the Government, and although there may be a number of things which they cannot do about exports, the overriding responsibility for the country's economic welfare is theirs. That is why I must describe the results of the last ten years as a failure in this sense.
The world's trade has recently been analysed by Professor Belassa of Yale University, who recently gave evidence before the United States Congress on the American balance of payments problems He had figures for us and he showed that whereas world trade had doubled since 1953 the British share had risen by only 50 per cent., so that other nations have been stepping into our shoes. According to his analysis, our share of world trade has gone down by about 7 per cent., that of Japan has gone up by 4 per cent., of Italy up by 3 per cent. and of Germany up by 8 per cent. These are the factors which we have to take into account.
He went on to make a detailed analysis of the way the differences have taken place. Here we turn to one of the major weaknesses in our export drive, the nature of the products which we are attempting to export. The analysis shows something to which I have referred previously, and which is that it is in the newer industries that we are failing to hold our own. In some of the traditional industries we are doing quite well, but in the new industries we are failing to hold the advantage we should have had.
In the export of chemicals, for example, Germany, Italy and Japan have all increased their share of world exports, but our share has gone down. He picked seven major exporters of electrical machinery and showed that while Germany, Italy and Japan have increased their share of the export of electrical machinery, ours has gone down by about 10 per cent.
861 I could continue with a number of these illustrations, but there is a great deal in the point made by my right hon. Friend the Leader of the Opposition—that the structure of British industry must be looked at and that we have to do something more in these new and modern types of industries if we are to expand our exports in those respects where the demand is growing fastest.
I name two issues about which we have to do more than we have been doing. One is salesmanship and service and the other is in the type of product which we are attempting to export. I should like to take out a couple of factors which are used against us far too much. As far as I can see, it is not right to say that our prices are out of line with those of other countries. The National Institute of Industrial and Economic Research in the current issue of its journal has a table showing export prices of manufacturers. Taking 1958 as 100, we are in line both with the United States and with West Germany. Indeed, the United States prices are a little higher than ours. Our prices are noticeably higher than those of France, Italy and Japan, but, broadly speaking, it is not true to say that we are being priced out of the market. Looking at the whole range of prices, one cannot draw that deduction.
Nor is it right to say that it is wages or earnings per man-hour in this country which are putting our goods out of competitive reach. It is a remarkable thing that the figures show that in terms of earnings per man-hour other nations are moving up faster than we have moved up. If it is not prices and if it is not earnings per man-hour, where does the deficiency come, apart from the two points which I have mentioned? It is in output, output per man-hour, productivity. It is in getting the maximum use of the machinery that we have and in organising what we are doing to the best advantage. Here I agree with the hon. Member for Liverpool, West Derby (Mr. Woollan). The policy the Government followed in the face of consistent criticism from this side of the House and from many other people, that of keeping down home demand over such a long period, was disastrous for the export industries of this country. They have now departed from that, and the Chancellor of the Exchequer has said that he does not believe in it.
862 Thank God for that, but we have wasted a considerable period during which we have actively hindered and handicapped our exporters in the job that they were trying to do.
I have in my constituency in Cardiff a large factory which was begun about six months before the pay pause started. It was due to be completed about three months after the pay pause came into operation. There is over £1 million's worth of equipment in it, and it was to employ 300 men. In fact only half a dozen men are employed there sweeping out the factory and greasing the machinery. It has never been used. How can we expect our industrialists to be ready to invest to the level that we need if we have this "stop-go" system.
There is another factor which must be taken into account in connection with our export problem, and that is the position of the primary producing countries. Their earnings may be higher during the next twelve months. Prices of primary products may turn in their favour, but I doubt whether their power to purchase will be much higher, because on the whole there has been a failure of crops in a number of directions, which has in itself resulted in higher earnings to them because of the scarcities. We have seen part of that in sugar, although the Government have behaved with lamentable shortsightedness in the sugar situation.
Months ago the Government knew that the Russians were buying Castro's crop. Or did not our man in Havana tell them?
§ Mr. Callaghan
I know that there has been a shortfall in the crop, but whether there was or not, it was some months ago that Castro concluded his deal with the U.S.S.R. to sell his sugar crop to them. The Government, if they had had the foresight, could have stepped in to tackle this problem before it came to a head, but they did not, I shall not pursue that point this afternoon, except to say that the primary producing countries will find it difficult to purchase more of our exports over the next 863 twelve months than they have done during the last few years.
For that reason I am strongly convinced of the need to increase the base of world liquidity. We have to put purchasing power into their hands, and I am certain that we have to translate the International Monetary Fund into an institution which is capable of giving assistance to these countries by means of allowing them to indulge in open market operations. If this were done, we could do a great deal that would help not only the developing countries but our export industries and the export industries of other countries. We shall continue to press this matter not only on our Government, but on other Governments, in the belief that there is an immediate need to put a much firmer monetary base behind the level of world trade if we wish it to expand.
I turn now to another point. Other nations are making strenuous efforts to increase their exports. The United States have a big drive under way. I do not know how far they will succeed. They have an adverse balance of payments, not on trading account, but because they have been giving considerable amounts of aid, which they are now tying to their exports to an increasing extent. In addition, they have been bearing much of the cost of the defence of the West and Europe. On trading terms they have a surplus, but they are trying to wipe out their adverse balance of payments. I doubt whether they will succeed, but they are to have an export drive, and other nations are doing the same. We are therefore faced with a difficult competitive situation, and we are entitled to ask the Government what their attitude is to this.
I was flabbergasted when I heard what the President of the Board of Trade said during the Budget debate. I asked him a question and hoped that he would hit it for six, but he did not do so. I said:Before the right hon. Gentleman leaves the question of exports…can he tell us what increased target of exports he is hoping for…?".He replied:I am not in a position to commit myself to a target at present, because I know that I would only be giving the hon. Gentleman a hostage to fortune; and I do not intend to do that."—[OFFICIAL REPORT, 4th April. 1963; Vol. 675, c. 676.]864 What a shocking attitude for a Minister to adopt in relation to a question that is fundamental to the level of growth and the amount of expansion that we are likely to get!
The National Economic Development Council, as the hon. Member for Mid-Bedfordshire said, thinks that we need to increase our exports by at least 5 per cent. per annum in order to achieve the proper growth rate. It is no good the Government's willing the ends unless they are ready to ensure that the means are there. The Government have willed the ends by saying that they accept a level of 4 per cent. increase in growth this year. Do they also intend to will the means? Can I have a clear answer from the Minister of State, telling me whether the Government accept the N.E.D.C. target of a 5 per cent. increase in exports this year?
There is a case for saying that that is an under-estimate. The N.E.D.C. started by saying that we should need to increase our target by more than 5 per cent. per annum, but cut it down because of the breakdown in the Brussels negotiations. It thought that if those negotiations had been successful—at least, this was its original idea—there would have been more imports into this country, and our exports would have had to be increased. When the negotiations broke down it thought that we should need fewer exports, and that therefore we could get along with a figure of 5 per cent.
Whether or not this is a minimum, we are entitled to ask the Secretary of State—not because we want to secure a party advantage, but because we want to know the Government intentions—whether the Government accept this as a realistic target. Is this what they are going out for? If so, there is a great deal more to be done in the months that lie ahead than we have done during the first four months of this year. So far our exports have been going at the rate of 2 per cent. per annum.
Incidentally, I do not notice much in the newspapers about this. We are entering an election period, and I suppose that it is no use disguising it. The Beaverbrook Press has already entered on it. It is very myopically willing to record every ray of sunshine it can find. When the March figures for exports 865 came out—and they were very good—it was front page news in the Beaver-brook tress. The Daily Express was decorated with a large sign, with a £ sterling in the middle and the headline, second only to the Royal Wedding—"Sunshine Trade. Export Records. More Cheer To Come. At Last the Export Boom has Arrived." The Evening Standard also ran true to form. It had the same banner headline—"Friday is Your Good News Day. Britain Hits the Trade Jackpot. Splendid News."
I was delighted with the export figures. To my mind they are a symbol of our balance of payments position, and I am always delighted when they are brought to the attention of the British public. Attention should always be focussed upon them. But they should be given the same prominence every month. When the April figures came out, they were very much worse, because the trade gap had grown, but then I could hardly find any reference to them in the Daily Express. They had disappeared off the front page and appeared at the foot of another page, consisting of a paragraph of about a dozen lines. The Evening Standard was exactly the same. They had disappeared from the front page on to the City page. There is was explained that, unfortunately, the splendid March figures were due to distortions in the trade balances.
We know that Lord Beaverbrook uses his newspapers as organs of propaganda, but at least he ought to try to give us a proper presentation of the balance of trade figures every month, with imports and exports, if he wants to serve Britain and not merely the interests of winning the election for the Conservative Party—or even his own interests.
Until we focus this right in the forefront of public attention and the attention of the Government we shall not succeed in getting the rate of growth and expansion which this country needs, as well as being able to aid countries overseas.
I should also like to follow up the suggestions, with which I agree, about the need for new organisations and organisms for developing trade with those countries which have a planned economy, the Communist countries in particular. We are now moving towards planning ourselves. I do not know whether the N.E.D.C. or the Government propose to have export 866 targets for the industries with which the N.E.D.C. is in a direct way now establishing some links. But whether they do or not I am sure there is a case for us having a special body to handle the particular problems which arise when dealing with countries which plan their economic systems. I believe that we could help our own exports very substantially indeed if we set up an export corporation which could handle on an official basis the problems of trade with countries behind the Iron Curtain which are planning their trade at present.
I am also not convinced by what the right hon. Member for Reigate (Sir J. Vaughan-Morgan) said about the lack of need for any organisations for dealing with trade with the Commonwealth. Of course, trade with the Commonwealth divides into many different areas according to whether we are dealing with Kuwait or Australia. Nevertheless, we have had a body of people who have done valuable work in focusing the attention of manufacturers upon the possibilities and influences of trade both with the dollar area and with the European market, and I believe that the same opportunities exist and should be taken with the Common. wealth. There is, as my hon. Friend the Member for Burnley (Mr. D. Jones) said, trade there which I believe could be picked up and should be picked up, and we want it all the time. It is not a case of there being traditional links. We want people's attention focused all the time on this matter. I believe that an export corporation could help the problems of smaller firms. I know that the merchant banks do that, but, whatever their useful work, I think that there is need for more machinery here.
I want to see—and I conclude on this —international solutions to these problems of world trade and to our own export problems. I am not persuaded by the arguments for bilateralism. If we ever have to return to bilateralism it will be a confession of failure on the part of the world to solve its own problems satisfactorily because there ought to be a free flow of trade between the developed and the less developed countries of the world. I am sure that we should seek a real solution to these problems. Therefore, I do not accept the views put forward today by my hon. Friend about the need for bilateralism. At the same time, we 867 must, in my opinion, be prepared. We have never taken the view that the General Agreement on Tariffs and Trade represents the last word in international wisdom.
I think that the Board of Trade should examine this Treaty again now with a view to seeing, if the negotiations taking place and which will take place over the next twelve months do not succeed, what alternatives we should use in place of the General Agreement on Tariffs and Trade because if these negotiations break down and if there was, as I fear but hope will not happen, a return to economic nationalism, then there is no doubt that the pattern of British trade and industry would need to be modernised.
We all await the Report of the Gordon Richardson Committee on tax changes. I think that anything which that Committee recommends we ought to try to adopt if it will help the problems of cur exporters.
That concludes all I want to say and I will finish by repeating my peroration. I am sure that the right way for Britain and the developed countries of the world is to seek international solutions which will maximise world trade, and not defensive solutions which might help us but which would handicap many developing countries.
§ 3.19 p.m.
§ The Minister of State, Board of Trade (Mr. Alan Green)
First, I should like to join other hon. Members on both sides of the House I am glad to say, who have congratulated my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) on introducing this extremely important discussion today. My hon. Friend made certain points with which, I think, in courtesy to him I should certainly deal first. He initiated the debate and he raised them.
Whatever may be made of the actual rate of progress of our export effort over the last 10 or 12 years, it is true that in the last two years the move forward has been encouraging. I do not say that because I happen to be the holder of this present job, because the credit for the current phase of British exporting clearly belongs not to me but to my predecessors. It is thanks to their efforts in the past that we have had this encourag- 868 ing increase in the last six months. It is encouraging, because it has been achieved in very much more competitive world trading conditions than existed even one year ago.
I am encouraged, not so much by its actual size but by the fact that it is taking place when competitive conditions in the world as a whole are a great deal more strict and severe than they were even a year ago. I therefore immediately take the opportunity of passing on to all those concerned with the export trade, the people who actually do it, the rather kind things my hon. Friend was good enough to say about my Department. Those people have been doing a good job against a very difficult background in the last 12 months.
I am particularly glad to endorse the tributes paid to the leaders, chairmen and active workers in the export councils, whether in the Western hemisphere generally, or in Europe. Sir William McFadzean has been an outstanding success in that sphere. To have achieved what British exporters have achieved—a spectacular rise in our exports to Western Europe—in the last seven months, is first-class. Incidentally, it tends to destroy the suggestion made by the hon. Member for Ashfield (Mr. Warbey) that we were exporting, so to speak, in the wrong direction; that we had an adverse balance of trade with Western Europe as well as with America, and that all this was, somehow, the product of some desperate American machinations against the British interest.
When I heard the hon. Member, I thought that I had better get the United Kingdom figures of exports to and imports from the E.E.C.—the Six. In 1962, United Kingdom exports to the Six. totalled £720 million, and our imports from the Six totalled £708½ million. In these direct terms, we used to have an adverse balance with the Six, but that is not the case now. There has been a further improvement still in the first quarter of this year, when our exports to the E.E.C. amounted to £205 million, and our imports came to £177½ million. We are therefore making progress there—and I am delighted.
It is an absolute travesty of the facts to suggest that, because we have this particular pattern of trade at present, it benefits only—only—the highly-developed 869 industrialised nations, and that we get no direct benefit from it ourselves. That is quite untrue. At this moment, we have a trading surplus on current account with the E.E.C., as well as with many parts of the Commonwealth.
It is quite true, of course, that over the last year or more we have been in heavy deficit with Canada, and in some deficit with the U.S.A. We all know that the Canadian Government had their general economic difficulties, and took certain actions, most of which, unfortunately, affected us more than any of their trading partners—primarily, because of the sort of pattern of trade that has historically grown up between us. The surcharges the Canadians had previously imposed have now been removed, and I hope that more normal across-the-Atlantic trade patterns may return to life, particularly as between ourselves and Canada. I am going there in the Whitsun Recess to meet the new Canadian Government. I hope that I may have constructive talks in Ottawa with the Canadian Government.
I want to say a few words about the very general points made by the hon. Member for Cardiff, South-East (Mr. Callaghan). It is easy to take selective examples of certain British industries and say that they are failing or not being allowed ha get on as well as they might. The hon. Member made a perfectly valid point when he said that the pattern of our export trade had to change in accordance with modern needs overseas. That I entirely accept.
Most of the things we used to export are not necessarily the kind of things which are now wanted overseas, or which can be profitably exported overseas. I do not think it follows that, because other people's chemical trade, for example, has grown faster than ours, chemicals is a good case. Chemicals in many cases are almost old-fashioned raw materials. Great quantities of new raw materials now form the bulk of world trade. So I am not too sure that to use chemicals as a modern illustration of the kind of industry in which we are not doing very well is a very happy one.
We can set against this—to fly our own flag a little and not to decry ourselves too much—the fact that of the jet and turbo-jet engines in operation 870 or on order in the Western world today two-thirds are British made. That is quite an achievement for a small country. I am very glad to be able to say this, because many people have too easy a manner of decrying what we are doing and pointing to what we do not do, while failing to point to what we do. In the products of that most advanced of all industries, nuclear energy for peace, we are very much in the lead. This, I am glad to say, is acknowledged by all our industrial competitors, and not least by the Americans.
§ Mr. D. Jones
Before the hon. Gentleman leaves the point about decrying British achievements, may I point out that the British Government are not without fault? I hope he paid attention to what I said about the British aircraft industry and the Trident and the Boeing 727.
§ Mr. Green
I think that the Boeing is using Rolls Royce engines. I am not absolutely certain, but I think it is using Rolls Royce engines. In answer to the particular point, which the hon. Member is fond of making, I should say that it is relatively easy on any one particular occasion for the British Government to buy a particular market or a particular order, but that is not in fact export business as he and I and the rest of the House understand it. That is unrequited export, and it is requited exports that we want.
I suppose that, because of the nature of the work, I collect a considerable number of complaints. Cases of good trading conditions do not come our way so readily as most of the complaints. I am not complaining about that, but most of the complaints arrive because a customer or country overseas simply has not the resources with which to pay for the things they would like to have. We in our turn have only a limited amount of cash or credit at any time at our disposal. We cannot always meet the cash or credit requirements for the overseas customer.
§ Mr. Hale
One word does not seem to have been mentioned today, at least not while I have been present. That word is cotton. The hon. Gentleman has just made an extremely important point, that we could buy a market; in other words, by providing facilities for 871 purchase, we could develop an overseas market. Here we have an industry which in world terms has continued to grow year after year for the last five years. We know now that the talk about a world cotton slump was nonsense. But our share of that trade has disappeared. It is not a question of it dropping; it has simply disappeared, at a time when the Colonies for which we are responsible are full of people who need cotton goods. Will the hon. Member say a word about Board of Trade policy in this respect?
§ Mr. Green
If the hon. Member had been a little patient he would have found that I had something to say on that subject. But I think that I should proceed, because there are other hon. Members who would like to add to the debate.
As I said, there is obviously a limit to the amount of cash or credit which this country or any other single country can generate and therefore an obvious limit to the number of overseas orders which we can buy in this sense. In any event, it is not in our interests to buy too many such orders.
I agree with the hon. Member for Cardiff. South-East in this main respect: we want to encourage and as much as we can to lead all developed industrial Western nations into opening their doors on a multilateral basis to trade with underdeveloped countries. Of course we have to give aid in the form of capital, technical skill long-term credit and so on, but those actions will fail absolutely unless we open the trade doors to their products —not just their primary products but, increasingly, their manufactured products. This is where we have great difficulty. I sympathise with the hon. Member for Oldham, West (Mr. Hale). As I am a Lancashire Member myself, he knows that I am not talking with my tongue in my cheek when I say that I have great sympathy with those old-established industries in this country which now face severe competition from imports from the newly developed countries overseas.
It is an extremely difficult clash of interests, but one thing is certain: if the developed Western nations, including our own, refuse absolutely to open their doors to these manufactured goods, whether 872 they come from Europe or Asia or from Latin-America, which the developing countries are learning how to make, then all the grants, all the aid, all the credits in the world, will wholly fail in their objectives, and we shall not produce what we desire to produce—increasing standards of living overseas so that multilateral world trade generally flourishes. It is only on the basis of an increase in genuine world trade that all of us can expect to see every country get more and more prosperous.
Many individual points have been made in the debate and I promise to examine each of them. Some are small, but that does not prevent them from being valid. I will examine them as closely as possible and take them up where I can. There is evidence from what has been happening in E.C.G.D. operations that we are prepared wherever we can to make that instrument even more flexible and even cheaper to use than it has been. Whereas some years ago it might have been the despair of British businessmen, today it is the envy of foreign businessmen. I am glad to pay that tribute to those in that Department who operate it and who make and keep it such a flexible instrument.
There has been a substantial improvement, too, in the export services branch, particularly, perhaps, in the knowledge and understanding of overseas officers on how to help British industry. This is the sort of thing in which every year, with experience, these people get a little better. I do not think that it is a branch in which there will be immediate, dramatic and sudden improvements. That is not the way it goes. Steadily, year by year, the services, particularly those rendered in foreign countries and which are important to our visiting businessmen, are improving, and I am grateful to those who work long and devoted hours in our embassies and posts overseas. I have managed in the past seven months to get to 14 overseas countries and I have been deeply impressed with the quality of our staff and the devotion they have shown on behalf of British trade. I am saying "Thank you" to them publicly now.
The small exporters' problems were mentioned by a number of hon. Members. Queries were raised as to whether the financial services developed in the City of London and throughout our banking system are today quite up to the mark.
873 Bankers and banks have, in my experience, responded very well to requests generally to help exporters, particularly whenever there has been a credit squeeze. I will not enter into an argument about stop-and-go—that is not my province—but it is worth remembering that whenever credit squeezes have occurred they have responded very well.
§ Mr. Callaghan
The hon. Gentleman said that in the last six months there has been an increase in exports. It has been during this time that the Government have admitted that their policy was wrong and have changed it.
§ Mr. Green
The hon. Member should be more careful when making remarks like that, because if he does not know that in order to get an increase in exports one must lay the ground a lot earlier than six months, I tremble to think what will happen if he becomes in charge of the country's economy. That is an elementary fact of life.
§ Mr. Green
I think that the hon. Member jumped into a little pit of his own making in the process of making his last intervention. As I was saying, I have found from my experience, both in my present office and previously, that banks and banking are fully seized of the need to help and encourage Britain's export drive.
I accept that as world trade gets even more complicated, as technological progress advances—and because of those advances and technological processes the new machines to produce the goods ourselves become alarmingly expensive and there are increases in other costs, including shipping, capital charges and so on —certain things often become outside the reach of the small exporter.
I agree that any improvement in the techniques of financing, particularly for export, is very much to be welcomed, and the House may be interested to know that I have been talking, I hope not without result, to those interested in finance in the City a London in the last few months. I have been encouraged to see their responses to my requests in this connection. There is always room for improvement. We shall never be absolutely perfect or right and I agree that there 874 is room for some increases in these techniques. In this connection, I was interested to hear my hon. Friend the Member for Merton and Morden (Mr. Atkins) mention the factoring technique. There is a use for that in this sphere.
I do not want to detain the House and I will mention only one other point —the question of language which was raised by several hon. Members. I entirely agree that improvements can he made in this connection. Many of our salesmen are very much better than a lot of people say. One seems to hear only about the bad salesmen and not the good ones. Many of them must be good or our exports against the trend would not have been going up. We should give credit where it is due, as well as criticising. In seeking to redress the balance to ensure that credit goes where it is due I hope that I am doing something useful for British exporters.
Nevertheless, there is a need for many more salesmen to have at least a good acquaintanceship with more languages than their own. I am glad to see that the F.B.I. is extremely interested in this matter and is encouraging the learning of languages. If the Board of Trade can help those efforts, we shall be glad to do so.
We can learn a great deal from things that were done in the war, such as a three to four months' course concentrated on grasping at least the rudiments of a language, so that one can go to foreign country not totally unable to listen to or be heard. There is room for a lot more use of this and I believe that industry should be encouraged to do it.
The hon. Member for West Lothian (Mr. Dalyell) made some detailed suggestions and kindly said that I need not answer them now. I accept his invitation and I will look at them later.
The hon. Member for West Ham, North (Mr. A. Lewis) raised with me a particular point. I can only make one general point in reply about this. It is perfectly true that one occasionally meets the case of a firm with extremely small net assets. In this case I think that the net assets of the firm were about £15,000 and that these were already charged to the bank. It had practically no new capital to raise. When a firm of that sort takes an order from abroad of over £½ million and it then finds that the buyer cannot pay, which I believe 875 was the genesis of this particular affair, it is extremely difficult to find a means by which such a company can over-trade safely to that tremendous extent.
The profits being made by the firm were between £2,000 and £4,000. That is a classic case of over-trading. What such companies most need if they are to take business so vastly outside the range of their normal orders is to take good advice—I hope that this will be accepted as good general advice to British industry—and give themselves the permanent injection of the equity capital obviously needed, and so put themselves in the future in a much better position to raise credit in emergencies of this kind, to borrow more assets on truly existing assets and thus be able to get the sort of orders which, personally, I would have welcomed if this firm had been able to undertake them.
§ Mr. A. Lewis
In quoting that particular case I went on to say that there were general cases of like character where the hon. Gentleman's explanation about capital assets would not apply. I could have quoted to him ad lib a whole range of firms in a similar position. I think that is the point he should deal with.
§ Mr. Green
In my talks with City of London and merchant bankers and ordinary bankers this is precisely the sort of point that I am trying to deal with. I do not think that one will get over it by new techniques if firms honestly believe that they will get away with wild over-trading. I think that responses have to come from private industry as well as from the merchant bankers and the City of London.
I thank my hon. Friend for raising this issue. I have no difficulty in commending the Motion to the House. I hope that as a result of this debate the general consciousness of the need to export will have sunk even deeper into the minds of all our business and commercial community. I hope that this will be so, because I am bound to accept the truth of the remark that, unless our export earnings including the invisibles can increase, it is very difficult to see how increased standards at home can possibly be sustained. We might jack them up artificially for a short time but not 876 be able to sustain them. What every hon. Member on both sides of the House am sure desires is a sustained improvement in our living standards, and we shall not get this unless we get a sustained and real improvement in our export earnings. For this reason I welcome the Motion.
§ Mr. Callaghan
Before the hon. Gentleman finally resumes his seat, might I point out that he has once again failed to answer a question which I have put for the second time? I have put it both to the President of the Board of Trade and to the hon. Gentleman. Do the Government accept the target of 5 per cent. increase in exports for this year which the National Economic Development Council says is imperative if we are to get growth at the rate of 4 per cent.? Will the hon. Gentleman tell me why he has failed to answer that question, and may I have a reply now?
§ Mr. Green
I cannot understand why the hon. Gentleman attaches some mystical importance to my giving him an answer about a certain target. The Government have accepted the N.E.D.C. Report. I am sure that the hon. Gentleman has observed that. I repeat that I cannot think why he attaches so much importance to an answer to a certain single question.
The fact that we accept the N.E.D.C. Report, and, with it, the target of export growth required, does not mean that we think it is easy to achieve. We think it is exceedingly difficult. There is more to hitting a target than setting it up, and that is what the debate has been about. Targets may be useful—though opinions may different about that—but the real problem is absolutely to maximise our export earnings. Personally, I am not content with merely setting a target of 5 per cent., that is not enough for me. The maximum export earnings is what I am after, and not a certain single traget.
§ 3.46 p.m.
§ Mr. J. A. Leavey (Heywood and Royton)
I want to echo what has been said by all hon. Members in congratulating my hon. Friend the Member for Mid-Bedfordshire (Mr. Hastings) upon the choice of this subject when he was lucky enough to be first in the Ballot. It 877 seems to me that he got his priorities absolutely right. I throw out the observation that, in view of our surprising procedures in this House, it needs a private Member to choose a subject which we all agree is very high in the list of priorities of general subjects which concern the nation.
If the hon. Member for Cardiff, South-East (Mr. Callaghan) is right in some of his criticisms, I think I could agree with him to the extent that we have failed to get accepted widely by the population as a whole just how important exports are. All of us at some moment in every week worry about peace and war and about our great social problems: although all of these problems do not seem to be very relevant or intimate to us as individuals sometimes, we are conscious of them. But I believe that we can, and ought to, criticise ourselves as a nation in that we have failed somehow or other, in spite of exhortation and much action by the Government, to get it generally and widely accepted that exports are something upon which the prosperity of this generation and succeeding generations depend.
The prosperity of this country depends upon exports, just as breathing is a matter of life and death for the individual, though that is, fortunately, a reflex action and happens naturally enough. But if we do not succeed, and continue to succeed, with our exports, then, as day follows night, our standards of living will fall. But this is just not felt to be relevant by 99 per cent. of the population. To that extent we have failed in a very large-scale exercise in communications.
It is a very difficult problem. We criticise successive Governments for governing by exhortation. We say, "They are there to govern. We ought to have effective fiscal and financial means, and so on." Next, we enter into international agreements—I am sure we are right to do so—which expressly forbid us to do the precise executive things in the form of applying export incentives which would probably succeed. Thus on the one hand we have exhortations, and on the other practical measures of export incentives are condemned by international agreement and also by a body of British business- 878 men, as shown by the Forbes Report of the Federation of British Industries.
It is somewhat difficult to know, therefore, how in positive terms the President of the Board of Trade or the Minister of State could answer the largely, I think, partisan political questions which the hon. Member for Cardiff, South-East pressed upon him. We cannot be precise about achievements next year or the year after. I was very glad to hear the Minister of State say that the 5 per cent, target was not acceptable, was not satisfactory and was not enough. That was an encouraging attitude.
There are one or two specific points that I should like to have put, but I realise that there are only 10 more minutes left to us and, though there is a temptation for a humble back bencher in such a position to play at being a Minister and try to wind up the debate. that would be a presumption and I shall not do it.
I put it to my hon. Friend that there is a widespread feeling amongst all those engaged in industry and trade in this country that, so far as the rules of the game are concerned, a large range of their competitors cheat like anything. It may be a somewhat old-fashioned attitude that we alone are the "mugs" who play the game by the rules, but it is a widely-held view. It would be helpful if the Board of Trade could do a little more than it is doing either to satisfy manufacturers and traders in this country that this is an illusion and that, in fact, their competitors overseas do not cheat on the scale that is believed, or, alternatively, to bring pressure to bear. no doubt with help from the Treasury and the Foreign Office, to persuade the Governments of those countries where British traders have reason to believe there are evasions that this is really against the interests of international trade. I am sure my hon. Friend realises the depth of this feeling.
I quote a case that came to my notice relating to Austria. A certain manufacturer of machinery was exporting to this country. On getting a confirmed export invoice—let us say the invoice was worth £1,000—the Austrian exporting company went to the central bank which bought the certified invoice for £1,050, and collected the money. This 879 sort of thing is not entirely a figment of somebody's imagination, I am sure, and I feel convinced that there are other cases also.
Some reference has been made—and it is appropriate, as this is a vital subject —to the words of my right hon. Friend the Chancellor of the Exchequer during his Budget statement. I intend to take up a few seconds to quote the words which seem to me to be important, and I can, if somewhat reluctantly, concede this point to the hon. Member for Cardiff, South-East. My right hon. Friend said on 3rd April:…a more buoyant home market should provide a basis for lower unit costs, more competitive export prices, and so for higher exports. Growth, change and stable costs…are the only recipe for success in expanding our export trade."—[OFFICIAL REPORT, 3rd April, 1963: Vol. 674. c. 477.]This was a very important and progressive statement, and in a sense it is fair to say that it marks a significant change from what have been the necessarily negative policies which have been applied by successive Governments, the basis hitherto being that it has been necessary, in order to stimulate exports, in a sense to make trading at home subject to certain restraints, and that this would divert a greater proportion of the national effort and, therefore, a greater proportion of the gross national product to exports. This is a very timely change or addition to the Government's thinking and I welcome it very much.
In his reference to invisibles and their contribution, I am sure that my hon. Friend the Member for Mid-Bedfordshire was right. But I was sorry to miss part of the speech of my hon. Friend the Member for Worcester (Mr. Walker) who dealt with insurance as an element in the invisibles. I should like to add my mite to that subject, and say that I believe it is true, in spite of some criticisms, that something like 60 per cent. of the business which goes through Lloyds is, in fact, export business or, indeed, is handling business for foreign insurances. This, therefore, is a massive contribution to our invisible exports. Something comparable, of course, goes on in banking as well.
I entirely agree with what my hon. Friend said about languages, a subject to which the hon. Member for West Lothian 880 (Mr. Dalyell) also referred, but, if I may, I will touch on a personal note here. I have a daughter who learned Russian at school from the age of 15 and became very competent. She went to the Moscow Trade Fair as an interpreter at the age of 18. She has since been disappointed—perhaps that is not too strong a word—to find what little demand there seems to be in commerce for a qualified bilingual secretary. This is a little surprising, but it has been the experience within the limits of my own family.
Now, a point relating to exchange control and our investment in Europe. Again, I hope that the House will forgive me if I quote something said by my right hon. Friend the Chancellor of the Exchequer. I mean no discourtesy to Ministers at the Board of Trade; perhaps they will be relieved that I am not quoting them. On 12th February, during our debate on the Common Market, my right hon. Friend saidWe can and should invest in Europe to the extent limited only by our balance of payments and the strength of our reserves.…It would be a very retrograde and short-sighted step to take the occasion of the failure of the Brussels negotiations to cut down the sort of investments…which in the long run will strengthen the economy of this country both in invisible income and the prospect of visible exports."—[OFFICIAL REPORT, 12th February, 1963; Vol. 671, c. 1249–50.]I have encountered considerable complaint about one of our visiting arrangements. As hon. Members know, and will readily accept, anyone wishing to invest on the Continent, in the E.E.C. countries, has to make application to the Bank of England. He cannot just go out, willy-nilly, and buy the currency he needs. There is a committee called the Wednesday Committee, a joint committee of the Bank of England and Treasury officials. It is my experience and that of others that this is a rather restrictive process.
Three things can happen. After making one's application, one may be told "Yes; you may go out and buy your currency quite freely". Second, one may be told, "No; you must buy switch dollars, for which you must pay a premium, perhaps 8, 9 or 10 per cent."—it has been as much as that recently, and can be very expensive—"and then, with your switch dollars, you may buy the francs, lire or whatever it is you want". Third, one may be told that one may do neither of 881 those things and that it is an undesirable investment.
I hesitate to be critical here but I understand that the dead hand of the Treasury, to use the old phrase, lies rather heavily upon this committee. I regret that it should be so. Although I have much respect for the advice which the Treasury is able to give, I consider that its influence is unduly restrictive here. If we are to make a serious effort in accordance with my hon. Friend's proposals, with which I entirely agree, to make some impact in that market, we must invest. We must lay down plant. We must make goods. The restriction which is imposed is really uneconomic in commercial terms and quite unrealistic.
The general restriction is that one must repatriate the funds, that one must return to this country the money one invests, that is, the foreign currency which has been purchased, within two years. In the ordinary circumstances which will prevail, no one can build a factory, ship out plant, get the enterprise going, run it at a loss for a year or more before beginning to make profits, and do it all within two years.
This restriction very largely limits investments to purely commercial or trading undertakings, distribution arrangements and the like, and this, I believe is trimming the wings of our more adventurous industrialists who seek to establish the manufacturing plant which will, in my right hon. Friend's words, produce theinvisible income and the prospects of visible exports.It very much limits those whom my hon. Friend described as the merchant adventurers.
I hope that my hon. Friend will convey to his right hon. Friend at the Treasury that this is an unrealistic restriction. I am sure that it is not necessary, and I believe that the Bank of England has, perhaps, a more progressive and more realistic attitude than the Treasury in the advice which it gives. I hope that this point will be seriously examined. I believe that a change would make a great difference to our investment prospects.
§ Question put and agreed to.
That this House conscious of the vital importance of an improved balance of pay-
ments and aware, particularly since the collapse of the Brussels talks, of the need to increase our industrial, commercial and financial power, congratulates the President of the Board of Trade on the various measures he has taken to help exporters, but nevertheless urges Her Majesty's Government to seek further means of encouraging a general expansion of our share of the world's trade in goods and services.